Financial statement as an indicator: sensitivity analysis of the balance sheet

Abstract

Different interest groups try to gather information about companies for various reasons. Several information types are evaluated and used for the purchasing decisions, for the lending decisions or simply for the efficient overall management of a firm. Among several evaluation tools, Financial Statement Analysis is one of the most widely used and reliable one. Financial Statement Analysis includes several methods. In this study, a new method, sensitivity analysis over the balance sheet is introduced. Within different interest groups, this study is mostly useful for a firm’s management for building a control on the firm's financial structure. In the thesis, first, a summary of descriptions of the existing methods of firm evaluation is given. Then sensitivity analysis with the balance sheet and income statement items over the selected ratios is introduced. A model for sensitivity analysis is developed, and a company application is performed. OZKOKLER A.Ş. and OZÇEGAŞ A.Ş., which are sister companies are selected for case study. The sensitivity analysis is applied to the consolidated financial statements of the above group of companies.OZKOKLER A.Ş. and OZÇEGAŞ A.Ş. are the customers of Impexbank Ankara Branch, and periodic and accurate data of these companies are available. During and as a result this study, * The performance of the firm is examined, * The sensitive items which affect the performance are investigated from the financial statements, * Recommendations for a following new period for better performance, using results of the sensitivity analysis, are given.