In accounting, the word "balance" has a double meaning: it is the equality of the totals of records on debit and credit of accounts, records on analytical accounts and the corresponding synthetic account, totals of assets and liabilities. It is also an important form of financial statements, which shows the state of the enterprise's funds in monetary terms as of a certain date. Reading the balance sheet is the first stage of a comprehensive analysis of the financial condition of the enterprise.
It is necessary
Calculator, balance sheet of the analyzed enterprise (Form No. 1), profit and loss statement (Form No. 2), annex to the balance sheet (Form No. 5), auditor's report, accounting policy of the organization
Instructions
Step 1
Conduct a visual and simple counting check of the balance: the completeness of the accounting report, the correctness and clarity of filling, the presence of all requisites, signatures, the presence of additional forms and applications, checking the balance currency, all subtotals, etc. A balance filled with errors is a source of incorrect analytical decisions.
Step 2
To get acquainted with the auditor's report, the accounting policy of the enterprise, with the substantive part of the annual report, qualitative changes in the property and financial situation of a commercial organization.
There are several types of auditor's report: unconditionally positive, conditionally positive, negative, with a refusal to express an opinion on the reliability of the financial statements.
The first two are of particular cognitive value.
Undoubtedly positive carries with it brief information about the state of the enterprise. Conditionally positive can carry unconditional information, or information with reservations to a greater extent. The reasons for this conclusion may be the opinion of another audit firm, if the audit is carried out by several organizations.
Reading accounting policies is necessary to understand the ways and methods of accounting for a given organization.
Step 3
Calculate and control the dynamics of a number of analytical coefficients. The set of indicators provides a comprehensive description of the financial and economic activities of the enterprise. These are indicators of liquidity, financial stability, economic potential, property potential, financial condition, financial results. Analyze the assets of the enterprise to characterize the property status, the company's liabilities to characterize the availability of its own funds. Determine the financial position by analyzing the financial results achieved during the reporting period.
Step 4
Draw conclusions based on the results of the analysis.
