What Is Economic Analysis?

Economic analysis is based on various economic theories, based on various basic data, and using various indicators and models to analyze and study the economic dynamics and their effects in a certain period of time, find out the laws from them, and point out the development Direction of research activities. Economic analysis can be divided into macro analysis and micro analysis according to the scope of the analysis object. ^[1]

Economic Analysis

Types of economic analysis

The basis of economic analysis of business decisions

In the course of production and operation, industrial enterprises must make a series of strategic or tactical decisions in order to achieve the predetermined production and operation goals. Decision making is the process of determining goals for future actions, and optimizing and implementing a more satisfactory one from two or more feasible ones. The problem of how to make correct decisions exists in all areas of the company's production and operation activities (human, financial, material, supply, production, sales), all links, and various levels (high-level, middle-level, grass-roots). High-level decision-making solves long-term, strategic major issues that are global, such as the business direction of the enterprise, and are closely related to the external environment; middle-level decision-making is a decision that ensures the completion of tasks within a certain period after the strategic decision is made; Solve specific problems in daily business. Decisions run through the production and management process. The success or failure of business decisions is related to the success or failure of an enterprise. Therefore, it is the core issue of business management. For enterprises with high management level, correct decisions will further increase economic benefits; for enterprises with high management efficiency, mistakes in decision-making will cause more serious losses. Whether an enterprise's business decision is correct or not is related to the quality of the decision maker, but also to the timeliness, accuracy, and comprehensiveness of the information and the quality of the decision analysis. The information provided by economic analysis is scientifically assimilated, screened, and used in various accounting data, and combined with various non-econometric factors to confirm each other. Therefore, in terms of the quality of its information, it is highly reliable and helpful. Decision makers analyze the situation, make judgments, and issue instructions, thereby greatly improving the level of decision-making. Decision analysis is the use of specialized methods to measure, compare and study various feasible schemes, weigh the advantages and disadvantages, enhance the advantages and avoid the disadvantages, and choose the satisfactory scheme from these activities.

Economic analysis guarantee of effective production and operation activities

Modern large-scale production, complex technology, strict division of labor, and extensive collaboration. In the production and business activities of enterprises, the external environment and internal conditions are changing rapidly, the influencing factors are complex and infiltrating. Command, control and coordination management functions to ensure the effectiveness of production operations. Economic analysis is an important part of business management. Economic analysis work, through the systematic analysis of information and data, can find gaps, tap potentials, and formulate improvement measures, so it has the functions of summing up the past, controlling the present, and guiding the future. For example, in the entire process of plan implementation, control standards are formulated based on plans, quotas, and indicators. Economic analysis is carried out, and the degree of deviation formed from the control standards is regularly reported. Measures; on the other hand, provide a basis for revising and improving control standards. Scientific and reasonable control standards put the entire production and operation process of enterprises under effective control. In this way, the effectiveness of production and operation is guaranteed.

Scientific Method of Economic Analysis and Evaluation of Enterprise Economic Benefits

In the production and operation activities of an enterprise, the comparison between input and output is called economic benefit. Any enterprise always strives to obtain the most output with a certain amount of input. Enterprises are economic organizations, and improving economic efficiency is at the center of everything they do.
Economic analysis practice and economic analysis theory run through the main line of improving economic benefits from beginning to end. Through economic analysis, we can correctly evaluate the company's ability to improve its economy from the interconnection of a series of indicators such as consumption, occupation, and results, from the economic environment in which the company is located, and from the analysis of the past, present, and development trends of the company's production and operation activities. Benefits have been reached, and the main problems exist, and the direction of future production and operation activities is pointed out.
It is a systematic project to comprehensively manage the production and operation of an enterprise. It is a systematic project. The economic activities of an enterprise are intricate and complicated. How to weigh economic benefits requires the scientific method of economic analysis. The occurrence of various economic activities has a positive or negative impact on the economic benefits of the enterprise, and the extent of the impact requires economic analysis. An economic activity may be considered beneficial if viewed from a local perspective, but may not be beneficial from an overall perspective.

Economic analysis shows that companies use economic laws

An enterprise is an organization engaged in the production and operation of socialist commodities and is the main body of the commodity economy. All activities of an enterprise are governed by economic laws, and an enterprise must organize production and operation activities in accordance with the requirements of economic laws. With the help of qualitative analysis, quantitative analysis, and causal analysis in economic analysis, the situation, causes, trends, and results of the development and changes in the production and management process of the enterprise are identified, and the actual performance of the production and operation activities of the street-level enterprises is summarized. To tap the potential and formulate countermeasures, so as to ensure that the production and operation activities of the enterprise comply with the requirements of economic laws, use economic laws more consciously, and strive to improve economic benefits.
Source: Market Research Report Network