08-17-2017, 12:03 AM
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1.1 INTRODUCTION TO FINANCIAL MANAGEMENT:
Finance in the modern business world is regarded as lifeblood of business at enterprise. Finance function has become so important that it has given birth to financial management as a separate subject. So this subject is acquiring universal applicability. Financial management is that managerial activity which is concerned with the planning and controlling of the firm s financial resource as a separate activity of decline is of recent origin, it was a branch of economics till 1980. Still today it has no unique body of knowledge of its own and it dreams lively on economies for its theoretical concepts.
Financial management is broadly concerned with the acquisition and use of funds by a business firm. It deals with:
* How large should the firm be and how fast should it grow
* What should be the mix of the firm s financing?
* How should be the firm analysis, plan of control its financial affairs?
While the first three questions express extra salmon s conception of financial management as discussed in his clerical work, The theory financial management . The forth one represents an addition that is very relevant in the light of the responsibilities surrounded by financial managers in practice. The modern thinking in financial management records greater importance to management in decision making and formation of policy.
Financial management occupies key position in top management and plays a dynamic role in solving complex management problems. They are now responsible for snapping the fortunes of the enterprise and are involved in allocation of capital.
1.2 OBJECTIVES OF THE STUDY:
To know how efficiently the company is using its resources.
To determine the financial soundness of the firm i.e., liquidity of the firm.
To know about causes for changes in financial position from time to time.
To evaluate the performance of the unit through ratio analysis.
To know the liquidity position of Oil and Natural Gas Corporation Limited.
To judge the solvency of the firm by working out leverage ratios.
To understand the practical implication of ratio analysis at industry level.
To make suitable recommendations based on critical findings.
1.3 NEED OF THE STUDY:
The Primary requirement of this study is academic and part of my MBA course study. I opted to do my study on the subject of Analysis of Financial Statements of ONGC Ltd.
The financial statements of a company are to convey its financial performance to owners, creditors and the general public.
They are used as bases for decisions by all those interested in the enterprise.
All the investment decisions of equity share holders either by financial institutions or general public are depending upon the strengths and weaknesses of the financial parameters of the company.
1.4 SIGNIFICANCE OF THE STUDY:
The study of financial statements is helpful to following groups.
The study of financial statements is useful in analyzing the various areas where certain measures can be taken for improvement.
The study is helpful for Investment Bankers, Financial Institutions and General public with reference to their investment in ONGCL equity in stock market.
This study is more useful to academicians and scholars to make for the insight into the various aspects of the financial statements analysis in others similar organizations.
Studies of this type are also useful to policy makers. To make necessary changes in the policies to know financial feasibility of the company at glance.