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Financial Module

Author/Source: VSB Technical University of Ostrava

Format: URL

Cost: FREE


Description

The purpose of this tool is to assess the financial health of the organisation by predicting the probability that the firm is going into bankruptcy. It is based on Altman’s Z-Score (ref), Kralicek Quick Test (ref) and DuPont Analysis (Ref) that are commonly used by banks and other financial institutions to check the financial health of any business. These analyses are also used by other investment and funding agencies to assess the financial health of the organisation.

This is a software based tool both in Excel for download and web application with a user friendly interface.

The key inputs are: Balance sheet, Profit and Loss Account and Cash Flow Statement. These can be either manually entered or electronically transferred from a spread sheet or companies accounting package. The app/tool then applies the Altman, Kralicek and DuPont analysis in the background. This involves horizontal (temporal analysis across a number of years) and vertical (within a year) analysis techniques as well as a differential ratio analysis (using a mixture of vertical and horizontal analysis). The output of the analysis is interpreted by using Altman, Kralicek and DuPont’s economic models to come to conclusions with regards to financial health of the company. The outputs include evaluation of financial ratios, bankruptcy prediction and ROE.



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