Abstract:
Financial statements are the basic source of information on the situation
and results of the operation of a business entity within a given period. The financial
result, i.e. the difference between the total income and the total cost,
is a measure which is important for assessing the company’s operation in a
financial statement. It is largely determined by deductible expenses which show
the company’s prudent financial management. Prudence means managing appropriately
the company’s assets which are used to generate income. Effective
management of resources should be based on a reliable analysis of the use of
assets according to defined criteria by calculating selected ratios. To have a
full picture it is important to perform a comparable analysis which compares
different periods while paying attention to changing market conditions, to draw
conclusions and then to adopt appropriate methods of effective management of
company’s assets in order to maximize its production potential.
This paper aims at emphasizing the importance of analyzing the use of assets
and possibilities of using it to ensure company’s effective operation.