Compiled by companies at year-end, the budget represents the static form in the financial position and financial performance, to meet the information needs of legal, tax and management. Modifications to the rules of the Civil Code (Articles 2423 to 2424), involving the preparation of financial statements – consisting of balance sheet, income statement and notes – with the transposition of Directive EEC IV, have improved the quality but did not alter conception “static” document itself.
More information (not only administrative and accounting) can then be obtained with the reclassification of balance sheet and income statement, and through the calculation of indices (relationships between items in the SP and CE reclassified), we can calculate with Excel.
It is a common practice for Italian SMEs, imported by the Anglo-Saxon countries and deemed useful tool to analyze the company and identify potential weaknesses.
Among other things, with the introduction since 2004 of new rules on the procedure for evaluating the creditworthiness of banks (Basel 2) the information system based on financial statements, has acquired additional strategic value in strengthening the corporate image based on the ability to count towards their customers, suppliers or potential business partners and investors.