Diagnosis Of Financial Position By Balance Sheet Analysis - Case Study

This study aims to elucidate and to exemplify an important technique for assessing the economic entities, namely the fundamental analysis of the balance sheet, in several significant aspects. The analysis of financial data reported in the balance sheet are, for an economic entity, the basis of a principle diagnosis by determining specific indicators of economic and financial analysis. This analysis aims to provide an insight into the companyâ€(tm)s financial position. The stated aim of this study is to highlight the usefulness and necessity of the Balance sheet analysis as the first step for the good financial management of an enterprise. The analysis in this paper is based on an updated and specific bibliography of economic and financial analysis, which, by using real data, interprets computed indicators on the main balance sheet items. Thorough analysis is then followed by financial stability assessment expressed by calculating and interpreting the Working Capital and finally by studying the rates of financial profitability (ERR, return on equity and return on assets). The case study research is dynamically conducted over a period of four years and it substantiates a diagnosis on the companyâ€(tm)s financial condition background and thus, we conclude that our analysis may reveal a true picture of the financial position and stability of an economic entity, resulting the importance and usefulness of studying the balance sheet.