Each enterprise, organization sets itself the task of making a profit, increasing sales, and more. The essence of any activity should be reduced to
a certain result. This is the result of the activity is the report on financial results. It will be discussed in this article.
Report on financial results - what is it?
This report represents not only the performance of the company for tax, but also the results of this activity for the organization itself. Indeed, thanks to him, you can understand how much we have earned, what losses have suffered, and so on.
The contents of the statement of financial performance
- Revenue This line provides the company's revenue from its activities, that is, gross turnover.
- Cost - the cost of manufacturing products (services). This line displays the organization’s costs for the product itself. Since this is a detachable line, the numbers in it, according to the reporting rule, are enclosed in parentheses.
- Gross profit is the difference between revenue and cost. Thanks to this line, we can see the profitability of the enterprise before deduction of indirect production costs.
- Selling expenses. This article indicates the organization’s costs associated with the sale of products (advertising, marketing). As well as cost, this article is taken in brackets.
- Management expenses. The statement of financial performance includes administrative expenses, enterprise management expenses . It is written in brackets.
- Profit from the goods sold. An article that shows net income from activities. It is calculated as gross profit minus selling and administrative expenses.
- Revenues from other enterprises - these are incomes, the source of which are other organizations, which “pour in” capital in the form of dividends, irrevocable financial assistance, etc.
- Interest receivable is the interest that we will receive on stocks, deposits or other securities.
- Interest payable is finance that we must pay on loans, leasing, loans.
- Other income. It displays income that is not of a fundamental nature to the business.
- Other expenses - other expenses not considered above.
- Profit before tax. We obtain this indicator based on the fact that we subtract costs from the above incomes.
- Current income tax. The indicator is written based on tax calculations.
- Permanent tax liabilities. This indicator is included in the preparation of the statement of financial results, if there is a difference between the data of accounting and tax accounting.
- Other - this is a line where the amounts are indicated that affect the amount of profit, but are not displayed anywhere in the above lines.
- Net profit. The most important line where profit is shown minus all expenses and taxes.
When and how is this report submitted?
A statement of financial performance is submitted by the company every quarter (depending on the tax system). Together with the balance sheet of the enterprise (form 1), the document described above (form 2) is submitted to the statistical and tax authorities. Failure of such documents entails significant penalties.