FEATURES OF THE ANALYSIS OF FINANCIAL STATEMENTS OF SMALL BUSINESSES ENTITIES

Abstract

A comprehensive analysis of indicators of financial statements will always be relevant for enterprises of all forms of ownership. Despite the fact that every enterprise may face some internal organizational  or financial changes, it is forced to survive in changeable external environment. In this regard, employees of economic departments on a regular basis assess their own performance on the basis of financial statements. This makes it possible to see the successes and failures that took place in the previous reporting periods, and allow for an indepth analysis of problem indicators that require corrections by making effective managerial decisions by the management of the enterprise. In the economic literature there is a wide choice of theoretical tools that can be used to assess financial condition of an enterprise. But each enterprise develops its own method of financial performance assessment. For this, enterprise analysts need to select precisely such indicators that will promptly and clearly demonstrate success of enterprise’s performance in the context of important business areas, as well as determine period and regularity of such an assessment. Another important point in analysis and assessment of financial statements is the necessity to establish long-term and reliable relationships with partners. By entering into an agreement with debtors for supply of products, we expect full and timely payment for delivery services. Conversely, from creditors, we expect timely deliveries of inventory items, which can be guaranteed only with successful financial and economic activities of these enterprises. Therefore, in both cases, long-term and reliable relationships are possible, provided that these partners achieve high financial indicators that can be determined precisely by analyzing financial statement forms. Consequently, financial stability of an enterprise depends not only on the analysis of indicators of its own financial statements, but also on the analysis of indicators of financial statements of existing and future partners. In this aspect, the question of analysis of indicators of financial statements of enterprises operating under the simplified form of accounting is particularly acute and compiles financial statements as small businesses entities. The authors of the paper have studied the features of assessment of absolute and relative indicators presented in the Financial report of a small business entity, and present methods for a comprehensive analysis of financial condition and financial results for such enterprises.