THE IMPORTANCE OF FINANCIAL RATIOS IN FINANCIAL ANALYSIS OF BUSINESS ENTITIES BESIK
Journal Title: Globalization and Business - Year 2018, Vol 5, Issue 5
Abstract
The paper refers to the specificities of usage of analytical financial tools in real sector of economy in Georgia, also inevitability of taking into consideration of analytical nuances by financial practitioners. In the article the importance of financial ratios utilization is highlighted. The following peculiarities are also considered and analysed:1. Selection of financial ratios; 2. Period of calculation of ratios; 3. Normativity of financial ratios; 4. Combined usage of ratios; 6. Sector specific financial ratios. It should be noted that analytical financial tools such as financial ratios are only used in Georgian business entities in following cases: economic entity represents corporate business; company has a good arranged management system; it is a branch of foreign firm; company is in tight coordination with financial institute, etc. The paper refers to the most important issues of the country’s corporate finance as follows: classification of enterprises for reporting goals, managerial reporting aspects, functions of regulator state organ, financial statements quality, companies’ accountability from auditing point of view, prerequisites the usage of international financial reporting standards (IFRS), inevitability of formation of financial benchmark system. It should be noted that the average sector benchmarks are not calculated in Georgian transitional economy that makes impossible for companies to compare their financial performance measures to the average sector/subsector financials. The consolidation and concentration process of financial and managerial reporting stimulates the utilization of analytical financial tools which increases the quality and access of relevant and reliable financial information flows.
Authors and Affiliations
BESIK BOLKVADZE
Keywords
Related Articles
- EP ID EP545840
- DOI -
- Views 80
- Downloads 0
Security issues in wireless network
In the last period of time, security in wireless networks and quality of service, became very important and it is a subject of active researches. Communication signals which are extended in some environment can be receiv...
ON THE ISSUE OF EXCESSIVE INDEBTEDNESS
Excessive indebtedness, or the “overproduction” of credits, is a feature of the modern credit system. Its results are commonly encountered in the local, regional or global economies. It appears before us as a cause of a...
Elaboration and Assessment of Mathematical Model of Efficient Management of Activity (Conveyance) of Automonile Transport of Georgia
Considered analysis of double-purpose function gives us a possibility to make conclusion that during plan- ning of volumes of cargo transportation and passenger carriage carried out by automobile transport the man- ageme...
Strategic trends in tourism development
The work focuses on strategic aspects of tourism development, some of the development of international tourism in Georgia and modern trends. Political decision-making during the new tourist planning, the complex nature o...
Evaluation of the Start-up Business Project
One of the most important factors of success is in the field of venture capital to select right investment project. Investors consider this process more precisely, because it is uncertain what project will have more chan...