In modern conditions of conducting a market economy, the indicator of the financial result of an enterprise is the most significant in the work of business entities. Its size is a criterion for the activity of any organization.
A financial result is the amount of profit or loss that was received in the reporting period from the sale of products, the provision of services and the performance of work, as well as other business operations. This indicator is the subject of attention of a wide range of market participants with an interest in the stable operation of the enterprise, and the main criterion for evaluating commercial activities.
The financial result depends on a number of factors:
- efficient use of production resources;
- compliance with the discipline of payments and the terms of contracts;
- changes in prices on commodity and commodity markets , etc.
The financial result also depends on the amount of income received. The amount of profit of the enterprise affects the remuneration of workers and mandatory contributions to the budget. The income of the founders also depends on its size. A positive financial result is a significant criterion for attracting investors, joint business partners, as well as lenders.
The formation of the financial results of the organization is based on the income received from the main and auxiliary activities. Based on analytical accounting, a gross profit indicator is derived. It is the difference resulting from the deduction of revenue and cost of sales, management and commercial expenses.
The gross profit indicator serves as a criterion of the organization's core business. The profit that the organization generates for taxation, takes into account all income and expenses. In addition to gross profit, this includes results from other activities, which may include the rental of fixed assets, participation in currency and stock exchanges, etc. The amount remaining after tax to the budget is allocated by the company for its development and dividends for the founders.
The financial result obtained by the enterprise from its activities depends on profit and profitability. The main positive criterion for the work of any entity is the receipt of income. Setting the goal of increasing profits, the company seeks to increase the volume of products, while reducing the cost of its production.
The amount of income of a business entity is the main indicator for investors, which determines the level of return on invested funds in assets. In a market economy, the main task is to maintain the necessary level of profitability of the organization. The fall of this indicator indicates the unsatisfactory state of the business and serves as a prerequisite for the bankruptcy of the enterprise.
The level of profitability is a relative criterion that indicates the effectiveness of business operations. This indicator has a comparison function. The level of profitability allows us to conclude about the degree of income, profit and benefit. It is this indicator that gives an estimate of the amount of profit that the company received from each ruble invested in assets. Profitability allows you to fully evaluate the final result of economic activity, showing the ratio of the final results with the amount of cash or used production resources.
In conditions of increasing competition and the desire to increase profitability, analysis of financial results is an obligatory function of enterprise management. It is he who makes it possible to find a reserve for increasing profits and profitability, and also enables the business entity to function with greater efficiency.