Tag Archives | Techniques

Ratio Analysis: Steps and Nature | Accounting

In this article we will discuss about:- 1. Introduction to Ratio Analysis 2. Steps in Ratio Analysis 3. Nature. Introduction to Ratio Analysis: The company’s financial information is contained in Balance Sheet and Profit and Loss Account. The figures contained in these statements are absolute and sometimes unconnected with one another. An absolute figure does […]

Users of Ratio Analysis | Accounting

In this article we will discuss about the users of ratio analysis in accounting. Ratio analysis of a firm’s financial statements is of interest to a number of parties, mainly, share-holders, creditors, debtors, firm’s own management etc. People in various walks of life are at present interested in ratio analysis though in different ways and […]

Importance of Ratio Analysis | Accounting

The importance of ratio analysis are:-  1. Aid to Measure General Efficiency 2. Aid to Measure Financial Solvency  4. Facilitate Decision-Making 5. Aid in Corrective Action 6. Aid in Intra Firm Comparison 7. Act as a Good Communication 8. Evaluation of Efficiency 9. Effective Tool 10. Detection of Unfavourable Factors.   1. Aid to Measure General […]

Limitations of Ratio Analysis | Accounting

Some of the limitations of the ratio analysis are:- 1. Differences in Definitions 2. Limitations of Accounting Records 3. Lack of Proper Standards 4. No Allowances for Price Level Changes 5. Changes in Accounting Procedure 6. Qualitative Factors are Ignored 7. Limited Use of Single Ratio 8. Background is Overlooked 9. Limited Use 10. Personal […]

Top 8 Techniques of Financial Management

The important techniques of financial management are summarized as follows:- 1. Common-Size Statements 2. Trend Ratios 3. Funds Flow Analysis 4. Cash-Flow Analysis 5. Ratio Analysis 6. Working Capital Management 7. Capital Structure 8. Capital Budgeting Techniques. Technique # 1. Common-Size Statements: The common-size financial statements are those in which figures reported are converted into […]

Top 11 Techniques used in Management Accounting

The following points highlight the top eleven techniques management accounting. The techniques are: 1. Financial Planning 2. Analysis of Financial Statements 3. Historical Cost Accounting 4. Standard Costing 5. Budgetary Control 6. Marginal Costing 7. Funds Flow Statement 8. Cash Flow Statement 9. Decision Making 10. Revaluation Accounting 11. Statistical and Graphical Techniques 12. Communicating. Management […]

Top 10 Techniques of Performance Evaluation

The following points highlight the top ten techniques of performance evaluation. The techniques are: 1. Budgetary Control and Reporting 2. Balanced Scorecard 3. Variance Analysis 4. Contribution Margin 5. Return on Capital Employed (ROCE) 6. Residual Income (RI) 7. Value Added 8. Bench Marking 9. Ratio Analysis 10. Non-Financial Quality Performance Measures. Evaluation Performance: Technique […]

Top 12 Techniques of Value Analysis

The following points highlight the top twelve techniques of value analysis. The techniques are: 1. Work in Specifics 2. Obtain All Available Costs 3. Seek Information from the most Authentic Source 4. Evaluate Function by Comparison 5. Discuss with Specialists and take Advantage of their Expertise Knowledge 6. Use Real Creativity 7. Consult your Suppliers […]

3 Main Techniques Used in Cost Audit

This article throws light upon the three main techniques used in cost audit. The techniques are: 1. Audit Sampling and Statistical Sampling 2. Flow Charts 3. Ratio Analysis.  Cost Audit: Technique # 1. Audit Sampling and Statistical Sampling: “Audit sampling is the application of a compliance or substantive audit procedure to less than 100% of […]

Techniques to be Employed for Preparing Checklists

This article throws light upon the top six techniques to be employed for preparing checklists. The techniques are: 1. Corporate Planning 2. Organisational Structure 3. Departmental Plans and Objectives (integrated outlook) 4. Corporate Objectives 5. Delegation of Authority 6. ‘Span of Control and Management’.  Preparing Checklist: Technique # 1. Corporate Planning: 1. (i) What are […]

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