Analysis of income and expenses of the organizationcharacterizes the financial condition of the company at the end of the reporting period. It reflects the data on incomes, expenses and other financial results. The analysis of expenses and incomes of the enterprise represents to external users the information on sources of profit or about the reasons of loss and opens the general picture about results of activity of the company.
Analysis of income and expenses of the organizationIt is used not only to evaluate the results of its activities for the reporting period, but also to draw up a forecast of its future activities. The forecast of future results is very significant for investors, since it means the possibility of profit in the future, for creditors, a positive outlook, above all, means the possibility of paying the debt amount with interest. If the company's activities are expected to be unprofitable, the situation is estimated as the impossibility of paying the debt with interest, and it is unlikely that some kind of bank will agree to issue a loan to this organization. When analyzing 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 activities of the enterprise. The requirement to provide information on discontinued operations, on transactions with affiliated entities, on the compilation of segmental reports, on the reflection of events and conditional facts. These and other facts allow you to make an accurate forecast of the company's work for the future. Analysis of the organization's income allows you to determine the profitability of an enterprise and plan its revenues.
Having received reliable information on activitiesobject for the previous period, you can learn to develop the right management decisions, programs and business plans for the future. In the conditions of a market economy, it is very important to calculate the financial stability of the enterprise, that is, to ensure a state of financial resources in which it is possible to freely manipulate funds and ensure the uninterrupted production process and the unhindered sale of products as a result of their use. The boundaries of financial stability of an organization are considered to be the most important factor in a market economy. Insufficient financial stability leads to insolvency, to a shortage of cash, and subsequently to bankruptcy. Excessive financial stability leads to a slowdown in development, reducing profits and increasing the time of capital turnover.
Analysis of income and expenses of the organization allowsjustify the parameters of such stability, but does not give an opportunity to judge the financial state of the company at the moment. Analysis of income and expenditure 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 wide variety of information on the activities of the enterprise, which is most often used in financial reporting documents. And these data do not in any way affect the judgment about the state of affairs in the enterprise, but their precise analysis needs to be processed.
Its main goal is to obtain basicinformative parameters that give an accurate and objective picture of the company's revenues and expenses for a certain period. Analysis of the movement of finance allows you to provide a comprehensive assessment of all economic activities and track the main trends of its development. An analysis of the organization's income and expenses is an important part of the strategic plan, according to which an enterprise can survive for a long time.