For a more stable and efficient activityan enterprise must conduct an analysis of the state of its work. Financial coefficients obtained as a result of the research help to find weak links in the activity of the organization and allow to determine the advantages of its actions. It is these data that give a detailed picture of the state of things in the company.
The financial condition (position) of an enterprise depends primarily on the ratio of borrowed capital to own. In this regard, determine:
- the ratio (level) of financial autonomy - while calculating the share of equity in the total amount of money the organization;
- coefficient (level) of financial dependence -here we are talking about the proportion of borrowed (borrowed) capital in the total amount of the company's funds. The indicator can be calculated in terms of time frames. That is, it is possible and possible to determine this index based on the long-term or short-term borrowed funds;
- level (coefficient) of financial risk,also known as the leverage of a financial leverage - here the ratio of borrowed funds to equity is considered. In this case, there is another name for this index - the coefficient of financial activity.
Accordingly, the higher the value of the firstproportion, the better and more stable the financial position (position) of the enterprise, if we consider it from the standpoint of credit debts and own funds. In ideal systems, the weight of this indicator should tend to unity.
To determine the profitability of attractingcash and capital from the side is used one more indicator - this is the effect of the financial leverage. This index shows how much the profitability of the company's own capital will grow if borrowed funds are raised.
Financial ratios, absolutely accuratereflecting the state of affairs in the enterprise, are the solvency ratios. If to say in simple words, then these data show how likely the company repays its short-term debts.
The solvency assessment is based on the liquidity of its current assets - the ability to repay obligations on loans and debts through the company's assets.
The following financial ratios are used for the analysis:
- current liquidity - it is also calledcoverage index. It characterizes the organization's ability to repay short-term loan obligations with its own available current assets;
- intermediate (fast) liquidity - shows,as far as possible repayment of obligations by their urgent assets (funds in the operational accounts of the organization, stocks in warehouses, short-term debts of debtors);
- absolute liquidity - the final valueThis indicator describes how likely it is to pay short-term loan loans at the expense of funds placed on the company's settlement accounts and other financial investments placed for a short period.
These financial ratios are the most important in calculating the solvency and financial position of the enterprise.
Assessment of the creditworthiness of the borrower. Basic
Coefficient of solvency. Formula
The balance sheet is the main source
Solvency of the enterprise:
How is the absolute coefficient
Economic Performance Indicators
Financial resources of the enterprise:
Solvency analysis is an important procedure