Indicators characterizing the financial condition can be divided into groups reflecting various aspects financial condition enterprises. These include liquidity ratios; capital structure indicators (sustainability ratios); profitability ratios; odds business activity.
The degree of solvency of an enterprise is usually assessed using financial liquidity ratios :
1. The absolute liquidity ratio is calculated as the ratio Money and quickly marketable short-term securities to current – short-term debt:
In world practice, an absolute liquidity ratio of 0.2 - 0.3 is considered sufficient, that is, an enterprise can immediately repay 20 - 30% of current liabilities.
2. The liquidity ratio is defined as the ratio of cash, short-term financial investments and accounts receivable to current liabilities:
According to estimates accepted in international practice, the value of the coefficient should be 0.8 - 1.
3. The overall coverage ratio, often referred to simply as the coverage ratio, provides an overall assessment of a business's solvency. The coverage ratio is of interest to buyers and holders of shares and bonds of a company. It is calculated using the formula
Normal value this coefficient is 2.0-2.5.
Financial stability and autonomy is reflected by the structure of the balance sheet (the relationship between individual sections of assets and liabilities), which is characterized by several indicators.
1. The autonomy coefficient characterizes the enterprise’s dependence on external loans. The lower the ratio, the more loans the company has, the higher the risk of insolvency. A low value of the ratio also reflects the potential danger of a cash shortage for the enterprise:
It is considered normal if the value of the autonomy coefficient is greater than 0.5, that is, the financing of the enterprise’s activities is carried out at least 50% from its own sources.
2. The share of borrowed funds is determined by the formula
This ratio shows how much borrowed funds the company attracted per 1 ruble. own funds invested in assets.
3. The investment ratio - the ratio of borrowed and equity funds - is another form of representing the financial independence ratio:
Profitability ratios. In addition to the profitability ratios already discussed, when analyzing the financial condition, other modifications are calculated that characterize various aspects of the enterprise’s activities.
1. Return on sales ratio. Demonstrates the share of net profit in the company's sales volume:
2. The return on equity ratio allows you to determine the efficiency of using capital invested by the owners of the enterprise. This indicator is usually compared with possible alternative investments in other securities. Return on equity shows how many monetary units of net profit earned each unit invested by the company's owners:
3. Profitability ratio current assets. Demonstrates the company’s capabilities in ensuring a sufficient amount of profit in relation to the company’s working capital used. The higher the value of this coefficient, the more efficiently working capital is used:
4. The profitability ratio of non-current assets demonstrates the ability of an enterprise to provide a sufficient amount of profit in relation to the company's fixed assets. The higher the value of this coefficient, the more efficiently fixed assets are used:
5. The return on investment ratio shows how many monetary units the company needed to obtain one monetary unit arrived. This indicator is one of the most important indicators of competitiveness:
Business activity ratios allow you to analyze how effectively the company uses its funds. Among these ratios, indicators such as capital productivity are considered when it comes to non-current assets, turnover of working capital, as well as turnover of total capital.
Financial analysis in the areas of its implementation is multidimensional, but fundamental and interconnected are: analysis of the financial condition of the enterprise and analysis of the financial results of its activities, which are assessed using a system of indicators. The financial condition of the enterprise is assessed based on the use of a system of indicators that reflect the competitiveness, location, use and movement of the enterprise's resources. The main areas of analysis of the financial condition of an enterprise include: analysis and assessment of the economic potential of the enterprise; assessment and analysis of the financial balance of the enterprise; analysis and assessment of enterprise profitability. An assessment of the financial condition based on the results of the analysis and its forecast for the future are necessary for every business entity, since its further functioning is directly related to its profitability and ability to maintain its solvency .
The solvency of the enterprise is significantly influenced by the efficiency of its functioning and the ability to generate a sufficient level of income. Profitability is assessed using numerical indicators, among which the main ones are the profitability of products sold and asset turnover.
In international practice, to analyze the financial condition of an enterprise, a system of indicators is used, as well as financial ratios associated with their changes, which reflect the interests and goals of various users. The most important indicators in assessing the financial condition of an enterprise are: liquidity, which characterize the enterprise’s ability to repay debt; solvency, which determine the extent to which the enterprise covers borrowed funds; profitability, which commensurate the profit with the invested funds; efficiency of use of long-term and current assets; profitability of capital.
At the present stage, to assess the financial condition of an enterprise, only the main indicators are used, with the exception of duplicates or those that do not significantly affect the synthesizing estimates.
Definition financial indicators in the form of coefficients is based on the relationship between individual items of assets and liabilities of the balance sheet, financial results, as well as the relationship between financial performance and balance sheet indicators.
Assessing the indicators of the financial condition of an enterprise involves comparing actual values with standard values. Standard values of indicators are established in the form of a closed interval. However, the recommended values of the indicators do not take into account the dynamics of the financial results of the enterprise. The limit values of the indicators must correspond to such a relationship between the numerator and denominator of financial ratios that would ensure a faster rate of increase in profit compared to the previous period. With this approach, the standard values of the coefficients will be differentiated for different reporting periods and will reflect the financial condition of the enterprise, which corresponds to its effectively developed production and economic activities. Taking this into account, the standard values of the numerator and denominator of financial ratios should be determined by multiplying their actual values for the previous period by the coefficient of growth (decrease) in profit from sales of products in the reporting period in comparison with the previous one. In this case, the minimum standard value of each financial ratio is defined as the ratio of the actual value of the numerator (but not more than the standard value) to the standard value of the denominator (no less than the actual value). The maximum value of the standard liquidity and solvency indicator is determined as the ratio of the standard numerator (but not less than its actual value) to the actual value of the denominator (but not more than its standard value) .
1) Liquidity and solvency indicators :
In the conditions of market relations, economic entities may experience financial difficulties associated with the repayment of received bank loans, loans from other organizations, commercial loans from suppliers of inventory and other obligations within a specified time frame. Therefore, there is a need to analyze the liquidity of the balance sheet of an economic entity in order to assess its creditworthiness and solvency.
Balance sheet liquidity is defined as the degree to which an organization's liabilities are covered by its assets, the period of transformation of which into monetary value corresponds to the period of repayment of obligations.
Asset liquidity is the reciprocal of balance sheet liquidity in terms of the time it takes for assets to be converted into cash. The less time it takes to transform assets into monetary value, the more liquid they are, i.e. their liquidity is higher.
Balance sheet liquidity is one of the important conditions for the sustainable financial condition of an enterprise. Balance sheet liquidity is one of the criteria for assessing the financial condition of an enterprise by shareholders, banks, suppliers and other partners.
Highly liquid assets of an enterprise are cash on hand and in a bank account, since they can be used to pay debts at any time.
The next most liquid assets are securities and urgent receivables for goods shipped and services rendered.
Less liquid is overdue debt for shipped goods that are not paid on time by buyers according to payment documents, since the date of receipt of payment for such debt is unknown.
Liquid funds are used by the enterprise to pay off priority obligations wages, bank loans and interest on them, for settlements with suppliers, financial authorities for taxes and other payments.
According to the degree of liquidity, the company’s funds can be divided into four groups:
The most liquid assets (cash and short-term financial investments);
Quickly realizable assets (accounts receivable, finished products and goods);
Slow moving assets ( productive reserves, work in progress, distribution costs);
Hard to sell assets or illiquid assets ( intangible assets, fixed assets and equipment for installation, capital long-term financial investments).
Balance sheet liquidity is assessed using special indicators that express the ratio of certain asset and liability items of the balance sheet or the structure of the balance sheet asset. When calculating all these indicators, a common denominator is used - short-term liabilities, which are calculated as the total amount of short-term loans, short-term loans, and accounts payable.
The liquidity of an enterprise's balance sheet is closely related to its solvency, which is understood as the ability to meet its obligations in a timely manner and in full.
In market conditions, the solvency of an enterprise is considered the most important condition for its economic activity. This indicator characterizes its ability to make regular payments and fulfill monetary obligations using cash, easily mobilized funds and assets. Means of payment include amounts for such balance sheet items as cash, securities, goods shipped, finished products, settlements with customers and other easily salable assets from the third section of the balance sheet. Payments and liabilities include wage arrears, short-term and overdue bank loans, suppliers and other creditors, and priority payments.
The level of solvency of an enterprise is assessed based on balance sheet data on the main characteristics of the liquidity of working capital, i.e. taking into account the time required to convert them into cash. The most mobile part of working capital is cash and securities. Less mobile means of payment finished products, goods shipped, etc. The longest period of liquidity is required by inventories and costs. Based on this, the economic literature defines three levels of enterprise solvency, which are assessed accordingly using three coefficients: monetary, settlement and liquid solvency. The most general indicator of the solvency of an enterprise is the liquid solvency ratio, the numerator of which reflects all current assets, and the denominator - borrowed and own sources of their formation. A liquid solvency ratio value of less than 1 indicates that the company has debt that exceeds the level of its working capital. In other words, it is bankrupt and can be liquidated and its property sold.
All three solvency ratios indicate that the solvency of the enterprise has noticeably increased and is actually secure. The company meets the parameters necessary to carry out credit and other financial relationships with it.
Increasing the level of solvency of an enterprise depends primarily on improving the results of its production and commercial activities. At the same time, a reliable financial condition is also determined by the rational organization and use of financial resources. In this regard, in a market economy, not only the assessment of the assets and liabilities of the balance sheet, but also an in-depth daily analysis of the condition and use of business assets are important. This analysis is carried out using management accounting data.
A distinction is made between current and expected solvency. Current solvency is determined as of the balance sheet date. An enterprise is considered solvent if it has no overdue debts to suppliers, bank loans and other payments. Expected solvency is determined for a certain upcoming date by comparing means of payment and priority obligations on that date.
When assessing the liquidity of an enterprise’s balance sheet, the following indicators are used:
The amount of own working capital (functioning capital) characterizes that part of the enterprise’s own capital, which is the source of covering current assets (i.e. assets with a turnover of less than one year). The amount of own working capital is numerically equal to the excess of current assets over current liabilities. The growth of this indicator over time is viewed positively.
The maneuverability of operating capital characterizes that part of its own working capital that is in the form of cash. For the normal functioning of an enterprise, this indicator varies from 0 to 1. Its growth is a positive trend.
Coefficient current liquidity– gives a general assessment of the liquidity of assets, showing how many rubles of the enterprise’s current assets account for one ruble of current liabilities. If current assets exceed the size of current liabilities, then this enterprise can be considered as successfully operating. The growth of this indicator in dynamics is usually assessed positively, and the approximate critical value is 2.
The quick ratio is similar in meaning to the “current ratio”, but inventories are excluded from the calculation. In Western literature it is approximately taken below 1, but this is conditional.
Absolute liquidity (solvency) ratio - calculated by dividing the amount of the enterprise's cash and short-term financial investments (excluding settlements with debtors) by the amount of short-term liabilities (1.1). It characterizes the immediate readiness of the enterprise to repay its debt.
Ka.l. = Cash + Securities + accounts payable;
Short-term liabilities
In world practice, the optimal value of this coefficient is taken to be within the range of 0.25-0.35, since payment terms do not fall on the same day. This is also confirmed by the fact that an enterprise can place its assets (cash) in other monetary assets.
The share of own working capital in covering inventories - characterizes that part of the cost of inventories that is covered by own working capital, a lower limit of 50% is recommended.
Coverage coefficient – Kp. (1.2), calculated by the formula:
Kp = Current assets
Current liabilities (1.2)
This is the most common indicator of liquidity. It characterizes the relationship between all current assets and short-term liabilities, i.e. sufficiency of working capital to repay debts throughout the year. World experience shows that the optimal value of this indicator is within the range of 2-2.5.
Dependence coefficient on material reserves (1.3), equal to:
Kz.m.z =
Current liabilities (1.3)
The free material assets ratio Ks.m.s characterizes the share of net current assets that are tied up in unsold inventories (1.4):
Ks.m.s = Inventories
Net current assets (1.4)
The efficiency ratio with cash assets Kr.n.a shows the period during which the enterprise can carry out current economic activities on the basis of existing cash liquid assets without additional sources (1.5).
Kr.n.a = Cash + Securities + Accounts Payable
Daily cash expenses minus expenses,
for which money is not needed (1.5)
2) Profitability indicators :
Profitability shows how many rubles are accounted for per ruble of advanced (own) capital.
The main indicators of this block include return on advanced capital and return on equity. They show how many rubles of profit are generated per ruble of advanced (own) capital. When calculating, you can use either balance sheet profit or net profit.
When analyzing profitability, in a spatiotemporal aspect, three factors should be taken into account: key features these indicators:
The temporary aspect, when an enterprise makes a transition to new promising technologies and types of products;
The problem of risk;
The problem of assessment, because profit is assessed dynamically, and equity capital is accumulated over a number of years.
However, not everything can be reflected in the balance sheet, for example, a brand, ultra-modern technologies, wonderful well-coordinated staff do not have a monetary value, therefore, when choosing financial decisions, it is necessary to take into account the market value of the company.
To assess the dynamics relative indicators(profitability ratios) you must first calculate them using formulas.
1.Sales profitability ratio
Krent.p. =
Revenue from product sales (1.6)
This ratio shows how much profit accrues per unit of products sold.
2. Return on total capital of the enterprise
Krent. capital = Profit from product sales
Average asset value (1.7)
The coefficient shows the efficiency of using all the assets of the enterprise.
3. Profitability ratio of fixed assets and other non-current assets
Krent. os. = Profit from product sales(1.8)
Average cost of fixed assets
and other non-current assets (A1ср)
This indicator reflects the efficiency of use of fixed assets and other non-current assets.
4. Return on equity ratio
Krent. sk. = Profit from product sales
Average cost of equity capital (P1av) (1.9)
The ratio shows the efficiency of using equity capital.
2) Business activity indicators :
Such qualitative criteria are: the breadth of markets for products, the reputation of the enterprise, etc. Quantitative assessment is given in two directions:
– the degree of implementation of the plan for key indicators, ensuring the specified rates of their growth;
– level of efficiency in the use of enterprise resources.
In particular, the following ratio is optimal:
Tnb > Tr > So > 100%; (1.10)
where Tnb, Tr, Tak are, respectively, the rate of change in profit, sales, and advanced capital.
This dependency means that:
a) the economic potential of the enterprise increases;
b) sales volume increases at a faster rate;
c) profits are growing at a faster pace.
This given ratio can be conditionally called the “golden rule of enterprise economics.”
To implement the second direction, the following can be calculated: production, capital productivity, inventory turnover, operating cycle duration, and advanced capital turnover.
General indicators include “resource productivity indicator and economic growth sustainability coefficient.”
Resource productivity (turnover ratio of advanced capital) - characterizes the volume of products sold per ruble of funds invested in the activities of the enterprise. The growth of this indicator in dynamics is considered as a favorable trend.
The economic growth sustainability coefficient shows the average rate at which an enterprise can develop in the future.
Enterprise balance sheet
The main document characterizing the financial position of an enterprise is the balance sheet. Balance is a system grouped into pivot table indicators characterizing the property and financial position of the enterprise at the reporting date and reflects data on its economic assets (assets) and sources of their financing (liabilities).
Directly from the balance sheet you can obtain a number of important characteristics of the financial condition of the organization. These include:
1) the total value of the organization’s property;
2) the cost of immobilized (i.e. non-current) funds (assets) or real estate;
3) the cost of mobile (working) funds;
4) the cost of working capital; 5) the amount of the organization’s own funds;
6) amount of borrowed funds;
7) the amount of own funds in circulation;
8) net working capital, equal to the difference between current assets and current liabilities, etc.
Analysis of the dynamics of the balance sheet currency, the structure of assets and liabilities of the organization allows us to draw a number of conclusions necessary both for the implementation of current financial and economic activities, and for adoption management decisions for the future.
IN general outline Signs of a “good” balance are:
♦ the balance sheet currency at the end of the reporting period increased compared to the beginning;
♦ the growth rate of current assets is higher than the growth rate of non-current assets;
♦ the organization’s own capital exceeds borrowed capital and its growth rate is higher than the growth rate of borrowed capital;
♦ the growth rates of accounts receivable and accounts payable are approximately the same.
To assess the financial condition of an enterprise, the following indicators or ratios are used:
Return on equity;
Financial leverage;
Liquidity indicators (current, quick and absolute liquidity);
Sales profitability;
Asset turnover
The most important indicator of financial efficiency economic activity the enterprise is return on equity(ROA). It is defined as the ratio of net profit to equity.
ROA=Net Profit/Equity. Capital
This ratio is compared to risk-free rates of return or to the returns on alternative investments available to the shareholder.
The next indicator of financial performance efficiency is financial leverage.
Fin. Leverage = Assets/Equity
The lower the value of this ratio, the less financial risks the company is exposed to. It characterizes the long-term solvency of the enterprise.
Short-term solvency is characterized by liquidity indicators - current, quick and absolute liquidity ratios.
Liquidity indicators characterize the ability of an enterprise to fulfill short-term (current) obligations at the expense of current assets. In general, an enterprise is considered liquid if its current (current) assets exceed short-term (current) liabilities. However, the excess of current assets by short-term liabilities in itself provides only a general picture of liquidity, while an enterprise may be liquid to a greater or lesser extent. In addition, it is always important to know by what means the liquidity of the enterprise is ensured. Therefore, to measure liquidity, a system of liquidity indicators (ratios) is used.
Depending on the rate of conversion of assets into cash, current assets can be divided into three groups. The first group includes cash on hand and in the current account, as well as cash equivalents (highly liquid market securities), i.e. the most mobile funds that can immediately be used to make current payments. The second group includes assets whose conversion into cash requires certain time. This includes primarily accounts receivable, as well as certain types of short-term financial investments. The third group consists of the least liquid assets - production and inventories and costs.
Based on the above classification of current assets, the following liquidity ratios are calculated. The current liquidity ratio is a financial indicator that characterizes the degree of total coverage of urgent obligations (short-term loans and borrowings, as well as accounts payable) by all current assets of the enterprise. This ratio reflects the overall provision of the enterprise with working capital for conducting business activities and timely repayment of urgent obligations.
Current ratio is defined as the ratio of the actual value of the working capital available to the enterprise to its most urgent liabilities in the form of short-term bank loans, short-term loans, accounts payable, dividend payments, contributions to consumption funds and other short-term liabilities. The formula for calculating this coefficient is:
K TL = OA/KP
where OA is the current assets of the enterprise; KP - short-term liabilities.
This indicator belongs to the class of standardized indicators, and in world practice a value in the range from 2 to 3 is considered normal.
Urgent (quick) liquidity ratio- an intermediate financial indicator, when determining which the least mobile part of working capital - inventories - is excluded from the calculation. This is due to the fact that the funds that can be gained in the event of a forced sale of inventories may be significantly lower than the amounts at which they were purchased and are listed on the balance sheet of the enterprise.
The possibility of such a situation occurring is precisely foreseen when the quick liquidity ratio is calculated. This coefficient is determined by the formula:
K bl = OA-Z/KP
where OA is the current assets of the enterprise; 3 - production reserves; KP - short-term liabilities.
This indicator belongs to the class of standardized indicators and is considered sufficient if the quick liquidity ratio is not less than one.
Absolute liquidity ratio- the most stringent criterion of an enterprise’s liquidity, showing what part of short-term liabilities can be repaid immediately based on the fact that cash is absolutely liquid by definition. The formula for calculating the coefficient is:
K AL = D/KP
where D - cash and equivalent funds; KP - short-term liabilities.
This indicator belongs to the class of standardized indicators, and experts believe that the theoretically normal value of the coefficient is 0.2-0.3.
Another indicator characterizing the efficiency of the financial and economic activities of an enterprise is return on sales(ROS)
ROS= Net profit / revenue
Asset turnover= Revenue/Assets.
This indicator characterizes the intensity of use of all enterprise resources. The significance of this indicator for an enterprise is determined by the fact that the higher this indicator, the faster the company earns income on capital invested in assets, the less investment is required to maintain a particular sales volume.
Control questions:
- What is analysis?
- What is AHD?
- What tasks does the enterprise's AHD perform?
- Types of business activity analysis
- Analysis methods
- What is a company's balance sheet?
- What data for analysis can be obtained directly from the balance sheet?
- What characterizes “good balance”?
- What indicators are used to assess the financial condition of an enterprise?
- What indicator characterizes long-term solvency?
- What indicators characterize short-term solvency?
- How are the indicators calculated:
– current liquidity
Quick liquidity
Absolute liquidity
13. How is return on sales calculated?
14. How is asset turnover calculated?
15. What determines the value of this indicator for an enterprise?
16. List solvency indicators
Any enterprise, regardless of its field of activity, must maintain accounting records and conduct a financial analysis of its work results. different periods time (month, quarter, year). The importance of assessing the financial performance of companies is increasingly increasing, because it allows you to study the efficiency of resource use, ways to increase the return on capital and reduce costs, and ensure the stability of the enterprise. Let's consider the balance sheet of a certain enterprise LLC "XXX" for 2005, 2006 and 2007. The scope of its activity is the provision of services in the field computer games in the Internet. The company was established in 2005, over the course of three years the company developed and won clients, mainly individuals, in this market. Let's see how successfully the company has operated over the past three years. In order to analyze the balance sheet data for these periods of the organization’s activity, we will draw up an aggregated balance sheet and reflect it in the table. 1.
Having analyzed the aggregated balance sheet and its dynamics over three years, we can conclude that the enterprise’s property by the end of 2007 compared to 2006 increased by 25,185 thousand rubles. (by 21.7%). The growth of property was caused by an increase in current assets by RUB 24,666 thousand. and non-current assets by 519 thousand rubles.
The increase in the value of current assets occurred due to all their components; accordingly, the share of current assets in the property of the enterprise increased from 54.0% in 2005 to 59.34% in 2006 and 66.22% in 2007. There is also an increase slowly sold assets by 20,235 thousand rubles. This is most likely due to rising prices for materials and components. For 2029 thousand rubles. accounts receivable increased. Although its growth is insignificant, this is unfavorable for the enterprise, because accounts receivable are funds drawn from its turnover. By 2402 thousand rubles. (78.4%) highly liquid assets of the enterprise increased, which is a favorable trend, since the liquidity of property in general increases. However, the share of highly liquid assets is small - 3.87% in 2007.
The size of the enterprise's financing sources in 2007 increased by 25,185 thousand rubles. (by 21.7%), which was caused by an increase in borrowed capital. The enterprise's equity capital increased in 2004 by 6,400 thousand rubles. (by 9.3%), in 2005 by 9,703 thousand rubles. (by 12.9%), but at the same time the share of own funds in sources of financing decreased from 64.96% in 2006 to 60.25% in 2007. Nevertheless, own capital is more than 50%. Borrowed capital increased by 15,482 thousand rubles, its growth is mainly due to an increase in accounts payable. This is beneficial for the enterprise, because it attracts these funds into its circulation. By 4522 thousand rubles. the size of the item “Short-term loans and borrowings” has increased, which is undesirable, since short-term loans are the most expensive source of financing (due to the high interest on the loan). However, their increase does not create a threat to the financial independence of the enterprise, because the share of short-term loans in 2006 amounted to 13.35% of funding sources, and in 2007 - 14.17%. The organization in 2006-2007. there were no long-term obligations, which is bad because causes a decrease in the possibility of capital investment. However, the company has enough of its own sources of financing.
In order to more accurately analyze the financial condition of the enterprise, it is necessary to analyze Form No. 2 “Profit and Loss Statement” for 2006 and 2007. To do this, we will draw up an aggregated profit and loss statement of the enterprise (Table 2). 
Analysis of aggregated form No. 2 “Profit and Loss Statement”) over three years showed that in the analyzed periods, profit before tax increased from 6,026 thousand rubles. up to 12,062 thousand rubles. in 2006 and up to 29,818 thousand rubles. (by 47.2%) in 2007. The increase in accounting profit was associated with an increase in profit from sales by 19,754 thousand rubles. (by 16.1%), which in turn is associated with an increase not in sales volumes, but in production costs by 42,270 thousand rubles. and commercial expenses by 3182 thousand rubles.
In the reporting period, the company's operating income decreased by 103 thousand rubles. and operating expenses by 528 thousand. rub., i.e. the balance before operating income and expenses is negative. This is most likely due to the sale of property at a loss.
In the reporting period, non-operating income decreased significantly - by 73 thousand rubles. The balance of non-operating income and expenses is also negative. The main reason for this is negative exchange rate differences, fines, penalties, penalties, debt write-off. Despite this, the company's net profit increases by 3143 thousand rubles. in 2006 and by 11,706 thousand rubles. in 2007
After analyzing financial statements enterprise, we can conclude that the profit received by it went to replenish its own capital. The growth of accounts payable is favorable and is caused by the fact that the organization compensates for the diversion of its own funds in accounts receivable. Short-term loans were most likely attracted to replenish inventories and carry out construction. To more accurately determine the financial condition of an enterprise, its solvency (Table 3) and financial stability should be analyzed. These indicators characterize the company’s ability to timely and fully make payments on short-term obligations to counterparties. Liquidity is the ability of any asset to be transformed into cash or its ability to be transformed into them in the course of the intended production technological process.
When talking about the liquidity of an enterprise, we mean that it has working capital in an amount theoretically sufficient to repay the obligations stipulated by counterparties. An enterprise, to some extent, is always liquid; therefore, one of the ways to assess liquidity is to compare certain elements of assets and liabilities. All assets of the enterprise were grouped depending on the degree of liquidity, i.e. rates of conversion into cash (see Table 1) and are divided into the following groups.
■ A1 -mostliquidassets- amounts for all cash items that can be used to perform current payments immediately. This group also includes short-term financial investments (securities).
■ A2 - quickly implementedassets- accounts receivable, payments for which are expected within 12 months after the reporting date, and other assets. In other words, these are assets that require a certain amount of time to convert into cash.
■ A 3 - slow to implementassets (leastliquidassets) - these are items from section II of the balance sheet “Current assets” (inventories minus deferred expenses, value added tax) and long-term financial investments from section I of the balance sheet “ Fixed assets».
■ A4- difficult to implementassets- assets that are intended for long-term use in economic activity over a relatively long period. These are items in the “Non-current assets” section of Form 1, with the exception of long-term financial investments that were included in the previous group, as well as receivables, payments for which are expected more than 12 months after the reporting date.
Liabilities are grouped according to the degree of urgency of their return:
■ P1 - mostshort-termobligations- accounts payable and other short-term liabilities;
■ P2 - short-termliabilities, those. short-term borrowed funds;
■ PZ - long-termliabilities- long-term loans and borrowed funds;
■ P4 - permanentassets- articles of the section “Capital and reserves” and the section “Short-term liabilities” that were not included in the previous group.
Short-term and long-term liabilities taken together are called external liabilities.
solvencyenterprises:
1.KTL=(A1 +A2 + A3)/(P1 +P2):
KTL for 2005 = (769 + 30,589 + 24,907) / (25,826 + 8721) = 56,265 / 34,547 = 1.625;
KTL for 2006 = (3064 + 30,930 + 34,915) / (25,188 + 15,500) = 68909/40688 = 1.694;
KTL for 2007 = (5466 + 32,959 + 55,150) / (36148 + 20,022) = 93,575 / 56170 = 1.666.
2.KBL = (A1+A2)/(P1 + P2):
KBL for 2005 = (769 + 30,589) / (25,826 + 8721) = 31358/34547 = 0.906;
KBL for 2006 = (3064 + 30,930) / (25,188 + 15,500) = 33,994/40688 = 0.835;
KBL for 2007 = (5466+32,959) / (36,148 + 2022) = 38425/56170 = 0.684.
Z.KAL = A1/(P1+P2):
KAL for 2005 = 769/(25,826 + 8721) = 769/34,547 = 0.02;
KAL for 2006 = 3064 / (25,188 + 15,500) = 3064 //40688 = 0.08;
KAL for 2007 = 5466 / (36148 + 2022) = 5466 / 56170 = 0.1.
In 2007, the company's current liquidity ratio decreased and amounted to 1.666, while it does not correspond to the norm. This means that for one ruble of liabilities there is slightly more than a ruble of current assets.
The critical liquidity ratio was also declining; in 2007 it was equal to 0.684, which is 0.151 less than in 2006, therefore, it is also below the standard. This indicates that the company will not be able to pay off its obligations with upcoming cash receipts.
By the end of 2007, the absolute liquidity ratio, although slightly, increased and amounted to 0.1, i.e. the enterprise can repay about 1% of current liabilities as of the balance sheet date, which is lower than the recommended value.
To assess the financial condition of an enterprise, it is necessary to calculate ratios financial stability(Table 4), which determines the long-term (as opposed to liquidity) stability of the company. It is associated with dependence on lenders and investors. The presence of significant liabilities that are not fully covered by its own liquid capital creates the preconditions for bankruptcy if large creditors demand the return of their funds. A financially stable business entity is one that, using its own funds, covers investments in assets (fixed assets, intangible assets, working capital), does not allow unjustified receivables and payables, and pays its obligations on time. 
Let's calculate the indicators financial stabilityenterprises:
Ownnegotiablefacilities enterprises =
Ownfacilities-
Non-negotiablefacilities.
1. COSS= Own working capital / Working capital of the enterprise:
COSS for 2005 = (69,033 - 47,950) / 56,265 = 21083/56,265 = 0.374;
COSS for 2006 = (75,433 - 47,212) / 68,909 = 28,221/68,909 = 0.409;
COSS for 2007 = (80,136 - 47,731) / 93,575 = 32,405 / 93,575 = 0.340.
2. KOMZ= (Equity - Non-current assets) / Inventories:
KOMZ for 2005 = (69,033 - 47,950) / 24,907 = 21,083/24,907 = 0.85;
KOMZ for 2006 = (75,433 - 47,212) / 34,915 = 28,221/34,915 = 0.81;
KOMZ for 2006 = (80,136-47731)/55150 =32405/55,150 = 0.59.
3. KM= Own working capital / Own capital:
KM for 2005 = 21,083 / 69,033 = 0.305;
KM for 2006 = 28,221 / 75,433 = 0.374;
KM for 2007 = 32,405 / 80,136 = 0.439.
4. CA =
Total amount of all funds/Balance currency:
CA for 2005 = 69,033/104215 = 0.662;
CA for 2006 = 75,433 / 11,6121 = 0.650;
CA for 2007 = 80,136/141,306 = 0.602.
5. KSZS=
Borrowed funds / Own funds:
KSZS for 2005 = 35,182/69033 = 0.510;
KSZS for 2006 = 40,688 / 75,433 = 0.539;
KSZS for 2007 = 56,170/80,136 = 0.66.
6. KFU=
(Equity + Long-term liabilities) / Balance sheet currency:
KFU for 2005 = (69,033 + 565) /104,215 =0.668;
KFU for 2006 = 75,433/116121 =0.65;
KFU for 2007 = 80,136/141,306 =0.602.
Calculation of the coefficients showed that by the end of 2007, the equity ratio decreased by 0.069 (from 0.409 to 0.340), but at the same time its value complied with the standard, i.e. The company generates 34.0% of its current assets from its own sources.
The ratio of provision of inventories with own funds also decreased to 0.735. but it is normal. This means that 73.5% of inventories are covered by own working capital, and 26.5% by borrowed funds.
The agility coefficient increased and showed that 43.9% of equity capital is mobile, i.e. used to finance current activities.
By the end of 2007, the autonomy coefficient decreased slightly (from 0.650 to 0.602), i.e. 60.2% of the enterprise's liabilities at the end of the year are represented by equity capital, which corresponds to the recommended values, although the downward trend of the ratio is unfavorable.
By the end of the year, the debt-to-equity ratio increased from 0.539 to 0.660, i.e. at the end of 2007, there were 66 kopecks of borrowed capital per ruble of equity capital. The value of the coefficient is within the normal range, however, its upward trend is unfavorable.
Since the enterprise did not have long-term liabilities in 2006 and 2007, the financial stability coefficient is equal to the autonomy coefficient.
To assess the financial condition of the enterprise, let's draw up a table. 5, in which we reflect the calculation of the coefficients of financial stability, solvency and absolute indicators of financial stability, although it can already be judged that in general the financial condition of the enterprise is unstable. 
GeneralmagnitudemainsourcesformationreservesAndcosts =
Availabilityownnegotiablefunds + Short termloansAndloans:
for 2005 = 21,083 + 565 + 8721 = 30,369 thousand rubles;
for 2006 = 28,221 + 15,500 = 42,462 thousand rubles;
for 2007 = 32,405 + 20,022 = 57,427 thousand rubles.
Surplus (+)
orflaw (-)
ownnegotiablefunds =
Availabilityownnegotiablefunds- Reserves:
for 2005 = 21,083 - 24,907 = -3824 thousand rubles;
for 2006 = 28221 - 34915 = -3306 thousand. rub.;
for 2007 = 32405 - 55150 = -22,745 thousand rubles.
Surplus (+)
orflaw (-)
ownand long-termborrowedfundsForformationreservesAndcosts = AvailabilityownAndlong-termborrowedfundsForreserve formationAndcosts -
Reserves:
for 2005 = 21,647 - 24,907 = -3260 thousand rubles;
for 2006 = 26,962 - 34,915 = -7953 thousand rubles;
for 2007 = 37405 -55 150 = -17745 thousand. rub.
Generalmagnitudemainsourcesformationfor suppliesAndcosts= GeneralmagnitudemainsourcesformationreservesAndcosts -
Expenses:
for 2005 = 30,369 - 24,907 - 5462 thousand rubles;
for 2006 - 42,462 - 34,915 = 7547 thousand rubles;
for 2007 = 57,427 - 55,150 = 2277 thousand rubles.
Having analyzed some of the most important indicators, we can conclude that the enterprise is in an unstable state financial situation. The volume of short-term loans and borrowings increased in 2006 and 2007, which amounted to 15,500 and 20,022 thousand rubles, respectively. This indicates a lack of own funds to cover the costs of the enterprise and increase the share of current assets. There is a positive change in solvency indicators from 0.02 in 2005 to 0.1 in 2007. However, this change is caused by an increase in short-term loans received. As the analysis of solvency ratios shows, the instability of the financial condition of an enterprise is largely determined by a shortage of funds.
Article from the magazine "Management Accounting and Finance" 04(16)2008
1. Bank V.R., BankS.V., Daraskina A.V. The financial analysis: Textbook. allowance. - M.: TKVelby, Prospect, 2007. - 344 p.
2. Ionova A.F., Selezneva N.N. Financial analysis: Textbook. - M.: TK Welby, Prospect, 2008. - 624 p.
3. Lyubushin N.P. Analysis of the financial condition of the organization: Textbook. allowance - M.: Eksmo, 2007. - 256 p.
Indicators for assessing the financial condition of enterprises
To assess the financial condition of enterprises, data sources are the enterprise's balance sheet and profit and loss report.
To analyze the financial condition of an enterprise, four groups of coefficients are used:
solvency and liquidity indicators;
financial stability indicators;
profitability indicators;
business activity indicators;
indicators of market activity.
1. Solvency and liquidity indicators.
The liquidity of an enterprise means the ability of its assets to be converted into money. Solvency means the ability of an enterprise to repay its obligations in a timely manner and in full.
To determine the liquidity of an enterprise, the following indicators are calculated:
Absolute liquidity ratio
a.l. =
The minimum standard value of this indicator is set at 0.2-0.25. The absolute liquidity ratio shows what part of the accounts payable the company can repay at the time of reporting.
Quick ratio (intermediate liquidity ratio)
b.l.=
Current ratio
K
t.l. =
The recommended value of this coefficient is from 1 to 2. The lower limit indicates the insolvency of the enterprise. If the current liquidity ratio is more than 2-3, as a rule, this indicates an irrational use of the company's funds. The current ratio shows whether the company has enough funds that can be used to pay off its short-term obligations during the year.
Coefficient of supply of inventories and costs from own sources
K supply of reserves and costs =
This ratio shows the share of own working capital that goes to finance inventories and costs.
Own working capital shows what part of the enterprise's current assets is financed from the enterprise's own funds, and can be calculated as the difference between the current assets and current liabilities of the enterprise. The excess of current assets over current liabilities means that there is financial resources to expand the activities of the enterprise. However, a significant excess indicates inefficient use of resources.
2. Indicators of financial stability.
The financial stability of an enterprise is the state of its financial resources, their distribution and use, which ensures the development of the enterprise based on the growth of profits and capital while maintaining solvency and creditworthiness under conditions of an acceptable level of risk.
There are four types of financial stability:
1. absolute stability(extremely rare);
S = 1; 1; 1 , i.e. SOS 0
2. regulatory stability, guarantees the solvency of the enterprise;
S = 0; 1; 1 , i.e. SOS 0
3. unstable financial condition, in which the solvent balance is disrupted, but the possibility of restoring balance remains due to replenishment of sources of own funds and acceleration of inventory turnover;
S = 0; 0; 1 , i.e. SOS 0
4. financial crisis(the company is on the verge of bankruptcy);
S = 0; 0; 0 , i.e. SOS 0
To characterize the sources of reserve formation, three main indicators are used:
1.Availability of own working capital (SOS):
SOS = liability section of the balance sheet - asset section of the balance sheet *
This indicator characterizes net working capital. Its increase compared to the previous period indicates the further development of the enterprise's activities.
2. Availability of own and long-term borrowed sources of formation of reserves and costs (SD):
SD= SOS + r.p.b.
3.The total value of the main sources of formation of reserves and costs (IO):
OI= SD + page 610 r.p.b.
There are three indicators of the provision of reserves with sources of their formation:
1. Excess (+) or deficiency (-) SOS ( SOS):
SOS = SOS – Z,
where 3 – reserves (p. 210 r.a.b.).
2. Excess (+) or deficiency (-) of SD ( SD):
SD = SD – W
3. Excess (+) or lack (-) of OI ( OI):
OI = OI – Z
The above-mentioned indicators of the provision of reserves with sources of their formation are integrated into the three-component indicator S:
S = SOS; SD; OI ,
which characterizes the type of financial stability.
The financial stability of an enterprise is based on an analysis of the enterprise's capital structure and characterizes the degree of independence of the enterprise from external sources of financing.
The main purpose of analyzing the financial stability of an enterprise is to assess the financial risk of the enterprise and determine the adequacy of equity capital and the degree of dependence on attracted resources.
To analyze the financial stability of an enterprise, the following indicators are used:
Autonomy coefficient (independence ratio, equity concentration ratio)
Autonomy coefficient = 
The autonomy coefficient shows the share of own funds in the structure of the enterprise's sources.
It is practically impossible to establish a standard value for this coefficient. The normal value for a particular enterprise should be established based on the characteristics of the enterprise, its needs for financial resources and development goals.
The higher the value of this coefficient, the higher the stability of the enterprise. However, when this value is close to one, this indicates an insufficiently effective financial management in an enterprise that does not know how to use borrowed funds. On the other hand, an extremely low value indicates high financial risk and high dependence on creditors.
Dependency coefficient (debt capital concentration ratio)
Dependency factor = 
This coefficient characterizes the share of borrowed funds in the structure of the enterprise’s sources of activity.
Financial stability ratio (long-term financial stability coefficient)
Financial coefficient sustainability =
This indicator characterizes the share of sustainable sources of financing in all sources of the enterprise, that is, the share of those liabilities that can be used to finance investments.
Funding ratio
Funding ratio = 
The financing ratio shows the structure of the company's liabilities.
Own funds maneuverability coefficient
Own funds maneuverability coefficient = 
The equity agility ratio shows the portion of equity that is invested in mobile assets.
3. Profitability indicators.
Profitability is the efficiency of using a particular type of asset or type of investment. The main goal of profitability analysis is to determine the level of profitability of an enterprise based on various indicators of invested funds and types of property of the enterprise and to assess the sufficiency of the level of profitability obtained.
To calculate profitability indicators, data from the enterprise's balance sheet and profit and loss report are used.
To analyze profitability, the following main indicators are calculated:
Return on assets indicator , which speaks about the efficiency of using all assets of the enterprise and shows how much net profit falls on 1 ruble of all assets of the enterprise.
Return on assets (property) = 
Return on equity indicator
Return on equity =
This indicator characterizes the profitability of using the enterprise’s own funds and shows how much net profit is received per 1 ruble of invested own funds.
Core activity profitability indicator
Profitability of core activities =
This ratio shows cost efficiency, that is, how much profit from sales in the main activity was received per 1 ruble of costs incurred.
Return on turnover indicator (return on sales)
Profitability of turnover = 
This indicator characterizes the sales efficiency of the enterprise, or how much profit was received from the sale of products per 1 ruble of revenue received from buyers and customers for the products sold.
Product profitability indicator
Product profitability =
This indicator shows how much profit was received per 1 ruble of costs.
For analysis purposes, both the net profit indicator (profit after taxes) and the profit before tax indicator can be used. A comparison of two options for profitability indicators (one using the profit before tax indicator and the second using the net profit indicator) allows us to determine the impact of interest payments and tax payments on the level of profitability of a particular type of asset or type of investment.
In addition, various profitability ratios can be calculated according to certain species activities, individual types of assets, etc.
4. Business activity indicators.
The business activity of an enterprise is manifested in the dynamism of its development, indicates the quality of management of financial resources invested in the property of the enterprise, and is reflected in the system of indicators of the turnover of funds of the enterprise. Business activity ratios allow us to assess the efficiency of using financial resources. The financial condition of an enterprise depends on the speed at which funds invested in various assets of the enterprise are converted into cash.
To calculate the indicators of the turnover of enterprise funds and the speed of turnover, data from the balance sheet and profit and loss report are used.
Key indicators of turnover and turnover rate:
Asset turnover ratio shows the efficiency of using all resources that the enterprise has in the analyzed period.
Asset turnover ratio =
Asset turnover period = 
Equity turnover ratio indicates the efficiency of using the enterprise's own capital.
Property turnover ratio capital =
Equity turnover period = 
When analyzing business activity, more specific turnover indicators (accounts receivable, accounts payable, inventories, etc.) and turnover periods in days are also calculated.
Accounts receivable turnover ratio = 
Receivables maturity (in days) =
Inventory turnover ratio =
Inventory turnover period (sales period) = 
Accounts payable turnover ratio = 
Accounts payable maturity (in days) =
5.Indicators of market activity
book value of a common share
basic earnings per share
common share dividend
dividend payout ratio
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