Analysis of the composition, structure and dynamics of profit and loss statement

. In this paper we used companies profit and loss statements’ information. We analyzed composition, structure and dynamics of profit and loss statement and learnt influence of operational, financial, investment incomes and expenses to profit and loss statement then made conclusion that how to improve efficiency of companies.


Introduction
The report on financial results is considered one of the forms of financial reporting and contains information about the expenses incurred by the business entity during the reporting period, received income, profits and losses. In our country, this form of report is one of the reports submitted quarterly together with the balance sheet. This report consists of lines from net income from product sales to net profit [1][2][3][4][5][6][7][8][9][10][11][12][13][14][15].
These reporting tools are also widely used in economic analysis. In this article, we focus on the analysis of the composition, dynamics and structure of financial results.
In general, the purpose of analyzing the financial results report is to assess the dynamics, composition and structure of income, income and expenses, profits and losses received by the business entity during the reporting period. As a result of the analysis, opportunities to increase profit are determined and opportunities to increase its size are sought.
To achieve these goals, it is necessary to determine the following tasks of the analysis of the financial results report:  comparing the volume of net income from product sales with the previous period, assessing its growth dynamics;  assess the dynamics of income and expenses of the subject;  assessment of the factors affecting the net profit received by the business entity during the reporting period;  to evaluate the composition of period expenses and their dynamics;  assessing the composition and dynamics of income and expenses from financial activities;  to study the dynamics of taxes paid on profits.
In economic analysis, horizontal and vertical analysis are widely used in the analysis of financial results. The following actions are performed in the horizontal analysis of financial results:  comparison of net income from product sales and cost of goods sold values with the previous period;  comparison of gross profit, profit of the operational activity, profit of general economic activity, profit before tax and net profit indicators with the values of the previous period and other reporting periods;  types of expenses, in particular, period expenses, financial expenses, extraordinary losses, comparison of tax expenses with the state of the previous period;  comparison of other operating income, financial income and extraordinary profit figures with prior period data. It should be noted that in the horizontal analysis, not only the previous period, but also the information of several years can be analyzed in a comparative manner.
In the vertical analysis of financial results, the following is carried out: assessment of the share of other types of profit in the formation of net profit; determining the share of cost of goods sold, period costs, financial costs, contingency and profit tax costs in total costs.

Literature review
According to the author D. Vitan (2010) [1], "for a long time, the account of profit and loss has been seen as a completion to the information given through the Balance Sheet, but it can be said that there was always an important battle between the Balance Sheet and the loss and profit Account in providing useful information to the decision makers. Thus, the development of the corporative form of the companies brings up in the front the utility of the profit and loss Account in financial reporting through growth of interest for the company's performance, for the dynamic information and the decrease of interest in historical expenses and for punctual, and static information." The profit and loss account remains as the main source of information for the study of economical-financial performance, in the conditions in which the very form of the document of synthesis is created following the main activities of the commercial companies: exploitation, financial and extraordinary [16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31][32][33].
The structural rates of the Profit and Loss account can be calculated because they are very important for the financial performance study, offering information of interest as much for the company's management as for the shareholder. Thus, the purpose for which these rates are being calculated is in order to show the structural modifications that happen from one financial exercise to another (Achim, 2009) [2].
Taking into consideration the fact that in the economical-financial analysis there is a series of analyzing methods, we chose the rates method in our case study. "The rate is a ratio between two indicators comparable from an economic point of view, with a superior meaning to the two indicators taken separately.
The main categories of rates are:  structural rates, which expresses the contribution of the parties for the formation of the phenomena;  efficiency rates, which reflects the correlation between effect and effort;  financial balance rates, which shows the correlations between balance-sheet items or groups of balance-sheet items from active and from passive" (Sandu, 2014) [3].
Of the three types of rates, since we operate with information provided by the profit and loss account, we focus on the structural rates which we will apply on the elements that generate results in order to see which of the expenses and which of the incomes have a significant contribution on forming results. Identifying the contribution of every groups of expenses for the formation of result is necessary in the situation in which the company's management wishes to improve the financial strategy. The extent in which every type of expenses contribute to the formation of the result is thus important when decisions regarding policy stabilization are taken to minimize expenses.

Methodology
In order to start our case study, we proceeded in reviewing the specialized literature regarding the domain of analysis based on the structural rates of the profit and loss account. Thus, the structural rates that we applied are those that can be found in specialized literature. These are the general structural rates of the results, the income and expenses for each type of activity performed by the entity, namely: operating activities, financing activities and extraordinary activities. At the level of operating and financial activities, the internal rates of the incomes and expenses are calculated.
In this paper we used some analyzing methods that horizontal, vertical trend analyzing methods.

Results and discussion
In the analysis of financial results, the absolute and relative changes of the indicators reflected in the report are determined. Each type of benefit analysis has specific objectives. For example, in the analysis of the gross profit from the sale of the product, reserves for reducing the cost of the product are determined. It is possible to determine the extent to which the income from the other processes of the operational activity and the write-off of fixed assets have been seen in the section of other operating expenses. By analyzing income and expenses from financial activities, aspects such as loan interest payments, dividend income and expenses, positive and negative difference in the exchange rate are clarified.
Important management decisions can be made by analyzing the financial performance report. All information on the lines presented in this report is important. The formation of financial results also depends on the characteristics of the network enterprises. For example, in cotton and wheat processing enterprises in our country, the share of the cost of the sold product has a large weight in the net income from the sale of products. In oil industry enterprises, this weight is less.
During the analysis, you should pay close attention to period costs. Because period costs are not directly related to the production process. The establishment of a large amount of period expenses may indicate that the management of economic entities is coldly approaching their tasks. In particular, there are many types of unproductive and excessive expenses in the structure of other operating expenses, and the management of economic entities should reduce these expenses as much as possible.
During the analysis, great attention is also paid to income and expenses from financial activities. If more income is obtained from financial activities, it means that the financial strategy of the organization is properly developed and works properly.
The value of fixed assets is high in economic entities. Their purchase or write-off has a significant impact on financial results. For example, if the income of an economic entity has been the same for several years, but has increased sharply during the reporting period, it is not necessary to be happy at once. First of all, it is necessary to analyze this situation and make a correct assessment of the situation. If an economic entity has sold a fixed asset with a large value, in particular, a building, during the reporting period, the income from other processes of the operational activity itself will increase sharply, but it may return to the old situation in the future. Therefore, an objective assessment of all cases is required in the analysis of financial results.
As can be seen from the data of Fig. 1, there was a steady increase in the total income of "Galla-alteg" JSC and "Tashkentvino Kombinati" JSC. However, in Tashkent Yog-Moy Kombinati JSC, total revenue has an increasing trend from 2015 to 2018, but total revenue has decreased in 2019 and 2020. The main reason for this is explained by the fact that in 2019, the income from the sale of products in this society decreased sharply compared to 2018 (Table 1) Table 1. Change in total income of "Galla-alteg" JSC, "Tashkent Yog-Moy Kombinati" JSC, "Tashkentvino Kombinati" JSC, in thousand sums (Prepared by the author based on the financial reports of "Galla-alteg" JSC, "Tashkent Oil-Oil Combine" JSC, "Tashkentvino Kombinati" JSC). In Fig. 2, we consider the change of total costs in "Galla-alteg" JSC, "Tashkent Yog-Moy Kombinati" JSC, and "Tashkentvino Kombinati" JSC.
As can be seen from the data of Fig. 2, there was an increase in the total costs of "Gallaalteg" JSC and "Tashkentvino Kombinati" JSC from year to year. However, the total expenses of "Tashkent Yog-Moy Kombinati" JSC decreased sharply in 2020. The main reason for this is explained by the sharp decrease in the cost of products sold in this society in 2020 compared to 2019 (-27469 million sums) ( Table 2).  Table 2. Changes in total expenses in "Galla-alteg" JSC, "Tashkent Yog-Moy Kombinati" JSC, "Tashkentvino Kombinati" JSC, in thousand sums (Prepared by the author based on the financial reports of "Galla-alteg" JSC, "Tashkent Oil-Oil Combine" JSC, "Tashkentvino Kombinati" JSC). In joint-stock companies, the cost of goods sold in the net income is important (Fig. 3). According to the data of Fig. 3, we can observe that the share of costs in the composition of net income has increased in recent years in "Galla-alteg" JSC and "Tashkent Yog-Moy CKombinati" JSC.This indicates that these enterprises suffered losses as a result of the operational activity. However, "Tashkentvino Kombinati" JSC has a smaller share of the cost. For example, in 2021, the share of costs in the total net income in this society was 61.8%.
It should be noted that the lower the cost of production in the net income, the greater the gross profit. We can also see this from the data in Fig. 4. Therefore, the share of gross profit in the net income of JSC "Tashkentvino Kombinati" in 2021 was 38.2%, which indicates that the activity of this enterprise has been effectively launched and it has a strong position in the market.
Period expenses also play an important role in the expenses of joint-stock companies. Focusing on the data in Table 2,we can see that "Tashkent Yog Moy Kombinati" JSC and "Tashkentvino Kombinati" JSC have a high weight. For example, in 2021, the share of period expenses in total expenses was 17.8% in Tashkent Yog Moy Kombinati JSC and 23.7% in Tashkentvino Kombinati JSC. On the contrary, "Galla-alteg" JSC in 2021 period costs made up 12.9% of total costs.
As can be seen from the Table 3,"Galla-alteg" JSC by 2021, there was a sharp increase in total period expenses compared to 2020 (21,585,102 thousand sums), and this increase was primarily due to operational expenses."Tashkentvino Kombinati" JSC also observed an increase in period expenses (43208056 thousand sums) decreased by period expenses in "Tashkent Yog Moy Kombinati" JSC. It decreased by 372,643 thousand sums, but the weight of sales expenses increased. Table 3. "Galla-alteg" JSC, "Tashkent Yog-Moy Kombinati" JSC, "Tashkentvino Kombinati" JSC composition and weight of period expenses (in thousands of sums) (Prepared by the author based on the financial reports of "Galla-alteg" JSC, "Tashkent Yog-Moy Kombinati" JSC, "Tashkentvino Kombinati" JSC.  According to the data of Fig. 5, we can see that sales expenses have the largest weight (86.7%) in JSC "Tashkentvino Kombinati". On the contrary, the lowest share of sales expenses (0.9%) belongs to JSC "Galla-alteg", and at the same time, we can observe the highest share of other operating expenses (87.0%). In "Tashkent Yog-Moy Kombinati" JSC, the weight of other operational expenses (58.5%) is observed to be high compared to other indicators. The large share of other operational expenses is a negative situation, and "Galla-alteg" JSC and "Tashkent Yog-Moy Kombinati" JSC should focus on reducing these types of expenses.

Conclusion
Above, we mainly used vertical and horizontal analysis methods to analyze the dynamics of financial results in joint-stock companies.
What indicators of profit should be focused on in the analysis of financial results? In our opinion, the following indicators of benefit should be evaluated in the analysis (Table 4).
all profit indicators can increase, but it is necessary to determine which profit indicator's growth rate is higher than another profit indicator's growth rate. We explain each case: if the growth rate of the profit before tax is higher than the growth rate of the profit of the operational activity, it indicates that more income is obtained in activities unrelated to the operational activity in economic entities; if the growth rate of the profit from the operational activity exceeds the growth rate of the net income from product sales, it indicates that economic entities have achieved positive results in reducing the cost of products, as well as selling their products in the market at an acceptable price, that is, marketing activities are well established.  Table 4. Indicators representing changes in profit used in economic analysis (developed by the author).

Procedure for detection Description
The growth rate of pre-tax profit exceeds the growth rate of operating profit.
pre-tax profit 1/ pre-tax profit 0> profit from the operational activity 1/ profit from the operational activity 0 Describes the positive impact of other income on pre-tax profit The growth rate of profit from the operational activity exceeds the growth rate of income profit from the operational activity 1/ profit from the operational activity 0 >net income1/ net income0 It indicates a relative decrease in production costs and an increase in the efficiency of the enterprise The increase in net profit over the increase in pre-tax profit net profit 1/ net profit 0>pre-tax profit 1/ pre-tax profit 0 It indicates that the economic entity uses the mechanism of optimization of taxation and reduction of the tax burden Focusing on the data in Table 4, it becomes clear which aspects the analyst should pay attention to. That is: the increase in the rate of growth of net profit over the rate of growth of profit before tax indicates that the economic entity used the mechanism of reducing the tax burden, as well as the prevention of penalties on profit tax.
Focusing on the above-mentioned situations during the analysis lays the groundwork for making rational management decisions.