Financial Analysis and Compliances

In order to put in simple words, financial analysis is finding out whether the project or business is financially viable. Typically financial analysis is carried out using innumerable financial ratios. Broadly these financial ratios can be classified as activity, profitability, solvency, liquidity, valuation and credit ratios. As their names suggest, these ratios when used interchangeably help infer the pre-decided goals of financial analysis. These ratios when evaluated are compared to their past performances or ratios of another company to conclude the in progress financial analysis.

Financial analysis or such ratio evaluations are carried out whenever a company plans a merger, an acquisition, a business partnership, an investment or a bank loan. In India companies, undergoing such acquisition processes, need to undergo financial analysis or valuation to determine the value of the entity of due diligence. That is, due diligence is the process by which the entities or organizations entering a major transaction are completely investigated. Due diligence India is a recent practice. However there are many companies providing due diligence services. These services include identifying legal and contractual matters as well as finding out issues related to the documentation and structuring of transactions. Focus is laid on hidden cost and commitments, tax exposures are quantified. The service providers have a close look at the business plan and spot out liabilities that could tilt the deal in favor of their client. That is, they check if there are any risks involved as also make sure that the business plan mentions the issues and the impact they will have on the transaction. They further try to determine if the mentioned risks will allow their client to negotiate and have a better position in the transaction. With the fast growing companies catering to risk management services in India, these risks can be taken care of at the right time.

Another important parameter while analyzing a company for a takeover or merger or investment or partnership is to make sure if the company is compliant with the rules and regulations of the governing authorities in the country of business. Compliance review plays an important role to assure this compliance of the organizations. In India, Compliance service companies take care of multiple compliance requirements. These requirements range right from the inception of the company to its takeover or merger or till the company is an ongoing concern. Compliance service India includes not only monthly but also quarterly, yearly and a year on year basis of monitoring. They require monitoring the requirements related to Income Tax, Profession Tax, VAT, Service Tax and Excise Tax. Apart from these few, there are other requirements too that these compliance service companies need to monitor.

Just as important as due diligence and compliance review services, the risk management services are also critical. Risk management services India helps companies achieve better shareholder value, greater decision making capabilities and excellent internal control. All these services together help companies progress towards achieving the challenge of managing risks effectively by good decision making, thus creating greater value for its shareholders.

Resource Box: For the best compliance and risk management services India, consult RSM Astute Consulting which is superior amongst all.

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