ANALYSIS OF SHORT-TERM FINANCIAL POSITION -A CASE STUDY OF RANBAXY LTD

A financial statement is a collection of data organized according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspect of a business firm. Financial analysis (also referred to as financial statement analysis or accounting analysis) refers to an assessment of the viability, stability and profitability of a business, subbusiness or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decision. The present paper explains in detail the analysis of financial statements of Ranbaxy ltd. It provides insights into two widely used financial tools, ratio analysis and common size statements analysis. The objective of this paper is to help the reader understand how these tools should be used to analyze the financial position of a firm. To demonstrate the process of financial analysis, Ranbaxy Limited’s balance sheet and income statements are analyzed in this paper.