Procedure for Analyzing Financial Statements

Oct 13, 2025 by wbrum.org 74 views

Introduction

The granting of credit by banks to customers is a crucial aspect of the economy, and it is not just a simple financial transaction. It is a complex process that involves a broader relationship between the bank and its customers. The purpose of providing credit is often blocked by the emergence of problems, such as problem loans or bad credit. This encourages the need for careful consideration and in-depth analysis of the bank before giving credit to the public. One effective method of assessing customer feasibility is through financial statement analysis, which aims to minimize the risk of loss.

In the decision-making process regarding credit granting, banks require customer financial statements to be analyzed and evaluated. The report can provide an overview of the customer's financial position and its capacity in paying off loans at maturity. This study aims to evaluate how PT. Bank Rakyat Indonesia (Persero) Iskandar Muda Branch Medan analyzed financial statements as a basis for making credit decisions.

Methodology

In writing this thesis, the author uses descriptive studies that use primary and secondary data. Data is collected through observation and interviews with related parties. The analysis method used is descriptive, which allows the writer to organize and analyze data so as to provide a better understanding of the problems encountered.

Procedure for Analyzing Financial Statements

From the analysis conducted, the authors found that the procedure for analyzing financial statements in providing credit at this bank had been carried out well. Both in terms of administration and juridical aspects, the bank has implemented a structured and effective procedure. This significantly reduces the possibility of bad loans.

Importance of Financial Statement Analysis

In analyzing credit feasibility, banks are expected to stick to the basic principles of credit granting. One of them is the search for comprehensive facts to ensure the decisions taken are not only right, but also professional. Thus, the credit granting process can run more smoothly, and the risks faced can be minimized.

Benefits of Financial Statement Analysis

Overall, financial statement analysis is an important step in making credit decisions. With a systematic approach and based on accurate data, banks can minimize risk and increase opportunities for success in credit relations with customers. Through this research, it is hoped that the bank can continue to improve their performance in terms of credit analysis, as well as building trust with their customers.

Case Study: PT. Bank Rakyat Indonesia (Persero) Iskandar Muda Branch Medan

The case study of PT. Bank Rakyat Indonesia (Persero) Iskandar Muda Branch Medan provides a real-life example of how financial statement analysis can be used to make credit decisions. The bank has implemented a structured and effective procedure for analyzing financial statements, which has significantly reduced the possibility of bad loans.

Conclusion

In conclusion, financial statement analysis is an important step in making credit decisions. With a systematic approach and based on accurate data, banks can minimize risk and increase opportunities for success in credit relations with customers. This study has provided a comprehensive overview of the procedure for analyzing financial statements in providing credit at PT. Bank Rakyat Indonesia (Persero) Iskandar Muda Branch Medan, and it is hoped that the bank can continue to improve their performance in terms of credit analysis, as well as building trust with their customers.

Recommendations

Based on the findings of this study, the following recommendations are made:

The bank should continue to improve their performance in terms of credit analysis, as well as building trust with their customers.
The bank should implement a more comprehensive and systematic approach to financial statement analysis.
The bank should provide training and development programs for their employees to improve their skills and knowledge in financial statement analysis.

Limitations of the Study

This study has several limitations, including:

The study is based on a single case study, which may not be representative of other banks.
The study only analyzed the procedure for analyzing financial statements in providing credit at PT. Bank Rakyat Indonesia (Persero) Iskandar Muda Branch Medan, and did not consider other factors that may affect credit decisions.
The study only used primary and secondary data, and did not use other sources of data, such as expert opinions or industry reports.

Future Research Directions

Future research directions include:

Conducting a comparative study of the procedure for analyzing financial statements in different banks.
Analyzing the impact of financial statement analysis on credit decisions.
Developing a more comprehensive and systematic approach to financial statement analysis.

Conclusion

Q: What is financial statement analysis?

A: Financial statement analysis is the process of analyzing a company's financial statements to understand its financial position, performance, and future prospects. It involves examining the company's income statement, balance sheet, and cash flow statement to identify trends, patterns, and anomalies.

Q: Why is financial statement analysis important in credit decision-making?

A: Financial statement analysis is important in credit decision-making because it helps lenders assess the creditworthiness of a borrower. By analyzing a borrower's financial statements, lenders can determine the borrower's ability to repay the loan, the level of risk involved, and the potential return on investment.

Q: What are the key components of financial statement analysis?

A: The key components of financial statement analysis include:

Ratio analysis: This involves calculating various financial ratios, such as the debt-to-equity ratio, current ratio, and return on equity, to assess a company's financial health and performance.
Trend analysis: This involves analyzing trends in a company's financial statements over time to identify patterns and anomalies.
Comparative analysis: This involves comparing a company's financial statements with those of its peers or industry averages to assess its relative performance.
Industry analysis: This involves analyzing the financial statements of companies within a specific industry to identify trends and patterns.

Q: What are the benefits of financial statement analysis?

A: The benefits of financial statement analysis include:

Improved credit decision-making: Financial statement analysis helps lenders make informed credit decisions by assessing a borrower's creditworthiness.
Reduced risk: Financial statement analysis helps lenders identify potential risks and mitigate them.
Increased return on investment: Financial statement analysis helps lenders identify opportunities for investment and maximize returns.
Enhanced reputation: Financial statement analysis helps lenders build a reputation for making informed and responsible credit decisions.

Q: What are the limitations of financial statement analysis?

A: The limitations of financial statement analysis include:

Subjectivity: Financial statement analysis is subjective and may be influenced by the analyst's biases and assumptions.
Limited information: Financial statement analysis may not provide a complete picture of a company's financial health and performance.
Time-consuming: Financial statement analysis can be time-consuming and may require significant resources.
Complexity: Financial statement analysis can be complex and may require specialized skills and knowledge.

Q: How can financial statement analysis be improved?

A: Financial statement analysis can be improved by:

Using advanced analytical techniques: Using advanced analytical techniques, such as data mining and machine learning, can help improve the accuracy and efficiency of financial statement analysis.
Using big data: Using big data can help provide a more comprehensive picture of a company's financial health and performance.
Using industry benchmarks: Using industry benchmarks can help provide a more accurate assessment of a company's financial performance.
Using expert opinions: Using expert opinions can help provide a more informed and nuanced assessment of a company's financial health and performance.

Q: What are the future directions of financial statement analysis?

A: The future directions of financial statement analysis include:

Integration with artificial intelligence: Integrating financial statement analysis with artificial intelligence can help improve the accuracy and efficiency of credit decision-making.
Use of blockchain technology: Using blockchain technology can help improve the security and transparency of financial statement analysis.
Use of machine learning: Using machine learning can help improve the accuracy and efficiency of financial statement analysis.
Use of big data: Using big data can help provide a more comprehensive picture of a company's financial health and performance.