PRINCIPLES OF FINANCIAL STATEMENTS ANALYSIS AS A MEANS OF REALIZATION OF COMPANY MANAGEMENT GOALS

Abstract

The paper subject relates to the establishment of the interdependence in principles of financial statement analysis as a tool for the realization of the company's management objectives. In this context, it determines the basic components that contribute to improving the quality of the said relationship in compliance with the interests of enterprise management. Company managers analyze the financial performance of the enterprise for the purpose of enterprise business management, current and, specially, strategic. Good information implies that the financial statements are established and presented with all significant information that may be of significant impact on the present and future decisions of investor and other users. In contrast, the omission of certain information could lead information users to the wrong judgment and making wrong decisions. Principles of financial statement analysis represent the conditions on which the understandability, relevance, reliability and comparability of information depends, and as such are a means for the realization of the objectives of the company's management. The study of principles of financial statement analysis in this paper starts from the modern accounting theory, which holds that the generally accepted principles, can be ranked as postulates: that provide the basic requirements for accounting and valuation; and basic principles governing the valuation of balance sheet items and that, accordingly, used in the preparation and presentation of financial statements. Following the case of International Accounting Standards, the International Financial Reporting Standards is present to follow, in terms of its merits, an approach based on fundamental principles, or tenets. International Financial Reporting Standards, in essence, establish the postulates and principles for accounting treatment of business transactions and events. These are the principles which, along with the necessary professional judgment on how to apply in specific circumstances, primarily determine the content of financial statements of companies.