The financial result is the result of the economic activity of the enterprise, the increase or decrease in its equity capital. It is determined by comparing costs and revenues received for a certain period. The main indicators characterizing the financial result are profit and loss.
Instructions
Step 1
In practice, the most common way of calculating the financial result is as follows. For a certain period of time (quarter, month), the amount of cash and non-cash received and spent funds is calculated. The resulting positive difference - profit, negative - loss. If we add the balance of funds at the beginning of the period to the difference obtained, then we will have their real balance.
Step 2
However, despite the convenience of this method, it is not entirely correct. The result we received is the effective cash flow, or cash flow, i.e. the difference between receipts and expenditures for a certain period. The amount received by us, which is real money, may in fact be monetary obligations. For example, it can be advances that the company owes to suppliers for the goods received.
Step 3
To determine the financial result, it is not enough to know the difference between receipts and payments. It is the profit that needs to be calculated, i.e. the difference between income and expenses. In this case, income, if they are not equal to the amount of funds received, will be determined "upon shipment". This method assumes that the enterprise receives income when the goods are transferred to the buyer, and not when the money is received. In the same way, expenses are taken into account at the time of receipt of the goods from the supplier.
Step 4
With this method of determining the financial result with a negative cash flow, profit can be positive. If the cash flow is calculated for a long period, then sooner or later, provided that the customer pays, it will be positive. The same cannot be said for profit.
Step 5
However, this method also has some disadvantages. First, information about the income and expenses received may be available only after some time. Secondly, the income calculated “on shipment” does not match the amount of funds available at the moment. Therefore, to control the cash balances, it is necessary to analyze the company's cash flows (“upon shipment”) and plan the cash flow.
