To determine the organization's ability to self-finance, that is, the ability to do without borrowing, it is necessary to assess the composition and structure of equity capital. Such an analysis is carried out on the basis of the data of the accounting statements of the enterprise.
It is necessary
Balance sheet (form No. 1)
Instructions
Step 1
The equity capital includes: - invested funds - authorized capital, which is the contributions of participants; - accumulated capital created as a result of the financial and economic activities of the enterprise - retained earnings or uncovered loss; - additional capital formed due to the revaluation of assets.
Step 2
In the balance sheet, each of the components of the equity capital structure is represented by the corresponding lines of the "Capital and reserves" section. In particular, the amount of the authorized capital can be determined in line 1310, additional capital - 1350, and retained earnings (uncovered loss) - 1370.
Step 3
But by themselves, these indicators do not reflect the financial condition of the enterprise. It is more important to consider their share in the balance sheet currency and the impact on the formation of current assets.
Step 4
Regularly monitor the ratio of equity in the turnover of the organization. Calculate it using the formula: Ksko = (p. 1300-p. 1100) (form No. 1 of the balance sheet). A positive value, growth or stability of the indicator indicates the financial stability of the enterprise, and a negative number indicates that the bulk of current assets was formed for account of borrowed funds. A decrease in the share of equity capital in the balance sheet currency and working capital over time may lead to the impossibility of fulfilling obligations to partners, and subsequently to bankruptcy.
Step 5
In addition, take into account the share of equity in equity working capital, which characterizes the ratio of equity and borrowed sources of financing the company's activities. Its ratio is the ratio of equity in circulation to the value of current assets and is calculated by the formula: Ksksos = (p. 1300-p. 1100) / p. 1200).
Step 6
The presence of equity capital also determines the ratio of financial independence or autonomy, that is, the security of the organization's assets with its own sources of formation. The indicator of financial independence is calculated as the quotient of dividing the cost of equity by the total amount of assets: Kfn = line 1300 / (line 1100 + line 1200).
Step 7
When analyzing equity capital, pay attention to its growth rate - the safety factor. To calculate it, use the formula: Kssk = SK1 / SK0x100%, where SK1 is the amount of equity at the end of the reporting period, and SK0 - at the beginning. The growth rate of equity capital must be more than 100%, exceed the growth rate of current assets and inflation for the reporting period … In this case, we can talk about the favorable financial condition of the enterprise.
