ANALYSIS OF THE PROFITABILITY - FINANCIAL POSITION CORRELATION
Evaluating a business' financial performance and profitability is a fundamental element of financial management, having a considerable impact on long-term success. In today's context, it is essential for a manager to be well informed about the current state of the business and to be ab...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Academica Brâncuşi
2024-12-01
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| Series: | Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie |
| Subjects: | |
| Online Access: | https://www.utgjiu.ro/revista/ec/pdf/2024-06,%20Volumul%20II/13_Caruntu.pdf |
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| Summary: | Evaluating a business' financial performance and profitability is a fundamental element of financial
management, having a considerable impact on long-term success. In today's context, it is essential for a manager to be
well informed about the current state of the business and to be able to react promptly to changes that could negatively
influence its value, thus diminishing returns for investors, even in the absence of a financial crisis .
The main objective of this topic is to apply financial analysis methods to identify the performance and financial
health of the analyzed company, based on profitability rates and financial indicators that reflect its position. In
addition, recommendations will be made to improve the current situation. To achieve this goal, the paper will use the
methods of description, analysis, comparison and synthesis. .
Economic-financial analysis plays an essential role in understanding the current context and in ensuring
favorable results in the future. The evaluation of financial statements is fundamental to carry out a complete diagnosis
of the profitability and financial stability of a company, representing a basic element in the analysis of financial
performance. Performance refers to the realization of activities that require specific skills. In the case of an
organization, it reflects the ability to achieve set goals. In certain circumstances, it may be necessary to temporarily
abandon the principles of economic rationality in order to access new markets or maintain existing products. This
forgoing of short-term profit should lead to higher future profits. Profitability assessment involves calculating the
difference between income and resources consumed, with the aim of increasing the wealth of the owners by distributing
dividends or increasing equity. |
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| ISSN: | 1844-7007 2344-3685 |