1. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 4, April (2014), pp. 34-37 © IAEME
34
EVALUATING THE PERFORMANCE OF COMPANIES ON THE BASIS OF
FINANCIAL ANALYSIS RATIOS
ADIL IBRAHIM ABBAS1
, Dr. M. H. DASHTI2
1
(Research Scholar, Department of Commerce, POONA COLLEGE OF ARTS, SCIENCE &
COMMERCE, University of Pune, India )
2
(Asst. Dr., Department of Commerce, POONA COLLEGE OF ARTS, SCIENCE & COMMERCE,
University of Pune, India)
ABSTRACT
The process of evaluating performance of great benefit to this, most companies, including the
company under study publicly report include a balance sheet and income statement and cash flow as
well as some of the details and financial ratios and comparisons, which explains the nature of the
company's activity. In order to strengthen the company's position in the market and for investors to
buy shares, but the company after all not made charts and graphs illustrate the company's
performance, and as we know, the charts and graphs give a clearer picture and also leave an impact.
Keywords: Financial Analysis, Advance Accounting, Financial Ratios, Performance of the
Companies.
1. INTRODUCTION
Financial analysis in the past few years has become a very significant even at the level of
states, although he has yet to reach the level of ambition but there are many universities and institutes
competent to take it upon himself to enter this article task within the approved curriculum for
graduating qualified to meet the market need that has become need desperately to such jurisdiction
after the great global openness and after the spread of capital markets in most countries of the world.
As fever intensified competition between the companies became the process of evaluating the
performance of organizations process indispensable for survival and development, and financial
analysis has the upper hand in the process of evaluating performance and detect deviations and even
find out where the flaw lies.
Financial analysis in a simple is the sum of methods and mathematical and statistical methods
and by the technical analyst financial data and financial statements and reports in order to evaluate
INTERNATIONAL JOURNAL OF MANAGEMENT (IJM)
ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)
Volume 5, Issue 4, April (2014), pp. 34-37
© IAEME: www.iaeme.com/ijm.asp
Journal Impact Factor (2014): 7.2230 (Calculated by GISI)
www.jifactor.com
IJM
© I A E M E

2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 4, April (2014), pp. 34-37 © IAEME
35
the performance of institutions and organizations in the past and the present and anticipate what will
be in the future. While others argue that the financial analysis on it the entrance or system to run data
to extract information that will help decision makers to identify.
2. FINANCIAL ANALYSIS
First: the concept and importance of financial analysis:
1- The Concept of Financial Analysis:
Financial analysis in a simple is the sum of methods and mathematical and statistical methods
and by the technical analyst financial data and financial statements and reports in order to evaluate
the performance of institutions and organizations in the past and the present and anticipate what will
be in the future.
While others argue that the financial analysis on it the entrance or system to run data to
extract information that will help decision makers to identify:
i) Past performance of the facility and the fact that the financial and economic situation of the
facility at the moment.
ii) Predict financial performance of the entity in the future.
iii) Evaluating the performance of management.
Second: financial analysis steps, the beneficiaries of it, sources of information analysis, and the types
of financial analysis:
1- Financial analysis steps:
There are specific steps used by financial analyst in the process of analyzing and perhaps
most important are the following:
a - Identify purpose or objective of the analysis and this relates to the decision of the
administration about what work you want do you want to evaluate final performance, or do you
want to analyse the project's ability.
Meet its obligations under way as often happens in banks, for example, when you want to give
a loan to a facilities, or intended an analysis of the productivity of labour, and other targets.
b - The analyst then collect the information required by the type of analysis, the goal was the final
analysis, performance evaluation, the analyst collects data on expenditure and income for a
certain period and identify the key indicators that have a significant role in the performance of
the project, such as sales or production.
c- Then moves analyst then to determine which tools will be applied in the analysis process this
regard, of course, the scientific and technical level of the analyst and the extent of his
experience in the field of analysis.
d - Here the analyst using relevant data in order to reach a certain benefit indicators in the analysis
process.
e - Having access to certain indicators will analyze these indicators in order to see the direction of
these indicators in the future.
f - Ends analyst to writing its findings and recommendations in the form of a report to be
submitted to the agency that requested the analysis.

3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 4, April (2014), pp. 34-37 © IAEME
36
3. SOURCES OF INFORMATION FINANCIAL ANALYSIS
Data sources can be divided into financial analysis to two sources:
A - Internal sources:
It sources from inside the facility, which is the accounting and statistical information,
administrative and economic.
B - External sources:
The all sources that are outside the facility and perhaps most notably capital markets and
offices stock brokers and bodies, specialized newspapers and magazines and various state
departments that have a relationship such as the Ministry of Planning and the Ministry of Economy
and the Ministry of Finance and statistical systems.
Additionally should identify levels of profitability and performance in different sectors as
well as the sector in which the entity operates analysis to be carried out in addition to some of the
legislation related to taxes and customs duties and other, as well as the economic conditions should
be known from recession and inflation and other vogue.
CONCLUSION
1- After a performance evaluation for Cement Acc Company unclear how effective and accurate
financial analysis tools to track paragraphs costs and analysis, for example, in addition to
compare each paragraph of the budget and costs with the same paragraph during the three
years (2009-2011), or compare costs with profits. In addition to that, the charts and graphs that
reflects the results of the analysis the best images and can - from a simple knowledge in this
area - to be a good idea for this company just by looking at these graphs.
2- The process of evaluating performance of great benefit to this, most companies, including the
company under study publicly report include a balance sheet and income statement and cash
flow as well as some of the details and financial ratios and comparisons, which explains the
nature of the company's activity. In order to strengthen the company's position in the market
and for investors to buy shares, but the company after all not made charts and graphs illustrate
the company's performance, and as we know, the charts and graphs give a clearer picture and
also leave an impact and impression more to the recipient, as the images are concentrated in
the mind more than other means as media experts say.
3- There is great interest in highlighting the pros and the economic and social status and
contribution to this company or those in the process development and all that represents the
state media have an impact individuals particularly investors. This, of course, as a result of the
use of financial analysis tools. So should the companies and the company the subject of the
study that emphasizes the social aspect and media because of their significant impact on the
hearts of members of the community.
REFERENCES
1. Gunnar, Rimmel & Christian, Nielsen (2006). Företagsekonomi, Studentia, Sweden.
2. Olsson, Karl O. & Olsson, Magnus (2006). Finansiering, Sweden, Goteborgs Universitet.
3. Modern trends in financial analysis (2004) op said .p(26), prof.drwalidnajihayali.

4. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 4, April (2014), pp. 34-37 © IAEME
37
4. Saudi Accounting Association (2005) and role of accounting information in the stock markets,
op cit, p 23 'HayaliWalid and duck' Mohamed Osman (1996) Financial Analysis 'source
previously mentioned' p 172.
5. S. Angappan and Dr. J. Clement Sudhahar, “An Empirical Examination of Corporate
Social Responsibility on Financial Performance - A Survey of Literature”, International
Journal of Management (IJM), Volume 5, Issue 1, 2014, pp. 63 - 70, ISSN Print: 0976-6502,
ISSN Online: 0976-6510.
6. Dr.V.Sarangarajan, Dr.A.Ananth and Dr.S.A.Lourthuraj, “Financial Performance Efficiency
of Select Cement Companies in Tamil Nadu”, International Journal of Advanced Research
in Management (IJARM), Volume 4, Issue 1, 2013, pp. 34 - 44”. ISSN Print: 0976 – 6324,
ISSN Online: 0976 – 6332.
7. Essential of Financial Analysis by George F. Friedlob, Lydia L. F. Schleifer.
8. Vasanth Vinayagamoorthi, Selvam Murugasen, Lingaraja Kasilingam, Karpagam
Venkatraman and Gayathri Mahalingam, “Environmental Management Accounting – A
Decision Making Tools”, International Journal of Management (IJM), Volume 3, Issue 3,
2012, pp. 144 - 151, ISSN Print: 0976-6502, ISSN Online: 0976-6510.
9. Dr. Jaydeepchaudhri and Pinkal Shah, “Financial Astrology: An Unexplored Tool of Security
Analysis”, International Journal of Management (IJM), Volume 4, Issue 2, 2013, pp. 22 - 30,
ISSN Print: 0976-6502, ISSN Online: 0976-6510.
10. Management accounting dr.maheshkulkarni /dr .suhasmahajan /university of pune.
11. http://www.saiuae.gov.ae/.
12. Turkistani, Anissa (2007).(www.anisaht.com).
13. www.saa.org.sa.
14. www.cgap.org.
15. www.saiuae,gov.ae.
16. http://en.wikipedia.org/wiki/Financial_ratio.
17. http://www.gulfbase.com/AR/InvestmentTutorial/SubSection?id=55&SectId=107.
18. http://www.kantakji.com/fiqh/Files/Accountancy/1204.doc.
19. www.acclimited.com/newsite/finance/annual_report_2010.pdf.
20. www.acclimited.com/newsite/finance/annual_report_2011.pdf
21. www.acclimited.com/newsite/heritage.asp.
22. www.http://en.wikipedia.org/wiki/Financial_statements.
23. www.arabosai.org.