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 predetermined 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. Five Public Limited corporations have been taken for this study for the period of 6 years starting from 2007-08 to 2012-2013. Short term solvency position ratio (current ratio and liquid ratio),long term solvency ratio and efficiency ratio have applied to construct descriptive statistics. ANOVA applied to find out which company's mean value is significantly differing from other companies and after that Post-hoc test applied to find out the differing companies mean values.
Keywords
Ratio Analysis, Descriptive Statistics, ANOVA and Post hoc analysis
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