Overview of the study (FSA) Challenges of FSA for BPOs Findings

Chris Naval

Financial Statement Analysis

meet external reporting obligations speak of the company performance and activities no meaningful conclusions can be drawn from these statements alone decision making purposes Financial analysis is the scaffold of managerial decisions

Also known as Offshore BPO BPO is the transfer of business processes from one company to the other BPO companies are external companies that accept BPO contracts low-cost human resource eliminates human resource dilemmas

Comparison of the portfolio of outsourced services Absorbs a lot of sudden changes Collection of information Conveyance of information Different approach in analysis due multi-departmental environment Risks for new projects

Theoretical Framework Conceptual Framework

Comparability Accounting Limitation

Financial Ratio Limitations Need to Look Beyond Numbers

Differences in accounting methods Estimates and assumptions Intrinsic Value versus Market Value

Basis on the time when those data are gathered

Challenge of avoiding window dressing techniques Companies wanting to be better than average Taking note of risks Amount or scale of the data analyzed Other ratios looks good and others that look bad

Companies that are operating in a highly changing competitive environment Firm that operates in different divisions and industries Different companies that operate in different industries each having different market conditions Users are more concerned about current and future information Generates more questions

AccountingExplained.com. Advantages and Limitations of Financial Ratio Analysis. 2011 <http://accountingexplained.com/financial/ratios/advant ages-limitations> B. Bryant, The Advantage & Disadvantages of Financial Statement Analysis, 2011 <http://www.ehow.com/list_5770990_advantagedisadvantages-financial-statementanalysis.html#ixzz1VjR57iXM> Brigham E, Houston J, 2004, Fundamentals of Financial Management, Tenth Edition, page 97 -101 CliffsNotes.com. Financial Statement Analysis Limitations. 5 Sep 2011 <http://www.cliffsnotes.com/study_guide/topicArticleId21248,articleId-21214.html>

FinancialStatementAnalysis.org. Financial Statement Analysis. 2011 <http://www.financialstatementanalysis.org> Garrison R, Noreen E, Brewer P, 2008, Managerial Accounting, Twelfth Edition, page 717 K. Redman, Pros and Cons of a Financial Statement Analysis, 2011 <http://www.ehow.com/list_5885702_pros-consfinancial-statement-analysis.html#ixzz1VjS8rDri> Saldana C, 2010, Principles of Managerial Finance: a Financial Analysis Approach, 2nd edition, page 122- 125

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