Entrepreneurial activity requires constant planning and analysis of the financial performance of the company. This is the basis for effective management of all stages of production and the development of methods for obtaining the greatest profit.
Instructions
Step 1
The financial analysis of an enterprise is aimed at studying its main economic indicators that ensure financial stability in the corresponding market niche. The sustainability of an enterprise is a guarantee of constant profit, an indicator of reliability for potential investors and shareholders.
Step 2
Within the framework of financial analysis, the formation of the so-called information analysis base is carried out. The base is a set of financial indicators for which the assessment is made. It includes: tangible assets, funding sources, liquidity ratios, the value of trade turnover, cash flows, investments, pricing methods, bankruptcy conditions. Based on the analysis, results are summarized and forecasts are displayed.
Step 3
The financial analysis of the enterprise can be both internal and external. Internal analysis is carried out by employees of the company itself, external - by third parties. The first type of analysis is carried out at the end of a certain reporting period. The second is when selling or buying a company, conducting special checks (audits), while additional verification of the reliability of the data provided can be carried out.
Step 4
There are several directions of financial analysis: horizontal, vertical, comparative, trend, analytical and factorial. The horizontal method of analysis involves comparing current indicators with historical data to identify dynamics. Vertical analysis involves an overview of the overall structure of the entire base of indicators and further study of the impact of each of them on the whole picture.
Step 5
Comparative analysis involves the comparison of similar financial indicators between divisions, shops, subsidiaries, as well as between the general indicators of the company with similar data of competitors, if such information is available.
Step 6
Trend analysis shows the general trend of changes in indicators from period to period. Building a trend helps in predicting the future of the organization, drawing up long-term preliminary plans.
Step 7
The analytical direction of financial analysis allows you to identify certain relationships and patterns between similar indicators of different firms, for example, grouping companies by structure or amount of authorized capital, by the amount of fixed assets or profits. This area is also called analytical grouping.
Step 8
Factor analysis is the study of the influence of individual factors on changes in financial indicators, for example, how an increase or decrease in price will affect the volume of production, or how the replacement or modification of equipment will affect the final profit, etc.
