The role of accounting information in the analysis of the risk of activities of entities from agriculture

Abstract

The accounting represents an essential component of the economic informational system; through its own way of processing the data it could offer exact information regarding the results from activities of the economic entities. Such information, especially the profitability, is necessary for evaluating the potential changes of economic resources which could be controlled by enterprises in the future. The information regarding the variability of results are important in order to anticipate the capacity of the enterprise to generate liquidity cash flows with existent resources, being at the same time, useful to formulate the reasoning regarding the efficiency of using the new resources by the enterprise. The profitability analysis is linked to risk defining; risk which at the entities from agriculture should be analyzed in a special way, because of the specificity of this activity. Profitability can be appreciated only depending on the supported risk and conversely, the economic agents assume a risk only depending on the profitability they expect. The analysis of the profitability should be done in accordance with the form involved by the risk such as: economic risk (operational risk), financial risk, bankruptcy risk. With the accounting information there were calculated some indicators and on this basis could be appreciated the way of taking place the economic activities, at the same time, drawing some conclusions regarding the favorable or unfavorable trends. Some examples of such indicators are the following: rate of net return, rate of return for the permanent capital, return on equity, quick ratio solvability, financial independence level, global debt rate and so on. The paper intends to underline the information valences of the accounting data, the resulted conclusions drawn on this basis could be the starting point for the management decisions in the next period.