International Journal of Management and Economics Fundamental
45
https://theusajournals.com/index.php/ijmef
VOLUME
Vol.05 Issue 04 2025
PAGE NO.
45-50
10.37547/ijmef/Volume05Issue04-07
Improving the Analysis of Joint-Stock Company
Profitability Indicators
Omanov Sanjar Qurbonazar o’g’li
Tashkent State University of Economics, "Financial analysis and audit" department, Basic doctoral student, Uzbekistan
Received:
23 February 2025;
Accepted:
19 March 2025;
Published:
22 April 2025
Abstract:
The article examines the analysis of production costs and profitability indicators in economic entities.
The main tasks of the analysis of production costs and the analysis of costs for one soum product, the analysis of
the profitability indicators of the joint-stock company were studied.
Keywords:
Accounting, audit, economic analysis, financial analysis, production costs, production cost analysis,
cost structure, production cost, net sales, profitability, financial stability.
Introduction:
In the conditions of economic
development and liberalization in the Republic of
Uzbekistan, technical and technological re-equipment
of production serves to establish the financial and
economic activities of economic entities and ensure
their economic and financial stability.
In the decision of the President of the Republic of
Uzbekistan dated September 19, 2018 "On measures to
further develop audit activity in the Republic of
Uzbekistan" modern approaches in regulation in
accordance
with
international
standards
are
introduced.
One of the directions of the consistent economic policy
conducted in our republic is the modernization of
production enterprises, technical and technological
updating, and reduction of production costs based on
the
widespread
introduction
of
innovative
technologies. Objective distribution of costs for
products (work and services) created in economic
entities according to cost objects and their correct
accounting in the initial documents, as well as
production costs in the cost of products (work and
services) It is an urgent task to make clear decisions for
future periods by auditing that is being formed
correctly.
Decision No. PQ-4611 of the President of the Republic
of Uzbekistan dated February 24, 2020 "On additional
measures for transition to international standards of
financial reporting" [2] by accelerating the transition to
international standards of financial reporting, providing
foreign investors with the necessary information
environment in order to expand access to financial
markets, as well as to improve the system of training
accounting and auditing specialists according to
international
standards,
joint-stock
companies,
commercial banks, insurance organizations will
organize accounting on the basis of
IFRS
from January
1, 2021, and from 2021 from the end of the year, it is
decided to prepare the financial report based on
IFRS
.
In accordance with the Law of the Republic of
Uzbekistan No. ORQ-677 dated 25.02.2021 [3], NSA
were canceled on July 31, 2021, and it was determined
that the audit activity will be carried out entirely in ISA.
Today, we need to develop export-oriented products
(works and services) in business entities. For this, the
products must be competitive and our product
manufacturers must gain competitive advantage.
Competitive advantage is determined by reducing the
costs of manufactured products (work and services),
increasing their quality, and quickly adapting to market
requirements. In this case, issues of reducing
production costs are important.
For this reason, it is necessary to objectively distribute
the costs of the products (work and services) created in
the business entities according to the cost objects and
correctly account for them in the original documents
and in the cost of the products (work and services) to
International Journal of Management and Economics Fundamental
46
https://theusajournals.com/index.php/ijmef
International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
make accurate decisions for future periods by auditing
the correct formation of production costs. Because it
shows that the current system does not fully meet the
requirements of the management in accounting and
reports of the expenses spent on the manufactured
products (work and services). Therefore, a positive
solution to the issues described above requires
conducting scientific research on this topic and
determines the need to solve these issues in the work.
In order to achieve effective results, effective
organization of the production process in enterprises,
rational use of available resources, and improvement
of their financial stability are one of the urgent issues.
Analysis of literature on the topic
The issues of production costs in economic entities are
given a lot of attention in normative legal documents
and works of economists.
According to Doctor of Economics, Professor B.A.
Khasanov, "Profit and profitability are one of the
important indicators of the company's activity and its
evaluation. The factor affecting the profit is the cost"
[5].
Considering the findings of Doctor of Economics,
Professor R.D. Dusmuratov, cost accounting objects are
separate structural units where costs are incurred and
accounted for [6].
Candidate of Economics, associate professor A.
Shoalimov believes that reducing the cost of products
reflects the saving of live labor and manufactured
labor, provides an increase in profits, and makes it
possible to lower wholesale and retail prices [7].
Candidate of Economics, Associate Professor A.V.
According to Ilina, expenses are the value of material,
labor, financial and other resources used in the
economic activity of the organization during the
reporting period. Costs can be assets or costs of the
organization [8].
Candidate of Economics, Associate Professor D.M.
According to Akbasheva, in order to effectively manage
costs, it is necessary to take into account production
and choose the right method of calculating costs and
production costs [9].
Studies have shown that the theoretical problems of
the analysis of production costs are one side of the
issue, and the other side is its practical relevance to
various industries. This determines the relevance of the
topic of the scientific article.
METHODOLOGY
The methods of grouping, comparison, analysis,
synthesis, induction, deduction and factor analysis
were used in the research work. In particular, the
comparison method is the most basic method of
analyzing the company's activity, and it is also used in
the analysis of financial results. Because every metric,
every number, control, and forecast used for
benchmarking is only meaningful when compared to a
similar metric. As a result of the comparison, it will be
possible to systematically control production costs and
comprehensively evaluate them. Grouping is a widely
used method, especially in the analysis of production
costs. Because the analysis of the cost structure, taking
into account their characteristics and main aspects,
allows to increase the quality of audits.
In the analysis of production costs, dialectical methods
of knowledge - analysis and synthesis are used. These
methods are used to estimate the composition of costs
and generalize the results of the analysis.
The factor analysis method is the main method used in
the analysis of production costs. Because the method
of factor analysis is used to calculate all the factors
affecting the change of the cost indicator. As a result of
the application of this method, it will be possible to
determine the internal economy's opportunities to
reduce costs and increase the amount of profit.
RESULTS
When assessing the activity of a joint-stock company,
the evaluation of profitability indicators is of great
importance. Profitability is a result indicator that
expresses the goal of managing the company's
activities.
Profitability indicators can be divided into two large
groups. The first is intended for external, that is,
enterprise owners and potential investors, and it
expresses the profitability of invested capital. The
second is internal, it is intended for the managers of the
joint-stock company, and the share represents the
efficiency of the company's activity.
The first type of profitability can include the return on
equity capital, return on private equity and return on
assets:
Table 1
Analysis of general profitability indicators in "G'alla-Alteg" joint-stock company
Indicators
As of
January
1, 2019
As of
January
1, 2020
As of
January
1, 2021
As of
January
1, 2022
As of
January
1, 2023
International Journal of Management and Economics Fundamental
47
https://theusajournals.com/index.php/ijmef
International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
Net profit, thousand soums
1323466
6 949 127 24 933 460
14844177
24253620
Authorized capital, thousand
soums
639863
639863
639863
639863
639863
Private capital, thousand
soums
14680037
22 018
710
44138436
14680037
20544201
Total assets, thousand soums 90707711
96171739 114634322 170001571 185367637
2.1.
Authorized
capital
profitability = Net profit /
Authorized capital *100%
206,8%
1086,03%
3896,68%
2319,89%
3790,43%
2.2.
Private
capital
profitability = Net profit /
Private capital *100%
9,01%
31,56%
56,49%
101,12%
118,05%
2.3. Assets profitability =
Net
Profit/Total
Assets*100%
1,46%
7,22%
21,75%
8,73%
13,08%
As a result of the increase of the net profit of the joint-
stock company from year to year, the profitability
indicators mentioned above have increased. Also, the
status of the authorized capital on January 1, 2022 has
not changed at all compared to January 1, 2018. Year-
on-year increase in the cost of private capital also
influenced the growth of profitability indicators.
The second category of profitability indicators
representing the efficiency of the activity is given in the
table below.
Table 2
Analysis of profitability indicators representing the efficiency of activity in "G'alla-Alteg" joint-
stock company
Indicators
As of
January 1,
2019
As of
January
1, 2020
As of
January 1,
2021
As of
January 1,
2022
As of
January 1,
2023
Sales profitability =
Gross profit/Product
sales net income
11,35%
14,32%
17,18%
11,18%
8,58%
Cost price profitability
= Gross Profit / Cost of
Goods Sold
12,81%
16,72%
20,74%
12,58%
9,38%
The main activity
profitability= The main
activity profit/( Cost of
Goods Sold + Period
Expenses)
2,60%
6,92%
13,96%
7,76%
3,73%
It can be seen from the table that the performance
indicators are also increasing.
In our opinion, in order to justify the opinion about the
reliability of the financial report, the auditor should
evaluate the importance of accounting information
according to mandatory indicators, and for a clear
conclusion, according to additional indicators.
Taking into account the high importance of all these
indicators for users, it will be possible to extrapolate
the result of the assessment to the entire set of
accounting information of the enterprise.
In the audit of financial statements, the objective basis
of the auditor's opinion is the auditor's evidence, and
accounting information is considered the basis of their
explanation. The need to develop a clear and logical
methodology for substantiating the auditor's opinion at
International Journal of Management and Economics Fundamental
48
https://theusajournals.com/index.php/ijmef
International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
each stage of the audit.
Thus, if the value of this coefficient (financial
independence coefficient) is greater than one, then it
can be concluded that the level of financial
independence and stability of the financial situation of
the joint-stock company will be in a bad situation.
The following practical recommendations for further
improvement of the analysis of the structure of the
joint-stock company's property and the sources of its
organization can be referred to in the performance of
analytical operations by the auditing organization.
Table 3
Recommendations on improving the composition of the balance sheet of the joint-stock
company
BALANCE SHEET ASSETS
BALANCE SHEET LIABILITIES
INCREASE IN THE BALANCE AMOUNT
In line with purpose
In line with purpose
1. Increasing the value of basic funds.
1. Increase of authorized capital.
2. Increase the amount of shipped goods
(within 20-40% of the amount of working
capital).
2. Increasing retained earnings.
3. Increase production reserves as a result of
increase in production volume.
3. Increasing allocations to funds.
4. Increase funds in the account number
(within 10-30% of the amount of working
capital).
4. Increasing own funds.
Not fit for purpose
Not fit for purpose
1. Growth of funds (if it is more than 30% of the
amount of working capital).
1. Increase in accounts payable.
2. Increase in receivables (more than 40% of
total working capital).
2. Increase in loans and debts.
DECREASE IN THE BALANCE AMOUNT
In line with purpose
In line with purpose
1. Reduction of production reserves as a result
of a decrease in production volume.
1. Reduction of accounts payable.
2. Reducing the volume of unfinished
production.
2. Credit and debt reduction.
3. To reduce the costs of the next period.
4. Reducing the stock of finished products
5. Reduction of receivables
Not fit for purpose
Not fit for purpose
1. Reduction of funds (less than 10 percent of
the amount of working capital)
1. Reduction of retained earnings.
2. Reduction of production reserves despite the
increase in production volume.
2. Reduction of authorized capital.
As can be seen from this table, changes in the asset side
and the liability side of the balance sheet are analyzed
as a result of the analysis of the corresponding increase
and decrease of the changes in the accounting balance.
Including, it is necessary to analyze the appropriateness
and inappropriateness of the increase on the asset side,
as well as the changes on the passive side in the same
order. For example: it is necessary to evaluate the
increase of money from two aspects. An increase in
funds is appropriate if it is in the range of 10-30% of the
amount of working capital, if it is more than that, it is
not considered appropriate.
Tangible working capital is the main component of
current assets, and their rational use increases the level
of stability of the joint-stock company's financial
position.
International Journal of Management and Economics Fundamental
49
https://theusajournals.com/index.php/ijmef
International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
Table 4
Analysis of the production costs of dry fodder
Cost Name
Plan
Actual
Difference
Total (in
thousand
sums)
for 1 tn
(sum)
Total (in
thousand
sums)
for 1 tn
(sum)
The
volume
of
products
to
be
calculated
31 800
34 680
( + -)
%
Materials
105 099
3305
88922
2564
-740,9
77,6
Electricity
263 081
8273
233900
6745
-1528,5
81,5
Depreciation
1 370 834
43108
1737991
50115
7007,1
116,3
Paying for work
158 936
4998
194122
5598
599,5
112,0
Single
social
payment
34 535
1086
27017
779
-307,0
71,7
Total
production
costs
2 541 392
79918
2869809
82751
2833,1
103,5
Other expenses
2 227 590
70050
2656900
76612
6561,9
109,4
Total
production
costs
6 701 468
210 738
7 808 661
225 163
14425,2
106,8
The cost estimate exceeded the plan by 6.8%. The main
overhead costs are wages, general production costs
and other costs. The reason for this is "due to the
increase in wages charged to employees and the
increase in transportation costs during the grain
receiving season.
CONCLUSIONS
In the conditions of economic development in our
country, establishing correct and timely accounting of
production costs in economic entities, conducting
audits and analysis, as well as rational use of material,
labor and financial resources. the establishment of
strict control is one of the most important ways to
reduce the cost of products.
The analysis of product production costs allows to use
internal capabilities and to develop practical
suggestions for increasing the efficiency of economic
activity. Therefore, in the work: the factors influencing
the change of product production costs at JSC "Galla-
Alteg" calculation and practical recommendations for
determining and increasing internal capabilities were
given.
As a result of research, the following can be indicated
as the main sources of reducing production costs at the
enterprise:
- increasing the production volume based on the full
use of the enterprise's production capacity; - increasing
labor productivity, reducing production costs due to
the economical use of raw materials and materials,
electricity,
fuel,
equipment,
elimination
of
unproductive costs, and avoidance of waste.
The possibility of increasing the volume of product
production is determined by analyzing the execution of
the production program. Due to the increase in the
volume of the product, the variable part of the costs
(employees' wages, material costs, etc.) increases,
while the constant part of the costs is kept in the same
state, therefore, the cost reduction is achieved.
The opportunity to reduce costs is achieved by applying
innovations in each cost mode, reducing wages, raw
materials, materials, and energy. Material cost
reduction Reserves for material cost reduction are
determined by the use of new technology and other
measures based on the volume of the planned product.
Additional costs for the possibility of increasing the
volume of product production are determined for each
type of product. It is considered appropriate that the
calculation of reserves in this order should be
determined separately for each type of product and, if
possible, for innovation measures.
As a result of the research, the implementation of the
proposals made on the analysis of production costs will
allow to increase the economic efficiency of the
enterprises.
International Journal of Management and Economics Fundamental
50
https://theusajournals.com/index.php/ijmef
International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
We believe that the application of these
recommendations in the practical activities of the
enterprise will allow to accurately diagnose the
financial situation, increase efficiency, ensure their
competitiveness, prevent bankruptcy, increase their
financial potential and ensure their financial stability.
REFERENCES
Decision PQ-3946 of the President of the Republic of
Uzbekistan "On measures to further develop audit
activities in the Republic of Uzbekistan". September 19,
2018.
Decision PQ-4611 of the President of the Republic of
Uzbekistan "On additional measures for the transition
to international standards of financial reporting".
February 24, 2020.
Law of the Republic of Uzbekistan No. ORQ-677 dated
25.02.2021 on auditor activities.
Regulation on the composition of production and sale
costs of products (works, services) and the procedure
for forming financial results. Decision of the Cabinet of
Ministers of the Republic of Uzbekistan. 5.02.1999 No.
54.
Xasanov B.A. and others. Financial analysis. Textbook.-
T: Economics, 2019.
Dusmuratov R.D. Theory of accounting. Textbook. -T.:
Science and technology, 2013. -476 p.
Shoalimov A.Kh., and others. Economic analysis. Study
guide. - T.: Lesson-press, 2016.
Bunyod Usmonov. Evaluation of efficiency of capital
management in joint stock companies in the textile
sector: in case of Uzbekistan. Asian Journal of Research
in Business Economics and Management.2022, 12(1)
40-50 pp.
Акбашева Д.М. Особенности учета
затрат и
калькулирования себестоимости продукции //
Вестник Евразийской науки / The Eurasian Scientific
Journal https://esj.today 2020, №6, Том 12 / 2020, No
6.
