Analysing Financing Activities

ANALYZING FINANCING ACTIVITIES How to Analyze Financial Activities of a Company totally what a conjunction do to raise finance for mingled direct and otherwise needs be referred to as pay activities. Analyzing financial activities is a one of the major analysis comes beneath bill analysis and it helps an analyst to understand the companys finance structure, growth, prospects , risk etc. These financing of a company comes either in form of equity or liabilities (debt). Liabilities Liabilities be financing obligations that require future payment of money, run or other assets. In other words a financial obligation is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events. These are essentially Outsiders claims against company resources. Classification of Liabilities 1. pay and Operating Liabilities Financing liabilities are all forms of credit financing much(pre nominal) as hornswoggle and long-term borrowings, bonds, notes, leases etc. Operating liabilities are Obligations that arise from operational(a) activities such as accounts payable, unearned revenue, advance payments, taxes payable, postretirement liabilities, and other accruals of operating expenses etc. 2. Current and Non Current Liabilities Current liabilities are Obligations whose settlement requires foretell of latest assets or the incurrence of another current liability at bottom one social class or the operating cycle, whichever is longer. Non current liabilities are Obligations not payable within one year or the operating cycle, whichever is longer. Composition of Liabilities * Interest bearing borrowings * Leases * solitude turn a profit obligation * Contingencies and commitments Factors to be considered when contemplate liabilities * Term and condition on borrowing * mode of ever-changing each item in cer tain period, * effects of such changes! net profit and other item on the residue sheet...If you want to get a full essay, secern it on our website: OrderEssay.net

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