Limitations Of Financial Management Analysis

The correct and complete financial analysis data provided by the financial analysis can check the implementation of the accounting law system, promote the correct handling of financial relations in all aspects, and safeguard the legitimate rights and interests of investors, creditors and other interested parties. National macro economy Administrative department And investors, through the information provided by financial analysis, can also solve the effective allocation of limited resources among enterprises, maintain market order and ensure effective operation of the market.

Since the reform and opening up, the market economy has been given to China. financial analysis The improvement has created a good external environment, and great progress has been made in financial analysis. But for our country, there are still many problems, which are manifested in the following aspects:

　　 (1) enterprise finance Report form Inherent limitations

The data of financial statements are the main basis for financial analysis. Various accounting statements, schedules and annotations, such as balance sheet, profit and loss account, cash flow statement and so on, are the starting point of financial analysis. At present, the financial statements themselves have the following limitations:

(1) financial statements are based on original cost and lack timeliness.

(2) without considering inflation and other factors and price changes, the data imply the risk of excess or depreciation of assets.

(3) the financial statement data do not take into account the change data between the beginning and the end of the year and the irregular changes in the whole year, which makes the scientific comparison between the data difficult.

(4) the balance sheet is different from the time concept reflected in the profit and loss account. Comparing the data of the two tables in the form of ratio, the degree of comparability is inconsistent.

(5) at present, China's accounting statements have not yet analyzed and evaluated human resources, and these contents are of great reference value to decision-making.

　　 (two) limitations of financial analysis methods

First, there are two basic methods of financial analysis: ratio analysis and comparative analysis.

Second, in terms of comparative analysis, comparability is the soul of comparative analysis. That is to say, only comparable indicators can be valuable by comparative analysis. Because of the limitations of the data, the data of different enterprises and even the same enterprise in different periods are not comparable. In this sense, the application of comparative analysis is bound to be limited.

Third, the choice of accounting policies such as accounting treatment of enterprises will affect the use of accounting methods.

　　 (three) limitations of financial analysis indicators

China's financial indicators lack a unified and general standard. At present, some newspapers and periodicals provide financial data of some industries. There are many problems such as rough division of industries, large sampling error and lack of representativeness.

In addition, China's financial analysis index ignores the analysis of asset liability ratio and investment return, and does not include liquidity indicators and risk indicators as necessary. As a result, accounting statements are difficult to disclose detailed information, making it difficult for users of accounting statements to obtain information such as inventory structure, asset structure, lot size and seasonal production changes.