DIAGNOSTICS OF THE ENTERPRISE PROFITABILITY BY NORMATIVE ACCOUNTING REPORTS

Abstract

Purport, goals, aspects and specificity of enterprise’s profitability evaluation aresurveyed. The importance of basic national obligatory accounting statements, namely the balancesheet and income statement, is recognized.Actual approaches to profitability estimation, listed in national enactments in the field oftaxation, crediting and privatization are analyzed. Absence of typical approach to enterprises’profitability also as discrepancy to fundamentals of financial analysis and necessity to adoptgiven formulas to current accounting reports are identified.Quantity, structure of earnings and profitability ratios are declared the core aspects ofenterprise’s profitability analysis. Technology of profit structuring and calculation ofprofitability indexes are elaborated. It is suggested that the earnings before tax should be splittedonto core activity profit, other operational activity profit, financial activity profit and otheractivity profit.Profitability ratios are divided onto four groups: financial sources profitability indexes,activity yield indexes, production resources’ profitability ratios and product/departmentprofitability indexes.