ECONOMIC ANALYSIS OF ACCOUNTING INDICATORS IN THE FUNCTION OF MAKING A DECISION ON LOAN AND BORROWING

Abstract

The process of making a decision on borrowing a company on the basis of a loan is based on the application of a complex procedure, where several reports from the accounting sector are included in the analysis and decision-making on lending. Also, on the part of creditors, within the credit analysis, the financial and market aspect of the company's business is processed in detail. Financial analysis significantly influences the positive decision on loan approval, but in combination with other analysis, the final decision on loan approval is made. In addition, the credit analyst pays special attention to the way of identifying risks and risk exposures of companies in their business. When applying for a loan in a bank, the company should enclose all the necessary documentation and be available to the bank for all necessary information. By applying a complex banking procedure, all relevant aspects of the company's operations that are important for making a decision on approving a loan are analyse. The market and the industry in which the company operates are analysed, and the financial analysis is performed by calculating the most important ratio indicators in the previous three-year period. Credit analysts specify the risks to which a company is exposed in its business, all in the function of making a decision on lending to companies. This paper discusses the economic analysis of accounting indicators in the function of making a decision on a loan, from the point of view of creditors, most often commercial banks. The aim of this paper is to point out the importance of purposeful analysis of accounting indicators, especially financial reports, on the basis of which the analysis of business performance is performed, with the aim to make credit decisions based on established analysis results. by management. The methodology applied during the preparation of this paper is suitable for research in the social sciences, in general, but also specifically for the area that the paper explores, and these are specific accounting techniques and elements needed for economic analysis. The results we obtained during the research confirm the goal of the research: up-to-date, qualitative and quantitative accounting of business changes is the only real basis on which operations with data from accounting reports are possible, which are related to economic analysis of business changes and business flow planning. Well-organized accounting business with timely and credible accounting coverage of business changes provides good information for business analysis and, more importantly, the basis for planning future business activities, which is the main conclusion of this paper. The recommendation for future research, but also for business practice, refers to the constant insistence on efficient and effective analysis of accounting reports in the segment related to lending and decision-making on corporate borrowing in the financial market.