| Abstract |
New entrepreneurs generally struggle to sustain their business in the first few years due to financial
management incompetency. Their inability to provide analyses for the overall business conditions such as
profitability, liquidity, efficiency and leverage eventually leads the business to failure. The Ratio Analyser
(RAN) is an analysis tool that enables its user to run ratio analysis for the business. The tool uses
forecasted figures to oversee their business ability in terms of future performance including profitability,
liquidity, efficiency and leverage ratio. It provides initial prediction for business performance based on the
financial management analysis. In addition, RAN provides adjustment recommendations for cost and
selling price to breakeven. Entrepreneurs will be able to expect the performance of their business, which
improves decision-making processes related to financial management. This effectively reduces the
business risk. RAN is highly effective as a fundamental tool for SWOT, and Investment Cost and Benefit
analyses for new businesses. Investors would also greatly benefit in using this tool when screening for
businesses with optimal potential. In relation to the academic syllabus, ratio analysis is one of component
in Business Proposal for Fundamentals of Entrepreneurship (ENT300) subject. Students can transfer data
from their forecast financial statements to RAN and will be able to oversee their business performance. It
also beneficial for students in running fundamental analysis of the company for investment decision as
taught in various accounting, financial and business subject such as Investment Management and
Fundamentals of Finance. Furthermore, higher education institutes may implement the tool for training
students in accurately assessing business performances as part of their syllabus. |