Analysis of the Operation and Financial Condition of the Enterprise

Analysis of the Operation and Financial Condition of the Enterprise net profit gained during the year reported; undistributed profit at the beginning of the year; total distributable amount of profit; dividends payable to shareholders (participants); undistributed profit at the end of the year.Estimates of the balance sheet items and financial performance measures are closelyrelated with other financial statements as increase (decrease) in profit compared to thepreceding period and transfer of profit to equity affects the enterprise development andfinancial position.Table 3.3 Possible order of income statement analysisItem Questions to be consideredProfit Is the outcome of the enterprise performance profit or loss?What is the distribution of profit?Turnover What is the turnover of an enterprise?What is the increase/decrease in the enterprise turnover?What factors influence the changes in the turnover of an enterprise?Revenues What is the revenue structure of an enterprise (the percentage by thetype of production or services from the turnover)?Costs What is the structure of costs (percentage of cost from the totalamount of costs or from the turnover)?What is the amount of costs compared to the previous period?What is cost increase/decrease against turnover increase/decrease?Example Preparation of the income statementThe following information is available for the period ended 31.12.200X.58