An analysis of the organization's income and expenses is an important part of the enterprise's strategic plan

An analysis of the company's income and expenses characterizes the company's financial position at the end of the reporting period. It reflects the data on income, expenses and other financial results. The analysis of expenses and incomes of the enterprise represents to external users the information on sources of profit or about the reasons of loss and reveals the general picture about results of activity of the company.

The analysis of incomes and expenses of the organization is used not only for an estimation of results of its activity for the accounting period, but also for drawing up the forecast of its future activity. The forecast of future results is very significant for investors, since it means the possibility of profit in the future, for creditors the positive forecast, first of all, means the possibility of paying the debt amount with interest. If the company's activities are expected to be unprofitable, the situation is estimated as the impossibility of paying the debt with interest, and it is unlikely that some kind of bank will agree to issue a loan to this organization. When analyzing the income and expenses of an organization, it is necessary to comply with a number of requirements that are used to more accurately forecast the activities of the enterprise. The requirement to provide information on discontinued operations, on transactions with affiliated entities, on the compilation of segmental reports, on the reflection of events and contingencies. These and other facts allow you to make an accurate forecast of the company's work for the future. Analysis of the organization's income allows you to determine the profitability of the enterprise and plan its revenues.

Having received reliable information about the activity of the facility for the previous period, you can learn how to develop the right management decisions, programs and business plans for the future. In a market economy, it is very important to calculate the financial sustainability of an enterprise, that is, to ensure a state of financial resources in which it is possible to freely manipulate funds and ensure the uninterrupted production process and unimpeded sales of products as a result of their use. The boundaries of the financial stability of an organization are considered to be the most important factor in a market economy. Insufficient financial stability leads to insolvency, to a shortage of cash, and subsequently to bankruptcy. Excessive financial stability leads to a slowdown in development, reducing profits and increasing the time of capital turnover.

Analysis of income and expenses of the organization allows to justify the parameters of such stability, but does not give an opportunity to judge the financial state of the enterprise at the moment. Analysis of income and expenditure is always necessary, regardless of economic relations. An urgent need for such an analysis arises when there is a transformation and reorganization of enterprises or organized legal structures. It is associated with the processing of a wide variety of information about the activities of the enterprise, which is most often used in financial reporting documents . And these data do not in any way influence the judgment about the state of affairs in the enterprise, but their precise analysis needs to be processed.

Its main goal is to obtain basic informative parameters that give an accurate and objective picture of the company's revenues and expenses for a certain period. Analysis of the movement of finance allows a comprehensive assessment of all economic activities and track the main trends of its development. An analysis of the organization's income and expenses is an important part of the strategic plan, according to which the company can comfortably exist for a long time.