IDEAS home Printed from https://ideas.repec.org/a/ssi/jouesi/v4y2016i1p53-63.html
   My bibliography  Save this article

Methodology of complex analysis of companies’ profitability

Author

Listed:
  • Daiva Tamulevičienė

    (Vilnius University, Lithuania)

Abstract

Profitability is one of the most important companies’ activity indicators. In the article, all profitability ratios are divided into three groups: sales, assets and equity. The importance of their analysis is underlined. In the financial analysis literature, the most common calculations of various financial indicators provided lack attention of their analysis. The complex analysis methodology recommended in the article comprises: 1) determination of analysis aims; 2) choice of analysis sources and technical methods; 3) calculation and evaluation profitability of sales (gross and net), profitability of assets (total assets, fixed and current assets), profitability of equity (authorized capital, shareholders’ equity and capital employed); 4) determination of factors influencing profitability; 5) usage of information collected during the analysis for internal and external users purposes. The recommended complex analysis methodology can be successfully applied to companies of various size and activity. After successfully applying it, it is possible to objectively evaluate efficiency of company's activity, potential risks, competitiveness and possibilities of continuity.

Suggested Citation

  • Daiva Tamulevičienė, 2016. "Methodology of complex analysis of companies’ profitability," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 4(1), pages 53-63, September.
  • Handle: RePEc:ssi:jouesi:v:4:y:2016:i:1:p:53-63
    DOI: 10.9770/jesi.2016.4.1(5)
    as

    Download full text from publisher

    File URL: https://jssidoi.org/jesi/uploads/articles/13/Tamuleviciene_Methodology_of_complex_analysis_of_companies_profitability.pdf
    Download Restriction: no

    File URL: https://jssidoi.org/jesi/article/87
    Download Restriction: no

    File URL: https://libkey.io/10.9770/jesi.2016.4.1(5)?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Marina Matetskaya, 2015. "Education programmes for entrepreneurs in the creative industries in St. Petersburg," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 3(1), pages 66-73, September.
    2. Black, Geoff, 2004. "Applied Financial Accounting and Reporting," OUP Catalogue, Oxford University Press, number 9780199264711.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ecaterina Surupaceanu, 2011. "The Objective Of Financial Statements.Company’S Financial Position," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 181-186, December.
    2. Paliu-Popa Lucia, 2013. "Analysis Of Exports Of Goods On Trade Credit Consignment From An Accounting Perspective," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 101-104, December.
    3. Sabina Hod?i? & Lucija Rogi? Duman?i? & Emira Be?i?, 2019. "Financial stability of pension system in the European Union member states," Proceedings of International Academic Conferences 9912130, International Institute of Social and Economic Sciences.
    4. Mariana Man & Emilia Vasile, 2009. "Economic Value Added - Index of Companies’ Internal Performance," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 9(2), pages 115-120.
    5. Daniela PORDEA & Alin-Constantin DUMITRESCU, 2021. "Convergence to IFRS in Romania – Score per Minute," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 19(162), pages 373-373, May.
    6. Paliu-Popa, Lucia, 2013. "Imports of Goods on its Own with Payment at Sight Analyzed from an Accounting Perspective," MPRA Paper 56105, University Library of Munich, Germany.
    7. Daniela Pordea & Maria-Adina Motica & Dorel Mates, 2018. "The Influence Of Fiscal Accounting On Entrepreneurial Decisions In Romania," Manager Journal, Faculty of Business and Administration, University of Bucharest, vol. 28(1), pages 84-100, December.
    8. Manuela Tvaronavičienė, 2016. "Start-ups across the EU: if particular tendencies could be trace," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 3(3), pages 290-298, March.

    More about this item

    Keywords

    net profit; gross profit; complex analysis; profitability of sales; profitability of assets; profitability of equity; profitability ratios;
    All these keywords.

    JEL classification:

    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ssi:jouesi:v:4:y:2016:i:1:p:53-63. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Manuela Tvaronaviciene (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.