Audit and economical analysis

6. Special methods of the financial analysis: financial reporting reading, horizontal, vertical, trend, comparative, factor, coefficient analysis

 

Methods for analyzing methods for obtaining objective information about the financial condition of business entities may include the following:⁹

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  read financial statements;
  

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  horizontal analysis;
  
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  vertical analysis;
  
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  trend analysis;
  
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  comparative analysis;
  
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  financial ratios;
  
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  factor analysis.
  

Under the "reading" of financial statements refers to the procedure for consideration of financial statements.   That is, the method of initial training of an enterprise is a method.

Horizontal analysis is a method of determining changes in financial statements and their positions by adopting absolute and relative differences.

Vertical analysis is a method of studying the sources and sources of their origin, income and expenses and other elements of financial reporting.

Trend is a method of dynamic learning in comparison with the basic one.

Comparative analysis is a method of balancing one or several indicators on different objects.

Analysis of financial ratios is a method of evaluating the elements and articles of financial statements based on indicators determined on the basis of multiplication.

Factor analysis is a method of identifying units that affect the performance of units and units that can be taken into account.¹⁰

Some sources of financial analysis also include benchmarking, project analysis and discounting methods that are widely used by other economists.

The above methods are used as a single method for all analyst layers.

A schematic explanation of the analytical methods makes them more conscious.   Therefore, we classify these methods for financial statements that reflect various aspects of a single economic situation.

Read the Financial Statements.   “Reading” of financial statements often refers to the classification of property (owner) of financial statements (private, shareholder, etc.), Units of measure (national and exchange rate), legal address, frequency (payment period).   In fact, reading is a broader concept. There is a division of ownership of debts, and if an enterprise has funds, if it is profitable, if the enterprise is profitable, what assets do they have (financial and non-financial), which explains the growth in balance, if it is stable or unstable, it should also cover such issues like how he is on balance.

Horizontal analysis is a method of assessing financial position by comparing individual financial indicators.   Changes are defined in absolute and relative terms. Elements and items of financial statements are evaluated on the basis of their horizontal analysis of financial indicators.

The financial analysis uses the following forms of horizontal analysis.

1. Comparison of financial indicators for the reporting period with the same period of the previous year (decade, month, quarter).

2. Comparison of financial indicators of the report for the same period last year (for example, comparison of the 1st quarter of the current year with the 1st quarter of the previous year).

3. Comparison of financial indicators for several years.