Basic research. Express assessment of the financial condition of the company Assessment of the financial condition of the enterprise article

Assessing the financial condition of an enterprise provides a snapshot of the resource base at a specific point in time and allows one to make informed conclusions and assumptions about business growth opportunities, scaling, and the company’s potential for financing.

In what cases is it necessary to assess the financial condition of an enterprise?

The strategy of an enterprise is determined not only by market opportunities, technological trends, competitive environment, mission or goals of the company, but also by the resources it has. Resources, along with effective demand, are the key limitation of an enterprise's strategy. Moreover, resources include not only existing assets, but also potential ones: the ability of shareholders to support their own company, to attract loans and investments, the ability to attract highly qualified and, accordingly, expensive personnel. Top management needs to have effective tools for measuring the resource base of the enterprise.

No investor will invest in a company with high debt. Partners, especially large companies, will not contact the supplier, knowing about his problems with payments - there is a high probability that the new partner will spend advances not on production, but on covering current payments, and this is a potential risk of supply disruptions. A highly qualified specialist will not risk his career and personal brand by going to work for a company with a high probability of bankruptcy in the coming months. Thus, there is no doubt that assessing financial condition is a very significant decision-making tool both for the company and its management, as well as for external users and potential

Defining the boundaries of the concept of “financial condition” of an enterprise

The term “financial condition of an enterprise” can be interpreted very broadly. So, by it one can understand only financial stability companies and a whole range of criteria. Therefore, it is necessary to define goals and relate them to the cost in money and man-hours of carrying out such an analysis.

It's worth starting with an analysis of the company's profitability. If a business is consistently unprofitable, current indicators are already secondary. The next most important thing is to assess the company's ability to pay current expenses, that is, business liquidity. Then you need to understand how the business is financed, is the source of profit or is it constant injections from the owner, or maybe loans? If the loans are long-term or short-term? The next question is: what assets does the business have, what are they?

The issue of operational efficiency for the purposes of analyzing financial condition is not a priority and can be omitted by limiting ourselves to the definition of profitability.

Thus, the methodology for assessing the financial condition of an enterprise should contain an analysis of:

business opportunities to make a profit;
the company's ability to pay operating expenses;
sources of financing;
company assets;

Download and use it:

Business opportunities to generate profit

To assess the financial and economic condition of an enterprise, it is first necessary to analyze profit and loss statements for several periods. What we want to see and understand:

Does the company make a profit, if not, what is it? earnings before taxes, depreciation and amortization (EBITDA) .
Evaluate a company's earnings and EBITDA retrospectively and prospectively to understand how long the company has been profitable, what its trend is, and whether that trend will continue into the future as predicted?
View the revenue structure by expenses, including the dynamics of the structure. The way the share of one or another type of expense grows can say a lot about management: for example, an increase in the share of cost in revenue may indicate that technologies are being disrupted, resources are being used inefficiently, the percentage of defects is growing, and staff productivity is falling.
Study the marginality of the business by product range; perhaps there is a hidden recipe for increasing profits or getting out of losses - some products generate losses and their production should be abandoned in favor of more marginal ones or free up resources for launching new items that can increase the profitability of the entire brand portfolio .

Having received this information, we will be able to make informed conclusions about whether the company is in the “red zone” or not! And if the company is unprofitable, is a brighter outlook possible and what parameters should be changed, what changes will give the greatest effect.

The company's ability to pay operating expenses

Having got an idea of the profitability of a business, you need to understand whether it has the funds to conduct current activities and reserves for growth. Analysis will give the answer liquidity.

Financial analysis tools make it possible to assess a company’s ability to pay bills at several levels:

Current liquidity ratio(Ktl) estimates the amount that a company can use to pay current liabilities by selling all its current assets. For a company that is firmly on its feet, the excess of the value of current assets over the amount of current liabilities should be at least 150%, in other words, there should be 1.5–2 times more assets than liabilities.

Ktl = Current assets / Current liabilities

Quick ratio(KBL) will allow you to assess the company’s ability to pay off current debt only with liquid assets. A company with a coefficient value above 1 leaves a favorable impression of its solvency. The main difference between Ktl and Kbl is that to calculate the latter, the cost of inventories is removed from the numerator - it is believed that it is not realistic to quickly sell inventories without loss of value, and practice confirms this.

Kbl = Liquid assets / Current liabilities

Quick liquidity ratio(Ksl) will show how much cash and assets similar in liquidity cover the amount of current debt. In world practice, the standard is 20% and higher, in Russia this value should be higher; it is best to focus on industry indicators, dynamics and quality of current liabilities when determining the standard value when analyzing the solvency of a particular company.

Ksl = Cash and equivalents / Current liabilities

It is necessary to evaluate liquidity not only statically, but also as a snapshot in dynamics, in order to see the overall trend and prevent possible manipulations to improve current indicators.

Having assessed liquidity, we assessed our ability to pay our creditors with our assets as a last resort, but this is force majeure. In a normal situation, a company should have enough current revenue to pay current payments. At the very beginning of the analysis, we assessed the availability of profit, which means that the company pays all its payments and has enough income. But ideally, this profit should cover the costs of servicing obligations 3–4 times; the corresponding indicator is called coverage ratio and is calculated like this:

Interest coverage ratio = Earnings before interest and taxes / Interest.

Analyzing the company's solvency prospects, it makes sense to build cash flow forecast and evaluate it for the presence of cash gaps and calculate the predicted values of liquidity ratios.

Solvency is especially important for creditors and suppliers, as they rely on regular, uninterrupted and unconditional payments. Getting involved with a company that is experiencing problems and difficulties is not profitable and dangerous for them.

Solvency can also be supplemented by an analysis of payment discipline. It is no secret that many companies resort to the principle of “delaying payment until the last minute,” and suppliers who do not have leverage to make appropriate decisions are, in fact, financing the activities of a dishonest counterparty.

Sources of financing

The solvency of a business, assessed on the basis of liquidity indicators and payment discipline, shows only the ratio of current assets and current liabilities, analyzes the company’s ability to pay for its activities using existing assets, but does not show the source of funds to finance these assets.

We need to understand how risky the company's business is, from the point of view – the greater the borrowed capital, the higher the risk of non-repayment of funds. It is necessary to assess the financial stability of the business. An idea of financial risks and the role of borrowed sources in the company’s financing scheme is given by the indicator financial dependence Debt Ratio:

Debt Ratio = All Liabilities / All Assets

By calculating the indicator, we will be able to estimate what part of the company’s assets is paid for with borrowed funds.

"Mirror" indicator - autonomy coefficient (1-Debt Ratio) in Russia is used more often than Debt Ratio and shows how high the role of the company’s own funds is in financing assets. Both indicators provide insight into the capital structure and risk level. Ideally, it is believed that they should be equal to each other and amount to 0.5.

The ratio between short-term and long-term borrowed funds is important; in financial management this indicator is called the short-term debt ratio. Financial management does not give it a standard meaning, but the higher the share of short-term sources, the higher the risk, the more liquid the company’s assets should be.

Short-term debt ratio = Current liabilities / Long-term liabilities.

We must not forget about such a factor as the effect of financial leverage, which can serve as a basis for increasing the credit load until its differential (the difference between the interest rate and the company's return on assets) is positive.

EFR = (1 – Income tax rate) × (Return on assets ratio – Interest rate on loan) × Debt capital/Equity capital,

All of these indicators also need to be studied over time and their predictive values assessed. At the same time, taking into account the specifics of the industry in which the company operates - comparing indicators with those of competitors and industry values.

Significant illiquid inventories and non-collectible receivables are the result of ineffective management.

Company assets

For the purposes of liquidity analysis and analysis of sources of financing, we divided assets into liquid and non-liquid, calculated their profitability, and this is very useful knowledge for studying the assets themselves.

It is also important to examine the proportion between current and non-current assets, the size, quality and dynamics of inventories, accounts receivable – how reasonable and justified they are for this type of activity and whether they contain hidden potential for increasing business efficiency. Significant illiquid inventories and non-collectible receivables are the result of ineffective management and, in addition to the fact that significant financial resources are immobilized in them, may require additional costs.

Inventory and receivables turnover must be examined both over time to determine the reason for their occurrence, and in comparison with industry indicators and competitors’ indicators:

Accounts receivable turnover ratio in days:

Kodz = (Average annual accounts receivable * 365) / (Revenue).

Inventory turnover ratio in days:

Goats = Cost of goods sold * 365 / Average annual cost of inventories

In addition, it is necessary to analyze existing assets for their use in the production process and the validity of their ownership; it is often more effective to rent property than to immobilize significant amounts in buildings and other non-current assets. Also in Russia, there may be ownership of assets inherited from Soviet times and not used in production processes and which are a useless burden for the company, requiring expenses to maintain in proper form. Such assets should be disposed of.

Having carried out such an analysis, we will get a complete picture of the financial condition of the enterprise:

we will know whether the business is generating profit and whether it is sufficient to cover existing and planned payments;
does the company have enough assets to pay off all its obligations if necessary;
how the business is financed and how efficient its assets are.

Based on this methodology for assessing the financial condition of an enterprise, we will have enough information to make informed decisions regarding investments in the company and increase its attractiveness in the eyes of third-party users of information.

We carry out horizontal and vertical balance analysis

We evaluate changes in the state of property and capital based on financial ratios

We make a short-term forecast of the state of solvency

We offer measures to improve financial condition

To make management decisions in a timely manner, you need complete, reliable, transparent information. Experts carry out an express assessment of the company’s financial condition based on the balance sheet.

Collecting information for express analysis

Let's look at how to analyze the financial condition of an enterprise and develop measures to improve it using the example of a regional company that produces confectionery products. The company's balance sheet is presented in table. 1, the results of calculations of financial ratios and liquidity ratios are in table. 2, 3.

Let's calculate the coefficient of loss (restoration) of solvency:

by the end of the year, the ratio of provision with own working capital is less than the normal value (≥ 0.1);
The current liquidity ratio is less than the normal value (2.0), but there is a tendency for the indicator to grow.

Let’s evaluate the possibility of restoring solvency in the next 6 months:

solvency recovery ratio = (1.14 + 6 / 12 × (1.14 - 1.1169)) / 2 = 0.58 (< 1,0).

Thus, the management of the enterprise should formulate rational management decisions in order to restore the solvency of the enterprise in the next 6 months.

Analyzing the results

Based on the results of the analysis, the following conclusions can be drawn:

1. Balance currency decreased by the end of the year by 12,414 thousand rubles. (-16.71%). This indicates that the assets and capital of the organization, i.e., its main activities, have decreased. Reasons for the decline:

reduction of equity capital (and above all, losses; see the balance sheet line “Capital and reserves”);
financing capital investments through short-term liabilities. The growth of non-current assets in the balance sheet under the section “Non-current assets” exceeds the total growth of equity capital and long-term liabilities under the section “Capital and reserves” and “Long-term liabilities”.

2. Magnitude non-current assets increased due to fixed assets (+362 thousand rubles, or +27.61%) and intangible assets. According to the results of the vertical analysis, it can be seen that the ratio of non-current assets to the balance sheet at the end of the year (5.77%) increased by 2.64% compared to the beginning of the year (3.13%). This is a positive result, indicating an increase in the production potential of the organization.

3. Magnitude current assets decreased for all items (except for VAT and short-term financial investments) and by 13,659 thousand rubles. (-18.98%).

Inventories decreased by 62.07%, which indicates a drop in production volumes, a reduction in inventories of raw materials and finished products.

4. Accounts receivable decreased by 10.82% (5,360 thousand rubles), however, the share of this balance sheet item during the reporting period increased by 4.72%.

For your information

The difference in the results of calculations of accounts receivable when conducting horizontal and vertical analysis arose due to the fact that accounts receivable did not decrease as significantly as the balance sheet total. Therefore, the increase in the share of receivables in the structure of property is a negative fact, which indicates a decrease in the mobility of property and a decrease in the efficiency of turnover.

5. According to the results of horizontal analysis, the accounts payable- by 20.43% (RUB 13,086 thousand). This indicates a reduction in urgent debts. The vertical analysis showed a decrease in the share of accounts payable by 3.85%.

On the one hand, this contributes to the growth of the organization’s liquidity, but on the other hand, the reduction in the amount of accounts payable is twice as large as the reduction in the amount of receivables, and this leads to a reduction in its own working capital and a decrease in the financial stability of the organization.

6. Magnitude equity decreased by 2193 thousand rubles. (-32.68%) due to a reduction in the volume of retained earnings, i.e. the financial results of the organization’s activities worsened, and the margin of financial stability decreased.

7. Reduction long-term liabilities talks about paying off debts to banks. But the absence of short-term loans and borrowings in the capital structure while simultaneously reducing accounts payable may indicate the low creditworthiness of the organization.

8. Dynamics financial ratios speaks of a decrease in the mobility of turnover and property in general; a decrease in production capabilities as a result of a reduction in inventories. A positive aspect is the increase in the provision of reserves with own funds.

9. Financial independence coefficients (autonomy, involvement, “leverage”) show the share of equity (borrowed) capital in total sources of funds.

For your information

The capital structure depends on the area of activity of the organization. For industrial enterprises, the recommended share of equity capital in the total amount of sources of funds is at least 50%. An increase in the share of equity capital is assessed positively, as it reduces the level of financial risk and strengthens the financial stability of the organization.

In the organization under consideration, the value of the autonomy coefficient is low and continues to decline: at the beginning of the year, equity capital was only 9% of the total capital, at the end of the year - 7.3%.

10. Meaning equity capital agility ratio at the beginning of the year - 1.1788 (> 1) - indicates that turnover is ensured by long-term borrowed funds, which increases the risk of insolvency.

11. Absolute liquidity ratio shows what part of the current debt can be repaid in the time closest to the time of drawing up the balance sheet, which is one of the conditions for solvency. The normal value is 0.2-0.5.

The actual coefficient value (0.02) does not fall within the specified range. This means that if the cash balance is maintained at the reporting date level (due to the uniform receipt of payments from partners), the existing short-term debt cannot be repaid in 2-5 days.

12. Quick liquidity ratio reflects the organization’s predicted payment capabilities, subject to timely settlements with debtors. The value of this coefficient should be » 0.8.

In our problem, the quick liquidity ratio = 0.83. We can conclude that the organization is able to repay its debt obligations (non-urgent) subject to timely repayment of receivables 13. Current liquidity ratio (coverage) shows the extent to which current assets cover short-term liabilities. It characterizes the payment capabilities of the organization, subject to not only timely settlements with debtors and favorable sales of finished products, but also in the event of the sale, if necessary, of material working capital.

The level of the coverage ratio depends on the industry of production, the length of the production cycle, the structure of inventories and costs. Norm - 2.0< Ктл< 3,0, т. е. на каждый рубль краткосрочных обязательств приходится от двух до трех рублей ликвидных средств.

Failure to comply with this standard (in the balance sheet in question, Ktl = 1.14) indicates financial instability, varying degrees of liquidity of assets and the inability to quickly sell them in the event of simultaneous requests from several creditors.

Why has the financial condition of the enterprise deteriorated and is it possible to improve the situation?

The situation in the organization has worsened, most likely due to ineffective management decisions. This problem is caused by:

lack of strategy in the enterprise’s activities and focus on short-term results to the detriment of medium and long-term ones;
low qualifications and inexperience of managers;
low level of responsibility of enterprise managers to the owners for the consequences of decisions made, for the safety and effective use of the enterprise’s property, as well as for the financial and economic results of its activities.

increase the transparency of enterprise management;
optimize the activities of the enterprise in accordance with the results achieved and the benefits received from certain implemented projects;
clearly set tasks for staff and evaluate the results of their work in accordance with the goals and results of the projects;
increase the degree of cost control in the enterprise (the special nature of budgeting, planning, control and accounting);
gain experience and create your own knowledge base at the enterprise;
link the results of crisis management with the motivation of the managers and specialists involved in this process.

Anti-crisis management will also create favorable conditions for the functioning of the company and will contribute to its recovery from an unstable financial and economic situation. At the same time, it is necessary to monitor the appropriateness of the measures taken and evaluate their effectiveness.

Mechanism for increasing the anti-crisis stability of an enterprise:

The main role in the company's anti-crisis management system is given to internal mechanisms of financial stabilization.

As for our example, in order to overcome crisis phenomena, a company needs to try to find internal reserves to increase profitability and economic efficiency of its activities, namely:

review the pricing policy;
increase production volumes;
improve product quality;
sell products in more optimal terms;
accelerate the turnover of capital and current assets;
increase profitability and ensure break-even operation of the enterprise;
sell products on more profitable markets.

To reduce accounts receivable, you can take out a loan. But according to the results of the analysis, the company is 82.38% dependent on creditors. Therefore it is important:

carefully monitor the structure and dynamics of accounts payable;
conduct continuous monitoring of accounts payable;
promptly identify and eliminate negative trends;
constantly monitor the status of settlements with customers and suppliers for overdue debts.

Analysis of a company's financial condition is one of the important areas of economic analysis. Assessing the financial position of a company is a set of methods that make it possible to determine the state of affairs of an enterprise by studying the results of its activities.

The financial condition of an enterprise reflects its competitiveness, solvency, as well as creditworthiness and, therefore, the efficiency of using invested equity capital. To assess the financial condition of a company, 4 groups of indicators are used: liquidity ratios, financial stability indicators, business activity indicators, and profitability ratios.

To begin with, we will analyze the liquidity of the enterprise in order to determine its ability to pay off short-term obligations. To do this, we will consider and analyze the dynamics of the main indicators: current, quick and absolute liquidity ratios.

Table 6.

Liquidity indicators and their dynamics

Chart 6. Liquidity indicators and their dynamics

The current liquidity ratio characterizes the company's ability to pay off current (short-term) obligations at the expense of current assets. This is one of the most important financial ratios. The higher the indicator, the better the solvency of the enterprise. A coefficient value of more than 2 is considered good. On the other hand, a value of more than 3 may indicate an irrational capital structure; this may be due to a slowdown in the turnover of funds invested in inventories or an unjustified increase in accounts receivable.

In our case, the current liquidity ratio in 2012 improved its values by 0.2 compared to the previous reporting period and amounted to 0.64, thereby again not fitting into the framework. This indicates a low level of solvency of the enterprise and the possible irrationality of its capital structure.

The quick (quick) liquidity ratio allows you to “illuminate” the situation with the structure of current assets. The logic behind calculating this ratio is that inventories often cannot be sold quickly if necessary without a significant loss in value, and therefore are a rather low-liquid asset. Using cash to purchase inventory does not change the current ratio, but it does reduce the quick ratio.

The company under study does not have any reserves due to the specifics of the tourism business, therefore the value of the quick ratio is equal to the current ratio in both periods. The higher the quick ratio, the better the financial position of the company. A coefficient value of less than 1 indicates that there is a risk of loss of solvency, which is a negative signal for investors.

The absolute liquidity ratio is a variation of the above two liquidity ratios. Moreover, in calculating this indicator, only the fastest-selling (liquid) assets are used.

This indicator is not as popular as the current and quick ratios and does not have a firmly established norm. Most often, a value of 0.2 or more is used as a guideline for the normal value of the indicator. A ratio that is too high indicates unreasonably high amounts of free cash that could be used for business development.

In our case, the value of the absolute liquidity ratio is less than the specified threshold: 0.01 in 2011 and 0.02 in 2012. A value less than 0.1 indicates that the company may experience difficulties when it is necessary to immediately pay bills to creditors, however, over the past two years there has been an increase in this ratio.

The considered indicators indicate that the company has difficulties with its most liquid assets. It might be advisable to review the asset structure in order to transform part of the non-current assets into current ones, as well as revise the terms of existing short-term liabilities.

It is also advisable to increase the amount of cash and funds in current accounts to increase the ability to pay off your short-term obligations.

The company's capital structure reflects the ratio of debt and equity capital raised to finance the long-term development of the company.

Table 7.

Capital structure and dynamics

Chart 7. Capital structure and its dynamics

The ratio of debt and equity capital of an organization is called financial leverage.

It demonstrates a principled approach to business financing, when, with the help of borrowed funds, the enterprise forms financial leverage to increase the return on its own funds invested in the business.

When calculating the ratio, both the numerator and the denominator are taken from the liability side of the organization's balance sheet. Liabilities include both long-term and short-term liabilities. This ratio shows how much equity is per 1 ruble of borrowed capital

Table 8.

Debt to Equity Ratio

Chart 8. Dynamics of the ratio of debt to equity and debt to equity

In Russian practice, an equal ratio of liabilities and equity capital is considered optimal, i.e. the financial leverage ratio is equal to 1. A value of up to 2 may be acceptable (for large public companies this ratio may be even higher). At large values of the coefficient, the organization loses its financial independence, and its financial position becomes extremely unstable.

It is more difficult for such organizations to attract additional loans. The most common ratio in developed economies is 1.5 (i.e. 60% debt and 40% equity). In our case, the ratio of debt and equity capital is at the optimal level and tends to increase.

Over the past 2 years, the company's debt to equity ratio has decreased from 0.3% to 0.2%. Increasing debt to equity ratio of more than 1:1 is considered risky, so in our case we can say that the company is currently not significantly dependent on borrowed funds.

Table 9.

Dynamics of capital structure

Chart 9. Dynamics of capital structure

In 2012, the company's equity capital decreased at a faster rate than the amount of borrowed capital. Continuing this trend may result in non-receipt of a loan if necessary.

Turnover ratios are financial ratios that show the intensity of use of certain assets or liabilities; they act as indicators of the business activity of an enterprise.

Business activity is the most important factor determining the financial stability of an enterprise. The results of the analysis of the business activity of organizations are necessary, first of all, for owners, as well as creditors, investors, suppliers, managers and tax officials. It is believed that the higher the turnover ratios, the better, the more efficient the operation of the enterprise.

Table 10.

Turnover ratios and their dynamics

Chart 10. Turnover ratios and their dynamics

Asset turnover is a financial indicator of the intensity of use by an organization of the entire set of available assets.

There is no specific standard for turnover indicators, since they depend on the industry characteristics of the organization of production.

In capital-intensive industries, asset turnover will be lower than in trade or services, in particular, in our case: 2.5 and 1.42. In 2012, the value increased noticeably, which is a positive result, because A higher asset turnover is desirable: low turnover may indicate insufficient efficiency in the use of assets.

Accounts receivable turnover measures the rate at which an organization's accounts receivable are cleared, how quickly the organization receives payment for goods sold from its customers.

The accounts receivable turnover ratio shows how many times during a period (year) the organization received payment from customers in the amount of the average balance of unpaid debt. For accounts receivable turnover, as well as for other turnover indicators, there are no clear standards, since they strongly depend on industry characteristics and the technology of the enterprise. But in any case, the higher the coefficient, i.e. The faster customers pay off their debt, the better for the organization.

In the case of JTB, this figure is small (1.68 and 2.88), but in 2012 it increased compared to 2011, which indicates an increase in the efficiency of working with customers in terms of collecting receivables.

Accounts payable turnover is an indicator of how quickly an organization repays its debts to suppliers and contractors. This ratio shows how many times (usually per year) the company has repaid the average amount of its accounts payable. Like accounts receivable turnover, accounts payable turnover is used in assessing the organization's cash flows and the efficiency of settlements.

Accounts payable turnover strongly depends on the industry and the scale of the organization’s activities. For creditors, a higher turnover ratio is preferable, while the organization itself is more profitable with a low ratio, which allows it to have the balance of unpaid accounts payable as a free source of financing for its current activities.

JTB's accounts payable turnover ratio shows that the company needed half a turn in 2011 to pay its supplier invoices and 1.5 in 2012. We can conclude that the organization of relationships with suppliers is less effective, providing a less profitable, deferred payment schedule and using accounts payable as a source of obtaining cheap financial resources.

Accounts payable turnover is assessed together with accounts receivable turnover. In both periods, the company in question has a double excess of accounts payable turnover over accounts receivable turnover. An unfavorable situation for an enterprise is when the accounts payable turnover ratio is significantly greater than the accounts receivable turnover ratio, but JTB has not yet encountered such a situation, so we can talk about the company’s effective work with its debtors and creditors.

Inventory turnover shows how many times during the analyzed period the organization used the average available inventory balance. This indicator characterizes the quality of inventories and the efficiency of their management, and allows us to identify the remains of unused, obsolete or substandard inventories. The importance of the indicator is due to the fact that profit arises with each “turnover” of inventories (i.e., use in production, operating cycle).

For JTB, the calculation of this indicator is impossible due to the lack of any reserves in the company due to the specifics of its field of operation.

The equity turnover ratio shows how much turnover is required to pay invoices. This indicator characterizes various aspects of activity. From a commercial point of view, it reflects either a surplus of sales or a lack of sales; from financial - the rate of turnover of invested capital; economically - the activity of funds at risk of the investor. JTB in 2011 required half a turnover, and in 2012 - 2. These values and their dynamics indicate the activity and acceptable speed of the enterprise’s use of its own capital.

In general, the economic potential of the enterprise is increasing compared to the previous year.

Profitability indicators are designed to assess the overall effectiveness of investing in an enterprise. They are widely used to assess the financial and economic activities of enterprises in all industries. These are one of the most important indicators when assessing the activities of an enterprise, which reflect the degree of profitability of the enterprise.

Table 11.

Profitability indicators and their dynamics

Return on sales is an indicator of the financial performance of an organization, showing what part of the organization's revenue is profit. In other words, return on sales shows how much profit the company receives from each ruble of products sold. The normal value of return on sales is determined by industry and other characteristics of the organization. However, it can be seen that this figure for JTB increased significantly in 2012, thus, profit began to account for a larger share of the company's revenue.

Return on sales shows whether the activity of an enterprise is profitable or unprofitable, but does not answer the question of how profitable investments in this enterprise are. To answer this question, return on assets and return on equity are calculated.

The profitability of core activities increased noticeably over these two periods: from 1 pound of production costs, the company began to receive 0.37 pounds of net profit in 2012.

As for the return on the company's total capital, it also increased: in 2012, 1 pound of capital accounted for 0.19 pounds of net profit.

Return on equity is an indicator of net profit in comparison with the organization's equity capital. This is the most important financial indicator of return for any investor or business owner, showing how effectively the capital invested in the business was used.

The higher the return on equity, the better. The normative value is considered to be 10%. In our case, this figure reached 48% in 2012, so the company began to receive 0.6 pounds of profit per 1 pounds of equity capital.

Return on assets is a very important indicator that can be used to measure the effectiveness of how a company generates its capital and manages the resources at its disposal. Return on assets must be sufficient to both satisfy the company's profitability requirements from its owners (return on equity) and ensure the payment of interest on the loan, as well as the payment of taxes.

Return on assets is a financial ratio that characterizes the return on use of all assets of an organization. The ratio shows the organization's ability to generate profit without taking into account the structure of its capital (financial leverage), and the quality of asset management. Unlike the "return on equity" indicator, this indicator takes into account all the assets of the organization, and not just equity. Therefore, it is less interesting for investors.

For more accurate calculations, the “Assets” indicator is taken not as the value for a specific date, but as the arithmetic average - assets at the beginning of the year plus assets at the end of the year divided by 2. As a result of the calculation, it turns out that the company received 0.6 pounds in 2012 profit from every pound invested in assets. This value indicates the high efficiency of using the company's assets.

From Table 12 it can be seen that all coefficients of the JTB company took on large positive values in 2012, which indicates an improvement in the efficiency of the enterprise.

To analyze the financial and economic activities, we will use the matrix of the company’s financial strategies proposed by the French scientists J. Franchon and I. Romanet. Having calculated the values of the RHD and RFD indicators, we will determine the company’s position in the matrix of financial strategies, and also determine the financial strategy for the company. In order to analyze the dynamics of the results of financial and economic activities, we will calculate the RHD and RFD indicators for 2 years.

Table 12.

Calculation of RFHD


Revenue from sales
Depreciation deductions
Change in the amount of accounts payable
Industrial investments
Inventory changes
Change in accounts receivable amount

Change of AP
Percentage to be paid
Income tax
Dividends
Other non-operating income (expenses)

Analysis is an important element in the enterprise management system, a necessary component of financial management, an effective means of identifying internal reserves, and the basis for the development of sound plans and management decisions. It is necessary both for the management of the enterprise and for creditors, auditors, and investors. Analysis of financial and economic activities allows you to assess the current financial position of the company, identify the reasons for this condition and make forecasts for the future.

The result of economic activity determines the size and dynamics of the company's funds as a result of its investment and economic activities. While the result of financial activities determines the amount and dynamics of the company's funds as a result of financial activities. Let us denote the position of JTB in 2011-2012. on the matrix of financial strategies.

Table 13.

Matrix of financial strategies

In 2011, the values of RHD and RFD are significantly greater than zero, so the company falls into the 6th quadrant of the “Holding” matrix of financial strategies. This position in the matrix is characterized by large cash flows associated with the active attraction of funds; there is also a risk associated with liquidity; insufficiently efficient use of financial resources.

The optimal position in the matrix of financial strategies is “Stable Equilibrium” (quadrant 2), the company needs to move in this direction (i.e. 6->5->2). To make this move, JTB's management needed to increase investment while reducing leverage. Only with such actions will the company achieve an optimal position within the matrix of financial strategies, which will be characterized by a stable equilibrium - a balance between liquidity and profitability.

Thus, as of 2012, JTB was already in the ninth quadrant - “Crisis” (RHD and RFD are significantly less than zero). JTB, along with many travel companies around the world, found itself in a situation of economic turmoil in 2012, requiring even more loans. This need arose due to the trend of very early bookings (less than a year in advance). To move to a stable equilibrium, the company needs to go through the path 9->8->3->5->2, which requires significant loans. Such a transition is characterized by the risk of loss of liquidity, but, most likely, the company will maintain the dynamics of liquidity ratios, since the calculated indicators for 2011-2012. indicate the solvency of the company (ratios are low, but tend to further increase). When reaching an “Unstable Equilibrium”, in order to achieve a stable equilibrium, the company must not only reduce borrowing, but also increase sales.

Since its founding, JTB has become one of the leading Japanese travel companies with a reputation for the highest quality of services provided. The company's strategy for many years has been to provide the highest quality of service to tourists and guarantee maximum reliability. Today, the size of the JTB office network makes it possible to ensure that clients interact with local sales representatives exactly in the area where it is convenient for the client, which is also a significant advantage for the company and allows it to win new clients. Thanks to the achieved level of reputation, as well as taking into account the excess of accounts receivable turnover over accounts payable turnover, the company should not have difficulties in obtaining and repaying loans, which in turn should improve the situation of the company’s financial and economic activities.

Assessment of the financial condition of the enterprise is a procedure that, in modern Russian conditions, is presented only as an integral part of a successful business, since the success of the business depends on the quality of analysis and diagnosis of the economic condition of the company and the determination of the development strategy. Based on assessment and analysis, a well-founded business plan, supported by reliable information, can be developed, with the help of which you can not only determine the optimal direction for the company’s development, but also take out a loan for your business from a bank.

What is an assessment of the financial condition of an enterprise?

Assessment of the financial condition of the enterprise carried out in order to identify the main factors influencing the financial viability of the company, as well as to make a forecast of growth trends and develop business development strategies.

Assessment of the financial condition of the enterprise is carried out by assessing the composition and structure of the company’s assets, their movement and condition, assessing the composition and structure of sources of debt and equity capital, analyzing the characteristics and properties of the company’s financial stability. Analysis of financial condition is an analytical procedure that can be used to identify the weaknesses of the financial mechanism of a business and predict its most likely development. The analysis also involves developing solutions to reduce and completely eliminate risks.

Why is an assessment of the financial condition of an enterprise necessary?

At the present stage of economic development of the Russian Federation, the issue is very relevant. After all, the success of the activity depends on economic health - and therefore maximum attention should be paid to the analysis.

Relevance of the procedure assessment of the financial condition of the enterprise led to the powerful development of various areas of assessment methods, and also created the necessary basis for their easier and short-term implementation. The methods used in the assessment activities of the company "Active Business Consultations" are aimed not only at detailed or express, but also at developing information useful for making informed management and investment decisions.

An assessment of the financial condition of an enterprise is carried out in the following cases:

1. Reorganization, restructuring, liquidation of the company;

2. Completion of a transaction of purchase and sale or lease of a business (both individual parts and all property);

3. Conducting revaluation of financial assets;

4. Obtaining various loans and investments;

5. Company property insurance;

6. Bankruptcy procedure with forced sale of an enterprise or part of it.

Existing techniques and assessment of the financial condition of the enterprise are basic and are not used in isolation in practice. When conducting assessment of the financial condition of the enterprise The Active Business Consulting company uses combined, comprehensive assessment models that ensure high accuracy of the result of the procedure. This integrated approach is due to the presence of certain approaches and methods of limitations and disadvantages, which are neutralized when using an integrated approach to assessment of the financial condition of the enterprise. It is in this case that they complement each other.

The main goals of the financial condition of the enterprise are:

1. Assessment of the dynamics of movement and the state of the composition and structure of assets;

2. Assessment of the dynamics of movement, composition, condition and structure of sources of equity and borrowed capital;

3. Analysis of calculated and absolute indicators of the company’s financial stability, assessment of changes in level and identification of changing trends;

4. Analysis of the company's solvency and the liquidity of its balance sheet assets.

The result assessment of the financial condition of the enterprise is:

1. Established indicators of financial position;

2. Identified changes in the financial condition of the company in space and time;

3. Identified main factors that cause changes in financial condition;

4. Conclusions and forecast on the main trends in the financial condition of the company.

At what stages does the Active Business Consulting company assess the financial condition of an enterprise?

1. Collection of data and documentary confirmation of the reliability of the information received;

2. Information processing - preparation of aggregated reporting forms and analytical tables;

3. Study and calculation using various methods of indicators of the structure of financial statements;

4. Establishing indicators of financial ratios for all areas of business development, or for intermediate financial aggregates (business activity, financial stability, business profitability and solvency);

5. Comparative analysis of the values of financial analysis with standards (industry average and generally accepted);

6. Analysis of trends and changes in financial ratios (identifying trends for improvement or deterioration);

7. Calculation of integral financial ratios;

8. Preparation of a statement of financial position based on interpretation and expert conclusions from the data obtained.

Depending on the objectives, financial analysis is carried out in the following forms:

Express analysis. It is reasonable to conduct it if the analysis is needed in a short time - in 1-2 days the general financial condition of the enterprise will be presented based on information from the financial statements;

Comprehensive financial analysis. Deep, reliable, high-precision - carried out in 1 month. Comprehensive assessment of the financial condition of the enterprise carried out on the basis of data from financial statements, as well as on the basis of analytical accounting, the results of an independent audit and transcripts of reporting items;

Regular financial analysis - needed to establish effective financial management of the company based on the presentation of all necessary information regularly with a certain period (quarterly or monthly) of specially processed results of a comprehensive financial analysis;

Oriented financial analysis. It is extremely important when it is necessary to resolve the company’s priority financial problems, for example, to optimize accounts receivable based on the main forms of external accounting reporting, as well as deciphering those reporting items that are associated with these problems.

The company "Active Business Consultations" guarantees the quality of appraisal work for the following reasons:

Compliance with internal company standards;

Availability of a quality control system;

Complete confidentiality when working with corporate and other documents.

The company "Active Business Consulting" provides high-quality assessment of the financial condition of the enterprise, offering you only useful and reliable information, with the help of which you can not only solve some business problems, but also make important strategic decisions to increase the profitability of the enterprise.

Send your good work in the knowledge base is simple. Use the form below

Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.

Posted on http://www.allbest.ru/

Federal State Budgetary Educational Institution of Higher Professional Education

"East Siberian State University of Technology and Management"

(FSBEI HPE VSGUTU)

Department of Finance and Credit

COURSE WORK

in the discipline "Theory of Economic Analysis"

“analysis of the financial condition of the enterprise”

Completed by: student of group D553-5 Dragushina P.

Scientific supervisor: Marina Abramovna Dugarzhapova

Ulan-Ude 2014

INTRODUCTION

The transition to a market economy requires the enterprise to increase production efficiency, competitiveness of products and services based on the introduction of scientific and technological progress, effective forms of business and production management, activation of entrepreneurship, etc. An important role in the implementation of this task is given to the analysis of the economic activities of enterprises. With its help, strategies and tactics for the development of the enterprise are developed, plans and management decisions are substantiated, their implementation is monitored, reserves for increasing production efficiency are identified, and the results of the activities of the enterprise, its divisions and employees are assessed.

The topic “Analysis of the financial condition of an enterprise” is very relevant today. Many enterprises in our country are on the verge of bankruptcy; the reason for this could be an untimely or incorrect analysis of the enterprise’s activities. Therefore, it is necessary to conduct a thorough analysis of the financial condition of the enterprise as a whole.

The purpose of this course work: to examine the financial condition of the enterprise, identify the main problems of financial activity and give recommendations on financial management.

Based on your goals, you can formulate tasks:

1. Determine the importance of financial condition for the development of the enterprise;

2. Analyze the ratio of equity and debt capital of the enterprise;

3. Assess the financial condition based on the liquidity of the balance sheet;

Analysis is understood as a way of understanding objects and phenomena of the environment, based on dividing the whole into its component parts and studying them in all the variety of connections and dependencies.

The content of the analysis follows from the functions. One of these functions is the study of the nature of the operation of economic laws, the establishment of patterns and trends in economic phenomena and processes in the specific conditions of the enterprise. The next function of analysis is monitoring the implementation of plans and management decisions, and the economical use of resources. The central function of the analysis is to search for reserves for increasing production efficiency based on the study of advanced experience and achievements of science and practice. Also, another function of analysis is to evaluate the results of the enterprise’s activities in terms of fulfilling plans, the achieved level of economic development, and the use of existing opportunities. And, finally, the development of measures for the use of identified reserves in the process of economic activity.

Managers and relevant services, as well as founders and investors, analyze the financial condition of an enterprise or organization in order to study the effective use of resources. Banks - to assess the terms of a loan and determine the degree of risk, suppliers - to receive payments on time, tax inspectorates - to fulfill the budget revenue plan, etc. Financial analysis is a flexible tool in the hands of enterprise managers.

The financial condition of an enterprise is characterized by the placement and use of enterprise funds. This information is presented in the balance sheet of the enterprise. The main factors determining the financial condition of the enterprise are, firstly, the implementation of the financial plan and replenishment as the need arises for its own working capital at the expense of profits and, secondly, the turnover rate of working capital (assets). The signal indicator in which the financial condition is manifested is the solvency of the enterprise, which means its ability to satisfy payment requirements on time, repay loans, pay staff, and make payments to the budget. The analysis of the financial condition of an enterprise includes an analysis of accounting analysis, liabilities and assets, their relationship and structure; analysis of the use of capital and assessment of financial stability; analysis of the solvency and creditworthiness of the enterprise, etc.

CHAPTER 1. THEORETICAL PART

1.1 The importance of financial condition for the development of an enterprise

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 feasibility of their placement and efficiency of use, financial relationships with other legal entities and individuals, solvency and financial stability.

Internal users include the owners and administration of the enterprise, external users include creditors, investors, and commercial partners. In accordance with this, analysis is divided into internal and external.

Internal analysis is carried out by enterprise services and its results are used for planning, monitoring and forecasting financial condition. Its goal is to establish a systematic flow of funds and place own and borrowed funds in such a way as to ensure the normal functioning of the enterprise, obtain maximum profits and avoid bankruptcy. Analysis of the financial condition, carried out in the interests of internal users, is aimed at identifying the weakest positions in the financial activities of the enterprise in order to strengthen them and determine the opportunities, operating conditions of the enterprise, and create an information base for making management decisions that ensure the effective operation of the enterprise.

External analysis - carried out by investors, suppliers of material and financial resources, regulatory authorities on the basis of published reports. Its goal is to establish the possibility of a profitable investment in order to ensure maximum profit and eliminate the risk of loss. An analysis of the financial condition in the interests of external users is carried out to assess the degree of guarantees of their economic interests, the ability of the enterprise to repay its obligations in a timely manner, ensure the efficient use of funds for investors, etc. This analysis allows you to assess the profitability and reliability of cooperation with a specific organization.

Analysis of financial statements involves the use of specific techniques or methods, one of which is “reading” the balance sheet, or the study of absolute values. “Reading”, or familiarization with the contents, of the balance sheet allows you to establish the main sources of funds (own and borrowed); main areas of investment; the ratio of funds and sources and other characteristics that allow us to assess the property status of the enterprise and its security. But information presented in absolute values does not always allow one to accurately determine the dynamics of indicators and is insufficient to justify decisions. Therefore, along with absolute values, when analyzing financial statements, various analysis techniques are used that involve the calculation and assessment of relative indicators. These include horizontal, vertical, trend, factor analysis and calculation of coefficients.

Horizontal analysis involves studying the absolute indicators of an organization’s reporting items for a certain period, calculating the rate of their change and evaluating it.

In conditions of inflation, the value of horizontal analysis is somewhat reduced, since the calculations made with its help do not reflect objective changes in indicators associated with inflation processes.

Horizontal analysis is complemented by vertical analysis of the study of financial indicators.

Vertical analysis refers to the presentation of reporting data in the form of relative indicators through the share of each article in the overall reporting and assessment of their changes over time. Relative indicators smooth out the impact of inflation, which allows for a fairly objective assessment of the changes taking place.

Vertical analysis data makes it possible to evaluate structural changes in the composition of assets, liabilities, other reporting indicators, the dynamics of the share of the main elements of the organization’s income, product profitability ratios, etc.

Trend analysis (analysis of development trends) is understood as a type of horizontal analysis that is oriented toward the future. Trend analysis involves studying indicators for the maximum possible period of time, while each reporting item is compared with the values of the analyzed indicators for a number of previous periods and a trend is determined, i.e. the main recurring trend in the development of the indicator, cleared of the influence of random factors and individual characteristics of the periods.

To carry out factor analysis, the indicator under study is expressed through the factors that form it, and the influence of these factors on the change in the indicator is calculated and assessed. Factor analysis can be direct, i.e. the indicator is studied and decomposed into its component parts, and inversely (synthesis) - individual elements (component parts) are combined into a common studied (resultative) indicator.

Comparative (spatial) analysis is a comparison and assessment of the performance indicators of an enterprise with the indicators of competing organizations, with industry average and average economic data, with standards, etc.

Analysis of coefficients (relative indicators) involves the calculation and assessment of the ratios of various types of funds and sources, indicators of the efficiency of using enterprise resources, and types of profitability. Analysis of relative indicators makes it possible to assess the relationship between indicators and is used in studying the financial stability, solvency of an enterprise, and the liquidity of its balance sheet.

The simultaneous use of all techniques (methods) makes it possible to most objectively assess the financial position of the enterprise, its reliability as a business partner, and development prospects.

The ability of an enterprise to make payments on time, finance its activities, withstand unexpected shocks and maintain its solvency in adverse circumstances indicates its stable financial condition, and vice versa. Therefore, one of the indicators characterizing the financial position of an enterprise is its solvency, i.e. the ability of cash resources to timely repay their payment obligations.

The solvency assessment is carried out on the basis of calculating relative liquidity indicators (current liquidity ratio, intermediate coverage ratio and absolute liquidity ratio). Absolute liquidity ratio is the ratio of the value of absolutely and most liquid assets to the value of short-term liabilities.

The absolute liquidity ratio shows what part of short-term liabilities can be repaid using available cash. Its optimal level is 0.2-0.25.

Interim coverage ratio - the ratio of cash, short-term financial investments and short-term receivables, payments for which are expected within 12 months after the reporting date, to the amount of short-term financial liabilities.

This ratio shows the predicted payment capabilities in the conditions of timely settlements with debtors. A ratio of 0.7 to 1 is usually satisfactory.

Current ratio (total coverage) - shows whether the company has enough funds to pay off short-term obligations within a certain time.

In some cases, it is necessary to calculate the urgent (quick) liquidity ratio. It is calculated as of today as the ratio of the available amount of funds (account balances 50 and 51) to the amount of the obligation that has arisen.

1.2 Analysis of assets and liabilities of the balance sheet

financial analysis balance liquidity

The main source of information for analyzing and assessing the financial condition of an organization, with which an analyst most often works, is financial statements. Accounting statements are a unified system of data on the property and financial position of an organization and the results of its economic activities. This document includes, in addition to the descriptive part, a complete set of accounting reporting forms, as well as specialized forms established in accordance with regulations governing accounting and reporting in the Russian Federation. The composition, content, requirements and other methodological principles of accounting statements are regulated by the Accounting Regulations “Accounting statements of organizations”, approved by order of the Ministry of Finance of the Russian Federation No. 43n dated July 6, 1999 /PBU 4/99/.

In accordance with the Federal Law of the Russian Federation “On Accounting” dated November 21, 1996, No. 129-FZ and the order of the Ministry of Finance of Russia dated July 22. No. 67n “On the forms of financial statements of organizations” the financial statements include:

Balance sheet - form No. 1;

Profit and loss statement - form No. 2;

Appendixes to the balance sheet and profit and loss account:

Statement of changes in capital - form No. 3

Cash flow statement - form No. 4;

Appendix to the balance sheet - form No. 5;

Report on the intended use of funds received - form No. 6;

Explanatory note;

The final part of the audit report issued based on the results of an audit of financial statements, mandatory under the legislation of the Russian Federation.

The main elements of financial statements are assets, liabilities, equity, income, expenses, profit and loss. The first three elements characterize the organization's funds and the sources of these funds on a certain date; the remaining elements reflect transactions and economic events that affected the financial position of the organization during the reporting period and caused changes in the first three elements. All elements of financial statements, among which in all countries, including Russia, the main ones are the balance sheet/f. No. 1/ and profit and loss statement /f. No. 2/.

Balance / f. No. 1/ occupies a central place in the accounting reporting system. It has undergone major changes associated with adaptation to the requirements of international accounting standards. It must be emphasized that the changes taking place are both quantitative and qualitative in nature.

Let us characterize the balance sheet in the most general form. The new form of balance sheet, approved by the Accounting Regulations “Accounting Reports of Organizations”, approved by Order of the Ministry of Finance of the Russian Federation No. 43n dated 07/06/99 /PBU 4/99/, has five sections, including two in its active part, and three - in passive.

The balance is built on the “net” principle, i.e. it does not contain regulatory articles: depreciation of fixed assets, intangible assets, low-value and wearable items, use of profits. In addition, in a more detailed perspective, the main form of financial statements shows the composition of intangible assets, fixed assets, long-term and short-term financial investments, and the structure of own and borrowed funds. It records the value / monetary value / of the remaining property, materials, finances, formed capital, funds, loans, credits and other debts and obligations.

The balance sheet is the most informative basis for analyzing and assessing the financial condition of an organization. The balance sheet asset characterizes the property mass of the organization, i.e. composition and condition of material assets directly owned by the organization. Liability characterizes the composition and state of rights to these values that arise in the process of the organization’s economic activities among various participants in a commercial business /shareholders, investors, creditors, the state, etc./.

Balance sheet assets include items that combine certain elements of the organization’s economic turnover according to a functional basis. The asset balance sheet includes two sections:

1. "Fixed assets";

2. “Current assets”.

Thus, in section 1 “Non-current assets” intangible assets / a breakdown of the composition of intangible assets is given in the Appendix to the balance sheet / f. No. 5//, fixed assets / a breakdown of the movement of fixed assets during the reporting period, as well as their composition at the end of the period, is given in the Appendix to the balance sheet /f. No. 5 //, unfinished construction / decoding of information on the movement of funds under this article is also given in f. No. 5/, profitable investments in material assets, financial investments.

Section 2 of the balance sheet asset “Current assets” reflects the amount of material current assets: inventories, work in progress, finished goods, etc., the organization’s availability of free cash, the amount of accounts receivable and other assets.

According to Order of the Ministry of Finance of the Russian Federation No. 43n dated 07/06/99. on the approval of the Accounting Regulations “Accounting Statements of Organizations” PBU 4/99, starting with the 2000 financial statements, the “Losses” section, previously present in the balance sheet asset, is excluded from the structure of the balance sheet.

The balance sheet liability begins with the “Capital and Reserves” section, which contains information about the authorized, additional, reserve capital, as well as about retained earnings /uncovered loss/.

A breakdown of the composition and movement of funds, movement of the balance of retained earnings of previous years during the reporting year is given in Form No. 3 “Report on Changes in Capital”.

Next come the sections “Long-term liabilities” and “Short-term liabilities”, which show outstanding amounts of borrowed funds, accounts payable, deferred income and reserves for future expenses and payments.

The content of the asset and liability items of the balance sheet makes it possible to use it both internally (top management of the organization, general meeting of participants, managers at relevant levels), and external users (state, existing and potential creditors, suppliers and buyers, owners of the organization’s funds, audit services, authorities statistics/.

Please note: starting with reporting first quarter of 2000, new PBU 4/99 is introduced. In accordance with this provision, the group of items “Intangible assets” has been added to the balance sheet asset group with the positions “Rights to objects of intellectual / industrial / property” and “Business reputation of the organization”. A group of articles “Profitable investments in material assets” was also introduced, and in the group of articles “Receivables” the position “Debt of participants / founders / on contributions to the authorized capital” appeared. The new form of balance sheet does not contain the following articles: “Accumulation funds”, “Social sector funds”, “Consumption funds”. The balances of these funds will be reported under the line “Retained earnings”.

Additionally, we note that in the balance sheet from the year 2000 There is no article “Targeted financing and revenues”. And, on the contrary, in the group of articles “Accounts payable” they highlight “Debt to participants / founders / for payment of income”.

The study of economic literature and business practices in organizations allows us to conclude that the existing form of the balance sheet has a number of limitations. Knowing the limitations is necessary to evaluate its actual analytical capabilities. Let's list some of them:

1. Balance is historical in nature. As you know, it is compiled for a specific date. As a result, the organization's balance sheet is a “photograph” between two specific dates, from which only the change, but not the movement of assets, equity and borrowed capital and liabilities of the organization is visible. He does not answer the question of why this situation has arisen.

2. The balance sheet is constructed in such a way as to generally record the financial and economic condition of the organization for the reporting period. At the same time, such an aspect of the organization’s well-being as the division of property into own and borrowed property, specifically by type, automatically falls out of consideration.

Indeed, if the balance sheet contains only a list of all movable and immovable property, then it is not possible to link specific property with a specific source of its financing. From the balance sheet one can only judge the property as a whole, highlighting its own and borrowed components. As a result, the user is deprived of the opportunity to “read” about this in the balance sheet. In the very In fact, if an organization purchased a technological line or a car during the reporting period, then it is important to know at what expense this happened.

If the purchase was made using a loan, then, for example, a car credited to the organization’s balance sheet cannot be considered the organization’s property in the economic sense, until the loan is repaid and the accumulation fund is not formed, which clearly does not follow from the balance sheet. As a result, this asset is unintentionally viewed by the user as property of this organization, which contradicts logic.

3. One of the main goals of any commercial organization is to make a profit. However, this indicator is not fully reflected in the balance sheet. The amount of retained earnings presented in the balance sheet, in isolation from costs and sales turnover, does not show what resulted in exactly this amount.

Moreover, there is no indicator of book profit in the balance sheet. The absence of this indicator reduces the information capacity contained in the balance sheet, thereby, in an analytical sense, the role of the profit and loss account is increased to an even greater extent.

4. It is not clear from the balance sheet what facts and business transactions accounted for the change in the balance sheet currency. To obtain an accurate answer, additional information is necessary, since turnover is not shown in the balance sheet, but it is through them that the balances at the end of the period are determined. The important things are thus reflected in the accounts, in the general ledger, and not in the balance sheet.

Form No. 1 of the Russian financial statements “Balance Sheet” is somewhat different from the forms of balance sheets of countries that adhere to international standards. Here are some of them:

In the Russian balance sheet, assets are arranged in order of increasing liquidity, i.e. direct dependence on the rate of transformation of these assets in the process of economic turnover into monetary form. Thus, in section 1 of the balance sheet asset “Non-current assets” / this term is scientifically untenable, because all assets and all capital - liabilities - are in circulation / real estate is shown, which retains its original form almost until the end of its existence. Liquidity, i.e. The mobility of this property in economic circulation is the lowest.

Section 2 of the balance sheet assets shows such elements of the organization’s property that change their form many times during the reporting period. The mobility of these balance sheet asset elements, i.e. liquidity is higher than the elements of section 1. The liquidity of funds is equal to one, i.e. they have absolute liquidity .

Accordingly, liabilities are located starting with own funds and reserves, which are embodied in “non-current” assets, then long-term liabilities and short-term liabilities follow.

In the asset balance sheet of the international standard, on the contrary, the most liquid, current assets are in first place (cash and cash equivalents are in the first place), and long-term assets are in second place.

In liabilities, accordingly, the list of items begins with short-term bank loans /as part of current liabilities/, followed by long-term liabilities and equity capital.

This difference is insignificant because each international standard balance sheet item can be found with an analogue in the Russian balance sheet according to Form No. 1. And vice versa: all sections and items of the Russian balance sheet can be interpreted in terms of international accounting standards.

2. A significant difference between the two balance sheets is that the international standard balance sheet does not have the position “Construction in progress”, because In world practice, construction is usually carried out by specialized construction companies that manufacture their products on a turnkey basis and sell them as ordinary goods.

3. The West also deals more decisively with outstanding accounts receivable: it is excluded from the organization’s property. At the same time, both assets and liabilities are freed from imaginary ownership. It is no coincidence that, in accordance with international accounting standards, extensive information about receivables is disclosed in the appendix to the statements/balance sheet: terms, special repayment conditions, specific risks associated with the debt. For an external analyst using Russian reporting data, the basic information characterizing the quality of receivables is information about overdue receivables.

Based on the above restrictions contained in the balance sheet of Russia / f. No. 1/ we can suggest the following ways to improve this form of financial reporting to increase its analyticality and information capacity:

It is advisable to divide the organization’s property in the balance sheet into its own and borrowed property specifically by type, because in general, the organization’s balance sheet does not provide an opportunity to get answers to questions that constantly interest users, in particular, whose property is on the organization’s balance sheet: theirs or someone else’s?

Considering that the balance sheet contains the most important information about the organization’s work for the reporting period, it is necessary to enter the balance sheet profit indicator into the liability side of the balance sheet so that the analytical nature of this document increases and its information content does not deteriorate.

In order to bring Russia’s balance sheet closer to the international balance sheet, it is necessary to exclude the item “Construction in progress” from the balance sheet asset, as is customary in world practice.

It is also necessary to exclude from the accounts receivable accounts receivables that are not repaid on time. This will free both the assets and liabilities of the balance sheet from imaginary ownership.

Posted on Allbest.ru