Factor analysis is one of the types of financial assessment of the performance of a particular area of activity in business. Factor analysis is used to consider investment, core and financial activities.
Instructions
Step 1
Consider all possible options for attracting capital from outside to your business. This will allow you to calculate the size of non-current assets required for the purchase of commercial real estate, equipment, payment of licenses, patents, etc.
Step 2
Analyze the state of current assets, which include the cost of raw materials, stocks of materials; costs of work in progress, finished goods. This also includes the costs of advances and future costs.
Step 3
Go to the analysis of the main activity. The goal is profit (loss) from the sale of manufactured goods and services. Compare quality and price, production costs and sales volume. Please note that changes in indicators can be affected by inflation, changes in legislation or high competition.
Step 4
Assess the internal resources of the enterprise. By properly managing costs and investments, you can increase your bottom line through profitable sales. Both positive and negative dynamics are possible.
Step 5
You must evaluate financial performance. For optimal fundraising, such an indicator as the ratio between equity and borrowed capital is required.
Step 6
Assess your financial capabilities when borrowing funds from banks. If your income is not high enough, you may find yourself in a financial risk zone, when the payment of interest on a loan may be equal or lower than the income level.
Step 7
Based on the analysis carried out, develop a series of measures that will improve the financial policy of the enterprise or business.
