LIMITS OF COEFFICIENT ANALYSIS OF COMPANIES' FINANCIAL REPORTING

Abstract

The content of corporate financial statements as a set of firm models is disclosed. The significance of the so -called accounting principles as the assumptions on which these models are based is shown. The limits of the information content of the reporting data are characterized as a consequence of the development of the practice of making reports in certain socioeconomic conditions, under the influence of relevant legal norms, in a situation of conflict of information needs of persons interested in the activities of companies that dominate in the relevant periods of economic views. The analysis of accounting statements is determined from the standpoint of a limited set of data on the facts of economic life, formed by the recognitio n of accounting objects as such and their monetary valuation. The construction of the so-called analytical coefficients in the study of reporting is defined as a necessary narrowing of the range of data under consideration. The place of the arithmetic component in the methods of coefficient analysis and their content (economic) value is shown. The mechanisms of influence of the postulates and principles of accounting, property characteristics of an asset, balance sheet theories implemented in practice, modern accounting standards, accounting policy techniques — on the possible results of the coefficient analysis of financial statements are revealed. Recommendations on the use of coefficient analysis in working with the reporting of co mpanies in the modern economy are offered.