Financial Analysis

Introduction

Financial analysis is a key instrument to assess the practicability, stability and profitability of an enterprise, project or any other kind of business.

Usually it is performed by the experts whose task is to reports taking into account ratios based on financial statements and other official documentation. The purpose of such reports is to be the base for making key business decisions.

Financial analysis assesses such aspects of a company’s activity as profitability, stability, solvency, and liquidity.

The basic methods of financial analysis include past performance (analysis of a company’s activity across different periods of time), future performance (making financial predictions based on certain statistical techniques), and comparative performance (comparison between different companies in the same field of activity).

Discussion

Though the majority of the people hardly ever looks at the governmental audited financial report. However, it is quite possible to get reliable financial information about local government (government of New Jersey) from open public sources.

The experts state that an annual independent audit is necessary for the successful financial management. The task of the Office of Legislative Services (OLS) is to periodically issue the latest analysis of State government revenue collections data in New Jersey. OLS periodically issues the Revenue Snapshot – a brief report including the narrative summary of major tax collection trends in the fiscal year, and a table that compares revenues in the current fiscal year to the similar amount received at the same point in the past fiscal year. All the revenue resources reported in the Snapshot are fees or taxes (except for New Jersey Lottery receipts). The OLS Revenue Snapshot includes only those financial data that are received on the fairly even basis throughout the year, accounting typically for about 80% of the State’s annual budgeted revenues.

The OLS snapshot and analyses are based upon actual cash receipts, as compiled by the Department of Treasury. However, the OLS Snapshot differs from the report of the Department of Treasury in the way that it does not include a current month accrual or “earned” estimate for those taxes that are transmitted to the State on a delayed basis.

The OLS snapshot represents a report about major revenues received and not a prediction of future revenues. In 2011 the general state expenditures of New Jersey exceeded $ 5 billion (Rivenbark, Roenigk, Allison, 2009).

Conclusion

Taking into account the stated above facts, it should be recommended that the local government of New Jersey makes a stronger effort to keep the state community timely and completely informed about their operations. New Jersey residents are given the right to be properly informed about all operations, finances, public meetings and leadership of all governmental organizations funded with public money.

Unfortunately, more than one third of governmental organizations in New Jersey do not maintain any web page. This makes monitoring of the financial activity of the government of New Jersey more complicated for the wider community. Thus, it can be insistently recommended to the governmental organization to make the reliable financial information widely available.

References

Data Analysis: Analyzing Data – Ratio Analysis. Texas …
Posted by: Min Brust

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