The tools of financial analysis

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One of the tools of financial analysis is statement of cash flow. What insights about a company’s operational performance do you get from cash flow statement analysis? You can use example of cash flow statement of a real company.

 

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Financial statements are generated to provide detailed information about an organization’s assets, liabilities, equity, reserves, expenses, and profit and loss. Comparative statements, common size statements, and other tools are routinely used to examine and comprehend financial statements. Let’s take a closer look. Financial statements, often known as ‘horizontal analysis,’ demonstrate a company’s financial situation and profitability over time. These financial statements provide an overview of the company’s financial status over two or more periods. Only when the financial statements are prepared using the same accounting standards can they be compared. The company’s progress can be seen by looking at the company’s various assets and liabilities on various dates and comparing the balances from one date to the next.

Teamwork plays an essential role within both Fiedler’s Contingency Theory and Chelladurai’s Multi-dimensional model particularly regarding leader-member relations, if the group are familiar and trusting of the leader policy implementation becomes much simpler. Similarly to leadership, understanding and adapting to the situation is key to a leader being able to implement policies that ensure a group work as a team. Teamwork is a product of good leadership, and is again the responsibility of the leader to ensure the group are working successfully together. Highly functioning teams are essential within organisations to increase productivity and member satisfaction, by utilising the talents of all group members effectively within the constraints of the task, personal relationships and the group goals (Pettinger, 2007). Figure 2: Tuckman’s Model of Group Development (Agile Scrum Guide, 2019) Tuckman in his Model of Group Development provides easily identifiable stages that a groups performance can be measured against, making it useful for monitoring performance, Figure 2 shows Tuckman’s model. Ranking group performance against this scale can provide leaders with a clear understanding of how the group are functioning, allowing them to implement policies to change this if performance is unsatisfactory (Pettinger, 2007). Within organisations, the theory can be loosely applied to creating teams by grouping familiar individuals with the aim that they will reach the norming and performing stage of the model quicker. For short and simple tasks this is an extremely effective way of organising groups, due to the increased short term productivity. However there are significant issues with grouping individuals in this manner, particularly when tasks become more complex, and ultimately the model should mainly be used for monitoring the progress of groups (Pettinger, 2007). Figure 3: Belbin’s Team Roles (PrePearl Training Development, 2019) A more functional approach of grouping individuals is to utilise Belbin’s Team Theory (Belbin, 2017). Belbin identifies 9 key roles that must be fulfilled within a group to ensure success, the role

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