Explanatory power of financial statements analysis with a focus on the classification of assets

Abstract

The objective of the present paper is to find out how a varying perception of assets may effect the explanatory power of financial statements and financial analysis indicators. The financial analysis is based on the data obtained from financial statements. The focus of the article is to show results of the analysis of the division of individual movable assets of surveyed companies from one part of the Czech Republic. Statistical results confirmed varying division of individual movable assets. The conclusion of the research shows that it is convenient to create a methodics of company's division of individual movable assets, to eliminate errors such as different tax base and different values of ratios of financial analysis.