Accounting

The income statement compares revenues and expenses to determine a company's profit. It serves to monitor financial performance and aids in decisions for increasing profitability.

Abschreibungen verteilen den Wertverlust von Anlagevermögen durch direkte oder indirekte Methoden. Beide Methoden erfassen absichtlich die Abschreibungen, um ein klares Bild der finanziellen Lage zu bieten.

In Switzerland, a ten-year retention period for accounting records such as business books and audit reports is legally required, with business books also allowed to be stored digitally. However, digital archiving requires demonstrable immutability of the data to meet legal requirements.

Fixed assets are activated upon purchase and depreciated over their useful life either on a straight-line or declining balance basis. Straight-line depreciation distributes the costs evenly, while declining balance depreciation decreases annually.

Hidden reserves arise from the undervaluation of assets or the overvaluation of liabilities, thus concealing equity. They reduce the reported profit and can be tax-advantageous.

Profitability ratios such as gross and profit margin show how efficiently companies generate profits from business activities. Gross margin measures the return after direct costs, while profit margin indicates net profitability.

Liquidity ratios check whether companies can settle short-term liabilities. Different liquidity ratios (1, 2, 3) measure this ability by setting assets in relation to debts.

Key figures help to efficiently evaluate the financial situation of companies using balance sheet and profitability analysis. They facilitate the assessment of liquidity, profitability, and debt ratio.

Depreciation reflects the loss in value and wear and tear of company assets, depending on their lifespan. The declining balance method of depreciation utilizes tax-recognized rates that vary by type of asset.