Determinants of formatting the financial results: retrospective and prospective analysis

Abstract

The activities of all business entities are characterized by the financial result obtained. The essence of this indicator is considered as profit (loss), result (outcome) of activities, capital increase (decrease) and the difference between income and expenses. The financial result obtained by an enterprise is the main source of development and growth of its market value, capital and business in general; an indicator of competitiveness and creditworthiness; a guarantee of fulfillment of obligations to the State and other market participants; a source of satisfaction of social needs of employees of the enterprise and society as a whole. The purpose of the conducted research is to specify the directions of retrospective analysis and substantiate the methods of prospective analysis of financial results of entrepreneurial structures in terms of indicators of the Financial Results Report. The information regarding the directions of analysis of financial results, highlighted by scientists, has been generalized, enabling the identification of two approaches to its conduct: 1) solely based on indicators of profit and profitability; 2) based on indicators upon which profit (income and expenses) is formed and profitability is determined, as well as the analysis of the distribution and utilization of profit. It is proposed that during the analysis, an assessment should be made of the implementation of planned tasks and trends in the change of income, expenses, production cost, profit, and profitability; determining the impact of factors on the identified deviations of indicators; calculating reserves for increasing income, profit, profitability, and reducing expenses and production costs. The study of trends in the change of indicators is used as a basis for forecasting the financial result in the short-term perspective. The feasibility of using the extrapolation method, especially the moving average, is substantiated for determining the forecast values of the financial results of the activities of entrepreneurial structures.