Micro and small enterprises’ financial statement information from the financial ratio analysis perspective

• Authors: Kristina Rudžionienė , Aušra Molotkevičiūtė , Rūta Klimaitienė

Title variants

PL

Informacje do sprawozdań finansowych mikro i małych przedsiębiorstw z perspektywy analizy wskaźników finansowych

Abstracts

EN

Purpose of the article is to evaluate the compliane, in all material respects, of the information provided in the financial statements of micro and small enterprises, from the financial ratio analysis perspective. To achieve this objective, the financial statements prepared by micro and small companies have been analyzed with regard to the form thereof, the most important ratios for micro enterprises have been determined, followed by a financial ratio analysis of micro enterprises preparing small company financial statements has been performed. It has been determined that, in all material respects, the information contained in the financial statements of small entities is complete, whereas the information presented in the financial statements of micro enterprises is incomplete. It is impossible to calculate all the main micro-enterprise ratios based on short financial statements. It is therefore recommended that micro businesses prepare their financial statements in the form of small enterprise financial statements. In order to survive on a competitive market, enterprises of this category need to assess their financial performance continuously and consistently. The EU and member states’ declared simplification of micro-business financial reporting can prevent business decision-makers from obtaining reliable information from financial statements which is necessary and for financial analysis. The practice shows that, when the financial statement information requirements are the same for both small and micro companies, many micro businesses opt to prepare small-company financial statements, rather than statements of their business category. The existing regulation should be revised with regard to this situation.

Keywords

EN

micro business; small business; financial statements; financial information; financial ratios.

• Publisher: Sopocka Akademia Nauk Stosowanych
• Journal: Przestrzeń, Ekonomia, Społeczeństwo
• Year: 2022
• Issue: 21/I
• Pages: 149-174

Dates

published

2022

Contributors

author

Kristina Rudžionienė

• Kaunas Faculty, Vilnius University

author

Aušra Molotkevičiūtė

• Vilnius University

author

Rūta Klimaitienė

• Kaunas Faculty, Vilnius University

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Identifiers

DOI

10.23830/21/I/2022/149174

Biblioteka Nauki

2232263