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1. SUMMER INTERNSHIP PROJECT ON
“ROLE OF FINANCIAL STATEMENT IN
INVESTMENT DECISION MAKING.”
RISHABH KUMAR BERMECHA AND ASSOCIATES
BY SUHITA SHIL

2. OBJECTIVES
 Financial statements allow investors to evaluate a company's historical performance and
profitability.
 Financial statements provide insights into a company's financial risk profile.
 Financial statements are instrumental in determining the value of a company.
 Financial statements offer insights into a company's historical financial performance,
which can be used to project its future performance. .

3. What is Financial Statement?
 Financial statements refer to the formal records of a company's financial activities, performance, and
position.
 Financial statements are prepared in accordance with accounting principles and standards, such as
Generally Accepted Accounting Principles (GAAP).
 They are prepared periodically (usually annually, quarterly, or monthly) and provide a snapshot of a
company's financial health and results of operations during a specific period. . .

4. Types of Financial Statement
 Balance Sheet or Statement of Financial Position
 Income Statement or Statement of Profit and Loss
 Cash Flow Statement

5. BALANCE SHEET
 A balance sheet is a financial statement that contains details of a company's assets or liabilities at a specific point in time.
 Balance sheets give a quick overview of a company’s financial standing..
 A balance sheet has two sides: assets on one and liabilities and equity on the other..
 Assets = Liabilities + Equity

6. INCOME STATEMENT
 An income statement is a financial statement that shows you the company's income and expenditures.
 An income statement helps business owners decide whether they can generate profit by increasing
revenues, by decreasing costs, or both.
 It also shows the effectiveness of the strategies that the business set at the beginning of a financial period.

7. CASH FLOW STATEMENT
 A cash flow statement is a financial statement that shows how cash entered and exited a company during an
accounting period.
 A cash flow statement is a regular financial statement telling you how much cash you have on hand for a
specific period.
 Cash coming in and out of a business is referred to as cash flows, and accountants use these statements to
record, track, and report these transactions..

8. IMPORTANCE OF INVESTMENT DECISION
MAKING
 Analyzing financial statements, decision-makers can evaluate the company's
profitability, liquidity, solvency, and overall financial stability.
 Examining a company's financial statements, decision-makers can identify companies
with strong growth potential, attractive valuations, or solid financial performance.
 Decision-makers can assess the company's ability to generate cash, manage working
capital, and fund its operations.

9. OBSERVATION AND FINDINGS
 Financial statements allow investors to assess the financial health of a company.
 Financial statements provide historical data on a company's financial performance, allowing investors to
analyze its past performance trends. .
 The cash flow statement in financial statements provides insights into a company's cash inflows and outflows.
 Financial statements enable investors to compare the financial performance of different companies within an
industry or sector.

10. RECOMMENDATIONS & SUGGESTIONS
 Understand Financial Statements
 Analyse Key Financial Ratios.
 Consider Historical Performance
 Assess Risk Factors

11. THANK YOU
BY SUHITA SHIL