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As an accountant, how do you analyse the balance sheet for your business unit on a monthly basis?
What are the main comparisons you make?
How does your analysis support the BU manager?
I believe use the ratios will not give accurate result in the all cases .The purpose of the analysis is to see growth or deterioration that occurre in the institution , for that the better way for analysis is to compar the results of the current month with the previous month or with the results of the same month of the previous year and then with the Budget .This will give a clear picture (for exapleis in debtors ) and then search for reasons for increase or decline
Simply as an accountant we have to use ratio analysis to gauge the performance of the three elements (Assets, Liability and Equity) used in preparing the balance sheet. It may includes the following ratios:
1.Current Ratio
2. Acid-Test Ratio
3. Average collection period
4. Average payment period
5. Gearing Ratio
Simply as an accountant we have to use ratio analysis to gauge the performance of the three elements (Assets, Liability and Equity) used in preparing the balance sheet. It may includes the following ratios:
1.Current Ratio
2. Acid-Test Ratio
3. Average collection period
4. Average payment period
5. Gearing Ratio
There are lot of other ratios that we can calculate alongside with income statements to best express and support the BU manager.
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