The financial statements of a company are a collection of extremely valuable documents. Their value lies in the information that they contain. In turn, using this information, one can rather thoroughly study the activities of an enterprise or firm. So, based on the balance sheet indicators, it is possible to draw conclusions about the financial stability of the organization and its liquidity, and a form that reflects information on profits and losses, that is, the report of the same name, allows you to make a factor analysis of profit from sales and other types of profit. This type of analysis makes it possible to identify those incomes and expenses that had a positive or negative impact on the absolute value of the earned profit. It is on this type of analysis that I would like to dwell in more detail.
Factor analysis of profit from sales, as mentioned above, is carried out according to form 2. It should be borne in mind that not all indicators presented in it affect this type of profit. Obviously, only those indicators that are higher than the profit from sales should be taken into account. After looking at the report form, we identify the following factors: revenue from the sale of products, the cost of the same products, as well as the amount of commercial and administrative expenses. However, it is worth noting that two important factors affect the amount of revenue received: sales and price. Their impact should be assessed separately. To do this, it is necessary to determine the revenue in comparable prices, and only then its change under the influence of the price.
In relation to expenses affecting the profit from sales, their influence is determined by studying changes in the relative level. This level is defined as the ratio of a particular type of expense to revenue for the corresponding period. Then the difference in levels in the reporting and base periods is multiplied by the revenue of the reporting period. Thus, the determination of the impact of cost, selling and administrative expenses.
Factor analysis of gross profit makes it possible to take into account even fewer factors, since the amount of this type of profit is not affected by the sum of managerial as well as selling expenses. By the way, gross profit, strictly speaking, is not entirely correct to call profit, since revenue is not cleared of all costs. It is more correct to call this indicator margin, but we see that historically everything turned out completely differently.
We go further along the studied report and begin to analyze the net profit of the enterprise. Such a study will be more detailed than a factor analysis of sales profit. This is due to the fact that there are many more factors to consider. In addition to those described above, it is necessary to take into account the effect of income and expenses from other activities, as well as income tax. For this, there is no need to determine their level, since it is enough to calculate their absolute change.
It should be noted that factor analysis is not only used to study profits. So, very often conduct factor analysis of working capital, or rather, their turnover. His technique is quite different. This is due to the features of this type of indicators, as they are relative. Most often, when conducting this type of analysis, the method of chain substitutions and some of its modifications are used.
Profit of the enterprise is a very important indicator, as it is a kind of indicator of effectiveness. It is clear that enough attention needs to be paid to its study. Factor analysis of profit from sales, as well as other types of profit is a very useful tool. It allows you to identify factors that most severely reduce profits, and to concentrate the impact on them. In addition, using this type of analysis, it is possible to identify indicators that influence positively, and then use these factors even more intensively.