FINANCIAL PERFORMANCE ANALYSIS OF SELECTED CERAMIC COMPANIES IN INDIA

commerce

Financial analysis is a process of identifying the financial strength and weakness of the firm by properly establishing relationships between the items, the balance sheet and the profit and loss account. Financial analysis helps to assess the financial position and profitability of a concern. This is done through comparison by ratios for the same concern over a period of years, or for one concern against the pre-determined standards. Accounting ratios calculated for a number of years show the trend of change of financial position i.e., whether the trend is upward or downward, or static. The ascertainment of trend helps us in making right estimates for the future. Financial Analysis can be undertaken by management of the firm or by parties outside the firm Viz., owners, creditors, investors and others. The nature of analysis will differ depending on the purpose of analyst. For example, trade creditors being their claims over a very short period of time, they are interested to evaluate the firm’s liquidity positions. The long term debt suppliers are interested to know the long term solvency and survival of the firm. The investors are interested to know the firms earnings. Finally, management of the firm would be interested in every aspects of the financial analysis. Seven Ceramic companies’ annual report for 10 years from 2010-1 to 2001-02 have been taken to analyze their financial performance by incorporating Ratio analysis, Mean, standard deviation, Coefficient of variation (COV), ANOVA, Post-hoc test have applied to find out the financial performance of selected ceramic companies in India.

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