Financial Performance Analysis of Finance Company: A Case study on “IDLC Finance Ltd”

Abstract

Financial performance evaluation is an important measure of the health and stability of a financial institution. It analyzes various financial statements, ratios and indicators to assess a company’s past performance and future prospects. Literature review summarizes the basic concepts and principles of financial performance analysis and IDLC Finance Ltd’s core concepts and principles. Financial statements are the primary sources of information for evaluating the financial performance of a company. The three main financial statements are balance sheet, income statement and cash flow statement (Palepu, 2010). This information provides insight into the company’s financial condition, profitability, cash flow and liquidity management. IDLC Finance Ltd. For me, analyzing this information will help assess the company’s financial health, capital structure and ability to manage cash flow for profitability. Ratio analysis is a powerful tool for evaluating a company’s financials by comparing key financial ratios (Brealey et al., 2018). Commonly used financial ratios include returns (such as return on assets and return on investment), liquidity ratios (current ratios, ratios of disposal). speed of execution), leverage ratio (cost and liquidity ratio), and efficiency (asset turnover). , income adjustment) ( Brigham & Houston, 2012). IDLC Finance Ltd. By calculating and analyzing these ratios for is, we can identify trends, compare a firm’s performance to industry peers, and assess its financial strengths and weaknesses. Various financial performance measurement models have been developed to assess a company's overall financial health and performance. The balanced scorecard, for example, considers not only financial metrics but also non-financial factors such as customer satisfaction, internal processes, and learning and growth (Kaplan and Norton, 1992). Applying these models to IDLC Finance Ltd. will provide a holistic view of the company's performance and help identify areas that require strategic attention.