Majandustulemus

Majandustulemus is the Estonian term for the economic result of an organization over a specific accounting period. It represents the overall profitability realized during that period and is typically shown as the bottom line in the income statement, indicating whether the entity earned a profit or incurred a loss.

In practice, majandustulemus is calculated as total income minus total expenses recognised for the period. This includes operating revenues and costs, depreciation and amortization, financial income and expenses, and tax effects, though the exact presentation depends on the accounting framework used. Some reports distinguish profit before tax from the final result after taxes; the latter is often the majandustulemus in common usage, but terminology can vary by framework.

In Estonia, the presentation of majandustulemus depends on the applicable accounting standards. Smaller entities may follow Estonian GAAP, while larger companies may prepare statements under IFRS. Regardless of the framework, majandustulemus serves as the key profitability indicator in the income statement and is used to assess financial performance for the period.

Usage and relevance: Majandustulemus is used by management, investors, and other stakeholders to evaluate profitability, track performance over time, compare with peers, and inform decisions on dividends, reinvestment, or strategic direction. It reflects how effectively an organization converts revenue into profit after accounting for expenses and costs.