Every organisation has a purpose and it is generally stated in the form of mission or vision statement. To achieve this purpose, organisations need finance, which is raised from the capital market through debt or equity and such capital is raised either directly from the investors or through intermediary institutions like Banks. Once capital is raised, the capital is invested in assets, which can be broadly classified into fixed and current assets. Several factors determine the choice of assets and proportion of investments in different types of assets. For instance, banking industry will invest less on real fixed assets whereas automobile manufacturer would invest substantial part of the capital to buy fixed assets. After raising capital and acquiring assets, the business unit runs the operations and generates revenue. Since most business units are started with an objective of making profit, many of them might report profit. What is the role of accounting in general when firm performs certain activities to achieve the goal? Accounting statements typically reflect the above activities and allow the managers to examine whether their plan or strategy has resulted in positive impact on the company or not. Balance Sheet, Profit and Loss Account and Cash Flow Statements are three principal financial statements and they reflect the above activities. Balance Sheet explains where from the organisation has raised money and where they have invested the money. Profit and Loss account explains how efficiently the assets of an organisation have been used and what is the net outcome of the operations in monetary terms. Cash Flow Statement provides operational outcome, capital raised and where they are used but all in terms of cash.

This course is very useful for students and bankers to enhance the knowledge on financial analysis pertaining to banking. This course discusses about the financial ratios in particular to banking industry.

Students are also requested to go through the question and answer provided at the end to get better insight.