Analysis of income and expenses of the organizationdescribes the financial condition of the company at the end of the reporting period. It reflects data on income, expenses and other financial results. An analysis of the expenses and incomes of the enterprise provides external users with information about the sources of profit or the causes of the loss and reveals a general picture of the company's performance.
Analysis of income and expenses of the organizationit is used not only to assess the results of its activities during the reporting period, but also to make a forecast of its future activities. The forecast of future results is very significant for investors, because it means the possibility of future profits; for lenders, a positive outlook means, above all, the possibility of paying the debt with interest. If the activity of the enterprise is expected to be unprofitable, then the situation is estimated as the impossibility of paying the debt with interest, and it is unlikely that any bank will agree to issue a loan to this organization. When compiling an analysis of the income and expenses of an organization, it is necessary to comply with a number of requirements that are used to more accurately forecast the activity of an enterprise. The requirement to provide information on discontinued activities, on transactions with affined persons, on the preparation of segmental reporting, on the reflection of events and conditional facts. These and other facts allow you to make an accurate forecast of the work of the enterprise for the future. Analysis of the organization's income allows you to determine the profitability of the enterprise and plan its income.
Having received reliable information about activitiesobject for the previous period, you can learn to develop the right management decisions, programs and business plans for the future. In a market economy, it is very important to calculate the financial stability of an enterprise, that is, to ensure a state of financial resources in which it is possible to freely manipulate money and ensure the uninterrupted production process and the smooth sale of products as a result of their use. The boundaries of an organization’s financial sustainability are considered the most important factor in a market economy. Insufficient financial stability leads to insolvency, a shortage of funds, and subsequently to bankruptcy. Excessive financial stability leads to a slowdown in development, reducing profits and increasing capital turnover periods.
Analysis of the income and expenses of the organization allowsjustify the parameters of such sustainability, but does not give an opportunity to judge the financial condition of the company at the moment. Analysis of income and expenses is always necessary, regardless of economic relations. An urgent need for such an analysis arises when there is a transformation and reorganization of enterprises or organized-legal structures. It is associated with the processing of a variety of information about the activities of the enterprise, which are most often used in financial reporting documents. Moreover, these data themselves do not affect the judgment on the state of affairs at the enterprise, but their accurate analysis needs processing.
His main goal is to get the maininformative parameters that give an accurate and objective picture of the income and expenses of the enterprise for a certain period. Analysis of the movement of finances allows you to give a comprehensive assessment of all economic activity and to track the main trends in its development. Analysis of the income and expenses of the organization is the most important part of the strategic plan, according to which an enterprise can exist comfortably for a long time.
