Competition program
7.1. Entries will be accepted until April 5, 2015. Summing up and solemn awarding of the winners will take place on April 16, 2015 at the Ufa State Petroleum Technological University, Ufa.
7.2. Entries are accepted by e-mail [email protected] marked "Competition-2015", by mail or in person at the address: 450062, Ufa, st. Kosmonavtov, 1, building 3, PSSO department.
7.3. For all questions related to participation in the competition, you can contact the representative of the organizing committee by phone. +7 927 312 8558 or email [email protected]
8. Other provisions.
11.1. The works submitted to the competition are not returned, are not reviewed and remain in the organizing committee of the competition.
11.4. In case of presentation of claims, claims and lawsuits of third parties, including holders of copyright and related rights to the submitted work, the participant undertakes to resolve them on his own behalf and at his own expense.
To answer the questions of how independent an organization is from a financial point of view, whether the level of this independence is growing or decreasing, and whether the state of assets and liabilities meets the objectives of its financial and economic activities, it is necessary to assess the degree of independence from borrowed sources of financing. For this, a financial stability analysis is carried out.
Financial stability of the organization- this is the ability of a business entity to function and develop, to maintain a balance of its assets and liabilities, guaranteeing its constant solvency and investment attractiveness within the limits of an acceptable level of risk.
The financial situation in the organization is characterized by four types of financial stability:
1. Absolute financial stability(in the current conditions of development of the Russian economy is extremely rare) is an extreme type of financial stability and is set by the condition Z< СОС, где З - запасы; СОС - собственные оборотные средства. Данное соотношение показывает, что все запасы полностью покрываются собственными оборотными средствами, т.е. организация совершенно не зависит от внешних кредиторов.
The increase in own working capital compared to the previous period indicates the further development of the enterprise. The availability of working capital is determined as follows:
SOS \u003d IrP - IrA,
where IrP - I section of the liability balance (capital and reserves);
IrA - I section of the asset balance (non-current assets).
The absolute stability of the financial condition is characterized by the following conditions:
SOS >= 0; SD >= 0; OI >= 0,
where SD - own and long-term sources of formation of reserves and costs;
OI - the main sources of formation of stocks and costs.
The presence of own and long-term borrowed sources of reserves and costs, or functioning capital, is determined by increasing own working capital by the amount of long-term liabilities (DO):
SD = SOS + TO.
The total value of the main sources of inventory formation and costs is calculated by increasing the SD by the amount of short-term bank loans (CC):
OI \u003d SD + KK.
2. Normal stability of the financial condition of the organization, guaranteeing its solvency, can be expressed as Z = SOS + ZS, where ZS - borrowed funds.
In this case, the company successfully uses and combines various sources of funds, both its own and attracted, to cover reserves and costs.
With normal financial stability
SOS< 0; СД >= 0; ROI >= 0.
3. Unstable financial condition characterized by a violation of solvency, when it remains possible to restore balance by replenishing sources of own funds and increasing the SOS:
where - part of the equity capital intended for servicing other short-term liabilities, restraining financial tension (reserves for future expenses, debts to participants (founders) for the payment of income, bank loans for temporary replenishment of working capital and other borrowed funds).
The following conditions indicate an unstable financial condition:
SOS< 0; СД < 0; ОИ >= 0.
Under these conditions, financial stability is not normal and reflects a trend towards a significant deterioration in the financial condition of the organization.
4. Crisis financial condition, or crisis financial instability:
Z > SOS + ZS.
It is set by the following conditions:
SOS< 0; СД < 0; ОИ < 0.
In the last two cases (unstable and crisis financial situation), stability can be restored by optimizing the structure of liabilities, as well as by a reasonable reduction in the level of reserves and costs.
There are three levels of crisis:
First degree (I): the presence of overdue loans to banks;
Second degree (II): I + presence of arrears to suppliers for goods;
Third degree (III - borders on bankruptcy): II + the presence of arrears in the budget.
For a more complete analysis of the financial stability of the organization, a special system of indicators and coefficients has been developed.
One of the most important characteristics of the stability of the financial condition of the organization, its independence from borrowed sources of funds is coefficient of autonomy, or financial independence, which is equal to the ratio of equity capital to the value of all assets of the enterprise:
where SC - equity;
B - balance sheet currency.
The autonomy coefficient characterizes the level of overall financial independence, i.e. the degree of independence of the organization from borrowed sources of financing. Thus, it shows the share of equity in total liabilities.
The minimum threshold value for the autonomy coefficient is 0.5. This means that until this limit is reached, you can use borrowed capital. With all the obligations of the organization can be covered by its own funds. Compliance with this restriction is important not only for the organization, but also for its creditors.
Financial leverage ratio(financial risk ratio, capitalization ratio, financial leverage):
where ZK - borrowed funds attracted by the organization.
This ratio shows how much borrowed funds the organization has attracted for 1 rub. own funds invested in assets. It is considered one of the main indicators of financial stability: the higher its value, the higher the risk of investing capital in this organization.
The relationship between the coefficients of autonomy and financial leverage is expressed by the formula:
whence it follows that the normal constraint on the debt-equity ratio is .
The coefficient of current assets security with own funds of financing shows what part of current assets is financed from own sources:
where TO - long-term liabilities;
VOA - external current assets;
OA - current assets.
This coefficient characterizes the presence of the company's own working capital necessary for its financial stability. The normal limit for it is: .
The coefficient of maneuverability of own funds is equal to the ratio of the organization's own working capital to the total amount of own funds:
The standard is the value of the coefficient from 0.4 to 0.6.
Financial stability ratio characterizes the share of equity and long-term liabilities in the total assets of the enterprise:
Optimal level: .
To assess the financial condition of the organization, we will conduct a structural analysis of the assets and liabilities of the organization (Tables 1 and 2).
Table 1
Analysis of the composition, structure and dynamics of assets
| Assets | As of 01.01.2013 | As of 31.12.2013 | Changes (+/-) | |||
| thousand roubles. | % | thousand roubles. | % | thousand roubles. | % | |
| Fixed assets | 90 000 | 43,8 | 107 960 | 41,2 | 17 960 | -2,6 |
| including: | ||||||
| intangible assets | 1,9 | 1,4 | -400 | -0,6 | ||
| fixed assets | 86 000 | 41,8 | 104 360 | 39,8 | 18 360 | -2,0 |
| current assets | 115 600 | 56,2 | 154 040 | 58,8 | 38 440 | 2,6 |
| including: | ||||||
| reserves | 63 100 | 30,7 | 84 100 | 32,1 | 21 000 | 1,4 |
| VAT on purchased assets | 1,9 | 1,9 | 0,0 | |||
| accounts receivable | 31 000 | 15,1 | 10 500 | 4,0 | -20 500 | -11,1 |
| cash and cash equivalents | 17 500 | 8,5 | 54 440 | 20,8 | 36 940 | 12,3 |
| Balance | 205 600 | 262 000 | 56 400 | 0,0 |
table 2
Analysis of the composition, structure and dynamics of liabilities
| Passive | As of 01.01.2013 | As of 31.12.2013 | Changes (+/-) | |||
| thousand roubles. | % | thousand roubles. | % | thousand roubles. | % | |
| Capital and reserves | 120 000 | 58,4 | 150 000 | 57,3 | 30 000 | -1,1 |
| including: | ||||||
| authorized capital | 50 000 | 24,3 | 50 000 | 19,1 | -5,2 | |
| Reserve capital | 10 000 | 4,9 | 10 000 | 3,8 | -1,0 | |
| retained earnings (uncovered loss) | 60 000 | 29,2 | 90 000 | 34,4 | 30 000 | 5,2 |
| long term duties | 15 000 | 7,3 | 25 000 | 9,5 | 10 000 | 2,2 |
| including: | ||||||
| borrowed funds | 15 000 | 7,3 | 25 000 | 9,5 | 10 000 | 2,2 |
| Short-term liabilities | 70 600 | 34,3 | 87 000 | 33,2 | 16 400 | -1,1 |
| including: | ||||||
| accounts payable | 70 600 | 34,3 | 87 000 | 33,2 | 16 400 | -1,1 |
| Balance | 205 600 | 262 000 | 56 400 | - |
According to the data in Table. 1 the assets of the organization for 2013 increased by 56,400 thousand rubles, or by 27.4%, including due to an increase in non-current assets by 17,960 thousand rubles. and current assets by 38,440 thousand rubles.
The overall structure of assets is characterized by the ratio of current and non-current assets at the beginning and end of the year:
The amount of current assets at the beginning of the year exceeds the amount of non-current assets by 1.28 times, at the end of the year - by 1.44 times.
The following changes occurred in the composition of non-current assets for the reporting period:
Fixed assets increased by 18,360 thousand rubles, their share in the structure of assets decreased by 2.0%;
Intangible assets decreased by 400 thousand rubles, their share in the structure of assets decreased by 0.6%.
The amount of current assets for the reporting year increased by 38,440 thousand rubles, their share in the total assets increased by 2.6%. Accounts receivable by the end of the year decreased by 20,500 thousand rubles, its share in assets decreased by 11.1%.
Analysis of the passive part of the balance sheet according to the data in Table. 2 shows that the increase in the balance sheet liability for the reporting year was caused by an increase in long-term liabilities (an increase in the amount of loans by 10,000 thousand rubles). As a result, the structure of the balance sheet currency has changed: 57.3% of the currency is formed from own sources (instead of 58.4% at the beginning of the period) and 42.7% from borrowed sources (instead of 41.6%), i.e. the share of borrowed sources increased by 1.1 percentage points. As part of equity, the changes were caused by the receipt of profit for the reporting year in the amount of 30,000 thousand rubles. Within the borrowed capital, the long-term is 9.5%, i.e. it increased by 2.2% due to long-term loans. The amount of short-term liabilities at the end of the year increased by 16,400 thousand rubles, their share decreased by 1.1%. Short-term debt decreased to 33.2%.
Let's analyze the financial stability of the organization using relative indicators.
Financial Independence Ratio:
Financial leverage (leverage):
The ratio of borrowed and own funds (financial leverage, leverage) corresponds to the regulatory limit both at the beginning and at the end of the period, which indicates an improvement in the financial condition of the organization;
The current assets security ratio with own sources of financing is less than the regulatory limit both at the beginning and at the end of the period, which indicates a deterioration in the financial condition of the organization;
The maneuverability coefficient for the analyzed period increased from 0.38 to 0.45, which made it possible to reach the standard value, which indicates an increase in the mobility of own working capital;
The financial stability ratio for the reporting period turned out to be below the critical value, indicating that the share of funding sources that the organization can use in its activities for a long time is insufficient.
The analysis revealed that the degree of financial stability of the organization is normal, but if the necessary stabilization measures are not taken, its position may become unstable.
It is important that the state of financial resources meet the requirements of the market and the needs of the organization's development, since insufficient financial stability can lead to the organization's insolvency and lack of funds for the development of production, and excess financial resources can hinder development, burdening the organization's costs with excessive stocks and reserves. Thus, the essence of financial stability is determined by the effective formation, distribution and use of financial resources.
The financial stability of an enterprise is the ability to increase the achieved level of its business activity and business efficiency, which guarantees constant solvency and increases investment attractiveness within the limits of an acceptable level of risk.
Financial stability is an ambiguous characteristic of the organization's activities. It should be understood as the ability to increase the achieved level of business activity and business efficiency, while guaranteeing solvency, increasing investment attractiveness within the limits of acceptable risk.
Table 1.
Absolute indicators of financial stability
| Balance item |
|
Change |
|||
| 2010 |
2011 |
year 2012 |
2011-2010 |
2012-2011 |
|
| Equity (SK) |
|
|
|
|
|
| Long-term liabilities (DO) |
|
|
|
|
|
| Short-term accounts payable (CCZ) |
|
|
|
|
|
| Non-current assets (BOA) |
|
|
|
|
|
| Stocks (W) |
|
|
|
|
|
There are 4 types of financial stability:
1. Absolute financial stability - its three-dimensional model M = (1; 1; 1), sources of financing reserves - own working capital (net working capital), characterizes a high level of solvency, the company does not depend on external creditors.
2. Normal financial stability - a three-dimensional model M = (0; 1; 1), the sources of financing of reserves are own working capital and long-term loans and borrowings, characterizes normal solvency. Rational use of borrowed funds, high profitability of current activities.
3. Unstable financial condition - model M = (0; 0; 1), sources of financing reserves - own working capital, long-term and short-term credits and loans, characterizes the violation of normal solvency, the need to attract additional sources of financing. Restoration of solvency is possible.
4. Crisis (critical) financial condition - M = (0; 0; 0), there are no sources of financing for reserves, since the main element of current assets "Reserves" is not provided with sources of financing. The enterprise is insolvent and is on the verge of bankruptcy.
Financial stability analysis is carried out in order to find out how well the company manages its own and borrowed funds. The main thing is that the structure of borrowed and own funds in all respects meets the development goals of the enterprise, since insufficient financial stability can lead to a shortage of funds, that is, the enterprise will be insolvent and will not be able to pay off its partners.
Let's analyze the financial stability of the enterprise on the example of OJSC "Ulyanovsk Sugar Plant" for 2010-2012. The calculated data are shown in Table 1.
Table 2.
Analysis of the financial stability of JSC "Ulyanovsk Sugar Plant"
Analysis of the financial stability of the enterprise on the example of OJSC "Ulyanovsk Sugar Plant"
| Index |
Absolute value, thousand rubles |
Change |
|||
| 2010 |
2011 |
year 2012 |
2011-2010 |
2012-2011 |
|
| Own working capital (SOS) |
|
|
|
|
|
| Own and long-term sources of formation of reserves and costs (SOD) |
|
|
|
|
|
| The total value of sources of formation of reserves and costs (OI) |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
Based on table 2, we can say that the own working capital of Ulyanovsk Sugar Plant OJSC in 2012 amounted to 28,771 thousand rubles, compared to 2011, they increased by 203,786 thousand rubles. Own and long-term sources of reserves and costs from 2010 to 2012 increased by almost 3.5 times, or by 404,162 thousand rubles. The total value of sources of formation of reserves and costs in 2010 was 357,264 thousand rubles, in 2011 - 84,930 thousand rubles, and in 2012 - 934,003 thousand rubles. As we see in this indicator, there has been a significant increase over the course of 3 years, which allows the company to form its reserves and costs.
The analysis showed us that the company has normal financial stability, which is typical for most Russian enterprises. Consequently, the enterprise can fulfill its financial obligations to the state and counterparties.
Relative indicators of financial stability show how much the company depends on investors and creditors.
Here are the formulas for calculating the listed coefficients:
1. Autonomy coefficient
where: SC - equity;
VB - balance currency.
2. Coefficient of financial dependence
3. Financial leverage
where: ZK - borrowed capital.
4. The ratio of borrowed funds and equity
(4)
5. Financial stability ratio
6. Concentration factor
(6)
where: TO - long-term liabilities.
7. Long-term leverage ratio
8. Share of term liabilities in equity
where: TO - short-term liabilities.
9. Ratio of mobile and immobilized means
where: OA - current assets;
VOA - non-current assets.
10. Mobility factor
(10)
11. The coefficient of mobility of current assets
(11)
where: DS - cash;
KFV - short-term financial investments.
12. Level of functioning capital
where: PV - financial investments.
13. Coverage ratio of own working capital assets
(13)
where: SOS - own working capital.
14. The coefficient of security of current assets of own working capital
(14)
15. The coefficient of security of stocks of own working capital
(15)
where: З - stocks.
16. Agility factor
(16)
In order to find out whether the company is heavily dependent on external borrowed funds, we will calculate the relative indicators of financial stability, from which the state of Ulyanovsk Sugar Plant OJSC in relation to borrowed funds will be noticeable.
Table 3
Relative indicators of financial stability
| Index |
|
|
|
Change |
|
| 2011-2010 |
2012-2011 |
||||
| Autonomy coefficient |
|
|
|
|
|
| Financial dependency ratio |
|
|
|
|
|
| Financial leverage |
|
|
|
|
|
| Debt to Equity Ratio |
|
|
|
|
|
| Financial stability ratio |
|
|
|
|
|
| Concentration factor |
|
|
|
|
|
| Long-term borrowing ratio |
|
|
|
|
|
| Share of term liabilities in equity |
|
|
|
|
|
| Ratio of mobile and immobilized means |
|
|
|
|
|
| Mobility factor |
|
|
|
|
|
| Mobility coefficient of current assets |
|
|
|
|
|
| Operating capital level |
|
|
|
|
|
| Asset coverage ratio of own working capital |
|
|
|
|
|
| The coefficient of security of current assets of own working capital |
|
|
|
|
|
| Capital stock ratio |
|
|
|
|
|
| Agility factor |
|
|
|
|
|
After analyzing, we can say that the autonomy coefficient in 2010 was 0.14, in 2012 - 0.15, i.e. increased by 0.01. The share of own funds in the total amount of all funds of the enterprise did not exceed the minimum threshold value of the coefficient of 0.5, which means that the enterprise uses borrowed funds.
The financial stability ratio, or the ratio of borrowed and own funds, in 2010 amounted to 5.94, in 2012 - 5.96, that is, it increased by 0.02. In other words, by 1 rub. of own funds invested in assets, the enterprise attracted 2 kopecks of borrowed funds by the end of the year. The financial stability ratio did not go beyond the established range.
The ratio of mobile and immobilized means in 2010 was 1.35, in 2012 - 4.74, i.e. increased by 3.39. The value of the ratio in 2010 and 2012 was lower than the financial stability ratio. This situation indicates the financial instability of the enterprise.
The maneuverability coefficient in 2010 was - (-1.96), in 2011 - (-0.72), and in 2012 - (-0.13). It shows what proportion of sources of own working capital is in the total amount of own funds. The range of this coefficient is approximately 0.5. For 3 years, this coefficient has never reached the minimum threshold value.
Financial leverage shows the ratio of borrowed capital to equity capital. The standard value is in the range from 0.5 to 0.8. Since this coefficient has been above the specified range for three years, this indicates that the company has a stable cash flow for its products.
After analyzing the financial stability of Ulyanovsk Sugar Plant OJSC, we can say that the company's own working capital is insufficient for independent production, so it resorts to borrowed funds, which are much larger than its own. Based on Table 3, we can say that most financial stability indicators do not exceed their minimum values, which means that the company needs additional reserves with which it will increase its own capital and reduce borrowed capital. The main condition for ensuring financial stability will be an increase in sales, which in the future will help to cover current costs, generating the necessary amount of profit.
In general, the enterprise has normal financial stability, like most other Russian enterprises, and therefore can control and make optimal use of credit resources.
Bibliography:
1. Vakhrushina M.A., Plaskova N.S. Analysis of Financial Statements: Textbook / Ed. M.A. Vakhrushina, N.S. Plaskova. M.: Vuzovsky textbook, 2009. - 367 p.
2. Kovalev V.V., Kovalev Vit. B. Financial reporting. Analysis of financial statements (basics of balance sheet). Proc. allowance / Ed. V.V. Kovalev. M.: Prospekt Publishing House LLC, 2005. - 342 p.
3. Ryabova M.A. Analysis of financial statements: Educational and practical guide / Ed. M.A. Ryabova. Ulyanovsk: UlGTU, 2011 - [Electronic resource] - Access mode. - URL: http://venec.ulstu.ru/lib/disk/2012/Rjabova1.pdf (accessed 9. 12. 2013).
Financial analysis Bocharov Vladimir Vladimirovich
Chapter 4 Assessment of the financial stability of an enterprise
Assessment of the financial stability of the enterprise
4.1. Absolute indicators of financial stability
One of the key tasks of analyzing the financial condition of an enterprise is to study indicators that reflect its financial stability. It is characterized by a stable excess of income over expenses, free maneuvering of funds and their effective use in the process of current (operational) activities.
An analysis of financial stability at a certain date (the end of a quarter, a year) allows you to establish how rationally an enterprise manages its own and borrowed funds during the period preceding this date. It is important that the state of sources of own and borrowed funds meet the strategic goals of the development of the enterprise, since insufficient financial stability can lead to its insolvency, i.e., the lack of funds necessary for settlements with internal and external partners, as well as with the state. At the same time, the presence of significant balances of free cash complicates the activities of the enterprise due to their immobilization in excessive inventories and costs.
Consequently, the content of financial stability is characterized by the effective formation and use of financial resources necessary for normal production and commercial activities. The company's own financial resources include, first of all, net (retained) profit and depreciation charges. An external sign of financial stability is the solvency of an economic entity.
Solvency is the ability of an enterprise to fulfill its financial obligations arising from commercial, credit and other payment transactions.
Satisfactory solvency of the enterprise is confirmed by such formal parameters as:
1) the availability of free cash on settlement, currency and other accounts in banks;
2) the absence of long-term arrears to suppliers, banks, personnel, the budget, off-budget funds and other creditors;
3) availability of own working capital (net working capital) at the beginning and end of the reporting period.
Low solvency can be both accidental, temporary, and long-term (chronic). Its last type can lead the enterprise to bankruptcy.
The highest type of financial stability is the ability of an enterprise to develop mainly at the expense of its own sources of financing. To do this, it must have a flexible structure of financial resources and the ability, if necessary, to raise borrowed funds, that is, be creditworthy. An enterprise is considered creditworthy if it has the prerequisites for obtaining a loan and the ability to repay the loan to the lender in a timely manner with the payment of interest due from its own financial resources.
At the expense of profit, the enterprise not only repays loan debt to banks, obligations to the budget for income tax, but also invests in capital expenditures. To maintain financial stability, it is necessary to increase not only the absolute mass of profit, but also its level relative to invested capital or operating costs, i.e., profitability. It should be borne in mind that high returns are associated with a significant level of risk. In practice, this means that instead of profit, the enterprise may suffer significant losses and even become insolvent (insolvent).
Consequently, the financial stability of an economic entity is such a state of its financial resources that ensures the development of an enterprise mainly at its own expense while maintaining solvency and creditworthiness with a minimum level of entrepreneurial risk.
Many factors influence the financial stability of an enterprise:
? position of the enterprise in the commodity and financial markets;
? production and sale of competitive and in demand products;
? degree of dependence on external creditors and investors;
? presence of insolvent debtors;
? the size and structure of production costs, their correlation with cash income;
? the amount of paid authorized capital;
? efficiency of commercial and financial operations;
? the state of property potential, including the ratio between non-current and current assets;
? the level of professional training of production and financial managers, their ability to constantly take into account changes in the internal and external environment, etc.
Practical work on the analysis of indicators of absolute financial stability is carried out on the basis of financial statements (forms No. 1, 5).
In the course of the production process at the enterprise, there is a constant replenishment of inventories. For these purposes, both own working capital and borrowed sources (short-term loans and borrowings) are used. By studying the surplus or lack of funds for the formation of stocks, absolute indicators of financial stability are established (Fig. 4.1).
Rice. 4.1. Indicators characterizing the financial stability of the enterprise
For a detailed reflection of different types of sources (own funds, long-term and short-term loans and borrowings), a system of indicators is used in the formation of reserves.
1. The availability of own working capital at the end of the billing period is determined by the formula:
SOS = SC - BOA, (15)
where SOS - own working capital (net working capital) at the end of the billing period; SC - equity (section III of the balance sheet "Capital and reserves"); VOA - non-current assets (section I of the balance sheet).
2. The availability of own and long-term borrowed sources of financing of reserves (SDI) is determined by the formula:
where DKZ - long-term loans and borrowings (section IV of the balance sheet "Long-term liabilities").
3. The total value of the main sources of formation of reserves (OIZ):
OIZ = SDI + KKZ, (17)
where KKZ - short-term loans and borrowings (section V of the balance sheet "Current liabilities").
As a result, it is possible to determine three indicators of the availability of reserves with sources of their financing.
1. Surplus (+), lack (-) own working capital
SOS=SOS-Z, (18)
where ASOS is the increase (surplus) of own working capital; З - reserves (section II of the balance sheet).
2. Surplus (+), lack (-) of own and long-term sources of financing reserves (ASDI)
SDI = SDI-Z. (19)
3. Surplus (+), deficiency (-) of the total value of the main sources of reserve coverage (AOIZ)
OIZ = OIZ-Z. (20)
The given indicators of the provision of reserves with the corresponding sources of financing are transformed into a three-factor model (M):
M = (?SOS; ?SDI; ?OIZ) (21)
This model characterizes the type of financial stability of the enterprise. In practice, there are four types of financial stability (Table 4.1).
Table 4.1. Types of financial stability of an enterprise
The first type of financial stability can be represented as the following formula:
M 1 \u003d (1, 1, 1), i.e. ASOS > 0; ASDI > 0; AOIZ > 0. (22)
Absolute financial stability (M1) is very rare in modern Russia.
The second type (normal financial stability) can be expressed by the formula:
M 2 \u003d (0, 1, 1), i.e.? SOS< 0; ?СДИ > 0; ?OIZ > 0. (23)
Normal financial stability guarantees the fulfillment of the financial obligations of the enterprise.
The third type (unstable financial condition) is determined by the formula:
M 3 \u003d (0, 0, 1), i.e.? SOS< 0; ?СДИ < 0; ?ОИЗ > ? 0. (24)
The fourth type (crisis financial situation) can be represented as follows:
M 4 \u003d (0, 0, 0), i.e.? SOS< 0; ??СДИ < 0; ?ОИЗ < 0. (25)
In this situation, the enterprise is completely insolvent and is on the verge of bankruptcy, since the key element of current assets "Reserves" is not provided with funding sources.
Indicators of financial stability of the considered joint-stock company are presented in table. 4.2. It follows from its data that the joint-stock company is in an absolutely stable financial condition, and it remained unchanged both at the beginning of the year and at the end of the reporting period.
Table 4.2. Absolute indicators of the financial stability of a joint-stock company, thousand rubles.
This conclusion is made on the basis of the following conclusions:
1) the surplus of own working capital for the reporting year more than doubled (18 409/9147);
2) the excess of their surplus over stocks at the beginning of the reporting year was 2.6 times (9147/3556), and at the end of the reporting period 3.2 times (18409/5789);
3) the excess of the total value of the main sources of financing reserves over the absolute amount of the reserves themselves at the beginning of the reporting year was 3.1 times (11 096/3555), and at the end of the reporting period 3.5 times (20 020/5789);
4) having a significant surplus of its own working capital, the company did not attract short-term credits and loans in the reporting period.
The main ways to improve the solvency of enterprises with an unstable financial condition are as follows:
1) increase in own capital (section III of the balance sheet);
2) decrease in non-current assets (due to the sale or leasing of unused fixed assets);
3) reduction in the value of inventories to the optimal level (to the size of current and insurance stocks).
This text is an introductory piece. From the book Finance and Credit author Shevchuk Denis Alexandrovich132. Analysis of the financial stability of an enterprise The stable financial position of an enterprise depends, first of all, on the improvement of qualitative indicators: labor productivity, production profitability, capital productivity, as well as the fulfillment of the profit plan.
From the book Accounting and taxation of employee insurance costs author Nikanorov P SChapter III. Ensuring the financial stability of insurers Article 25. Conditions for ensuring the financial stability of an insurer (as amended by Federal Law No. 172-FZ of 10.12.2003)
From the book Finance of Organizations. cheat sheets author Zaritsky Alexander Evgenievich106. Analysis of financial stability The first stage of the analysis of financial stability is to check the availability of reserves and costs with sources of formation.
author Olshevskaya Natalya104. Analysis of financial stability The financial stability of an enterprise is determined primarily by the ratio of the cost of material working capital and the values of own and borrowed sources of their formation. There are several types of financial stability:
From the book Analysis of Financial Statements. cheat sheets author Olshevskaya Natalya105. Indicators of financial stability To characterize the financial stability of an organization, various financial ratios are used in practice. One of the most important characteristics of the stability of the financial condition of an organization, its independence from borrowed
From the book Insurance Business: Cheat Sheet author author unknown From the book Economic Statistics the author Shcherbak I A56. Indicators of financial stability and solvency of an enterprise
From the book Finance: Lecture Notes author Kotelnikova Ekaterina2. Assessment of solvency, financial stability and investment attractiveness of agribusiness enterprises A comprehensive assessment of the economic state of production is necessary not only for an entrepreneur, but also for tax authorities, lending banks,
author Sherstneva Galina Sergeevna39. Indicators of the financial stability of the enterprise The main indicators of the financial stability of the enterprise are the following coefficients: 1) autonomy coefficient - the share of equity capital in the total amount of capital. It determines the degree of independence
From the book Financial Statistics author Sherstneva Galina Sergeevna40. Factors of stability of the enterprise Coefficient of provision of stocks with own working capital: 1) Kozok \u003d SOK / Z Coefficients that also characterize financial stability are the autonomy coefficient Ka and the coefficient of working capital
author4.1. Absolute indicators of financial stability One of the key tasks of the analysis of the financial condition of an enterprise is the study of indicators that reflect its financial stability. It is characterized by a stable excess of income over expenditure, free
From the book Financial Analysis author Bocharov Vladimir Vladimirovich4.2. Relative indicators of financial stability and their analysis Relative indicators of financial stability characterize the degree of dependence of the enterprise on external investors and creditors. The owners of the enterprise are interested in optimizing their own
From the book Economic Analysis. Crib author Korotkov Yu. E.The concept of economic analysis When studying any science, natural phenomena, society, we are faced with such a concept as analysis. The term "analysis" in Greek means "separation", "dismemberment", i.e. analysis is a division of the object under study
From the book Business Analysis. Crib author Takhtomysova Danara Anuarovna1. The concept of economic analysis The economic analysis of the financial and economic activities of an enterprise consists in a comprehensive consideration of issues related to the production and technical level, the quality of products and its competitiveness in
From the book Quality, Efficiency, Morality author Glichev Alexander Vladimirovich9.3. On the sustainability of the enterprise's activities Now that we have examined in detail the issues of efficiency, a wide range of quality improvement problems, found out the probabilistic nature of the consequences of quality change, felt the constant presence of the danger of its
From the book Economic Analysis author Klimova Natalia VladimirovnaQuestion 70 Analysis of financial stability Analysis of financial stability is carried out in absolute and relative terms. Absolute indicators characterize the availability of reserves and costs by the sources of their formation. At the same time, they calculate: Fsos \u003d SOS - 33, where SOS
2.2.1 Importance of financial sustainability
One of the characteristics of the stable position of the enterprise is its financial stability. It depends both on the stability of the economic environment within which the enterprise operates, and on the results of its functioning, its active and effective response to changes in internal and external factors.
Financial stability is a characteristic that indicates a steady excess of an enterprise's income over its expenses, free maneuvering of the enterprise's funds and their efficient use, an uninterrupted production process and product sales. Financial stability is formed in the process of all production and economic activities and is the main component of the overall stability of the company.
An analysis of the stability of the financial condition on a particular date allows you to find out how correctly the company managed resources during the period preceding this date.
An external manifestation of financial stability is solvency, i.e. the ability to pay in cash in a timely manner their payment obligations. Solvency analysis is necessary for the enterprise not only for the purpose of assessing and forecasting financial activities, but also for external investors (banks). It is especially important to know about the financial capabilities of a partner if the question arises of providing him with a commercial loan or deferred payment. Solvency assessment is carried out on the basis of the characteristics of the liquidity of current assets, i.e. the time it takes to turn them into cash.
The criteria for assessing the financial position are the liquidity and solvency of the enterprise, i.e. the ability to timely and in full make settlements on short-term obligations.
The concepts of solvency and liquidity are very close, but the second is more capacious. Solvency depends on the degree of liquidity of the balance sheet. At the same time, liquidity characterizes not only the current state of settlements, but also the prospects.
The liquidity of the balance sheet is expressed in the degree of coverage of the obligations of the enterprise by its assets, the period of transformation of which into money corresponds to the maturity of the obligations. Balance sheet liquidity is achieved by establishing equality between liabilities and assets.
The liquidity of an asset is its ability to be converted into cash. The degree of liquidity of an asset is determined by the duration of the time period during which this transformation can be carried out. The shorter the period, the higher the liquidity of this type of asset.
In general, an enterprise is considered liquid if its current assets exceed its current liabilities.
The assessment of solvency is given for a specific date. However, one should take into account its subjective nature and the fact that it can be performed with varying degrees of accuracy. Solvency is confirmed by the data:
on the availability of funds on current accounts, foreign currency accounts, short-term financial investments. These assets should have an optimal value. The more significant the amount of cash in the accounts, the more likely it can be argued that the company has sufficient funds for current settlements and payments. However, the presence of insignificant balances in cash accounts does not always mean that the company is insolvent: funds can go to the cash desk, to settlement, foreign currency accounts in the coming days, short-term financial investments can easily be turned into cash. The constant crisis lack of cash leads to the fact that the enterprise turns into a "technically insolvent", and this can already be considered as the first step on the path to bankruptcy;
about the absence of overdue debts and delays in payments;
untimely repayment of loans, as well as long-term continuous use of loans.
The highest form of enterprise sustainability is its ability to develop. To do this, the enterprise must have a flexible structure of financial resources and the ability, if necessary, to attract borrowed funds, i.e. be creditworthy. Figure 2 shows the main stages of the analysis of the financial condition of the enterprise.
Rice. 2 Stages of analysis of the financial condition of the enterprise
The key to survival and the basis for the stability of the organization is its financial stability, i.e. such a state of finance, which guarantees its constant solvency. Such an economic entity, at its own expense, covers the funds invested in assets, does not allow unjustified receivables and payables, and pays its obligations on time.
The analysis of the financial stability management system will include two blocks:
Assessment of financial stability.
Analysis of financial stability management.
The first block includes:
analysis of property status;
absolute and relative coefficients of financial stability.
Second block:
analysis of own working capital and current financial needs;
determination of the liquidity of the enterprise, the establishment of factors that determine the quality of current assets;
analysis of business activity (turnover), i.e. how effectively the enterprise uses its funds, determining ways to accelerate them;
analysis of the state and management of receivables and payables.
The analysis should reveal the existing shortcomings and outline ways to eliminate them. Then it is necessary to develop measures to mobilize internal resources and further improve the financial condition.
The main indicators reflecting the financial position of the enterprise are presented in the balance sheet. The balance characterizes the financial position of the enterprise on a certain date and reflects the resources of the enterprise in a single monetary value in terms of their composition and directions of use.
Unlike the balance sheet, which seems to reflect a fixed statistical picture of the financial balance of the enterprise, the income statement shows the dynamics of its financial operations. The income statement compares the costs of their activities, determines the amount of net income and its distribution.
Thus, using these forms of financial reporting, the analysis of financial stability management, carried out in the following sequence, allows:
1) determine the structure of the property of the enterprise and sources of formation;
3) compare the grouping of assets and liabilities.
2.2.2 Financial strength ratios
One of the indicators of financial stability is the surplus or lack of sources of funds for the formation of reserves, defined as the difference between the value of sources of funds and the value of reserves. This refers to the security of certain types of sources (own, credit and other borrowed), since the sufficiency of the sum of all possible types of sources (including accounts payable and other short-term liabilities and liabilities) is guaranteed by the identity of the results of the asset and liabilities of the balance sheet. By studying the surplus or lack of funds for the formation of stocks, absolute indicators of financial stability are established. For a detailed reflection of different types of sources (own funds, long-term and short-term loans and borrowings), a system of indicators is used in the formation of reserves, reflecting a different degree of coverage of different types of sources:
1. Availability of own working capital at the end of the billing period. The formula for calculating this indicator (according to formula 1):
SOS = SC - BOA, (1)
where: SOS - own working capital (net working capital) at the end of the billing period;
SC - equity (section III of the balance sheet "Capital and reserves");
VOA - non-current assets (section I of the balance sheet).
2. Availability of own and long-term borrowed sources of financing reserves. The formula for calculating this indicator (according to formula 2):
SDI = SOS + DCS, (2)
where: SDI - the availability of own and long-term borrowed sources of financing reserves;
SOS - own working capital (net working capital) at the end of the billing period;
DKZ - long-term loans and borrowings (section IV of the balance sheet "Long-term liabilities").
3. The total value of the main sources of reserves formation. The formula for calculating the total value of sources of reserves formation (according to formula 3):
OIZ = SDI + KKZ, (3)
where: OIZ is the total value of the main sources of reserves formation;
KKZ - short-term loans and borrowings (section V of the balance sheet "Current liabilities").
As a result, three indicators of the availability of reserves with sources of their financing can be determined:
1. Surplus (+), lack (-) of own working capital. The formula for calculating this indicator (according to formula 4):
∆SOS = SOS - Z, (4)
where: ∆SOS - increase (surplus) of own working capital;
З - reserves (section II of the balance sheet).
2. Surplus (+), lack (-) of own and long-term sources of financing reserves. The formula for calculating this indicator (according to formula 5):
∆SDI = SDI – Z, (5)
where: ∆SDI - increase (surplus) of own and long-term sources of financing reserves.
3. Surplus (+), lack (-) of the total value of the main sources of reserves coverage. The formula for calculating this indicator (according to formula 6):
∆OIZ = OIZ – Z, (6)
where: ∆OIZ is the increase (surplus) of the total value of the main sources of reserves coverage.
The given indicators of the provision of reserves with the corresponding sources of financing are transformed into a three-factor model. The formula for calculating the three-factor model (according to formula 7):
М = (∆SOS; ∆SDI; ∆OIZ), (7)
where: M is a three-factor model.
This model characterizes the type of financial stability of the enterprise. In practice, there are four types of financial stability presented in Table 3.
Table 3
Types of financial stability of an enterprise
|
Type of financial stability |
Reserve funding sources |
Brief description of financial stability |
|
Absolute financial stability |
Own working capital (net working capital) |
High level of solvency. The company is not dependent on external creditors. |
|
Normal financial stability |
Own working capital plus long-term loans and borrowings. |
Normal solvency. Rational use of borrowed funds. High profitability of current activities. |
|
Unstable financial condition |
Own working capital plus long-term loans and borrowings plus short-term loans and borrowings. |
Violation of normal solvency. There is a need to attract additional sources of funding. Restoration of solvency is possible. |
|
Crisis (critical) financial condition |
The company is completely insolvent and is on the verge of bankruptcy. |
The first type of financial stability can be represented as the following formula (according to formula 8):
M 1 = (1,1,1), i.e. ∆SOS ≥ 0; ∆SDI ≥ 0; ∆OIZ ≥ 0. (8)
Absolute financial stability (M 1) is very rare in modern Russia.
The second type (normal financial stability) can be expressed (according to formula 9):
M 2 \u003d (0,1,1), i.e. ∆SOS< 0; ∆СДИ ≥ 0; ∆ОИЗ ≥ 0. (9)
Normal financial stability guarantees the fulfillment of the financial obligations of the enterprise.
The third type (unstable financial condition) is established (according to formula 10):
M 3 \u003d (0.0.1), i.e. ∆SOS< 0; ∆СДИ < 0; ∆ОИЗ ≥ 0. (10)
The fourth type (crisis financial situation) can be represented (according to formula 11):
M 4 \u003d (0,0,0), i.e. ∆SOS< 0; ∆СДИ < 0; ∆ОИЗ < 0. (11)
In this situation, the enterprise is completely insolvent and is on the verge of bankruptcy, since the key element of current assets "Reserves" is not provided with funding sources.
Relative indicators of financial stability characterize the degree of dependence of the enterprise on external investors and creditors. The owners of the enterprise are interested in optimizing their own capital and minimizing borrowed funds in the total volume of financial sources. Lenders assess the financial stability of the borrower by the amount of equity capital and the probability of preventing bankruptcy.
Financial stability is assessed using a system of financial ratios (Table 4).
Table 4
Relative indicators of financial stability
|
Index |
Calculation method | ||
|
balance lines |
|||
|
Capitalization ratio |
|
|
Not higher than 1.5. Shows how much borrowed funds the organization has attracted for 1 rub. own funds invested in assets |
|
Coverage ratio with own sources of financing |
|
| |
|
Coefficient of financial independence (autonomy) |
|
| |
|
Funding ratio |
|
| |
|
Financial stability ratio |
|
| |
where: ZK - borrowed capital;
SC - equity;
VOA - non-current assets;
ОА - current assets;
WB - balance currency;
DO - long-term liabilities.
Thus, the financial stability of an enterprise is characterized by a set of absolute and relative indicators: the presence of own working capital, the presence of own and long-term borrowed sources of financing reserves, the total value of the main sources of reserves formation, the capitalization ratio, the ratio of provision with own sources of financing, the coefficient of financial independence (autonomy), funding ratio, financial stability ratio
Financial Stability Analysis: What is it?
Financial stability- an integral part of the overall stability of the enterprise, the balance of financial flows, the availability of funds that allow the organization to maintain its activities for a certain period of time, including servicing loans received and producing products.
The main indicators of the financial stability of the organization
|
Index |
Description of the indicator and its normative value |
|
Autonomy coefficient |
The ratio of equity to total capital. |
|
Financial leverage ratio |
The ratio of borrowed capital to equity. |
|
Working capital ratio |
The ratio of equity to current assets. |
|
The ratio of equity and long-term liabilities to total equity. |
|
|
Equity maneuverability ratio |
The ratio of own working capital to sources of own funds. |
|
Property mobility coefficient |
The ratio of current assets to the value of all property. Characterizes the industry specifics of the organization. |
|
Working capital mobility ratio |
The ratio of the most mobile part of current assets (cash and financial investments) to the total value of current assets. |
|
The ratio of own working capital to the value of inventories. |
|
|
Short-term debt ratio |
The ratio of short-term debt to total debt. |
The main indicator that affects the financial stability of the organization is the share of borrowed funds. It is generally believed that if borrowed funds account for more than half of the company's funds, then this is not a very good sign for financial stability, for various industries the normal share of borrowed funds can fluctuate: for trading companies with large turnovers, it is much higher.
In addition to the above ratios, the financial stability of an enterprise reflects the liquidity of its assets in comparison with liabilities by maturity: the current liquidity ratio and the quick liquidity ratio.
Autonomy coefficient
Autonomy coefficient(financial independence ratio) characterizes the ratio of equity capital to the total amount of capital (assets) of the organization. The ratio shows how independent the organization is from creditors.
Capitalization ratio
Capitalization ratio(capitalization ratio) is an indicator that compares the amount of long-term accounts payable with the total sources of long-term financing, which include, in addition to long-term accounts payable, the organization's own capital. The capitalization ratio allows you to assess the adequacy of the organization's source of financing for its activities in the form of equity.
Reserves coverage ratio
Reserves coverage ratio- This is an indicator of the financial stability of the organization, which determines the extent to which the organization's material reserves are covered by its own working capital.
Asset coverage ratio
Asset coverage ratio (asset coverage ratio) measures the ability of an organization to repay its debts with existing assets. The ratio shows what part of the assets will go to cover debts.
Investment coverage ratio
Investment coverage ratio- this is a financial ratio showing what part of the organization's assets is financed from sustainable sources: own funds and long-term liabilities.
Interest coverage ratio
Interest coverage ratio(interest coverage ratio, ICR) characterizes the organization's ability to service its debt obligations. The indicator compares earnings before interest and taxes (EBIT) for a specific period of time (usually one year) and interest on debt obligations for the same period.
We advise you to read
Moscow Automobile and Highway State Technical University (MADI) training How to pay for tuition at the bank
Automated cadastre information system Number of parties during
Automation of land cadastral work Sanitation and hygiene in field work
Sterilization of jars: traditional methods and the help of modern household appliances
