METHODOLOGICAL ISSUES OF THE ANALYSIS OF THE FINANCIAL RESULTS OF THE ENTERPRISE

Authors

  • Rositsa Ivanova UNWE – Sofia, Republic of Bulgaria

Keywords:

profit, values, methodology, analysis, factors

Abstract

Profit is a key economic category. Enterprise’s profit is an important absolute indicator that describes the efficiency of the overall business of the enterprise. By comparing the profit with the respective reference, we define a number of important relative indicators that demonstrate the business efficiency. These are the return indicators calculated on different bases (assets, invested capital, equity, fixed capital, revenue, costs, etc.). The above background gives rise to the relevance of issues related to the analysis and evaluation of the enterprise’s financial performance. The object under consideration in the publication refers to the different values of financial performance: accounting profit or loss; tax profit or loss; balance sheet profit or loss; operating profit or loss of the enterprise. As a subject of this study we can define the methods for analysis of different values of profit or loss of the enterprise, respectively. The tasks identified for the achievement of this objective may be systemized as follows: 1) identification of the deviation of the balance sheet financial performance for the current period in comparison to the reference period (previous period, business plan, etc.); 2) analysis and evaluation of the impact of the direct factors on the deviation of the balance sheet financial performance for the current period in comparison to the reference period; 3) based on the information obtained as a result of the analysis, one can identify measures that the management should implement in order to improve the financial performance and to achieve financial stability of the enterprise from operational and strategic point of view. The analysis of enterprise’s financial performance is made on the basis of the accounting information. Data that are necessary for the analysis of both accounting and balance sheet financial performance are contained in the enterprise’s statement of income and expenses. In general, this is an external analysis as it is carried out on the basis of the enterprise’s financial statements, which are public. The information necessary for the analysis of the financial performance from sales of products, respectively goods and services, is accounting information created within the enterprise. This is internal information generated as a result of the synthetic and analytical accounting and the trial balances with regard to the calculation of the sales financial performance. The analysis of financial performance from sales of products, goods and services is a typical internal analysis. The information resulting from this analysis is of confidential nature and is intended for use by internal users of information only.

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Published

2022-03-30

How to Cite

Ivanova, R. (2022). METHODOLOGICAL ISSUES OF THE ANALYSIS OF THE FINANCIAL RESULTS OF THE ENTERPRISE. KNOWLEDGE - International Journal , 51(1), 51–57. Retrieved from https://ikm.mk/ojs/index.php/kij/article/view/5038

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