As a shareholder and creditor, what do you see as the limitations of the income statement and what c

Limitations of the income statement in China's current accounting standards for business enterprises:

1) The elements of the income statement are incomplete, and the reference to the index terms is inappropriate.

1.Since the concepts of accounting elements such as "gains", "losses", and "gains and losses directly included in current profits" have been clearly defined in the basic standards, there should be no more ambiguous accounting terms with Chinese characteristics such as "non-operating income" and "non-operating expenses" in the income statement, which will make foreign counterparts puzzled.

2. The terms "non-operating income" and "non-operating expenses" are inherently inappropriate.

2) The structure and content of the income statement are unreasonable.

1.The composition of the operating profit indicator is unreasonable.

2.Since there is no distinction between different types of income, for example, income from cash receipts and income from sales on credit are reflected in the income statement, there is none.

Consider the risk of income on credit.

3.The "cost of inventory sold" is not shown separately in the income statement, making it possible to distinguish between "the number of inventory turnovers" and the "inventory turnover days".

The calculation of "number" causes a large error, and it is not easy to evaluate the inventory liquidity of the enterprise.

4.The content of the financial expenses is unreasonable. It is not the practice of Chinese enterprises to record "interest income from bank deposits" in financial expenses. Appropriate. Improvements:

1) Improve the accounting elements of the income statement to make it conform to the accounting standards for business enterprises.

2) Change the structure and content of the income statement to make the financial performance information provided by it more reasonable.

The changed profit** formula is as follows:

1. Operating income.

Among them: operating income on credit.

Less: Operating costs.

Where: Cost of Inventory Sales.

Sales tax and surcharges.

Management fees. Selling expenses.

2. Operating profit (loss is listed with "-").

Add: Investment income (losses are listed with a "-" sign).

Gains. Less: Finance costs.

Among them: interest expense.

Loss. Among them: asset impairment loss.

3. Total profit (the total loss is listed with a "-" sign).

Add: Fair value change gain (loss is listed with a "-" sign).

Fourth, the overall profit (the loss is listed with a "-" sign).

Income tax expense.

5. Net profit (net loss is listed with "-").

6. Earnings per share:

1) Basic earnings per share.

ii) Diluted earnings per share.

Personally, I believe that the income statement should be divided into operating income and non-operating income, and a combination of single-step and multi-step methods should be adopted.

Wuhan University 09 double degree in accounting. Do you want to be so talented? . .

Summary. The increase in undistributed profit indicates the increase in the company's current operating net profit, which also affects the increase in the company's distributable profit to shareholders and the increase in the owner's equity.

In the statement of changes in owners' equity, the increase in undistributed profit becomes larger, indicating what capacity the company has enhanced.

Hello, welcome to use the know** one-on-one wisdom hand consulting service, I know the answer to the main "yo cola" before the dust. I will answer for you next, I am honored to serve you, and I will take your questions seriously and carefully. It may take a few minutes to type and organize the information, so please be patient!

Dear, hello to the town, in response to your question, through the information published on all platforms, you can find the following answer. You can use it as a reference accordingly. The increase in undistributed profit indicates the increase in the current operating net profit of Zhidan Enterprise, and at the same time affects the increase in the profit available for distribution to shareholders and the increase in the owner's equity of the enterprise.

Summary. The purpose of profitability analysis is to find problems in a timely manner through analysis, improve the financial structure of the enterprise, strengthen the solvency and operating ability of the enterprise, and ultimately improve the profitability of the enterprise and promote the sustainable and stable development of the enterprise.

For enterprise managers, through profitability analysis, the relevant indicators of profitability can be used to reflect and measure the business performance of the enterprise, and the problems existing in operation and management can be found and solved. For investors, profitability analysis helps investors to understand the profitability of the target company, so that investors can avoid or reduce the possibility of financial risks.

2) The purpose of profitability analysis: the operation of the company is particularly important to the creditors and shareholders of an enterprise. For corporate shareholders, when there is a loss in the operation of the enterprise, the shareholders will have no "pie" to share when the year-end dividend, so the company's profitability has become an important indicator of whether shareholders invest in the company. For creditors, the company usually uses operating profits to repay debts, when the company's profits are poor or even have losses, the debt will appear to be repaid, in other words, the company's poor profitability seriously affects its ability to repay its debts, whether the debt can be repaid mainly depends on the company's operating conditions, business performance as the most intuitive embodiment of the company's profitability, so the strength of the company's solvency may reflect its profitability.

Creditors often use the strength of profitability as the most intuitive basis for repaying debts, so they decide whether to continue lending to enterprises; Investors can determine whether the investment in the company is worth investing in based on the level of profitability, so they can see whether the company's capital is preserved. Switch to another way without pretending or changing the original meaning of the sentence.

Hello, it is a pleasure to serve you, the answer to your question is being queried and sorted out, please wait a moment. Thank you.

The purpose of profitability analysis is to find problems in a timely manner through analysis, improve the financial structure of the enterprise, strengthen the solvency and operating ability of the enterprise, and ultimately improve the profitability of the enterprise, and promote the sustainable and stable development of the enterprise. For enterprise managers, through profitability analysis, the relevant indicators of profitability can be used to reflect and measure the business performance of the enterprise, and the problems existing in operation and management can be found and solved.

For investors, profitability analysis helps investors to understand the ability of the target company to make profits, so that investors can avoid or reduce the possibility of financial risks. Thank you for your consultation, I hope this service can help you, you can click on my avatar to follow me, and if you have any questions in the future, please consult me again, and finally wish you a happy life! <>