Scope of Financial Analysis in IndiaJuly 26, 2018
Advocacy of Foreign Direct Investment in India deployed opportunities of immense proportion that aided in the articulation of a new future encapsulating evolution of repressed business regimes in India. Nation extended its arms with pockets and excuses to suffice in a subtle business scenario that once had a notion and an attitude of an orthodox individual that digressed the opportunity for some time. FDI underwent critical empowerment and upgradation, and about 25 sectors became more prone to FDI and its impact than ever. Initiatives like “Make in India” further catalysed the process and company rolled their money and tangibility with an ascertain projection and hope in the evolving economy. Under the dominion of such pro-competitive market and cost-intensive environment with a sharp eye on profitability and margins, Financial Analysis finds its existence in the most authentic propensity. With the amplified foreign investment and stakeholders, the predicament sphere has to be normalised and offset mode should be incorporated so that the glean of companies enslaving trust in the economy doesn’t come under the bridge with weak foundations.
Financial Analysis acts as damage control for the companies so that the tides don’t upset the throttle of the company to evolve in the business arena hence to restore and majorly revive the situation to bracket the damage to confine it in a closed forum is amalgamated through Financial Analysis.
Also Read: What Are The Careers in Financial Analysis?
India is ordinarily designated and caricatured as a Developing Economy that still requires a higher degree of potent introspection to match the expectations of stakeholders, and hence financial analysis tools such as Ratio Analysis helps in assisting the economy. An informed analysis aid in better investment which subsequently results in better profits and therefore in a country like India, the revival of the economy stands a better chance with the help of better tools at hand leading to the carving of a profitable investment. For starters, Financial Analysis imply explicitly even to the amateurs in the investing domain about the current position of the organisation regarding their ability to pay short-term debts and liabilities in the company and the current ratios and Quick Ratios can correctly demonstrate this by analysing the previous trends in their assets and liabilities. Similarly, Debt Ratios dictate the financial position of the company. Here the accumulation of asset is garnered through the supporting pillar, i.e. debt. Which is critical and require monitoring to constrain it in the prescribed boundaries of company policy else the disruption is outraged due to the ignorance towards thee thrusting debt, which eventually gave rise to massive hoarding of liabilities that put the company in an insolvent mark which lays an impact in the growing economy. Hence the escalation alienation of the company’s relevance and standards in the market is interconnected to the economic growth which further entails that the falling brick may move also put the existence of the whole castle into jeopardy.
Amidst many attributes assigned to India, outsourcing service is one such domain where India emerges as a leading player, a proper example, in this case, can be the information technology(IT) industry where India is the renowned name and hence an enormous girth of scope fabricates in the form of opportunity. In this sector as well where an analysis routing toward the insights and prepositions that marks the outset of some fruitful results gets intoned in the whole system, and hence the Financial Analysis finally surfaces as a deterrent to the falling economy through encouraging and persuading the global investor that fuel the growing economy forward with a robust trust.