Financial Statement Analysis (for Pt. D.D. Upadhyay Gorakhpur University, Gorakhpur)

The present text has been planned and designed to cope with the needs of B.Com. Part III students of Pt. D.D. Upadhya Gorakhpur University to present the subject in simple language and lucid style.

Salient features of the book :

• The subject-matter has been arranged and systematised strictly according to course prescribed.
• In this revised edition chapters on RATIO ANALYSIS and FUNDS FLOW STATEMENT have been thoroughly revised and enlarged.
• Chapter of CASH FLOW STATEMENT has been written strictly as per AS-3 and AS-4 (Revised) Contingencies and Events Occurring after the Balance Sheet Date. The revised AS-4 prescribes that ‘proposed dividend’ will be treated as ‘Contingent liability’ instead of short-term provisions.
• Rate of Income Tax @ 25 percent on companies has been applied in all numerical questions as per amendment made by the Finance (No. 2) Act, 2019.
• An important feature of revised edition of this book is that Notification dated 24th March, 2021 has amended Schedule III to the Companies Act, 2013, which is effective from the 1st day of April, 2021 has been included.
• The language and style of presentation are very simple and the subject-matter has been divided into various headings and sub-headings so as to give a flow in studying this numerical subject.
• Both theoretical and numerical aspects of the subject have been given due importance. The numerical illustrations have been carefully graded with supporting theoretical background. At many places explanatory notes have also been given to clarify the working of solution.
• Numerical illustrations and questions have been arranged in a systematic and scientific sequence from simple to complex.
• Illustrations and questions both have been arranged in the identical sequence so that students can easily solve the questions after understanding the illustration in the same order.
• In the selection of illustrations and questions priority has been given to university examination papers so that students may make practice according to that standard.
• Short answer and objective type questions (Theoretical & Numerical) have also been incorporated according to new examination pattern of different universities.
• Standard but simple formulae have been used in different chapters and at the end of each chapter all formulae relevant to that chapter have been given at one place.

Financial Statement Analysis Syllabus For B.Com. IIIrd Year of Pt. D.D. Upadhya Gorakhpur University

• Unit – I Management Accounting : Definition, Functions and Role of Accounting as a tool of Decision-making. Limitations of Management Accounting. Basic Postulates of Accounting and Accounting policy.
• Unit – II Financial Statements : Meaning, Types of Financial statements, Limitations of financial statements, Financial Analysis—Types and methods of financial analysis, Tools of financial analysis, Trend percentages common size statements.
• Unit – III Financial Statement Analysis : Ratio analysis, funds flow analysis, Cash flow analysis.
• Unit -IV Marginal Cost Concept : Cost classification, Theory of contribution, Profit Volume relationship, Break even analysis.
• Unit – V Standard Costing : Definition, Nature, Setting Standards, Establishment of standard costing system, Variance analysis (only Material Variance).
• Unit -VI Budgets : Nature, Types of budgets, Preparation of Budget (Sales and Cash Budget only).
• Zero Base Budgeting—Concepts and Applications.

Financial Statement Analysis Contents :

1. Management Accounting (An Introduction)
2. Financial Statements
3. Analysis And Interpretation of Financial Statements
4. Ratio Analysis
5. Funds Flow Statement
6. Cash Flow Statement (As Per Accounting Standard–3)
7. Absorption Costing And Marginal Costing
8. Marginal Costing (As A Tool For Decision Making)
9. Differential Costing
10. Cost-Volume-Profit Analysis (Break-Even Point)
11. Budget And Budgeting
12. Budgetary Control
13. Fixed And Flexible Budgeting
14. Cash Budget
15. Sales And Production Budget
16. Control Ratios
17. Zero Base Budgeting
18. Responsibility Accounting
19. Performance Budgeting
20. Standard Costing
21. Variance Analysis (Material & Labour Variance)
22. Basic Postulates of Accounting and Accounting Policy

• Appendix :
  Establishment Of Standard Costing System