To obtain an objective assessment of the financial stability, solvency, business activity of an enterprise and the effectiveness of its activities, it is necessary to analyze its financial condition. It is carried out when considering the issue of lending to an organization, discussing investment prospects, introducing bankruptcy procedures against the company.
Financial analysis is carried out on the basis of financial statements: balance sheet (form No. 1), profit and loss statement (form No. 2), cash flow statement (form No. 4), annex to the balance sheet (form No. 5), explanatory note and others documents. His methodology is based on the calculation of coefficients characterizing the financial and economic activities of the enterprise: average monthly revenue, indicators of solvency and financial stability, the efficiency of using working capital, profit and profitability, investment activity.
First of all, the basic indicator is determined - the average monthly revenue, which indicates the level of income for the reporting period and determines the total amount of financial resources of the organization. Most of the remaining coefficients are calculated based on its value. An additional characteristic of the liquidity of the company's finances is the share of cash in revenue.
Then the degree of solvency is established, that is, the ratio of the amount of long-term and short-term liabilities to the average monthly revenue, which determines the general situation of the enterprise's debt to creditors. The structure of the debt is formed by the distribution of the monetary coefficient into various components: debt on bank loans and loans to organizations and individuals, taxes and payments to off-budget funds, other creditors by dividing the corresponding value in the balance sheet by the average monthly revenue.
An important ratio of financial stability is the current debt solvency indicator, which is calculated as the ratio of short-term liabilities to average monthly earnings. It determines the timing of the possible repayment of current debt to creditors.
Closely related to the latter indicator is the ratio of coverage of short-term liabilities with current assets (current liquidity), which is calculated as the ratio of the value of current assets (stocks, receivables, cash, short-term financial investments) to current liabilities. It characterizes the degree of security of debt to creditors with quick-realizable assets. In addition, during the analysis of financial and economic activities, the absolute liquidity ratio is calculated - the ratio of the amount of short-term financial investments and cash to short-term liabilities.
The financial stability of the organization is confirmed by the presence in the turnover of equity capital, that is, the difference between equity and non-current assets, the share of equity in working capital (the ratio of equity in circulation to the amount of working capital), as well as the autonomy coefficient - the ratio of equity to the amount of non-current and current assets.
Great importance is attached to the provision of the organization with circulating assets. When analyzing the financial condition, it is defined as the ratio of current assets to average monthly earnings, which characterizes the rate of circulation of funds invested in current assets. Additionally, the coefficient of working capital in production and calculations is calculated.
One of the criteria for the effective operation of an enterprise is profitability. In the analysis of sustainability, the return on equity is determined (quotient from dividing profit before tax by the amount of current assets) and return on sales (the ratio of profit to revenue, showing how many rubles of profit was obtained as a result of the sale of goods and services per 1 ruble of revenue).
In addition, potential investors may be interested in the indicator of investment activity, which is calculated by dividing the amount of investments in non-current assets and long-term financial investments by the total value of non-current assets. It characterizes the development strategies of the organization, modification and improvement of property.
