Key Aspects of Corporate Activities Analysis through the Prism of Domestic Studies
Today, the corporate sector features the considerably higher risks of corporate performance with the accordingly higher standards of accountability for results, which largely depend on objectivity, timeliness and comprehensiveness of assessment of the existing and expected financial performance of corporations. This enhances the role and significance of an important analytical field, the corporate activities analysis.
The role of economic analysis in the context of market economy and globalization can hardly be overestimated, since the analysis permeates all the operative phases of a corporation. It precedes planning of indicators for the next period, helping organize production processes in a rational and reasonable way, improve collection and processing of information on their progress in the accounting system, assess the situation, and formulate important propositions to correct deficiencies and introduce best practices.
Financial analysis is important in the economic operation of a corporation as it enables it to seek reserves to improve its financial condition; to assess the adequacy of use of all the types of financial resources; to take timely measures to improve the solvency, liquidity and financial stability; to ensure optimal production and social development by use of reserves found through the analysis; to develop plans for financial recovery.
Methodology and organization of the corporate activities analysis is conditional on the organization and operation specifics of corporate enterprises. The following characteristics of a corporation are covered by analysis: economic activity; technological and organizational structure; interaction of business units within a corporation; capitalization; budgeting; integration of information system for analysis; variability in the conditions of risk.
The review of studies devoted to corporate activities analysis shows that domestic and foreign experts offer different methods for analysis of financial statements, depending on the goals and objectives of the analysis, available information, technical support, the efficiency of solutions for analytical and management tasks, experience and qualification of staff. The corporate activities analysis will be more objective when new analysis concepts are adopted, focused on the future.
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