NECESSITY OF APPLYING FINANCIAL ANALYSIS TECHNIQUES IN INVESTMENT DECISIONS

Finance is the life blood and nerve centre of a business, just as circulation of blood is essential in the human body for maintaining life, finance is a very essential to smooth running of thebusiness. Financial Management refers to that part of the management activity which is concerned with the planning and controlling of firm’s financial resources. It deals with findingout various sources for raising fund for the firm. The main objective of Financial Management isto arrange sufficient finances for meeting short term and long term needs. Financial analysis refers to an assessment of the viability, stability and profitability of a business,sub-business or project. Financial Analysis Techniques is targeted toward external reporting andanalysis, following generally accepted accounting principles as the foundation for the data used. It helps to discover how to, Adopt the information and models used in case studies to effectivelycommunicate the financial side of business to non-financial colleagues, Review, refresh andupdate analytical skills to gain better insight into an organization’s operations, Apply valuation drivers to enhance the value of organization, Employ sustainable growth techniques to assessgrowth assumptions, Illustrate and communicate the impact of operations on cash flow to operational colleagues. Financial analysts provide guidance to businesses and individuals making investment decisions. Financial analysts assess the performance of stocks, bonds, commodities,and other types of investments. The investment decisions of a firm are generally known as the capital budgeting or capital expenditure decisions.

کلیدواژه ها:

Financial Management ، investment decision ، financial techniques ، analysis techniques ، capital budgeting