The authors provide an analysis of the existing form no. 2 of accounting statement of Profit and Loss Account. There is a detailed consideration of changes in the Profit and Loss Account that have occurred in recent years, including changes in lines numbering, names of certain items and their sequence and the change of the name of this form of financial statements. The authors have identified the problems related to the analysis of financial statements' forms and certain areas of financial condition resulted from or in connection with the changes introduced into Balance Sheet and unchanged Profit and Loss Account. The Balance Sheet shows the data for three related periods, and Profit and Loss Account presents the results of operations for two similar periods. In these circumstances, problems arise in the analysis of annual and quarterly financial statements. The article offers solutions to the identified problems, which will improve the comparability of data provided in Balance Sheet and in Profit and Loss Account, as well as the information content of both analyses. The authors present an approach to analyzing Profit and Loss Account, which will enable to improve its quality and efficiency. Under this approach the authors describe the sequence of generating various profit indicators under form no. 2 (subject to changes) and their importance for assessing the overall performance of an organization, highlight key considerations, which should be taken into account in the analysis of financial results.
Keywords: Profit and Loss Account, profit, efficiency, performance, financial, condition, analysis
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