Analysis of the financial condition is necessary to obtain objective information about the solvency, business activity and financial stability of the enterprise. Most often, it is required by the top management of the organization for making management decisions. In addition, the financial condition is assessed by banks when considering the issue of possible lending to the enterprise.
It is necessary
- - balance sheet (form No. 1);
- - profit and loss statement (form No. 2).
Instructions
Step 1
The assessment of the financial condition of the organization is carried out according to the financial statements, taking into account the tendencies to change for the better or worse, as well as the factors that determine these changes. The analysis examines individual balance sheet indicators, its structure, asset quality.
Step 2
The data for a separate reporting date does not fully characterize the financial and economic activities of the enterprise, therefore, they need to be evaluated in dynamics, at least for 1 year. To do this, draw up the aggregated balance sheet for the last 4 reporting periods in the form of a table: in the vertical range of values, list the items of the balance sheet and the profit and loss statement, and in the horizontal - reporting dates. Fill in the table based on the data of the financial statements in forms No. 1 and No. 2.
Step 3
The financial condition of the enterprise is assessed using the coefficients: absolute, quick and current liquidity, the availability of own funds, as well as indicators of asset turnover and profitability. Absolute liquidity means the company's readiness to pay off short-term liabilities immediately, fast liquidity means the ability to pay off debt in a fairly short time, and the current one characterizes all possible means of payment. The equity ratio shows the proportion of an organization's assets that are covered by equity.
Step 4
To calculate the indicators, use the following lines of the balance sheet (form No. 1) and the profit and loss statement (form No. 2): - 1210 - "Inventories"; - 1230 - "Accounts receivable"; - 1240 - "Short-term financial investments"; - 1250 - "Cash"; - 1200 - total of the section "Current assets"; - 1300 - total of the section "Capital and reserves" - 1530 - "Deferred income"; - 1500 - total of the section "Short-term liabilities"; - 1700 - total balance sheet liabilities; - 2110 - "Revenue"; - 2200 - "Profit from sales"; - 2400 - "Net profit".
Step 5
Calculate the indicators using the formulas: - absolute liquidity: K1 = (line 1240 + line 1250) / (line 1500-line 1530); - quick liquidity: K2 = (line 1250 + line 1240) / (line 1500-line 1530); - current liquidity: K3 = line 1200 / (line 1500-line 1530); - availability of own funds: K4 = (line 1300 + line 1530) / line 1700.
Step 6
Next, evaluate the profitability of the organization by type: - profitability of sales: K5 = p. 2200 / p. 2110; - profitability of activities: K6 = p. 2400 / p. 2110.
Step 7
Then determine the indicators of the turnover of various elements of current assets and payables. They are calculated based on the volume of daily sales, which is calculated by dividing the sales revenue by the number of days in the period in question.
Step 8
Add up the values of lines 1210, 1230 and 1200 for the start and end dates of the analyzed period for each article separately, divide by 2 and add all intermediate values. Divide the total by the number of terms, reduced by 1: you get the average of inventories, receivables and current assets. Divide the numbers by daily sales to calculate turnover rates.
Step 9
The turnover indicators characterize the management policy of the enterprise: the higher they are, the worse the business of the company is, while a decrease in the turnover period indicates competent business conduct, good customer demand for products and its timely satisfaction.
Step 10
Combine the obtained ratios of liquidity, equity and turnover into a table, analyze them in dynamics, note the improvement, stability or deterioration of certain indicators. Based on this analysis, it is possible to draw conclusions about the financial condition of the enterprise, predict development trends or possible bankruptcy.
