Analysis of the critical financial condition of the enterprise. Thesis: Analysis of the financial condition of the enterprise
under financial condition refers to the ability of an enterprise to finance its activities. It is characterized by the availability of financial resources necessary for the normal functioning of the enterprise, the expediency of their placement and efficiency of use, financial relationships with other legal entities and individuals, solvency and financial stability.
The financial condition can be stable, unstable and crisis. The ability of the enterprise to make payments in a timely manner, to finance its activities on an expanded basis, indicates its good financial condition.
Financial condition of the enterprise (FSP) depends on the results of its industrial, commercial and financial activities. If the production and financial plans are successfully implemented, then this has a positive effect on the financial position of the enterprise. Conversely, as a result of underfulfillment of the plan for the production and sale of products, there is an increase in its cost, a decrease in revenue and the amount of profit and, as a result, a deterioration in the financial condition of the enterprise and its solvency.
A stable financial position, in turn, has a positive impact on the implementation of production plans and the provision of production needs with the necessary resources. Therefore, financial activity as an integral part of economic activity is aimed at ensuring the planned receipt and expenditure of financial resources, the implementation of settlement discipline, the achievement of rational proportions of equity and borrowed capital and its most efficient use.
The main purpose of the analysis is to timely identify and eliminate shortcomings in financial activity and find reserves for improving the financial condition of the enterprise and its solvency.
Analysis of the financial condition of the organization involves the following steps.
1. Preliminary review of the economic and financial situation of a business entity.
1.1. Characteristics of the general direction of financial and economic activity.
1.2. Estimation of reliability of the information of articles of the reporting.
2. Assessment and analysis of the economic potential of the organization.
2.1. Assessment of property status.
2.1.1. Construction of analytical net balance.
2.1.2. Vertical balance analysis.
2.1.3. Horizontal balance sheet analysis.
2.1.4. Analysis of qualitative changes in property status.
2.2. Assessment of the financial situation.
2.2.1. Liquidity assessment.
2.2.2. Assessment of financial stability.
3. Evaluation and analysis of the effectiveness of the financial and economic activities of the enterprise.
3.1. Evaluation of production (main) activity.
3.2. Profitability analysis.
3.3. Assessment of the situation in the securities market.
information base this methodology is a system of indicators given in Appendix 1.
8.1. Preliminary review of the economic and financial situation of the enterprise
The analysis begins with a review of the main performance indicators of the enterprise. This review should consider the following questions:
· the property status of the enterprise at the beginning and end of the reporting period;
operating conditions of the enterprise in the reporting period;
the results achieved by the enterprise in the reporting period;
· prospects of financial and economic activity of the enterprise.
The property position of the enterprise at the beginning and end of the reporting period is characterized by balance sheet data. Comparing the dynamics of the results of sections of the asset balance, you can find out the trends in the change in property status. Information about changes in the organizational structure of management, the opening of new types of activities of the enterprise, the features of working with counterparties, etc. is usually contained in an explanatory note to the annual financial statements. The effectiveness and prospects of the enterprise's activity can be generally estimated according to the analysis of profit dynamics, as well as a comparative analysis of the elements of growth of the enterprise's assets, the volume of its production activities and profit. Information about shortcomings in the work of the enterprise may be directly present in the balance sheet in an explicit or veiled form. This case may occur when there are articles in the reporting that indicate the extremely unsatisfactory performance of the enterprise in the reporting period and the resulting poor financial position (for example, the “Losses” article). In the balance sheets of quite profitable enterprises, articles may also be present in a hidden, veiled form, indicating certain shortcomings in their work.
This can be caused not only by falsifications on the part of the enterprise, but also by the accepted reporting methodology, according to which many balance sheet items are complex (for example, the items “Other debtors”, “Other creditors”).
8.2. Assessment and analysis of the economic potential of the organization
8.2.1. Assessment of property status
The economic potential of the organization can be characterized in two ways: from the position of the property status of the enterprise and from the position of its financial position. Both of these aspects of financial and economic activity are interrelated - the irrational structure of property, its poor quality composition can lead to a deterioration in the financial situation and vice versa.
According to current regulations, the balance sheet is currently compiled in net valuation. However, a number of articles are still regulatory in nature. For ease of analysis, it is advisable to use the so-called condensed analytical net balance
, which is formed by eliminating the influence on the balance sheet result (currency) and its structure of regulatory articles. For this:
· amounts under the item “Debts of participants (founders) on contributions to the authorized capital” reduce the amount of equity capital and the amount of current assets;
· by the value of the item “Evaluated reserves (“Reserve for doubtful debts”)”, the value of receivables and equity of the enterprise is adjusted;
· elements of balance sheet items that are homogeneous in composition are combined in the necessary analytical sections (long-term current assets, equity and borrowed capital).
The stability of the financial position of the enterprise largely depends on the appropriateness and correctness of investing financial resources in assets.
In the course of the functioning of the enterprise, the value of assets, their structure undergo constant changes. The most general idea of the qualitative changes that have taken place in the structure of funds and their sources, as well as the dynamics of these changes, can be obtained using vertical and horizontal analysis of reporting.
Vertical Analysis shows the structure of the company's funds and their sources. Vertical analysis allows you to move on to relative estimates and conduct economic comparisons of the economic performance of enterprises that differ in the amount of resources used, smooth out the impact of inflationary processes that distort the absolute indicators of financial statements.
Horizontal Analysis reporting consists in building one or more analytical tables in which absolute indicators are supplemented by relative growth (decrease) rates. The degree of aggregation of indicators is determined by the analyst. As a rule, basic growth rates are taken for a number of years (contiguous periods), which makes it possible to analyze not only the change in individual indicators, but also to predict their values.
Horizontal and vertical analyzes complement each other. Therefore, in practice, it is not uncommon to build analytical tables that characterize both the structure of financial statements and the dynamics of its individual indicators. Both of these types of analysis are especially valuable in inter-farm comparisons, as they allow you to compare the statements of enterprises that differ in type of activity and production volumes.
Criteria qualitative changes in the property status of the enterprise and the degree of their progressiveness are indicators such as:
the amount of economic assets of the enterprise;
The share of the active part of fixed assets;
The wear factor
· the share of quickly realizable assets;
the share of leased fixed assets;
The share of accounts receivable, etc.
Formulas for calculating these indicators are given in Appendix 2.
Consider their economic interpretation.
The amount of economic assets at the disposal of the enterprise. This indicator gives a generalized valuation of assets on the balance sheet of the enterprise. This is an accounting estimate that does not match the total market value of its assets. The growth of this indicator indicates an increase in the property potential of the enterprise.
The share of the active part of fixed assets. Under the active part of fixed assets understand machinery, equipment and vehicles. The growth of this indicator in dynamics is usually regarded as a favorable trend.
Wear factor. The indicator characterizes the share of the value of fixed assets remaining to be written off as expenses in subsequent periods. The coefficient is usually used in the analysis as a characteristic of the state of fixed assets. The addition of this indicator to 100% (or one) is the coefficient validity. The depreciation factor depends on the accepted depreciation calculation method and does not fully reflect the actual depreciation of fixed assets. Likewise, shelf life does not provide an accurate estimate of their present value. This is due to a number of reasons: the rate of inflation, the state of the conjuncture and demand, the correctness of determining the useful life of fixed assets, etc. However, despite the shortcomings, the conditionality of indicators of wear and tear, they have a certain analytical value. According to some estimates, a wear factor value of more than 50% is considered undesirable.
update rate. Shows what part of the fixed assets available at the end of the reporting period are new fixed assets.
Dropout rate. Shows what part of the fixed assets with which the company began operations in the reporting period, retired due to dilapidation and other reasons.
8.2.2. Assessment of financial position
The financial position of the enterprise can be assessed from the point of view of the short and long term. In the first case, the criteria for assessing the financial position are the liquidity and solvency of the enterprise, i.e. the ability to timely and in full make settlements on short-term obligations.
Under liquidity any asset understand its ability to be transformed into cash, and the degree of liquidity is determined by the length of the time period during which this transformation can be carried out. The shorter the period, the higher the liquidity of this type of assets.
Speaking of company liquidity, mean that he has working capital in the amount theoretically sufficient to repay short-term obligations, even if with a violation of the maturity dates stipulated by the contracts.
Solvency means that the enterprise has cash and cash equivalents sufficient for settlements of accounts payable requiring immediate repayment. Thus, the main signs of solvency are: a) the presence of sufficient funds in the current account; b) the absence of overdue accounts payable.
Obviously, liquidity and solvency are not identical to each other. Thus, liquidity ratios may characterize the financial position as satisfactory, however, in essence, this assessment may be erroneous if a significant proportion of current assets falls on illiquid assets and overdue receivables. Here are the main indicators to assess the liquidity and solvency of the enterprise.
The amount of own working capital. It characterizes that part of the company's own capital, which is the source of coverage of its current assets (ie, assets with a turnover of less than one year). This is a calculated indicator that depends both on the structure of assets and on the structure of sources of funds. The indicator is of particular importance for enterprises engaged in commercial activities and other intermediary operations. Ceteris paribus, the growth of this indicator in dynamics is regarded as a positive trend. The main and constant source of increasing own funds is profit. It is necessary to distinguish between "working capital" and "own working capital". The first indicator characterizes the assets of the enterprise (section II of the balance sheet asset), the second - the sources of funds, namely the part of the enterprise's own capital, considered as a source of coverage of current assets. The value of own working capital is numerically equal to the excess of current assets over current liabilities. A situation is possible when the value of current liabilities exceeds the value of current assets. The financial position of the enterprise in this case is considered as unstable; immediate action is required to correct it.
Maneuverability of functioning capital. It characterizes that part of own working capital, which is in the form of cash, i.e. funds with absolute liquidity. For a normally functioning enterprise, this indicator usually varies from zero to one. Ceteris paribus, the growth of the indicator in dynamics is considered as a positive trend. An acceptable indicative value of the indicator is set by the enterprise independently and depends, for example, on how high its daily need for free cash resources is.
Current liquidity ratio. Gives a general assessment of the liquidity of assets, showing how many rubles of current assets account for one ruble of current liabilities. The logic of calculating this indicator is that the company repays short-term liabilities mainly at the expense of current assets; therefore, if current assets exceed current liabilities, the enterprise can be considered as successfully functioning (at least theoretically). The value of the indicator can vary by industry and type of activity, and its reasonable growth in dynamics is usually regarded as a favorable trend. In Western accounting and analytical practice, the lower critical value of the indicator is given - 2; however, this is only an indicative value, indicating the order of the indicator, but not its exact normative value.
Quick liquidity ratio. The indicator is similar to the current liquidity ratio; however, it is calculated on a narrower range of current assets. The least liquid part of them - production stocks - is excluded from the calculation. The logic behind this exclusion is not only that inventories are significantly less liquid, but, more importantly, that the cash that can be raised if inventories are forced to be sold may be substantially lower than the cost of acquiring them.
Approximate lower value of the indicator - 1; however, this assessment is also conditional. Analyzing the dynamics of this coefficient, it is necessary to pay attention to the factors that caused its change. So, if the growth of the quick liquidity ratio was associated mainly with growth. unjustified receivables, this cannot characterize the activity of the enterprise on the positive side.
Absolute liquidity ratio (solvency) is the most stringent criterion for the liquidity of an enterprise and shows what part of short-term debt obligations can be repaid immediately if necessary. The recommended lower limit of the indicator given in Western literature is 0.2. Since the development of industry standards for these coefficients is a matter of the future, in practice it is desirable to analyze the dynamics of these indicators, supplementing it with a comparative analysis of available data on enterprises that have a similar orientation of their economic activity.
The share of own working capital in covering stocks. Characterizes that part of the cost of inventories, which is covered by own working capital. Traditionally, it is of great importance in the analysis of the financial condition of trade enterprises; the recommended lower limit of the indicator in this case is 50%.
Inventory coverage ratio. Calculated by correlating the value of "normal" sources of coverage of reserves and the amount of reserves. If the value of this indicator is less than one, then the current financial condition of the enterprise is considered as unstable.
One of the most important characteristics of the financial condition of an enterprise is the stability of its activities in the light of a long-term perspective. It is related to the overall financial structure of the enterprise, the degree of its dependence on creditors and investors.
Financial stability in the long run is characterized, therefore, by the ratio of own and borrowed funds. However, this indicator gives only a general assessment of financial stability. Therefore, in the world and domestic accounting and analytical practice, a system of indicators has been developed.
Equity concentration ratio. Characterizes the share of the owners of the enterprise in the total amount of funds advanced in its activities. The higher the value of this ratio, the more financially stable, stable and independent of external loans the enterprise. An addition to this indicator is the concentration ratio of attracted (borrowed) capital - their sum is equal to 1 (or 100%).
Coefficient of financial dependence. It is the inverse of the equity concentration ratio. The growth of this indicator in dynamics means an increase in the share of borrowed funds in the financing of the enterprise. If its value is reduced to one (or 100%), this means that the owners fully finance their enterprise.
The coefficient of maneuverability of equity capital. Shows what part of equity is used to finance current activities, i.e. invested in working capital, and what part is capitalized. The value of this indicator can significantly vary depending on the capital structure and industry sector of the enterprise.
Coefficient of structure of long-term investments. The logic for calculating this indicator is based on the assumption that long-term loans and borrowings are used to finance fixed assets and other capital investments. The ratio shows what part of fixed assets and other non-current assets is financed by external investors.
Long-term borrowing ratio. Characterizes the structure of capital. The growth of this indicator in dynamics is a negative trend, which means that the company is becoming more and more dependent on external investors.
The ratio of own and borrowed funds. Like some of the above indicators, this ratio gives the most general assessment of the financial stability of the enterprise. It has a fairly simple interpretation: its value, for example, equal to 0.178, means that for every ruble of own funds invested in the assets of the enterprise, 17.8 kopecks are accounted for. borrowed money. The growth of the indicator in dynamics indicates an increase in the dependence of the enterprise on external investors and creditors, i.e. about some decrease in financial stability, and vice versa.
There are no single normative criteria for the considered indicators. They depend on many factors: the sectoral affiliation of the enterprise, the principles of lending, the current structure of sources of funds, the turnover of working capital, the reputation of the enterprise, etc. Therefore, the acceptability of the values of these coefficients, an assessment of their dynamics and directions of change can only be established as a result of comparison by groups.
8.3. Evaluation and analysis of the effectiveness of financial and economic activities
8.3.1. Business Activity Assessment
The assessment of business activity is aimed at analyzing the results and the effectiveness of the current main production activity
An assessment of business activity at a qualitative level can be obtained as a result of comparing the activities of a given enterprise and related enterprises in terms of capital investment. Such qualitative (i.e., non-formalizable) criteria are: the breadth of sales markets for products; the availability of products supplied for export; the reputation of the enterprise, expressed, in particular, in the popularity of customers using the services of the enterprise, etc. Quantitative assessment is done in two directions :
the degree of fulfillment of the plan (established by a higher organization or independently) according to the main indicators, ensuring the specified rates of their growth;
· level of efficiency of use of resources of the enterprise.
To implement the first line of analysis, it is also advisable to take into account the comparative dynamics of the main indicators. In particular, the following ratio is optimal:
T pb > T p > T ak > 100%,
where T pb > T p -, T ak - respectively, the rate of change in profits, sales, advanced capital (Bd).
This dependence means that: a) the economic potential of the enterprise increases; b) compared with the increase in economic potential, the volume of sales increases at a higher rate, i.e. enterprise resources are used more efficiently; c) profit increases at a faster pace, which indicates, as a rule, a relative decrease in production and distribution costs.
However, deviations from this ideal dependence are also possible, and they should not always be considered as negative, such reasons are: the development of new prospects for the direction of capital investment, the reconstruction and modernization of existing industries, etc. This activity is always associated with significant investments of financial resources, which for the most part do not provide quick benefits, but in the long term can fully pay off.
To implement the second direction, various indicators can be calculated that characterize the efficiency of the use of material, labor and financial resources. The main ones are output, capital productivity, turnover of inventories, duration of the operating cycle, turnover of advanced capital.
At analysis of working capital turnover special attention should be paid to inventories and receivables. The less the financial resources in these assets become dead, the more efficiently they are used, the faster they turn around, and the more and more profits they bring to the enterprise.
The turnover is estimated by comparing the indicators of the average balances of current assets and their turnover for the analyzed period. Turnovers in the assessment and analysis of turnover are:
For inventories - the cost of production of sold products;
· for receivables - sales of products by bank transfer (since this indicator is not reflected in the financial statements and can be identified from accounting data, in practice it is often replaced by an indicator of sales proceeds).
Let's give an economic interpretation of the turnover indicators:
· turnover in turnover indicates the average number of turnovers of funds invested in assets of this type in the analyzed period;
· turnover in days indicates the duration (in days) of one turnover of funds invested in assets of this type.
A generalized characteristic of the duration of the deadening of financial resources in current assets is cycle time indicator, i.e. how many days on average pass from the moment of investing funds in current production activities until they are returned in the form of proceeds to the current account. This indicator largely depends on the nature of production activities; its reduction is one of the main on-farm tasks of the enterprise.
Indicators of the efficiency of the use of certain types of resources are summarized in terms of the turnover of equity capital and the turnover of fixed capital, characterizing, respectively, the return on investment in the enterprise: a) the owner's funds; b) all means, including attracted. The difference between these ratios is due to the degree of borrowing to finance production activities.
The generalizing indicators for assessing the efficiency of the use of enterprise resources and the dynamism of its development include the indicator of resource efficiency and the coefficient of sustainability of economic growth.
Resource productivity (turnover ratio of advanced capital). It characterizes the volume of sold products per ruble of funds invested in the activities of the enterprise. The growth of the indicator in dynamics is considered as a favorable trend.
Coefficient of sustainability of economic growth. Shows the average pace at which an enterprise can develop in the future without changing the already established ratio between various sources of financing, capital productivity, production profitability, dividend policy, etc.
8.3.2. Profitability assessment
The main indicators of this block, used in countries with market economies to characterize the profitability of investments in activities of a particular type, include return on advanced capital And return on equity. The economic interpretation of these indicators is obvious - how many rubles of profit fall on one ruble of advanced (own) capital. Enough attention is paid to the calculation of these indicators in topic No. 7.
8.3.3. Assessment of the situation in the securities market
This type of analysis is performed in companies listed on stock exchanges and listing their securities there. Analysis cannot be performed directly on financial statements - additional information is needed. Since the terminology for securities in our country has not yet fully developed, the given names of indicators are conditional.
Earnings per share. It is the ratio of net income, less dividends on preferred shares, to the total number of ordinary shares. It is this indicator that largely affects the market price of shares. Its main shortcoming in the analytical plan is the spatial incompatibility due to the unequal market value of the shares of different companies.
Share value. It is calculated as the quotient of dividing the market price of a share by earnings per share. This indicator serves as an indicator of demand for the shares of this company, since it shows how much investors are willing to pay at the moment for one ruble of earnings per share. The relatively high growth of this indicator in dynamics indicates that investors expect faster growth in the profits of this firm compared to others. This indicator can already be used in spatial (inter-farm) comparisons. Companies with a relatively high value of the economic growth stability coefficient are also characterized, as a rule, by a high value of the “share value” indicator.
The dividend yield of a share. It is expressed as the ratio of the dividend paid on shares to its market price. In companies expanding their activities by capitalizing most of the profits, the value of this indicator is relatively small. The dividend yield of a stock is the percentage return on capital invested in a firm's stock. This is a direct effect. There is also an indirect one (income or loss), expressed in a change in the market price of the shares of this company.
dividend yield. Calculated by dividing the dividend paid per share by earnings per share. The most obvious interpretation of this indicator is the share of net profit paid out to shareholders in the form of dividends. The value of the coefficient depends on the investment policy of the company. This indicator is closely related to the profit reinvestment coefficient, which characterizes its share aimed at the development of production activities. The sum of the values of the dividend yield indicator and the profit reinvestment coefficient is equal to one.
Share quote ratio. It is calculated by the ratio of the market price of a share to its accounting (book) price. The book price characterizes the share of equity per share. It consists of the nominal value (i.e. the value affixed on the letterhead of the share for which it is accounted for in the share capital), share premium (the accumulated difference between the market price of the shares at the time of sale and their nominal value) and the share accumulated and invested in profit firm development. The value of the quote coefficient greater than one means that potential shareholders, when purchasing a share, are ready to give a price for it that exceeds the accounting estimate of the real capital attributable to the share at the moment.
In the process of analysis, rigidly determined factor models can be used to identify and give a comparative description of the main factors that influenced the change in a particular indicator. .
The given system is based on the following rigidly determined factor dependence:
Where KFZ- coefficient of financial dependence, VA- the amount of assets of the enterprise, SC- equity.
From the presented model it can be seen that the return on equity depends on three factors: the profitability of economic activity, resource efficiency and the structure of the advanced capital. The significance of the identified factors is explained by the fact that in a certain sense they summarize all aspects of the financial and economic activities of the enterprise, in particular the financial statements: the first factor summarizes the form No. 2 "Profit and Loss Statement", the second - the balance sheet asset, the third - balance sheet liabilities.
8.4. Determination of the unsatisfactory structure of the balance sheet of the enterprise
Currently, most Russian enterprises are in a difficult financial condition. Mutual non-payments between business entities, high tax and bank interest rates lead to the fact that enterprises are insolvent. An external sign of the insolvency (bankruptcy) of an enterprise is the suspension of its current payments and the inability to satisfy the claims of creditors within three months from the date of their execution.
In this regard, the issue of assessing the structure of the balance sheet is of particular relevance, since decisions on the insolvency of an enterprise are made upon recognition of the unsatisfactory structure of the balance sheet.
The main purpose of conducting a preliminary analysis of the financial condition of the enterprise is to justify the decision to recognize the balance sheet structure as unsatisfactory, and the enterprise as solvent in accordance with the system of criteria approved by Decree of the Government of the Russian Federation dated May 20, 1994 No. 498 “On Certain Measures to Implement Insolvency Law ( bankruptcy) of enterprises. The main sources of analysis are f. No. 1 "Balance of the enterprise", f. No. 2 "Profit and Loss Statement".
Analysis and assessment of the structure of the enterprise's balance sheet are carried out on the basis of indicators: current liquidity ratio; coefficient of provision with own funds.
The basis for recognizing the balance sheet structure of an enterprise as unsatisfactory, and the enterprise as insolvent is one of the following conditions:
the current liquidity ratio at the end of the reporting period is less than 2; (K tl);
the equity ratio at the end of the reporting period is less than 0.1. (K oss).
The main indicator characterizing the presence of a real opportunity for an enterprise to restore (or lose) its solvency within a certain period is the coefficient of restoration (loss) of solvency. If at least one of the coefficients is less than the standard ( K tl<2, а K oss<0,1), то рассчитывается коэффициент восстановления платежеспособности за период, установленный равным шести месяцам.
If the current liquidity ratio is greater than or equal to 2, and the equity ratio is greater than or equal to 0.1, the solvency loss ratio is calculated for a period set equal to three months.
Solvency recovery ratio Sun is defined as the ratio of the estimated current liquidity ratio to its standard. The estimated current liquidity ratio is determined as the sum of the actual value of the current liquidity ratio at the end of the reporting period and the change in the value of this ratio between the end and the beginning of the reporting period in terms of the solvency recovery period, set equal to six months:
,
Where K ntl- normative value of the current liquidity ratio,
K ntl\u003d 2; 6 - the period of restoration of solvency for 6 months;
T - reporting period, months.
The solvency recovery ratio, which takes a value greater than 1, indicates that the enterprise has a real opportunity to restore its solvency. The solvency recovery ratio, which takes a value less than 1, indicates that the company has no real opportunity to restore solvency in the next six months.
The coefficient of loss of solvency K y is defined as the ratio of the estimated current liquidity ratio to its established value. The estimated current liquidity ratio is determined as the sum of the actual value of the current liquidity ratio at the end of the reporting period and the change in the value of this ratio between the end and the beginning of the reporting period in terms of the period of insolvency, set equal to three months:
,
Where That- the period of loss of solvency of the enterprise, months.
The calculated coefficients are entered in the table (Table 29), which is available in the appendices to the "Methodological provisions for assessing the financial condition of enterprises and establishing an unsatisfactory balance structure."
Table 29
Assessment of the balance sheet structure of an enterprise
|
Name of indicator |
At the beginning of the period |
At the time of establishment of solvency |
coefficient |
|
|
Current liquidity ratio |
At least 2 |
|||
|
Equity ratio |
Not less than 0.1 |
|||
|
The coefficient of restoration of solvency of the enterprise. According to this table, the calculation according to the formula: |
Not less than 1.0 |
|||
|
The coefficient of loss of solvency of the enterprise. According to this table, calculation according to the formula: line 1gr.4 + 3: T (str.1gr.4-tr.1gr.Z), where T takes the values of 3, 6, 9 or 12 months |
Questions for self-control
1. What is the procedure for analyzing the financial condition of the enterprise?
2. What are the sources of information for the analysis of the financial condition?
3. What is the essence of the vertical and horizontal analysis of the balance sheet of the enterprise?
4. What are the principles of building an analytical balance - net?
5. What is the liquidity of the enterprise and how does it differ from its solvency?
6. Based on what indicators is the analysis of the liquidity of the enterprise?
7. What is the concept and assessment of the financial stability of the enterprise?
8. What indicators are used to analyze the business activity of the enterprise?
9. Under what conditions are solvency recovery ratios calculated?
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Application for assessment of the financial condition of the enterprise
It is one of the key points of its assessment, as it serves as the basis for understanding the true state of the enterprise. Financial analysis is the process of researching and evaluating an enterprise in order to develop the most reasonable decisions for its further development and understanding of its current state.Under the financial condition refers to the ability of the company to finance its activities. It is characterized by the availability of financial resources necessary for the normal functioning of the enterprise, the expediency of their placement and efficiency of use, financial relationships with other legal entities and individuals, solvency and financial stability.The results of financial analysis directly affect the choice of valuation methods, forecasting the income and expenses of the enterprise, determining the discount rate used in the discounted cash flow method, and the value of the multiplier used in the comparative approach.
Analysis of the financial condition of the enterprise includes the analysis of balance sheets and reports on the financial results of the evaluated enterprise for the past periods in order to identify trends in its activities and determine the main financial indicators.
Analysis of the financial condition of the enterprise involves the following steps:
- Analysis of property status
- Analysis of financial results
- Analysis of the financial condition
1. Analysis of property status
In the course of the functioning of the enterprise, the value of assets, their structure undergo constant changes. The most general idea of the qualitative changes that have taken place in the structure of funds and their sources, as well as the dynamics of these changes, can be obtained using vertical and horizontal analysis of reporting.
Vertical analysis shows the structure of enterprise funds and their sources. Vertical analysis allows you to move on to relative estimates and conduct economic comparisons of the economic performance of enterprises that differ in the amount of resources used, smooth out the impact of inflationary processes that distort the absolute indicators of financial statements.
Horizontal analysis of reporting consists in the construction of one or more analytical tables in which absolute indicators are supplemented by relative growth (decrease) rates. The degree of aggregation of indicators is determined by the analyst. As a rule, basic growth rates are taken for a number of years (contiguous periods), which makes it possible to analyze not only the change in individual indicators, but also to predict their values.
Horizontal and vertical analyzes complement each other. Therefore, in practice, it is not uncommon to build analytical tables that characterize both the structure of financial statements and the dynamics of its individual indicators. Both of these types of analysis are especially valuable in inter-farm comparisons, as they allow you to compare the statements of enterprises that differ in type of activity and production volumes.
2. Analysis of financial results
Profitability indicators are relative characteristics of the financial results and performance of the enterprise. They measure the profitability of an enterprise from various positions and are grouped according to the interests of the participants in the economic process, market volume. Profitability indicators are important characteristics of the factor environment for the formation of profits and income of enterprises. The effectiveness and economic feasibility of the operation of an enterprise are measured by absolute and relative indicators: profit, gross income, profitability, etc.
3. Analysis of the financial condition
3.1. Assessment of the dynamics and structure of balance sheet items
The financial condition of the enterprise is characterized by the placement and use of funds and sources of their formation.For a general assessment of the dynamics of the financial condition, balance sheet items should be grouped into separate specific groups on the basis of liquidity and maturity of obligations (aggregate balance sheet). On the basis of the aggregated balance sheet, an analysis of the structure of the enterprise's property is carried out. Directly from the analytical balance sheet, you can get a number of the most important characteristics of the financial condition of the enterprise.Dynamic analysis of these indicators allows you to set their absolute increments and growth rates, which is important for characterizing the financial condition of the enterprise.
3.2. Analysis of liquidity and solvency of the balance sheet
The financial position of the enterprise can be assessed from the point of view of the short and long term. In the first case, the criteria for assessing the financial position are the liquidity and solvency of the enterprise, i.e. the ability to timely and in full make settlements on short-term obligations.The task of analyzing the liquidity of the balance sheet arises in connection with the need to assess the creditworthiness of the organization, i.e. its ability to timely and fully pay all its obligations.
Balance sheet liquidity is defined as the extent to which an organization's liabilities are covered by its assets, the maturity of which is equal to the maturity of the liabilities. Liquidity of the balance sheet should be distinguished from the liquidity of assets, which is defined as the temporary value necessary to convert them into cash. The less time it takes for this type of asset to turn into money, the higher their liquidity.
Solvency means that the enterprise has cash and cash equivalents sufficient to pay for accounts payable requiring immediate repayment. Thus, the main signs of solvency are: a) the presence of sufficient funds in the current account; b) the absence of overdue accounts payable.
Obviously, liquidity and solvency are not identical to each other. Thus, liquidity ratios may characterize the financial position as satisfactory, however, in essence, this assessment may be erroneous if a significant proportion of current assets falls on illiquid assets and overdue receivables.
Depending on the degree of liquidity, i.e. the rate of conversion into cash, the Company's assets can be divided into the following groups:
A1. Most liquid assets- these include all items of cash assets of the enterprise and short-term financial investments. This group is calculated as follows: (line 260+line 250)
A2. Quick Selling Assets- accounts receivable, payments on which are expected within 12 months after the reporting date: (line 240+line 270).
A3. Slow selling assets- items in section II of the balance sheet asset, including inventories, value added tax, receivables (payments for which are expected more than 12 months after the reporting date) and other current assets:
A4. Difficult-to-sell assets- articles of section I of the balance sheet asset - non-current assets: (line 110 + line 120-line 140)
Liabilities of the balance are grouped according to the degree of urgency of their payment.
P1. Most urgent obligations- these include accounts payable: (line 620 + line 670)
P2. Short-term liabilities- these are short-term borrowed funds, and other short-term liabilities: (line 610 + line 630 + line 640 + line 650 + line 660)
P3. Long-term liabilities- these are balance sheet items related to sections V and VI, i.e. long-term loans and borrowings, as well as debt to participants for the payment of income, deferred income and reserves for future expenses: (line 510 + line 520)
P4. Permanent liabilities or sustainable- these are articles of the IV section of the balance sheet "Capital and reserves". (p. 490-p. 217). If the organization has losses, then they are deducted:
To determine the liquidity of the balance sheet, one should compare the results of the above groups for assets and liabilities.
The balance is considered absolutely liquid if the following ratios take place:
A1 > P1; A2 > P2; A3 > P3; A4
If the first three inequalities are satisfied in this system, then this entails the fulfillment of the fourth inequality, so it is important to compare the results of the first three groups by asset and liability.
In the case when one or more inequalities of the system have the opposite sign from that fixed in the optimal variant, the liquidity of the balance to a greater or lesser extent differs from the absolute one. At the same time, the lack of funds in one group of assets is compensated by their surplus in another group in value, but in a real situation, less liquid assets cannot replace more liquid ones.
Further comparison of liquid funds and liabilities allows us to calculate the following indicators:
Current liquidity of TL, which indicates the solvency (+) or insolvency (-) of the organization for the nearest time period to the moment in question:
TL \u003d (A1 + A2) - (P1 + P2)
Prospective liquidity of PL is a forecast of solvency based on a comparison of future receipts and payments:
PL \u003d A3 - P3
The analysis of financial statements and liquidity of the balance sheet carried out according to the above scheme is approximate. More detailed is the analysis of financial indicators and ratios.
3.3. Analysis of financial independence and capital structure
An assessment of the financial condition of an enterprise will be incomplete without an analysis of financial stability. Financial independence - a certain state of the company's accounts, guaranteeing its constant solvency.
An analysis of financial independence for a particular date allows you to answer the question: how correctly did the organization manage financial resources during the period preceding this date. The essence of financial independence is determined by the effective formation, distribution and use of financial resources. An important indicator that characterizes the financial condition of the enterprise and its independence is the availability of material working capital from its own sources, i.e. financial independence is the provision of reserves with sources of their formation, and solvency is its external manifestation. It is important not only the ability of the enterprise to return borrowed funds, but also its financial stability, i.e. financial independence of the enterprise, the ability to maneuver with its own funds, sufficient financial security for an uninterrupted process of activity.
The tasks of analyzing the financial stability of an enterprise are to assess the size and structure of assets and liabilities - this is necessary in order to find out:
a) how independent the enterprise is from a financial point of view;
b) the level of this independence increases or decreases and whether the state of assets and liabilities meets the objectives of the financial and economic activities of the enterprise.
Financial independence is characterized by a system of absolute and relative indicators. Absolute are used to characterize the financial situation arising within the same enterprise. Relative - to characterize the financial situation in the economy, they are called financial ratios.
The most general indicator of financial independence is the excess or lack of a source of funds for the formation of reserves. The meaning of the analysis of financial independence using an absolute indicator is to check what sources of funds and in what amount are used to cover stocks.
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INTRODUCTION 2
1. Theoretical aspects of the analysis. 5
the financial condition of the enterprise. 5
1.2. Analysis of solvency and financial stability as indicators of the financial potential of the enterprise. 21
1.3. Methodology for the analysis of the financial condition. 24
2. Preliminary characteristics of the financial condition according to the financial statements of Tambovavtoservice LLC. 27
2.1. Characteristics of the enterprise TambovAvtoservis LLC. 27
2.2. Analysis of the composition and structure of the enterprise's funds and their sources according to the balance sheet. 28
2.3. Analysis of the composition and structure of current assets according to the degree of risk. 34
2.4. Analysis of receivables and payables. 37
3. Internal in-depth analysis of the financial condition and financial stability of LLC "tambovavtoservis". 44
3.1. Analysis of the liquidity of the balance sheet, solvency of the enterprise. 44
3.2. Analysis of the turnover of the company's assets. 50
3.3. Generalizing analysis of the financial stability of the enterprise. 54
CONCLUSION. 63
LIST OF USED LITERATURE .. 66
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8. Balabanov I.T. Financial analysis and planning of an economic entity. / I.T. Balabanov. - M: Finance and statistics, 2002. - 207 p.
9. Berdnikova T.B. Analysis and diagnostics of financial and economic activity of the enterprise. / T.B. Berdnikov. Proc. allowance. - M .: Infra-M - M, 2006. - 224 p.
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12. Vakhrin P.I. Financial analysis in commercial and non-commercial structures. / P.I. Vakhrin. Proc. allowance. -M.: Dashkov and Co., 2002. -224 p.
13. Gerasimova V.A. Analysis of the financial and economic activities of the enterprise in questions and answers. / V.A. Gerasimova, I.N. Chuev, L.N. Lentils. Proc. allowance. - M .: Dashkov and Co. 2002. - 224 p.
14. Efimova O.V. The financial analysis. / O.V. Efimova - M .: Accounting, 2002. - 351 p.
15. Zimin N.E. Analysis and diagnostics of the financial condition of the enterprise. / NOT. Zimin. Proc. allowance. – M.: EKMOS, 2002. – 240 p.
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21. Kreinina M.N. Financial management. / M.N. Kreinin. -M.: DiS, 2001. -400 p.
22. Lyubushin N.P. Analysis of financial and economic activity. / N.P. Lyubushin, V.B. Leshcheva, V.G. Dyakova. Proc. allowance. - M.: UNITI-DANA, 2001. - 471 p.
23. Makarieva V.I. Analysis of the financial and economic activities of the organization. / IN AND. Makarieva, L.V. Andreeva - M.: Finance and statistics, 2006. - 304 p.
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26. Radchenko Yu.V. Analysis of financial statements. / Yu.V. Radchenko. Proc. allowance. - M.: Phoenix, 2006. - 192 p.
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28. Selezneva N.N. The financial analysis. / N.N. Selezneva, A.F. Ivanova. Proc. allowance. - M.: UNITI-DANA, 2001. - 479 p.
29. Selezneva N.N. Analysis of the organization's financial statements. / N.N. Seleznev. Proc. allowance. - M.: UNITI-DANA, 2007. - 584 p.
30. Stoyanova E.S. Financial management: theory and practice. / E.S. Stoyanov. Textbook - M .: Perspective, 2006. - 656 p.
31. Finance of organizations (enterprises) / Ed. N.V. Kolchina. - M.: UNITI-DANA, 2006. - 368 p.
Application
Compacted balance sheet of AutoAlliance LLC in dynamics for the period from 2005 to 2007 (thousand roubles)
| Indicators | 2005 year | 2006 | 2007 | ||||||||||||
| Start | end | Start | end | Start | end | ||||||||||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ||||||||
| ASSETS | |||||||||||||||
| 1. Non-current assets | |||||||||||||||
| Intangible assets | 110 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
| fixed assets | 120 | 397,00 | 742,00 | 742,00 | 1169,00 | 1169,00 | 1561,00 | ||||||||
| Construction in progress | 130 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
| Long-term financial investments | 140 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
| Other noncurrent assets | 150 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
| Section 1 Total | 190 | 397,00 | 742,00 | 742,00 | 1169,00 | 1169,00 | 1561,00 | ||||||||
| 2. Current assets | |||||||||||||||
|
including |
18539,00 | 18539,00 | 23402,00 | 23402,00 | |||||||||||
| raw materials | 211 | 1031,00 | 2022,00 | 2022,00 | 3355,00 | 3355,00 | 4654,00 | ||||||||
| finished products | 214 | 6234,00 | 7833,00 | 7833,00 | 9235,00 | 9235,00 | 10326,00 | ||||||||
| Goods shipped | 215 | 8203,00 | 8684,00 | 8684,00 | 10812,00 | 10812,00 | 10958,00 | ||||||||
| Future expenses | 216 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
| Value added tax on acquired valuables | 220 | 2861,00 | 3366,00 | 3366,00 | 3939,00 | 29239,30 | 4798, 20 | ||||||||
| Accounts receivable (payments more than a year later) | 230 | 1786,00 | 1786,00 | 2522,00 | 2522,00 | 10201,00 | |||||||||
| Accounts receivable (payments during the year) | 240 | 1254,00 | 1865,00 | 1865,00 | 2444,00 | 2444,00 | 4890,00 | ||||||||
| Short-term financial investments | 250 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
| Cash | 260 | 1957,00 | 286,00 | 286,00 | 886,00 | 886,00 | 1731 | ||||||||
| Other current assets | 270 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
| Section 2 total | 290 | 19743,00 | 22476,00 | 22476,00 | 29254,00 | 29254,00 | 42760,00 | ||||||||
| BALANCE (190+290) | 300 | 20140,00 | 23218,00 | 23218,00 | 30423,00 | 30423,00 | 44321,00 | ||||||||
| LIABILITY | |||||||||||||||
| 3. Capital and reserves | |||||||||||||||
| Authorized capital | 410 | 300,00 | 300,00 | 300,00 | 300,00 | 300,00 | 300,00 | ||||||||
| Extra capital | 420 | 0 | |||||||||||||
| Reserve capital | 430 | 3000,00 | 5000,00 | 5000,00 | 10000,00 | 10000,00 | 10000,00 | ||||||||
| retained earnings | 470 | 476,00 | 617,00 | 617,00 | 1131,00 | 1131,00 | 1580,00 | ||||||||
| Section 3 Total | 490 | 3776,00 | 5917,00 | 5917,00 | 11431,00 | 11431,00 | 11880,00 | ||||||||
Table continuation.
Comparative analytical balance
Analysis of the financial condition of the organization begins with a comparative analytical balance sheet. This reveals the most important characteristics:
The total value of the property of the organization;
Cost of immobilized and mobile means;
The amount of own and borrowed funds of the organization, etc.
Evaluation of comparative analytical balance data is, in fact, a preliminary analysis of the financial condition, which makes it possible to judge the payment, creditworthiness and financial stability of the organization, the nature of the use of financial resources
| Name of indicator | Code lines |
01.01.2011 | 01.01.2012 | 01.01.2013 | 01.01.2014 | 01.01.2015 | Deviation 01.01.2015 from 01.01.2011 |
|
1. Immobilized assets |
- |
1.1. Intangible assets |
1110+..+1140 | 5905 | 5897 | 5967 | 5877 | 5076 | -829 |
|
1.2. fixed assets |
1150 | 324515 | 314515 | 324515 | 314415 | 284433 | -40082 |
1.3. Long-term financial investments |
1160+1170 | 8636 | 6065 | 21576 | 3842 | 176392 | 167756 |
|
1.4. Other |
1180+1190 | 154148 | 181097 | 187141 | 173237 | 190524 | 36376 |
TOTAL for section 1 |
1100 | 493204 | 507574 | 539199 | 497371 | 656425 | 163221 |
|
2. Current assets |
- |
2.1. Stocks |
1210+1220 | 905479 | 890123 | 896164 | 924500 | 1016399 | 110920 |
|
2.2. Accounts receivable |
1230 | 879066 | 944505 | 569852 | 340691 | 426937 | -452129 |
2.4. Short-term financial investments |
1240 | 99552 | 130254 | 131252 | 152612 | 8231 | -91321 |
|
2.5. Cash |
1250 | 58236 | 88965 | 98563 | 104238 | 368828 | 310592 |
2.6. Other |
1260 | 578 | 7041 | 8875 | 7219 | 14580 | 14002 |
|
TOTAL Section 2 |
1200 | 1942911 | 2060888 | 1704706 | 1529260 | 1834975 | -107936 |
PROPERTY, total |
1600 | 2436115 | 2568462 | 2243905 | 2026631 | 2491400 | 55285 |
|
3. Equity |
- |
3.1. Authorized capital |
1310-1320 | 46754 | 46754 | 46754 | 46754 | 48156 | 1402 |
|
3.2. Extra capital |
1340+1350 | 367685 | 397785 | 498785 | 579738 | 608013 | 240328 |
3.3. Reserve capital |
1360 | 2338 | 2338 | 2338 | 2338 | 2338 | 0 |
|
3.4. Profit Loss) |
1370 | 307822 | 382458 | 312458 | 242903 | 839853 | 532031 |
TOTAL Section 3 |
1300 | 724599 | 829335 | 860335 | 871733 | 1498360 | 773761 |
|
4. Long-term liabilities |
- |
4.1. Borrowed funds |
1410 | ||||
|
4.2. Other borrowed funds |
1420+..+1450 | 20170 | 20170 | 20170 | 20170 | 20933 | 763 |
TOTAL Section 4 |
1400 | 20170 | 20170 | 20170 | 20170 | 20933 | 763 |
|
5. Short-term liabilities |
- |
5.1. Loans and credits |
1510 | 687754 | 785754 | 289370 | 289370 | -687754 |
|
5.2. Accounts payable |
1520 | 948616 | 848616 | 965252 | 809613 | 907014 | -41602 |
5.3. revenue of the future periods |
1530 | 2589 | 2540 | 1732 | 1692 | 2289 | -300 |
|
5.4. Provisions for future expenses and contingent liabilities |
1540 | 44682 | 74682 | 98682 | 28682 | 56550 | 11868 |
5.5. Other |
1550 | 7705 | 7365 | 8364 | 5371 | 6254 | -1451 |
|
TOTAL for Section 5 |
1500 | 1691346 | 1718957 | 1363400 | 1134728 | 972107 | -719239 |
Borrowed capital, total |
1400+1500 | 1711516 | 1739127 | 1383570 | 1154898 | 993040 | -718476 |
|
SOURCES OF PROPERTY, total |
1700 | 2436115 | 2568462 | 2243905 | 2026631 | 2491400 | 55285 |
Own working capital |
1300-1100 | 231395 | 321761 | 321136 | 374362 | 841935 | 610540 |
The cost of intangible assets for the study period decreased by 829 thousand rubles. and amounted to 5,076 thousand rubles. The largest decrease in intangible assets is observed in the period from 01/01/2014 to 01/01/2015, while the lowest value for the entire period the cost of intangible assets reached 01/01/2015 and amounted to 5076 thousand rubles.
The cost of fixed assets for the study period decreased by 40,082 thousand rubles. and amounted to 284433 thousand rubles. A significant disposal of fixed assets occurred from 01/01/2014 to 01/01/2015, when the value of property decreased by 29,982 thousand rubles. and amounted to 284433 thousand rubles. The smallest value is 284433 thousand rubles. the value of fixed assets reached 01/01/2015.
Profitable investments in material assets decreased by 206 thousand rubles. and amounted to 579 thousand rubles.
In the period 01/01/2011 to 01/01/2015, there was an increase of 167,962 thousand rubles. or 95.53% of long-term financial investments.
The cost of other non-current assets for the period from 01/01/2011 to 01/01/2015 increased by 29616 thousand rubles. and amounted to 179201 thousand rubles.
The cost of inventories for the study period increased by 109421 thousand rubles. and amounted to 1014646 thousand rubles. A significant increase in the cost of inventories occurred in the period from 01/01/2014 to 01/01/2015, when their value increased by 90,322 thousand rubles.
Accounts receivable in the analyzed period decreased. A noticeable decrease in the amount of -374,653 thousand rubles. occurred between 01/01/2012 and 01/01/2013. The level of accounts receivable in the composition of current assets amounted to 45.24% as of 01.01.2011, and 23.27% as of 01.01.2015
At the beginning of the study period, receivables are of critical importance (exceeds 25-27% of current assets). Thus, for the period from 01/01/2011 to 01/01/2015, the current assets of the enterprise decreased by 452,129 thousand rubles due to a decrease in accounts receivable.
In the structure of the balance of OAO Arsenal (EXAMPLE), both at the beginning and at the end of the period, there are short-term financial investments. During the analyzed period, their level decreased by 91,321 thousand rubles.
The amount of free cash at the enterprise for the period from 01/01/2011 to 01/01/2015 increased by 310,592 thousand rubles. and amounted to 368828 thousand rubles.
The analysis of liabilities is carried out in order to identify on-farm reserves to ensure the restoration of solvency, to identify obligations that can be disputed or terminated, to identify the possibility of restructuring the timing of obligations.
 |
As can be seen from the diagram, the balance sheet liability as of 01/01/2015 consists of capital and reserves, long-term liabilities, short-term liabilities. At the same time, equity capital makes up 60.14% of the total value of the organization's property sources, long-term liabilities are at the level of 0.84% of the property value, and the share of short-term liabilities is 39.02%.
At the end of the analyzed period, additional capital, reserve capital, and retained earnings are allocated as part of the company's own capital.
The level of additional capital increased by 240,328 thousand rubles. and amounted to 608013 thousand rubles. Also in the structure of the balance there is a reserve capital in the amount of 2338 thousand rubles. Both at the beginning and at the end of the period under study, there is retained earnings in the balance sheet of the enterprise. At the same time, its level increased by 532,031 thousand rubles. and amounted to 839853 thousand rubles.
Long-term liabilities, reaching their maximum in the amount of 20933 thousand rubles. by 01/01/2015 increase by the end of the period compared to the level on 01/01/2011 by 763 thousand rubles. and amount to 20933 thousand rubles. or 96.36% of the original level. The structure of long-term liabilities at the beginning of the period contains deferred tax liabilities. At the end of the period, non-current liabilities consist of deferred tax liabilities.
In line 1510 of the balance sheet (Short-term borrowings) - the amount of borrowed funds as of 01.01.2015 decreased compared to the situation as of 01.01.2011 by 687,754 thousand rubles. and amounted to 0 thousand rubles.
The amount of accounts payable as of 01.01.2015 decreased compared to the situation as of 01.01.2011 by 41,602 thousand rubles. and amounted to 907,014 thousand rubles. A significant decrease in accounts payable by -155,639 thousand rubles. occurred between 01/01/2013 and 01/01/2014. There is a high proportion of accounts payable. As of 01.01.2011, its amount is 38.94% of the total value of the company's property, and as of 01.01.2015 - 36.41%.
In the structure of the balance sheet liabilities as of the end of the period under study, there are also deferred tax liabilities, reserves for future expenses, and other short-term liabilities.
The ratio of receivables and payables in the study period has not changed. At the same time, as of January 1, 2011, accounts payable exceeded accounts receivable by 7.9%, and as of January 1, 2015, by 112.4%.
Increase in assets by -719239 thousand rubles. accompanied by a simultaneous decrease in the company's liabilities by 718,476 thousand rubles. Since solvency depends on covering the obligations of the enterprise with its assets, it can be argued that due to the fact that the assets of the organization have increased, the ratio of current liabilities to current assets has changed and led to a significant improvement in solvency.
Analysis of the financial condition of the enterprise: 5 complete stages + a practical example of analysis + 4 main indicators of the financial condition of the organization.
Running a business is a big responsibility. In order to avoid mistakes in their activities, it is necessary to constantly analyze and correct the financial performance of the company.
Today we will analyze how to conduct an express analysis of the financial condition of the enterprise.
A practical example will help to resolve points that may cause difficulties at various stages of the study.
General principles for analyzing the financial condition of an enterprise
To understand the economic capabilities of the enterprise, its creditworthiness and investment potential is one of the main goals of the analysis.
The data obtained will help company leaders make the right decisions in a timely manner.
Each organization has its own priorities in reporting analysis, but the general algorithm remains unchanged:
| № | Analysis section | Indicators |
|---|---|---|
| 1 | Property assessment | 1. Share of fixed assets in total assets. 2. The coefficient of depreciation of fixed assets. |
| 2 | Liquidity assessment | 1. Absolute liquidity ratio. 2. Ratio of intermediate liquidity. 3. Current liquidity ratio |
| 3 | Financial stability assessment | 1. Coefficient of autonomy. 2. Coefficient of financial dependence. 3. The coefficient of financial stability. 4. The coefficient of security with own working capital. 5. The ratio of borrowed and own funds. 6. The coefficient of maneuverability of own funds. |
| 4 | Business Activity Assessment | 1. Total turnover ratio. 2. The turnover ratio of fixed assets. 3. The turnover ratio of working capital. 4. Inventory turnover ratio. 5. Accounts receivable turnover ratio. 6. Accounts payable turnover ratio. |
| 5 | Profitability assessment | 1. Return on assets. 2. Profitability of sales. 3. Product profitability. 4. Return on equity. |
| 6 | Assessment of the company's position in the securities market | 1. Earnings per share. 2. Price/earnings ratio. 3. Coefficient "price / revenue". 4. Share quote ratio. |
The list of main points for the procedure is shown in the table above.
At the discretion of the leading positions of the accounting department, the calculation of the state may not be carried out according to all parameters. Only sections where financial problems are possible that need to be identified and resolved as soon as possible are taken into circulation.
1) Measurement of liquidity indicators in the analysis of the financial condition of the enterprise
The important components of the analysis of the state include the solvency of the company and its liquidity.
The term " solvency» implies the existence of financial security to cover unforeseen items of expenditure by the firm. Lenders first of all pay attention to this section.
Liquidity is a complex section that signals the possibility of repaying debts in any outcome, even with time delays.
An indicator of availability is the predominance of active funds over passive ones in the financial condition of the organization.
The liquidity system contains:
- liquidity ratio;
- an indicator of the stability of the organization;
- the value of business activity;
- the effectiveness of the organization.
The calculation of the coefficients provides an opportunity to assess the state of competitiveness of enterprises with the same focus in the field of work.
*Fig.1. Relative liquidity values
A more detailed analysis of the state will make it possible to carry out additional coefficients presented in Fig. 1.
The global state of affairs in the solvency of the enterprise will show total liquidity coverage value(Ktl).
Intermediate values of this indicator should be kept within 0.7-0.9, and for retail sales, the allowable reduction limit is 0.5.
These parameters contain information about the company's ability to repay at the current moment.
The most demanding one is the absolute liquidity ratio. Its value should not fall below 0.3.
2) Calculation of the stability of the enterprise in financial terms
When conducting a study of the economic performance of an enterprise, one cannot ignore the state of financial stability organizations.
More details in Fig.2:
*Fig.2 - Values of the state of financial stability
Autonomy coefficient(Kavt) should always be above 0.5. The trust of investment institutions and experts directly depends on the state of the current parameter.
The resulting characteristics of financial dependence (Kfz) and the ratio of borrowed funds to the amount of cash in the account (Ksas) range from 0.9 - 1.
- value inverse to the autonomy parameter;
- from 1 subtract Cavt.
Will keep you up to date on the amount of available funds at the moment maneuverability parameter(Kmss). The optimal value for it will be 0.5.
3) Calculation of business activity
It will be most convenient to calculate the resource return and cash flow using the formulas in Fig. 3:
*Figure 3 - Values for business activity
Depending on the industry in which your firm operates, total returns (d1) can be abnormally low or high.
The fact is that heavy production with a large amount of resource spending will always show results lower than with general consumption.
The turnover of monetary resources is estimated:
speed.
How many times the invested money will have time to return to the investor for the analyzed period.
Period.
How long does it take for the money to make a complete turnover and return to the depositor 1 time.
How exhausted the monetary resource of your additional sources of financing will let you know the characteristic - return on assets (d2).
Unforeseen expenses can reduce the rate of return on assets, but if resources are used to improve the technical base, the result may well pay for itself in the future.
4) Measuring the profitability of an enterprise
To understand how profitable your company is, the analysis uses the concept of enterprise profitability.
*Rice. 4 - The value of the profitability of the organization
All characteristics of this direction are calculated according to the same principle: in the numerator, the value of profit, and in the denominator, the cost of producing goods.
Higher profitability - better business at.
Sometimes the value does not always give 100% objective information. The reason for this may be long-term investment - the figures are lower than the real state of the enterprise.
When 2-3 risky projects have paid off, the value, on the contrary, increases, although in fact there have not been any special changes in the economic plan.
If you do not have a private business, but an open joint stock company, then, in addition to standard financial statements, you should use information from the external market.
This will help you evaluate the profitability and development prospects of your business from an independent point of view.
Express analysis of the financial condition of the enterprise on an example
Suppose we have data on any limited liability company. Based on it, we will analyze the financial condition of the enterprise for a certain reporting period.
Stage 1: General characteristics of the enterprise.
Before proceeding with the analysis of the main indicators, the accountant should make a brief overview of the activities of the organization.
Components of a general analysis:
- type of economic activity;
- composition of the governing body;
- production structure;
- basic services.
The information should fully reflect all the key points in the work. The introductory part should not be voluminous - display only the main thing.
Stage 2: Analysis of the material condition.
These indicators reflect the amount of funds from the enterprise for economic needs.
Their percentage in the general bank of the organization for the current period.
Analysis is required both for personal purposes and for reporting to government agencies.
It makes it possible to track financial risks during transactions at all stages of the operation of the enterprise.
Stage 3: Analysis of the financial situation.
Helps to identify adverse situations in business development.
Accurate calculations using elements of financial analysis make it possible to determine the possibility of bankruptcy with a 90% probability.
For the full implementation of this procedure, accounting and tax reporting for the studied time period will be required.
Stage 4: Profitability of the enterprise.
It will help to analyze how effectively the company conducts its activities.
Required to identify articles to reduce funding and optimize the process of selling goods.
In order for your company to be profitable, the items must cover all available items of expenditure for the analyzed period.
For example, net profit indicates the high profitability of the organization.
Stage 5: Finding weaknesses in financial statements.
The final step that allows you to identify problems in the state of the enterprise in advance and close these gaps.
The final data on the express analysis will provide an opportunity to focus on improving the state of affairs in problem areas, if any.
Full analysis of the financial condition of the enterprise as a result, it will allow you to find the strengths and weaknesses of your business.
How is the analysis of the financial condition of the enterprise?
All stages of the process are in the following training video:
It will become easier to manage free finances and decide on priority areas in the development of your enterprise.
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