Economic analysis is systematized information that is designed to identify all the flaws of the enterprise and ensure the highest efficiency of its work. This type of analysis can be carried out by a specialist who is quite well versed not only in accounting, but also in the economy as a whole.
Instructions
Step 1
Decide on the type of economic analysis: external or internal; technical and economic, economic and legal, etc.; preliminary, current, etc.; macro or microanalysis, etc.
Step 2
Form and select the information that should be:
- relevant (to influence the adoption of managerial decisions;
- reliable, i.e. truthful, without falsified results of the enterprise and such that it is easy to verify with the help of primary documents;
- neutral - without benefit to any one group;
- understandable - easily perceived without special training;
- comparable, for example, with information from other organizations;
- rational, the selection of which would be carried out at minimal cost;
- confidential - i.e. does not contain data that could harm the company and its strong positions.
Step 3
Conduct analytical processing of data with the preparation of analytical tables and balance sheets, where the articles are brought together in enlarged groups with the same economic content. Such a balance is convenient for reading and conducting a qualitative economic analysis.
Step 4
Based on the groups received, calculate the main indicators of the financial condition of the enterprise - liquidity, financial stability, turnover, etc. Please note that with such a transformation of the balance, the balance is maintained - the equality of the asset and liability.
Step 5
Conduct vertical and horizontal balance sheet analyzes. In a vertical analysis, take the total of assets and revenue as 100% and divide the percentages by items according to the figures presented. In a horizontal analysis, compare the main balance sheet items with previous years, placing them in adjacent columns.
Step 6
Compare all metrics to industry benchmarks.
Step 7
Summarize the results of the economic analysis. Based on the information received, give an objective assessment of the activities of the enterprise, make proposals for identifying reserves to improve the efficiency of the enterprise.
