Entity's position and financial performance - basic source for information users

Abstract

The topicality of the researched topic consists in the need to provide decision makers, but also all stakeholders, a complete and current picture of the financial situation of the entities, which makes it possible to make correct decisions at management level, by following the evolution of the position and of the financial performance of the analyzed entity. The data provided by accounting for decision making by information users are influenced by various factors, including: the structure and composition of the entity's balance sheet, the financial result of the activity, the characteristic of the accounting information provided, and the correlation of accounting data with economic activities for the users in the process of substantiating economic decisions. The purpose of information users is to analyze over time the financial statements reported by the entity, to identify trends in its financial position and performance. Users can also compare financial statements between different entities, to assess the results of their activity and compare economic and financial indicators. In order to achieve the proposed objectives, various methods of scientific research were used in the paper, such as: the documentation, the analysis, the synthesis, the deduction and comparison. Based on what is examined in the paper, we mention that information on the position and economic performance of an entity is useful for assessing potential changes in economic resources that it can control in the future and for anticipating the ability to generate revenue streams with existing resources. Also, based on position and performance, reasoning is formulated regarding the efficiency with which the entity can use new resources. JEL: M41, F36.