In a general sense, financial indicators are data that fully characterize an enterprise. They help to assess business results, generalize and summarize the financial performance indicators of the entity.

The financial indicators of an enterprise can be considered as criteria for assessing the performance of an economic entity, and can be associated with the choice of the direction and goals of the enterprise, i.e. used in making management decisions.

The main financial indicators in the operation of an enterprise include the analysis of the following values: sales revenue, profit received and the balance of cash flows of the organization.

Sales revenue shows the income received by an enterprise from the sale of goods and finished products, from performing certain works and providing services for a specific period of time. The result obtained can be expressed both in monetary and non-monetary form. The second form refers to mutual settlement, barter, and the like.

Profit is the difference between income, represented by sales revenue, and all expenses that the enterprise had in the corresponding period. Expenses must take into account the cost of goods, services or work. It is the profit received that is subject to taxation. And the remainder of the profit that is at the disposal of the subject after calculating all taxes can be used by the enterprise for its own needs (expansion of production, founders, etc.).

The balance is calculated as the difference between the total amount of funds received by the enterprise and the funds transferred by it to other organizations in a certain amount. In this case, funds are understood as both cash and non-cash money, and regardless of the currency in which the turnover is carried out.

These financial indicators must be clearly differentiated from each other. So, when it is necessary to take into account all the income of the enterprise, including proceeds from sales, and absolutely all other receipts of funds.

It should be noted that such financial indicators allow the founders or regulatory authorities to draw a conclusion about the efficiency of the enterprise, identify problematic issues and determine ways to solve them.

To fully characterize the financial activities of an enterprise, there are financial indicators that are formed in the process of conducting analytical activities or during the production and investment activities of an economic entity. At the same time, there is not a single universal coefficient that would fully characterize the results of an entrepreneur’s activities.

Financial indicators reflecting the results of the enterprise's operation - profitability, financial stability, liquidity and market value of assets.

Profitability characterizes the economic efficiency of an enterprise and is a relative indicator that compares the result obtained with the costs or resources used to achieve a positive effect. In practice, there are a large number of profitability ratios, the use of any of which depends on the choice of criteria for assessing the economic activity of an entity from the standpoint of efficiency. The choice of the main evaluation indicator, represented by profit, which is used in the calculations, also depends on this. So, pre-tax operating profit and net profit can be used

Financial indicators of the enterprise- these are reporting or calculated data characterizing various aspects of the enterprise’s activities related to the formation and use of its cash funds and savings. Financial indicators are expressed in absolute and relative (norms, ratios) values. The most important financial indicators of the enterprise:

• income;
• balance sheet, net profit;
• level of profitability (assets, current assets, products, sales);
• volume and structure of sources for the formation and use of working capital, depreciation fund;
• the relationship between the need for own funds and their availability;
• the relationship between the consumption fund and the accumulation fund;
• the state of settlements with employees, suppliers, buyers, higher organizations, budgets of different levels, extra-budgetary funds, banks and leasing companies.

Calculation and analysis of all financial indicators of the enterprise is carried out in the FinEkAnalysis program.

The financial indicators of the enterprise also include such general economic indicators as reducing the cost of production and construction and installation work, reducing distribution costs in supply and trade. When developing a financial recovery plan for an enterprise, the following coefficients are calculated:

• liquidity,
• financial stability,
• business activity,
• profitability, etc.

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To make it easier to study the material, we divide the article into topics:

Liquidity is considered as an overall coverage ratio - this indicator shows the adequacy of the company's working capital, which can be used by it to pay off its short-term obligations. It is calculated as the ratio of current assets (current assets) to current liabilities (short-term liabilities).

Thus, the lower limit is due to the fact that working capital must be sufficient to cover its short-term obligations. An excess of current assets over short-term liabilities by more than 2 times is also considered undesirable, since it indicates an irrational investment by the enterprise of its funds and ineffective use of them.

Profitability

Profitability (return on net assets based on net profit) - shows that the efficiency of using funds belonging to the owners of the enterprise. Serves as the main criterion when assessing the level of stock quotes on the stock exchange. It is calculated as the ratio of net profit to the average value of net assets for the period.

Conclusion, return on net assets based on net profit should ensure the return on funds invested in the enterprise by shareholders.

Business activity

Business activity (turnover) is considered as the rate of turnover of the material and monetary resources of an enterprise for the analyzed period or how many rubles of turnover (revenue) are removed from each ruble of a given type of asset.

It is calculated as the ratio of net sales proceeds to the average value for the period of the cost of tangible working capital, cash and short-term securities.

There is no standard value, however, the efforts of the enterprise management in all cases should be aimed at accelerating turnover. If an enterprise constantly resorts to additional use of borrowed funds (credits, borrowings, accounts payable), it means that the current turnover rate generates an insufficient amount of cash to cover costs and expand activities

Thus, financial analysis reflects the current position of the company, its past achievements, reveals the dependence of financial and economic performance indicators on various factors, allows one to assess the relative financial position of the company, and reveals the degree.

Financial performance indicators

The most important financial performance indicators:

1. Profit (loss) as of the end of the reporting year is a financial result that is identified on the basis of accounting of all financial transactions of enterprises and represents the amount of profit (loss) from the sale of fixed assets, products, works, services, other property of the enterprise and net income from non-operating operations.

Profit data is presented in statistics in actual current prices, according to the methodology and structure of the corresponding years.

2. Profitability characterizes the efficiency of enterprises. Product profitability is defined as the relationship between the amount of profit from the sale of products and the costs of production and sales of products.

Return on assets is the ratio of profit to the average value of an enterprise's assets.

3. Working capital of an enterprise is a value advanced in cash, which, as a result of the turnover of funds, takes the form of circulation funds and working capital, which are necessary to maintain a constant circulation and return to their original form after its completion.

4. Working capital turnover is defined as the ratio of the average cost of working capital and the production costs of sold products, multiplied by the number of days in the period.

5. Cash receipts of enterprises include the entire amount of money received from the sale of products, work performed, and services provided by the enterprise.

6. Accounts payable - debt for settlements with suppliers and contractors for goods supplied, work performed, services rendered, debt for issued payments, with subsidiaries, with employees and workers for wages, with the budget and extra-budgetary funds, for advances received, as well as amounts of advances received for planned payments.

7. Accounts receivable is a debt for goods, works and services for settlements with debtors, on bills of exchange, with subsidiaries, with personnel for other operations, with the budget, with other debtors (debt of accountable persons, advances issued to suppliers and contractors, taking into account amounts paid to other enterprises, advances for upcoming payments).

8. Overdue debt is a debt that is not repaid within the terms specified in the contract.

Analysis of a company's level of sustainable growth is a dynamic analytical framework that combines financial analysis to explain critical relationships between strategic planning variables and financial variables, and to test the alignment of corporate growth objectives and financial policies. This analysis allows you to determine the company's current opportunities for financial growth, determine how the company's financial policies will influence the future, and analyze the strengths and weaknesses of the company's competitive strategies.

In this article we will consider the components of the analysis of financial indicators.

Any measures to implement strategic programs have their own cost. A necessary part of planning and implementing a strategy is calculating the necessary and sufficient financial resources that the company must invest.

Information for financial analysis

The most complete definition of the concept of financial analysis is given in the “Financial and Credit Encyclopedic Dictionary”: “Financial analysis is a set of methods for determining the property and financial position of an economic entity in the past period, as well as its capabilities for the short and long term.” The purpose of financial analysis is to determine the most effective ways to achieve profitability of the company; the main tasks are to analyze profitability and assess the risks of the enterprise.

Analysis of financial indicators and ratios allows the manager to understand the competitive position of the company at the current time. Published reports and company accounts contain a lot of numbers, the ability to read this information allows analysts to know how efficiently and effectively their company and competing companies are performing.

Analysis of financial ratios and indicators is an excellent tool that provides an idea of ​​the financial condition of the company and its competitive advantages and prospects for its development.

1. Performance analysis. The ratios allow you to analyze changes in the company's productivity in terms of net profit, capital use and control the level of costs. Financial ratios allow you to analyze the financial liquidity and stability of an enterprise through the effective use of a system of assets and liabilities.

3. Analysis of alternative business strategies. By changing the indicators of the coefficients in the business plan, it is possible to analyze alternative options for the company's development.

Ratio analysis is the art of interrelating two or more indicators of a company's financial performance. Analysts can see a more complete picture of the company's performance over several years, and additionally by comparing the company's performance with industry averages.

It is worth noting that the financial performance system is not a crystal ball in which you can see everything that has happened and what will happen. It's simply a convenient way to summarize large amounts of financial data and compare the performance of different companies. Financial ratios themselves help the company's management to focus attention on the strengths and weaknesses of the company's activities, and to correctly formulate questions that these ratios can rarely answer. It is important to understand that financial analysis does not end with the calculation of financial indicators and ratios, it only begins when the analyst has carried out their full calculation.

A company's financial reports are a source of information about the company not only for analysts, but also for the company's management and a wide range of stakeholders. For effective ratio analysis, it is important for users of financial ratio information to know the basic characteristics of major financial statements and the concepts of ratio analysis. However, when conducting financial analysis, it is important to understand: the main thing is not the calculation of indicators, but the ability to interpret the results obtained.

When analyzing financial indicators, it is always worth keeping in mind that the assessment of operating results is made on the basis of data from past periods, and on this basis extrapolation of the future development of the company may be incorrect. Financial analysis should be focused on the future.

Financial analysis is used when constructing budgets, to identify the reasons for deviations of actual indicators from planned indicators and to adjust plans, as well as when calculating individual projects. The main tools used are horizontal (dynamics of indicators) and vertical (structural analysis of articles) analysis of management accounting reporting documents, as well as calculation of coefficients. Such an analysis is carried out for all main budgets: BDDS, BDR, balance sheet, sales budgets, purchases, inventory.

The main features of financial analysis are the following:

1. The vast majority of financial indicators are relative values, which makes it possible to compare enterprises of different scales of activity.

2. When conducting financial analysis, it is important to apply the comparison factor:

Compare company performance indicators in trends over different periods of time;
compare the performance of a given company with the industry average or with similar performance of enterprises within a given industry.

3. To conduct financial analysis, it is important to have a complete financial description of the company for selected periods of time (usually years). If the analyst has data for only one period, then there must be data from the enterprise’s balance sheet at the beginning and end of the period, as well as a profit statement for the period under review. It is important to remember that the number of balance sheets for analysis should be one more than the number of profit reports.

Accounting management is an important element in the analysis of financial ratios and ratios. The basic accounting equation expressing the interdependence of assets, liabilities and property rights is called accounting balance:

ASSETS = LIABILITIES + EQUITY

2. Land property, fixed assets and equipment (fixed capital) include assets that are characterized by a relatively long service life. These products are generally not intended for resale and are used in the production or sale of other goods and services.
3. Long-term assets include the company's investments in securities, such as stocks and bonds, as well as intangible assets, including: patents, expenses for monopoly rights and privileges, .

1. Current liabilities include amounts payable that must be paid within one year; for example, accumulated liabilities and bills payable.
2. Long-term obligations are the rights of creditors that do not necessarily have to be realized within one year. This category includes bond obligations, long-term bank loans, and mortgages.

Own capital is the rights of the owners of the enterprise. In accounting terms, it is the remaining amount after deducting liabilities from assets. This balance is increased by any profits and decreased by any losses of the company.

A company's operating statement, also referred to as a profit and loss statement or income statement, summarizes a company's performance over a specific reporting period of time. Net income is calculated using the periodic accounting method used in calculating profits and costs. It is generally considered the most important financial indicator. The report shows whether the percentage of income on the company's shares decreased or increased during the reporting period after the appointment of dividends or after the conclusion of other transactions with the owners. The income statement helps owners assess the amount, timing, and uncertainty of future cash flows.

The balance sheet and income statement are the main sources of metrics used by companies. A balance sheet is a report that shows what a company owns (assets) and what it owes (liabilities and equity) as of a specific date. Some analysts call the balance sheet a "snapshot of a company's financial health" at a particular point in time.

The total number of financial ratios that can be used to analyze a company’s activities is about two hundred. Typically, only a small number of basic coefficients and indicators are used and, accordingly, the main conclusions that can be drawn on their basis. For the purpose of more orderly consideration and analysis, financial indicators are usually divided into groups, most often into groups that reflect the interests of certain interested parties (stakeholders). The main groups of stakeholders include: owners, management of the enterprise, creditors. It is important to understand that the division is conditional and indicators for each group can be used by different stakeholders.

As an option, it is possible to organize and analyze financial indicators into groups that characterize the main properties of the company’s activities: liquidity and solvency; efficiency of company management; profitability (profitability) of activities.

Let's take a closer look at the groups of financial indicators.

Transaction cost indicators:

Analysis of operating costs allows us to consider the relative dynamics of the shares of various types of costs in the structure of the total costs of an enterprise and is a complement to operational analysis. These indicators allow us to find out the reason for changes in the company's profitability indicators.

These indicators make it possible to determine how effectively the company's management manages the assets entrusted to it by the company's owners. The balance sheet can be used to judge the nature of the assets used by the company. It is important to remember that these indicators are very approximate, because On the balance sheets of most companies, a wide variety of assets acquired at different times are reported at historical cost. Consequently, the book value of such assets often has nothing to do with their assets, this condition is further aggravated in conditions of inflation and when the value of such assets increases.

Another distortion of the current situation may be associated with the types of activities of the company, when specific types of activities require attracting a certain amount of assets to obtain a relatively equal amount of profit. Therefore, when analyzing, it is advisable to strive to separate financial indicators by certain types of company activities or by types of products.

Liquidity indicators:

These indicators allow us to assess the degree of solvency of the company for short-term debts. The essence of these indicators is to compare the amount of the company's current debts and its working capital, which will ensure the repayment of these debts.

Profitability (profitability) indicators:

They allow assessing the effectiveness of the company's management in using its assets. Operating efficiency is determined by the ratio of net profit, determined in various ways, to the amount of assets used to generate this profit. This group of indicators is formed depending on the emphasis of the effectiveness study. Following the objectives of the analysis, the components of the indicator are formed: the amount of profit (net, operating, profit before tax) and the amount of the asset or capital that forms this profit.

Using these indicators, it is possible to analyze the company’s risk level in connection with the use of borrowed financial resources. With an increase in the share of borrowed capital, the risk of bankruptcy increases, because the volume of the company's obligations increases. This group of ratios is primarily of interest to the company’s existing and potential creditors. Management and owners evaluate the company as a continuously operating business entity; creditors have a two-fold approach. On the one hand, creditors are interested in financing the activities of a successfully operating company, the development of which will meet expectations; on the other hand, creditors assess how significant the claim for debt repayment will be if the company experiences significant difficulties in repaying a long-term loan.

A separate group is formed by financial indicators that characterize the company’s ability to service debt using funds received from current operations.

The positive or negative impact of financial leverage increases in proportion to the amount of debt capital used by the company. The lender's risk increases along with the owners' risk.

Debt service indicators:

Financial analysis is based on balance sheet data, which is an accounting form that reflects the financial condition of a company at a certain point in time. Whatever the coefficient characterizing the capital structure is considered, the analysis of the share of borrowed capital, in essence, remains statistical and does not take into account the dynamics of the company’s operating activities and changes in its economic value. Therefore, debt service indicators do not provide a complete picture of the company's solvency, but only show the company's ability to pay interest and the principal amount within the agreed time frame.

Market indicators:

These indicators are among the most interesting for company owners and potential investors. In a joint stock company, the owner - the holder of shares - is interested in the profitability of the company. This refers to the profit received through the efforts of the company’s management from funds invested by the owners. Owners are interested in the impact of the company's performance on the market value of their shares, especially those freely traded on the market. They are interested in the distribution of their profits, how much of it is reinvested in the company, and what part is paid to them as dividends.

Financial stability indicators

Financial stability indicators characterize the degree of dependence of an enterprise on external sources of financing. However, if the equity-debt structure is heavily skewed toward debt, the business could easily go bankrupt if multiple creditors simultaneously demand their money back at the same time.

The financial stability of an enterprise is one of the most important characteristics of its financial activities. Financial stability is the stability of an enterprise's activities in the long term.

It is recommended to analyze the financial stability of a company using both the coefficient method and the analysis of the “net assets” indicator.

Estimation of net asset value

The “net asset” value indicator characterizes the degree of protection of the interests of the organization’s creditors. In addition, it is the initial basis for determining the share of a participant leaving the company and the value of the company’s shares.

The legislation on joint stock companies uses the term “net asset value”. The specific meanings of this term are associated with the emergence, change and termination of corresponding rights and obligations.

Thus, at the end of the second and each subsequent financial year, the value of the company’s net assets will be less than the authorized capital, the company must declare and register a decrease in its authorized capital (clause 4 of Article 99 of the Civil Code of the Russian Federation).

If the value of these assets becomes less than the minimum amount of authorized capital (clause 1 of Article 99 of the Civil Code of the Russian Federation), then the company is subject to liquidation.

Until full payment of the entire authorized capital;
if the value of its net assets is less than the authorized capital and reserve fund or becomes less than their size after payment of dividends.

The procedure for assessing the value of a company’s net assets according to the methodology of the Ministry of Finance of the Russian Federation

Net assets are a value that is determined by deducting from the amount of the enterprise's assets accepted for calculation the amount of its debt obligations accepted for calculation.

The assets involved in the calculation are the monetary and non-monetary property of the company, which includes the following items at book value:

Non-current assets reflected in the first section of the balance sheet, except for the book value of own shares purchased from shareholders;
inventories and expenses, cash, settlements and other assets shown in the second section of the balance sheet, with the exception of the debt of participants (founders) for their contributions to the authorized capital and the book value of their own shares purchased from shareholders.

If the company has at the end of the year estimated reserves for doubtful debts and for the impairment of securities, the indicators of the items in connection with which they were created are shown in the calculation with a corresponding reduction in their book value by the value of these reserves.

The liabilities involved in the calculation are the obligations of the company. They include the following articles:

Article of the fourth section of the balance sheet - targeted financing and revenues;
articles of the fifth section of the balance sheet - long-term and short-term liabilities to banks and other legal entities and individuals, settlements and other liabilities, except for the amounts reflected under the items “deferred income” and “Consumption funds”.

Conventionally, the procedure for assessing the value of net assets can be presented as follows:

HA = Ar – Pr, where
Ar - assets accepted for calculation,
Pr - liabilities accepted for calculation,
NAV - net asset value.

The essence of the concept of net assets

Commercial organizations are legal entities that pursue profit as the main goal of their activities. Profit reflects an increase in the value of a commercial organization, and a loss, on the contrary, reflects a decrease in the value of property.

Since as a result of the activities of a commercial organization there is a change in both the composition of its property and its size, there is a need to establish criteria by which the effectiveness of the organization’s activities and the security of the interests of its creditors are assessed.

The function of guaranteeing the interests of creditors at the time of creation of the company is performed by the property contributed to its authorized capital. The size of the authorized capital is determined according to the rules for assessing property contributed to the authorized capital of a commercial organization.

In the future, the authorized capital as an indicator of the activities of a commercial organization does not fulfill or does not fully perform this function. It no longer reflects the value of the property of a commercial organization that is free from obligations to creditors (except for the founders) of the commercial organization.

In practice, various performance indicators of a commercial organization are used to characterize the state of its affairs. As one of them, when calculating creditworthiness, an indicator called “net asset value of a commercial organization” is used. This indicator reflects the value of the organization’s property, which will remain during its “imaginary” liquidation (i.e., the value of the organization’s property remaining with it after fulfilling all its obligations).

This follows from the following definition of net assets: Net Worth is the difference between a company's total assets and total liabilities (also called equity or shareholders' equity). This performance indicator is used to determine indicators characterizing the solvency of a commercial organization, otherwise called capital structure indicators.

So, the value of net assets as an indicator of the state of affairs of a commercial organization reflects the value of that part of the property that serves to secure the interests of creditors, but does not provide specific obligations of the commercial organization. In other words, we are talking about a property base that, in the event of unfavorable circumstances, can be used to fulfill its obligations. The value of net assets also reflects the value of that part of the organization’s property that would remain with its founders during its “imaginary” liquidation with the simultaneous termination of accounts payable and receivable at the value reflected in the accounting registers on the date of the imaginary liquidation. It is for this reason that this part of the value of assets is called the value of net assets (i.e., the value of the organization’s property not burdened with obligations for payments to the budget, to extra-budgetary funds and in favor of other creditors).

The net asset value can take on both positive and negative net asset value, which means that part of the funds received from creditors of a commercial organization is used to cover the organization’s own costs. The latter indicates not only the ineffective work of the organization, but also at the same time the insecurity of fulfillment of the claims of its creditors.

From the content of the concept of “net asset value” it follows that at the time of creation of a commercial organization, the value of the net asset value is equal to the value of the property contributed to the authorized capital of the company. Thus, the restriction in the form of the minimum size of the authorized capital acts as a unique expression of the general indicator - the value of net assets.

Financial condition indicators

1. Liquidity indicators

The ability of a business to pay its short-term obligations is called liquidity. An enterprise is considered liquid if it is able to fulfill its short-term obligations by selling current assets. Fixed assets, if they are not acquired for the purpose of further resale, in most cases cannot be a source of repayment of the current debt of the enterprise. Of all the assets of the organization, the most liquid are current assets, and of all current assets, cash, short-term financial assets (securities, deposits, etc.), as well as non-overdue receivables whose payment has come due, or bills accepted for payment.

The other part of current assets cannot be more confidently called highly liquid assets (for example, inventories, overdue accounts receivable, debt on advances issued and funds on account).

In the practice of analytical work, a scheme of liquidity indicators is used. Let's look at the most important of them.

Absolute liquidity is the ratio of the most liquid assets to short-term liabilities.

The absolute liquidity ratio (K ab. liquid.) shows what part of the current debt can be repaid as of the balance sheet date, or another specific date and is calculated based on data from sections II and IV of the balance sheet using the formula:

To ab. liquid = (cash + marketable securities) / short-term liabilities

The value of the absolute liquidity ratio is considered sufficient if it is from 0.2 to 0.5.

The critical liquidity ratio (Critical liquidity), or, as it is also called, “intermediate liquidity,” shows what part of short-term liabilities can be repaid not only from available funds, but also from expected revenues.

K. crit. liquid = (DZ + DS + KFV + POA) / KO, where
DZ - accounts receivable,
DS - cash,
KFV - short-term financial investments,
POA - other current assets,

The current liquidity ratio (C. current liquidity) allows one to determine the extent to which current assets cover short-term liabilities.

K. tech. liquid = JSC / KO, where
OA - current assets,
KO - short-term liabilities.

The standard value of this coefficient is assumed to be from 1 to 2.

2. Financial stability indicators

Financial stability is the ability of an enterprise to maneuver its funds.

Funds from long-term loans and balance sheet borrowings are spent, as a rule, on replenishing non-current assets, although the organization can partially use them in some cases to cover shortfalls in working capital. Having this information from the balance sheet, it is possible to identify the types of financial stability of the organization.

1) Absolute financial stability (rarely found in modern Russian practice: when ZZ - reserves, line 210 of the balance sheet;
SK - equity capital, line 490;
VA - non-current assets, line 190;
KKZ - short-term loans and borrowings, line 610;
KZ - accounts payable, line 620

2) Normal stability, which is guaranteed by its solvency: when 3 = (SK-VA)+KKZ+KZ.

3) Unstable financial condition, in which there are failures in solvency, but there is still an opportunity to restore it: when 3 = (SK - VA) + KKZ + KZ + SKos,

Where SKos is a special part of the capital intended for servicing other short-term liabilities, restraining financial tension (debt to participants (founders) for payment of income + other short-term liabilities), lines 630 + 660.

4) Crisis financial condition, or crisis financial instability: when 3 > (SK-VA)+KKZ+KZ+SKos. In this case, the company is on the verge of bankruptcy, since cash, short-term securities and accounts receivable do not even cover its accounts payable and overdue loans.

Let's analyze the relative indicators of financial stability:

I. The coefficient of autonomy (financial independence) is one of the most important characteristics of the financial stability of an enterprise. It characterizes the share of equity capital in the total volume of liabilities.

To autonomy = SC / A, where
SK - equity capital,
A - assets.

The standard value must be greater than or equal to 0.5.

II. The financial stability coefficient shows the share of funding sources that can be used for a long time.

To finance stable = (SC + DO) / A, where
DO - monetary obligations.

The optimal level of the coefficient value should be greater than or equal to 0.7.

III. The coefficient of financial dependence on capital with preferential rights.

K Finnish dependent = ZK / A, where
ZK - capital with preferential rights (long-term debt capital) + preferred shares.

The standard value must be less than or equal to 0.5.

IV. The financing ratio shows which part of the enterprise’s activities is financed from its own funds and which from borrowed funds.

K financing = SK / ZK, where
SK - equity capital,
ZK - borrowed capital.

If the value of the financing ratio is less than one (most of the enterprise’s property is formed from borrowed funds), then this may indicate the danger of insolvency and make it difficult to obtain a loan.

V. The coefficient of maneuverability of equity capital shows what part of equity capital is in circulation, that is, in a form that allows you to freely maneuver these funds; and which one is capitalized?

To maneuverability = (SK-VA) / SK, where
SK - equity capital,
VA - current assets.
The standard is a coefficient value from 0.4 to 0.6.

VI. Financial leverage (leverage) is the reciprocal of the financing ratio.

K leverage = 1 / K agility

3. Enterprise profitability indicators

Enterprise profitability

The sustainable functioning of an enterprise depends on its ability to generate a sufficient amount of income (profit). This ability affects the solvency of the enterprise.

In general, the performance of any enterprise can be assessed using absolute and relative indicators. Thus, using the indicators of the first group, it is possible to analyze the dynamics of various indicators of profit (balance sheet, sales of products, works, services remaining at the disposal of the enterprise) over a number of years. Such calculations will have more arithmetic than economic meaning (unless appropriate methods of conversion into comparable prices are used).

Relative indicators are practically not affected by inflation, since they represent different ratios of profit and invested capital (own, invested, borrowed, etc.). The economic meaning of the values ​​of these indicators (they are usually called profitability indicators) is that they characterize the profit received from each ruble of funds (own or borrowed) invested in the enterprise.

Profitability (profitability, profitability) is the ratio of profit to the capital invested to obtain this profit.

Return on assets (R a), %, shows how much profit the company receives from each ruble invested in assets.

R a = (R day / A) * 100%, where
P dn - profit before tax;
A - assets.

Return on sales (R p), %, shows how much profit the company has from each ruble of sales.

R p = (P real / N) * 100%, where
R real. - profit from sales;
N - sales volume.

Return on equity capital (R s.k.), %, shows the amount of profit received from each ruble invested in the enterprise by the owners.

R s.k. = (R / SK) * 100%, where
P - net profit (retained);
SK - equity capital.

Return on borrowed capital (R z.k.), %, characterizes the cost of borrowed funds.

R c.c. = (R vol. d. / ZK) * 100%, where
R ob.d. - profit from ordinary activities;
ZK - borrowed capital.

Financial performance indicators of the enterprise

The main financial indicators of an enterprise in most cases include at least the following: sales revenue, profit and cash flows of the enterprise.

Sales revenue is the income received by an enterprise from the sale of inventory (work performed, services provided) for a certain period of time. This income can be expressed in both monetary and non-monetary form. Examples of non-cash proceeds - barter, offset of mutual claims, etc.

Profit is the difference between the proceeds from the sale of inventory (work performed, services rendered) and all expenses incurred by the enterprise in the reporting period, including the cost of goods (work, services) sold. This profit is subject to tax. The profit remaining after paying taxes due is called retained profit.

The balance of cash flows is the difference between all funds received by the enterprise (cash, non-cash, foreign currency, etc.) and all funds paid by the enterprise for the reporting period.

The totality of the values ​​of these indicators, as well as the trend of their changes, allows us to judge with a high degree of reliability the efficiency of the enterprise, as well as the problems it has. It is obvious that these indicators need to be considered and analyzed for one reporting period common to all. In other words, it makes no sense to analyze the financial performance of an enterprise if revenue from the sale of goods (work, services) is taken for January, profit for April, and the balance of cash flows for June.

Inexperienced people sometimes confuse the concepts of revenue, profit and cash flow balance, almost identifying them. However, it is very important to understand the difference here. For example, when calculating profit, all income received by the enterprise during the reporting period is taken into account, including income from barter transactions, offsets and other non-monetary types of income. Obviously, in this case, the amount of total income (i.e., proceeds from sales) will not coincide with the actual receipt of funds by the enterprise in the reporting period.

In addition, you should remember the fact that profit is calculated not necessarily after the receipt of funds by the enterprise, but after the fact of sale. The mere fact of receipt of funds can be considered an advance payment, and not revenue from the sale of goods (works, services).

Financial and economic indicators

The financial and economic activity of an enterprise is characterized, first of all, by the quantity and range of products produced, as well as the volume of its sales. The volume of output depends on the presence of many conditions and prerequisites, namely production capacity, the availability of raw materials, materials, components, personnel with appropriate qualifications, and markets for products.

The financial and economic activity of an enterprise is characterized, first of all, by the quantity and range of products produced, as well as the volume of its sales. The volume of output depends on the presence of many conditions and prerequisites, namely production capacity, the availability of raw materials, materials, components, personnel with appropriate qualifications, and markets for products. In turn, the volume of output affects all other aspects of the financial and economic activities of the enterprise - the cost of output, the amount of profit received, the profitability of production, the financial condition of the enterprise.

The financial and economic activities of enterprises are purposeful activities based on decisions made, each of which is optimized on the basis of intuition or calculations. The risk of decision making is understood as the probability that the actual results of the implemented decision do not correspond to the set goals.

The financial and economic activities of an enterprise depend on many factors (resources, conditions, etc.), and the influence and comparative characteristics of not all of them can be formally assessed. From the standpoint of the possibility of such an assessment, it is customary to highlight the labor, material and financial resources of the enterprise.

The financial and economic activities of enterprises are accompanied by the implementation of numerous and varied operations. In turn, each business transaction must be documented in accounting documents, which contain primary information about completed business transactions or the right to carry them out. The objects of accounting documents are the processes of supply, production and sales, as well as individual divisions of the enterprise and various financial, economic, and settlement relations within and outside the enterprise.

The financial and economic activities of enterprises (associations) are assessed on the basis of a comprehensive analysis, objectively revealing shortcomings, omissions, losses, bottlenecks, and at the same time identifying those workforces that work honestly, conscientiously, and constantly increase cash savings.

Analysis of the financial and economic activities of an enterprise can be more or less detailed, in-depth or, conversely, an express analysis. One area of ​​activity may be subject to analysis (for example, analysis of the location and operating features of a distribution network or analysis of monetary and other settlements of an enterprise) - in this case, the analysis will be thematic. If the sphere of interests of the analytical group includes the entire enterprise as a complex, then such an analysis should be called comprehensive.

Analysis of the financial and economic activities of an enterprise is very often in its form an analysis of indicators, i.e. characteristics of the economic activity of an economic unit. The term scorecard is widely used in economic research. The analyst, in accordance with certain criteria, selects indicators, forms a system from them, and analyzes it. The complexity of the analysis requires the use of entire systems, rather than individual indicators.

An analysis of the financial and economic activities of an enterprise will not be complete if it does not concern two more specific aspects of its activities. We are talking, first of all, about what place the quality of its products occupies in a comprehensive assessment of an enterprise. If the products are of low quality, cause complaints from consumers, do not meet sanitary standards, state or market standards, the enterprise’s activities cannot be called successful, its comprehensive assessment will be low. The prospects of such an enterprise, if it does not intend to radically change its market strategy and product quality, cannot be considered brilliant .

Analysis of the financial and economic activities of an enterprise can be divided into non-financial and intra-company.

Analysis of the financial and economic activities of an enterprise is impossible without the use of relevant planning and regulatory data. To diagnose the financial and economic situation of an enterprise, special methods are used.

Optimization of the financial and economic activities of an enterprise using intellectual property is possible provided that they are included in the composition of intangible assets.

The audit of the financial and economic activities of enterprises served by centralized accounting is carried out in the manner established by the superior organization.

An analysis of the financial and economic activities of an enterprise subject to state support must contain the following information for the reporting period.

Audits of the financial and economic activities of enterprises and organizations served by centralized accounting departments, as well as audits of centralized accounting departments, are carried out by the higher-level organizations under which they were created.

The effectiveness of the financial and economic activities of an enterprise in the reporting period can be assessed in various areas.

Control of the financial and economic activities of the enterprise is carried out on a commercial basis by a Soviet audit organization.

Analyzes the financial and economic activities of the enterprise, participates in the development of proposals aimed at preventing the formation and liquidation of unused inventory, increasing production profitability, reducing production costs, strengthening financial discipline, economic accounting, and improving the production management apparatus. Ensures timely preparation and submission of prescribed financial statements.

In the analysis of the financial and economic activities of enterprises, the question often arises about the comparability of the results of activities of various economic units. This question can have two aspects. The first of them is associated with the comparison of several enterprises or different divisions of one enterprise on the basis of some objective indicators selected by the analyst based on the importance of these values ​​for a comprehensive assessment of the activities of business entities.

In the process of financial and economic activity of an enterprise, continuous changes occur in the means and sources of their formation. This is reflected in the dynamics of balance sheet items.

Operational diagnostics of the financial and economic activities of an enterprise serves as the basis for making current, operational management decisions. It monitors and evaluates the key areas of the enterprise’s activities and, above all, analyzes the financial condition, break-even, material and information flows, assesses risk and makes recommendations on.

When checking the financial and economic activities of the enterprise by the state tax inspectorate for the last year, an additional profit was accrued in the amount of 400 0 thousand rubles, a fine - 100%, a 10% financial sanction, and a penalty.

An indicator of the effectiveness of the financial and economic activities of an enterprise is the profitability indicator. There are profitability of production assets, profitability of products and profitability of investments in the enterprise.

Business transactions of the financial and economic activities of the enterprise are taken into account in the reporting period in which they took place, regardless of the actual time of receipt or payment of funds associated with these facts.

The result of the analysis of the financial and economic activities of the enterprise should be an assessment of the feasibility of the chosen strategy for the behavior of the enterprise at various stages of its development.

In the course of financial and economic activities, enterprises are faced with the need to sell foreign currency previously received in the form of revenue and other income permitted by the legislation of the Russian Federation.

A general assessment of the financial and economic activities of an enterprise is given based on a study of profit and profitability indicators. The choice of directions and objects of analysis, techniques and methods of its implementation is determined by management tasks.

In the process of carrying out financial and economic activities, enterprises can carry out mutual lending. This occurs due to the time difference between the shipment of products, goods, performance of work, services and their actual payment. Therefore, in the cash flow of enterprises, along with bank loans, there are funds from other creditors, including supplier enterprises, individuals, and regular business partners in production and commercial transactions. To formalize a debt, a bill of exchange is used, which is a payment document, a security indicating the provision of a commercial loan servicing the movement of goods.

However, in the analysis of the financial and economic activities of an enterprise, a more traditional interpretation of risk has become widespread, which classifies as risk situations those associated not with uncertainty in general, but only with the possibility of an unfavorable outcome.

The program for an in-depth analysis of the financial and economic activities of an enterprise is as follows.

AUDIT - verification of the financial and economic activities of enterprises, organizations, institutions, official actions of officials, documents, records, authorized bodies for the purpose of monitoring compliance with laws, rules, instructions, reliability and objective reflection of the true position in documents, absence of violations, availability of documented recorded inventory items.

SELF-FINANCING - carrying out financial and economic activities of an enterprise on the basis of its own monetary resources; in this case, not only current expenses, but also investments and future expenses are provided from own sources.

SELF-FINANCING - carrying out the financial and economic activities of an enterprise, firm, entrepreneur on the basis of its own monetary resources; in this case, not only current expenses, but also investments and future expenses are provided from own sources.

Remuneration for the results of the financial and economic activities of the enterprise is paid from the profits remaining at the disposal of the enterprise minus funds allocated for consumption. The amount of remuneration is established according to a standard defined as the ratio of 12-month official salaries to the amount of specified profit for the previous calendar year.

AUDIT - verification of the financial and economic activities of enterprises, organizations, institutions, official actions of officials, documents, records by authorized bodies for the purpose of monitoring compliance with laws, rules, instructions, reliability and objective reflection in documents of the true position, absence of violations, presence of documented inventory items.

Remuneration for the results of the financial and economic activities of the enterprise is paid from the profits remaining at the disposal of the enterprise, minus funds allocated for consumption. The amount of remuneration is established according to a standard defined as the ratio of 12 monthly official salaries to the amount of specified profit for the previous calendar year.

Remuneration for the results of the financial and economic activities of the enterprise is paid from the profits remaining at the disposal of the enterprise minus funds allocated for consumption. The amount of remuneration is established according to a standard defined as the ratio of 12 monthly official salaries to the amount of specified profit for the previous calendar year.

The subject of analysis of the financial and economic activities of an enterprise is understood as the economic processes of enterprises, their socio-economic essence and the final financial results of their activities.

However, to manage the financial and economic activities of an enterprise, assess its place in a market economy, and the state of settlements with suppliers and payroll personnel, accounting in general terms is not enough. Therefore, for a more detailed accounting of property and the sources of its formation, as well as economic processes, they are used, which are opened as a result of the division of individual synthetic accounts. Analytical accounting is carried out not only in monetary terms - accounts Calculation of wages, settlements with debtors and creditors, but also in physical (quantitative) terms - accounts Materials, Fixed Assets, etc., in personal, material and other analytical accounts of accounting, grouping detailed information about assets, liabilities and business transactions within each synthetic account.

The subject of accounting is the financial and economic activities of an enterprise aimed at fulfilling statutory obligations.

Calculation of financial indicators

Liquidity indicators:

1. Absolute liquidity ratio (LR)

Shows what share of short-term debt obligations can be covered by cash and cash equivalents in the form of marketable securities and deposits, i.e. almost completely liquid assets.

LR = (Cash + Short-term investments)/Current liabilities

Recommended values: 0.2 - 0.5.

2. Quick ratio (QR)

The ratio of the most liquid part of current assets to short-term liabilities. It is usually recommended that the value of this indicator be greater than 1. However, in reality the values ​​for Russian enterprises are rarely more than 0.7-0.8, which is considered acceptable.

QR = (Cash + Short-term investments + Accounts and notes receivable)/Current liabilities

When calculating the indicator, the average values ​​of the variables for the period are used.

3. Current ratio (CR)

It is calculated as the quotient of current assets divided by short-term liabilities and shows whether the enterprise has enough funds that can be used to pay off short-term liabilities. According to international practice, liquidity ratio values ​​should range from one to two (sometimes up to three). The lower limit is due to the fact that working capital must be at least sufficient to pay off short-term obligations, otherwise the company will be at risk of bankruptcy. An excess of current assets over short-term liabilities by more than three times is also undesirable, since it may indicate an irrational asset structure.

CR = Current assets/Current liabilities

The value of the ratio is mainly determined by the amount of inventory, the amount of invoices and bills receivable and invoices and bills payable. When calculating the indicator, the average values ​​of the variables for the period are used.

4. Net Working Capital (NWC)

The difference between current assets and current liabilities. Sometimes this indicator is also called the “working capital quota.” The optimal amount of net working capital depends on the characteristics of the company’s activities, in particular on its scale, sales volumes, inventory turnover rate and accounts receivable. A lack of working capital indicates the inability of the enterprise to repay short-term obligations in a timely manner. A significant excess of net working capital over the optimal need indicates an irrational use of the enterprise's resources. For example: issuing shares or obtaining loans in excess of the real need.

NWC = Current assets - Current liabilities.

When calculating the indicator, the average values ​​of the variables for the period are used.

Capital structure indicators:

5. Financial independence ratio (EQ/TA)

Characterizes the firm's dependence on external loans. The lower the ratio, the more loans the company has, the higher the risk of insolvency and the potential occurrence of a cash deficit for the company.

EQ/TA=Equity/Total Asset

When calculating the indicator, the average values ​​of the variables for the period are used. Recommended values: 0.5-0.8.

6. Total liabilities to assets (TD/TA)

Shows what proportion of assets is financed by debt, regardless of source.

TD/TA = (Long-term liabilities + current liabilities) / Total asset

When calculating the indicator, the average values ​​of the variables for the period are used.

7. Total liabilities to equity (TD/EQ)

Characterizes the firm's dependence on external loans. The higher the ratio, the more loans the company has, the higher the risk of insolvency. A high value of the ratio also reflects the potential danger of a cash shortage for the enterprise. The interpretation of this indicator depends on many factors: the average level of this ratio in other industries, the company’s access to additional debt sources of financing.

TD/EQ = Total liabilities/Total. When calculating the indicator, the average values ​​of the variables for the period are used. Recommended values: 0.5 - 0.8

8. Long-term liabilities to assets (LTD/TA)

Demonstrates what share of the company's assets is financed by long-term loans.

LTD/TA = Long-term liabilities / Total assets

When calculating the indicator, the average values ​​of the variables for the period are used.

9. Long-term liabilities to non-current assets (LTD/FA)

Demonstrates what share of fixed assets is financed by long-term loans. Sometimes a similar inverse coefficient is calculated, showing the share of equity capital in the financing of fixed assets.

LTD/FA = Long-term liabilities / Non-current assets

When calculating the indicator, the average values ​​of the variables for the period are used.

10. Interest coverage ratio or debt protection ratio (TIE), times

Shows how many times during the reporting period the company earned funds to pay interest on loans.

TIE = Earnings before interest and taxes + Depreciation/Interest on loans.

When calculating the indicator, the average values ​​of the variables for the period are used.

Profitability indicators:

11. Return on sales (ROS), %

Demonstrates the share of net profit in the company's sales volume

ROS=(Net profit/Net volume)*100%

When calculating the indicator, the average values ​​of the variables for the period are used. An increase in the coefficient is a positive trend. A decrease indicates a decrease in prices with constant costs or an increase in production costs with constant prices, i.e. a decrease in demand for the company's products.

12. Return on equity (ROE), %

Allows you to determine the efficiency of use of capital invested by the owners of the enterprise. Typically, this indicator is compared with possible alternative investments in other securities. It shows how many monetary units of net profit each unit invested by the company's owners earned.

NI/EQ = (Net profit/Total equity)*100%

When calculating the indicator, the average values ​​of the variables for the period are used. An increase in the indicator means an increase in profit attributable to shareholders and has a positive impact on the dynamics of stock prices.

13. Return on current assets (RCA), %

Demonstrates the enterprise’s capabilities in ensuring a sufficient amount of profit in relation to the company’s working capital used. The higher the value of this ratio, the more efficiently working capital is used.

NI/CA = (Net profit/Current assets)*100%

When calculating the indicator, the average values ​​of the variables for the period are used.

14. Return on non-current assets (RFA), %

Demonstrates the ability of the enterprise to provide a sufficient amount of profit in relation to the company's fixed assets. The higher the value of this ratio, the more efficiently fixed assets are used.

NI/FA = (Net profit/non-current assets)*100%

When calculating the indicator, the average values ​​of the variables for the period are used.

15. Return on assets (Return on investment) (ROI), %

There has been some terminological confusion regarding this indicator. Literally translated from English, the name of this indicator sounds like “return on investment,” although, as follows from the formula, there is no talk of any investment:

NI/EA =(Net profit/Total assets)*100%

When calculating the indicator, the average values ​​of the variables for the period are used. A decrease in the indicator indicates a falling demand for the company's products and an overaccumulation of assets.

Business activity indicators:

16. Working capital turnover (NCT), times Shows how effectively the company uses investments in working capital and how this affects sales growth. To get the number of days, you need to multiply the value of the coefficient by 365. The higher the value of this coefficient, the more effectively the company uses net working capital.

NS/NWC = Total revenue for the year/Average net working capital

The calculation is made only for a period of one year, using the total revenue from sales of products or services for the current year and the average value of net working capital for the current year. In the case of calculations for a period of less than one year, the amount of revenue must also be multiplied by the appropriate coefficient, and the value of net working capital must be the average for the calculation period.

17. Fixed asset turnover (FAT), times

Characterizes the efficiency of the enterprise's use of the fixed assets at its disposal. The higher the ratio, the more efficiently the company uses fixed assets. A low level of capital productivity indicates insufficient sales or too high a level of capital investment. However, the values ​​of this coefficient differ greatly from each other in different industries. Also, the value of this coefficient greatly depends on the methods of calculating depreciation and the practice of assessing the value of assets. Thus, a situation may arise that the fixed asset turnover rate will be higher in an enterprise that has worn-out fixed assets.

NS/FA = Total revenue for the year/Average value of non-current assets

The calculation is made only for a period of one year, using the total revenue from sales of products (services) for the current year and the average value of the amount of non-current assets for the current year. In the case of calculating the coefficient for the periods: month, quarter, half-year - the average value of the amount of non-current assets for the calculation period is included in the calculation, and the value of the revenue received for the reporting period must be multiplied by 12, 4 and 2, respectively.

An increase in the indicator means an acceleration in the turnover of fixed assets; a decrease in the indicator makes it necessary to take measures to modernize and sell unused and ineffective parts of fixed assets.

18. Asset turnover (TAT), times

Characterizes the efficiency of the company's use of all resources at its disposal, regardless of the sources of their attraction. This coefficient shows how many times per year the full cycle of production and circulation is completed, bringing a corresponding effect in the form of profit. This ratio also varies greatly depending on the industry.

NS/TA = Total revenue for the year/Average of total assets for the year

The calculation is made only for a period of one year, using the total revenue from sales of products (services) for the current year and the average value of the sum of all assets for the current year. In the case of calculating the coefficient for the periods: month, quarter, half-year - the average value of the sum of all assets for the billing period is included in the calculation, and the value of the revenue received for the reporting period must be multiplied by 12, 4 and 2, respectively.

19. Inventory turnover (ST), times

Reflects the speed of inventory sales. To calculate the coefficient in days, you need to divide 365 days by the value of the coefficient. In general, the higher the inventory turnover ratio, the less funds are tied up in this least liquid asset group. It is especially important to increase turnover and reduce inventories if there is significant debt in the company’s liabilities.

ST=Cost of goods sold/Cost of inventory.

20. Receivables turnover (Receivables repayment period (CP), days.

Shows the average number of days required to collect a debt. To get the number of days, you need to multiply the value of the coefficient by 365. The lower this number, the faster the receivables turn into cash, and, consequently, the liquidity of the company’s working capital increases. A high ratio may indicate difficulties in collecting funds from accounts receivable.

CP = Average Accounts Receivable for the Year/Total Revenue for the Year.

The calculation is made only for a period of one year, using the total revenue for the year and the average value of accounts receivable for the current year. In case of calculation for a period of less than one year, the value of revenue from the sale of products (services) must be multiplied by a coefficient, respectively: for one month - 12, quarter - 4, half a year - 2. In this case, the average value of accounts receivable for the billing period is used.

Financial indicators of banks

1. Net assets

Net assets (or net assets) are equal to the bank's capital (equity capital) plus the bank's liabilities (depositors' money, account balances of legal entity clients, interbank loans and other borrowed funds). Net assets characterize the size of the bank and, other things being equal, its reliability.

2. The bank’s resistance to the “panic” of depositors

The indicator is calculated according to the Rostsber method and characterizes the bank’s ability to satisfy the desire of depositors to withdraw their money in the event of a panic for any reason. We discussed this issue in detail in the article Test for a bank’s resistance to depositor panic, in which we introduced the concept of GBT - readiness for return of deposits.

If the GBB is >50%, the degree of bank stability is high,
with GVV in the range of 30-50% - sufficient stability,
with hepatitis B
However, it should be borne in mind that if a given bank has the opportunity to increase its liquidity in a short period of time (for example, VTB 24), its resistance to this test increases sharply.

3. Loan portfolio overdue indicator

This indicator is the ratio of the volume of loans whose repayment period has already passed (overdue loans) to the total volume of loans issued (the size of the loan portfolio). This indicator indicates the bank's credit policy. If the bank follows a conservative lending policy and does not issue unsecured and risky loans, then the value of this indicator does not exceed 2%. With an aggressive credit policy aimed at obtaining maximum profits, the amount of overdue loans can reach up to 5%. If the value of this indicator exceeds 7-8%, then the bank is pursuing a very risky lending policy, which can lead to a liquidity crisis and even bankruptcy, since in this case the panic factor of depositors can arise.

4. Return on capital is the ratio of the profit received to the amount of capital expressed per year. This is a very important indicator that evaluates the success of the bank as a commercial enterprise from the point of view of the bank’s shareholder, since the higher the return on capital, the more income the shareholder receives for each invested ruble. However, you should not be alarmed by too low and sometimes negative values ​​of this indicator at certain moments. This may be due to both the payment of dividends and the transfer of part of the profit to the bank’s reserve funds formed by the Central Bank (contributions to the DIA, etc.). However, if the return on equity remains at an unsatisfactory level from month to month, then this means low efficiency of the bank as a commercial enterprise, and, of course, worsens the bank's resistance to all kinds of difficulties.

Dynamics of financial indicators

Analysis of the dynamics of indicators begins with exactly how they change (increase, decrease or remain unchanged) in absolute and relative terms. To track changes in time series, indicators are calculated: absolute change, relative change, rate of change. Just follow these simple step-by-step tips and you will be on the right track in solving your financial issues.

1. Please note that all these indicators can be basic, when the level of one period is compared with the level of the initial period, and chain, when the level of two adjacent periods is compared. Next, move on to the next step of the recommendation.

2. You can calculate the basic absolute change (absolute increase) as the difference between the specific and the first levels of the series: Y(b) = Y(i) – Y(1). It shows how much the level of a particular period is greater or less than the base level. Chain absolute change is the difference between a specific and previous level of the series: Y (t) = Y (i) – Y (i-1). It shows how many units the level of a particular period is greater or less than the previous one. Remember that there is a relationship between the base and chain absolute changes: the sum of the chain absolute changes is equal to the last base change. Next, move on to the next step of the recommendation.

3. When analyzing the dynamics of indicators, you can calculate the basic relative change (basic growth rate). It represents the ratio of a specific indicator to the first of a series of dynamics: I(b) = Y(i)/Y(1). A chain relative change is the ratio of a specific and previous level of a series: I(t) = Y(i)/Y(i-1). Relative change shows how many times the level of a given row is greater than the level of the previous row or what part of it it is. The relative change can be expressed as a percentage by multiplying the ratio by 100%. There is a relationship between chain and basic relative changes: the product of chain relative changes is equal to the last basic one. Next, move on to the next step of the recommendation.

4. In addition, when analyzing the dynamics of indicators, you can calculate the rate of change (growth rate) of levels. This is a relative indicator that shows by what percentage a given indicator is greater or less than another, taken as the basis of comparison. It is determined by subtracting 100% from the relative base or chain change: T(i) = I(i) – 100%.

Indicators of financial ratios

Analysis of the level of sustainable growth of an organization is a dynamic analytical framework that combines financial analysis with strategic management to explain the main relationships between strategic planning variables and financial variables, as well as to check the consistency of corporate growth objectives and financial policies. This analysis allows you to assess the company's current opportunities for financial growth, determine how the company's financial policies will influence the future, and analyze the strengths and weaknesses of the company's competitive strategies.

Any measures to implement strategic programs have their own cost. A necessary part of planning and implementing a strategy is determining the amount of funding required to implement these tasks.

Information for financial analysis

The most complete definition of the concept of financial analysis is given in the “Financial and Credit Encyclopedic Dictionary”: “Financial analysis is a set of methods for determining the property and financial position of an economic entity in the past period, as well as its capabilities for the short and long term.”

The information for performing financial analysis in accordance with published textbooks, manuals, and methodological instructions was the official accounting (financial) statements of the organization. Only in very rare cases did any author dare to recommend primary accounting data and specifically indicate the sources and methods of calculation and their application in analysis.

The purpose of financial analysis is to determine the most effective ways to achieve the profitability of an enterprise; the main tasks are to analyze profitability and assess the risks of the company.

Analysis of financial indicators and ratios allows the analyst to understand the competitive position of the organization at the current time. Published company reports contain a lot of numbers; the ability to read this information allows analysts to know how efficiently and effectively their company and competing companies are working.

Ratios allow you to see the relationship between sales profit and expenses, between fixed assets and liabilities. There are many types of ratios, usually used to analyze five main aspects of a company's performance: liquidity, debt-to-equity ratio, asset turnover, profitability and market value.

Analysis of financial ratios and indicators is a tool that provides an idea of ​​the financial condition of the organization, its competitive advantages and development prospects.

1. Performance analysis. This group of indicators allows you to analyze changes in productivity in terms of net profit, capital use and control the level of costs. Financial ratios allow you to analyze the financial liquidity and stability of an enterprise through the effective use of a system of assets and liabilities.

2. Assess market business trends. By analyzing the dynamics of financial indicators and ratios over a period of several years, it is possible to study the effectiveness of trends in the context of the existing business strategy.

3. Analysis of alternative business strategies. By changing the indicators of the coefficients in the business plan, it is possible to analyze alternative options for the company's development.

4. Monitoring the company's progress. Having chosen the optimal business strategy, company managers, continuing to study and analyze the main current ratios, can see a deviation from the planned indicators of the implemented development strategy.

Ratio analysis is the study of the relationship between two or more indicators characterizing the financial activities of an organization. Analysts can see a more complete picture of the company's performance over several years, and additionally by comparing the company's performance with industry averages.

It is worth noting that the system of financial indicators is not a crystal ball in which you can see everything that has happened and what will happen. It's simply a convenient way to summarize large amounts of financial data and compare the performance of different businesses. Financial ratios themselves help the company's management to focus attention on the strengths and weaknesses of the company's activities, and to correctly formulate questions that these ratios can rarely answer.

It is important to understand that financial analysis does not end with the calculation of financial indicators and ratios, it only begins when the analyst has carried out their full calculation.

The real usefulness of the calculated coefficients is determined by the tasks set. First of all, ratios make it possible to see changes in the financial position or results of production activities, help determine trends and the structure of planned changes; which helps management see the threats and opportunities inherent in this particular enterprise.

A company's financial reports are a source of information about the company not only for analysts, but also for enterprise management and a wide range of external users. For effective ratio analysis, it is important for users of financial ratio information to know the basic characteristics of major financial statements and the concepts of ratio analysis. However, when conducting financial analysis, it is important to understand: the main thing is not the calculation of indicators, but the ability to interpret the results obtained.

When analyzing financial indicators, it is always worth keeping in mind that the assessment of operating results is made on the basis of data from past periods, and on this basis, extrapolation of the future development of the company may be incorrect.

Concepts Underlying Financial Ratio Analysis

Financial analysis is used in the construction of budgets, to identify the reasons for deviations of actual indicators from planned indicators and correction of plans, as well as in the calculation of individual investment projects. The main tools used are horizontal analysis of time series of indicators, vertical analysis, analysis of relative indicators (ratio analysis), comparison, deterministic factor analysis, stochastic analysis. That is, when carrying out analytical procedures, it is recommended to use traditional retrospective ones; attention is not focused on forecasting based on promising methods of analysis, including the use of computer technologies. At the same time, the development of the economy, the increasing importance of economic analysis in assessing the stability and continuity of development of an economic entity, the needs of users of analytical information necessitate the use of predictive, long-term methods of analysis, as well as reducing the time for calculations and analysis of indicators.

The main features of financial analysis are:

1. Most of the financial indicators are relative values, which makes it possible to compare companies of different scales of activity.
2. When conducting financial analysis, it is important to apply the comparison factor: compare the company's performance indicators in trends over different periods of time; compare the performance of a given company with the industry average or with similar performance of enterprises within a given industry.
3. To conduct financial analysis, it is important to have a complete financial description of the company for selected periods of time (usually years). If the analyst has data for only one period, then there must be data from the enterprise’s balance sheet at the beginning and end of the period, as well as a profit and loss statement for the period under review.

Accounting management is an important element in the analysis of financial ratios and ratios. The basic accounting equation expressing the interdependence of assets, liabilities and property rights is called the accounting balance: ASSETS = LIABILITIES + EQUITY.

1. Current assets include cash and other assets that must be converted into cash within one year (for example, publicly traded securities; accounts receivable; notes receivable; current assets and advances).
2. Land, fixed assets and equipment (fixed capital) include assets that are characterized by a relatively long service life. These products are generally not intended for resale and are used in the production or sale of other goods and services.
3. Long-term assets include investments in securities, such as stocks and bonds, as well as intangible assets, including: patents, expenses for monopoly rights and privileges, copyrights.

Liabilities are usually divided into two groups:

1. Current liabilities include amounts payable that must be paid within one year, such as accrued liabilities and notes payable.
2. Long-term liabilities. Rights of creditors that do not have to be exercised within one year. This category includes bond obligations, long-term bank loans, and mortgages.
3. Own capital is the rights of the owners of the enterprise. From an accounting point of view, this is the remaining amount after deducting liabilities from assets. This balance is increased by any profits and decreased by any losses of the company.

Measures commonly considered by analysts include the statement of operations, the balance sheet, measures of changes in financial position, and measures of changes in equity.

A company's operating statement, also referred to as a profit and loss statement or income statement, summarizes the results of a company's options activities over a specific reporting period of time. Net income is calculated using the periodic accounting method used in calculating profits and costs. It is generally considered the most important financial indicator. This report shows whether the earnings percentage of a firm's shares decreased or increased during the reporting period after dividends were issued or after other transactions were entered into with the owners. The income statement helps owners assess the amount, timing, and uncertainty of future cash flows.

The balance sheet and income statement are the main sources of metrics used by companies. A balance sheet is a statement that shows what a company owns (assets) and what it owes (liabilities and equity) as of a specific date. Some analysts call the balance sheet a "snapshot of a company's financial health" at a particular point in time.

System of financial indicators and ratios

The total number of financial ratios that can be used to analyze a company’s activities is about two hundred. Typically, only a small number of basic coefficients and indicators are used and, accordingly, the main conclusions that can be drawn on their basis. For the purpose of more orderly consideration and analysis, financial indicators are usually divided into groups, most often into groups that reflect the interests of certain stakeholders. The main groups of such persons include: owners, management of the enterprise, creditors. It is important to understand that the division is conditional and indicators for each group can be used by different stakeholders.

Working with financial ratios involves at least three stages. At the first stage, the categories and characteristics necessary to illuminate a specific aspect of the financial situation, for example solvency, are selected. At the second stage, indicators-coefficients are developed that quantitatively express the analyzed side of the financial situation, for example, the coefficient of overall solvency. The third stage is devoted to the evaluation characteristics of the numerical values ​​that the desired coefficient can take.

To control business entities and create guidelines for making management decisions, such values ​​are standardized. The specifics of these norms are established as a result of the combination of many factors, including administrative interests, accumulated experience, common sense, etc. Their purpose is to serve as objective evaluation criteria, as well as unique beacons in establishing and maintaining the course of economic development in a given direction. However, it seems that effective guidelines should be more flexible, taking into account relevant differences by region, type of activity of economic entities, etc.

As an option, it is possible to organize and analyze financial indicators into groups that characterize the main properties of the company’s activities: liquidity and solvency; management efficiency; profitability (profitability) of activities.

Let's take a closer look at the groups of financial indicators:

Indicators of transaction costs: Analysis of transaction costs allows us to consider the relative dynamics of the shares of various types of costs in the structure of the total costs of the enterprise and is a complement to operational analysis. These indicators allow us to find out the reason for changes in the company's profitability indicators.

Indicators of effective asset management: These indicators allow us to determine how effectively the company's management manages the assets entrusted to it by the company's owners. The balance sheet can be used to judge the nature of the assets used by the company. It is important to remember that these indicators are very approximate, because On the balance sheets of most companies, a wide variety of assets acquired at different times are reported at historical cost. Consequently, the book value of such assets often has nothing to do with their market value, a condition that is further aggravated in conditions of inflation and when the value of such assets increases.

Another distortion of the current situation may be associated with the diversification of activities, when specific activities require attracting a certain amount of assets to obtain a relatively equal amount of profit. Therefore, when analyzing, it is advisable to strive to separate financial indicators by certain types of company activities or by types of products.

Liquidity indicators: These indicators allow us to assess the degree of solvency of a company for short-term debts. The essence of these indicators is to compare the amount of the company's current debts and its working capital, which will ensure the repayment of these debts.

Profitability indicators (profitability): Allow you to evaluate the effectiveness of the company's management in using its assets. Operating efficiency is determined by the ratio of net profit, determined in various ways, to the amount of assets used to generate this profit. This group of indicators is formed depending on the emphasis of the effectiveness study. Following the objectives of the analysis, the components of the indicator are formed: the amount of profit (net, operating, profit before tax) and the amount of the asset or capital that forms this profit.

Capital structure indicators: Using these indicators, it is possible to analyze the degree of risk of bankruptcy of a company in connection with the use of borrowed financial resources. With an increase in the share of borrowed capital, the risk of bankruptcy increases, because the volume of the company's obligations increases. This group of ratios is primarily of interest to the company’s existing and potential creditors. Management and owners evaluate the company as a continuously operating business entity; creditors have a two-fold approach. On the one hand, creditors are interested in financing the activities of a successfully operating company, the development of which will meet expectations; on the other hand, creditors assess how significant the claim for debt repayment will be if the company experiences significant difficulties in repaying a long-term loan.

A separate group is formed by financial indicators that characterize the company’s ability to service debt using funds received from current operations. The positive or negative impact of financial leverage increases in proportion to the amount of debt capital used by the company. The lender's risk increases along with the owners' risk.

Debt service indicators: Financial analysis is based on balance sheet data, which is an accounting form that reflects the financial condition of a company at a certain point in time. Whatever the coefficient describing the capital structure is considered, the analysis of the share of borrowed capital, in essence, remains statistical and does not take into account the dynamics of the company’s operating activities and changes in its economic value. Therefore, debt service indicators do not provide a complete picture of the company's solvency, but only show the company's ability to pay interest and the principal amount within the agreed time frame.

Market indicators: These indicators are among the most interesting for company owners and potential investors. In a joint stock company, the owner—the holder of the shares—is interested in the profitability of the company. This refers to the profit received through the efforts of the company’s management from funds invested by the owners. Owners are interested in the impact of the company's performance on the market value of their shares, especially those freely traded on the market. They are interested in the distribution of their profits, how much of it is reinvested in the company, and what part is paid to them as dividends.

The main analytical purpose of analyzing financial ratios and indicators is to acquire skills in making management decisions and understanding the effectiveness of its work.

The meaning of financial indicators

All organizations use financial (lagging) indicators for various periods of time (usually a month, a quarter, a year). Often such reports are written in a special language and are full of abbreviations (EBIT, ROCE, ROE, CFROI, NOPAT, ROS, EPS, TSR, MVA, EVA). Many of them are quite useful because they allow management to understand how the organization has performed recently and whether it is moving in the right direction. However, these indicators do not tell you what to do to improve results. They also do not provide information about the value of many intangible assets (such as the value of developments, brands, customer relationships, etc.) or ongoing risks (financial risks inherent in the use of derivatives and hedge funds) that have a huge impact on the market value of many organizations.

Another problem is that, as we noted in this chapter, accounting data is very easy to manipulate. It’s tempting to use the terms “blindsighting” and “creative accounting” to describe this problem. So how can a CFO benefit from accounting data? One way is to compare with relevant indicators both externally and internally. Another way is to analyze trends. I'll look at these methods in more detail a little later. For now, I would like to focus on some indicators of problems, both strategic and financial, that will allow the CFO to better understand the performance of his company and its divisions.

Strategic indicators of problems. Gary Hamel has come to some impressive conclusions about how financial metrics can be used to better understand the effectiveness of strategy implementation. Hamel believes that many executives become fixated on one performance metric - share price, revenue growth, return on investment (ROI), or others. He notes how dangerous this can be: “A disruptive strategy can be masked by strong earnings growth, ever-increasing revenue, soaring returns on investment, and even rising stock prices. In fact, focusing on a single financial metric tends to blind executives to subtler signs of strategic decline.” How to look for signs of such strategic decline? According to Hamel, there are four signs that indicate a moribund strategy.

Profits are growing much faster than sales volume. Over the past few decades, many firms have achieved acceptable levels of growth based on efficiency improvements and, as a result, have paid little attention to the top line of the books. As a result, profit growth rates significantly exceeded sales growth. But the limit to growth through increased efficiency has already been chosen. The problem is that most executives have forgotten how to grow profitably.

Sales are growing significantly faster than profits. Although it becomes more difficult for companies to achieve profitable growth, this does not stop unprofitable growth. This outcome can be achieved in many ways, including engaging in price wars, overpaying for acquisitions, and “buying” customers. As Hamel notes, “This reminds us of the old saying that if we lose money on every sale, we make up for it in volume.”

Return on investment is rising while the price-to-earnings ratio is falling. Contrary to conventional wisdom, Hamel believes this ratio is the best and only indicator of investor confidence that the company can continue to grow earnings in the future. He notes the following.

An increasing or significantly higher P/E ratio indicates a significant degree of confidence - the market believes that your strategy will yet bear its best fruits. However, the opposite is also true. There are only two reasons why P/E might fall or rise slower than the market rate: either investors believe that the risks associated with future earnings have increased, or they expect your earnings to fall sharply in the future. In any case, they assume that your strategy has stopped working. All other things being equal, a rising return on investment with a falling P/E suggests that the company is borrowing from the future to pay for the present.

Shareholder profits are growing faster than the market. Again, Hamel's opinion is mixed.

Today it is fashionable to talk about “liberating” shareholder wealth.

This metaphor speaks for itself. The assumption is that wealth is already there. It doesn't need to be created, it just needs to be released. To release shareholder wealth, it is necessary to exit bad businesses, spin off firms that may have significantly higher P/E ratios than the parent company, and transfer unproductive assets outside. You acquire rivals and eliminate unnecessary expenses.

You ruthlessly eliminate inefficiency in management. In short, you eliminate those factors that destroy wealth. It is indeed possible to “liberate” shareholder wealth without creating new wealth. There are many companies that have consistently delivered healthy results for shareholders in recent times, but have experienced little or no growth in overall market value. Shareholders are doing well, but there is no market growth and no new wealth is being created. In this case, we can say that the firm's strategy is to throw out, rather than multiply, the income it receives.

Hamel's opinion is interesting due to the huge amount of debate devoted to the relationship between strategic and financial indicators, which usually do not lead to any results. His ideas clearly point us towards multivariate measures that should confirm the strengths of the strategy being used. Perhaps the solution is to simultaneously grow sales and profits faster than competitors while the P/E ratio remains a key indicator of future performance. This conclusion raises questions about performance appraisal and management rewards.

Financial indicators of problems. A number of indicators in the financial statements may indicate that they paint an overly rosy picture and should prompt the CFO to demand further explanation. Some point to unethical practices by management; others - due to a drop in financial indicators. Below are just a few metrics that should catch the attention of a CFO.

Falling operating margin. If operating margin (current income divided by sales) declines, it indicates deteriorating performance. As a guideline, if profits fall by 10% or more over the course of a year (say, from 35 to 31.5%), there are serious problems in the company's value proposition to customers, production costs are increasing, or The company's competitiveness is at risk.

Decrease in free cash flows. Some financial analysts prefer to track free cash flow (operating flow minus capital expenditures) rather than earnings per share (they believe this is a more reliable measure of performance because it is more difficult to manipulate). The growth of free cash flows indicates the success of the company - it means that it can pay debts on time, reinvest in the business and pay dividends. Conversely, a decline in free cash flow indicates growing pressure on the business and impending problems. There are exceptions to this rule - for example, in the case of recent large investments in expansion. However, more often than not, a downward trend in free cash flow is a sign of potential problems.

Increasing net income while reducing operating cash flows. Operating cash flow (which can be roughly defined as net income plus non-cash expenses such as depreciation) is another important metric to track. If they decrease and net income increases, it may mean that inventory levels or accounts receivable have increased. Any of these reasons indicate problems (see next point).

Accounts receivable are growing faster than sales. Accounts receivable usually reflects the sales situation (if sales are up 30%, they should be up the same). If sales grow faster than accounts receivable, this indicates good work by managers. Otherwise, the CFO should look at issues such as ineffective billing and collections, dissatisfied customers who are late in paying, potential unpaid debts, and businesses buying customers through overly generous offers or offering returnable products.

Growing debt. While there is nothing wrong with borrowing money, excessive levels of debt can turn a business disruption into a full-blown crisis. The acceptable level varies from industry to industry, but in general you should keep your debt to equity ratio within the 1:1 range. If debt is rising and free cash flow is shrinking, the CFO should be concerned.

Increasing the ratio of fixed costs to sales volume. Every organization must work tirelessly to reduce the share of fixed costs in its cost. If it is rising, it indicates a decline in management effectiveness, too many levels of management, poor quality, dissatisfied personnel (that is, high levels of shirking or high turnover) and a large number of unused opportunities.

Business financial indicators

The result of effective management is the value of the business and the efficiency of using equity capital, which have very specific financial indicators. But they are not achieved with monetary resources. And above all - the timeliness of making the right management decisions.

Financial ratios (or indicators) are used:

Lenders to assess credit risk;
investors in order to form hypotheses about future profits and dividends;
top management to assess the achievement of the financial component of the strategy;
financial managers to obtain information about the effectiveness of management decisions made.

Financial indicators are calculated based on financial reporting data:

Balance sheet
Income statement,
Cash flow statement.
Statement of retained earnings.

Financial ratios measure many aspects of a business but are not typically used in isolation from financial statements. Financial ratios are traditionally an integral part of financial statement analysis.

The coefficients allow you to compare:

Companies;
industries;
different periods of activity of the same company;
The company's performance results are in line with the industry average.

The main financial indicators proposed in the System Management Model are:

EV\EVA (business value or),
ROE (return on equity),
ROA (return on assets),
Business liquidity,
EBITDA (operating profit),
State of emergency (net profit),
Return on turnover (TO\EBITDA),
Cost level (Sb production\maintenance),
Level of overhead costs (NZ\TO).

Business cost

Company value (Enterprise value (EV), Total enterprise value (TEV) or Firm value (FV)) is an analytical indicator that is an assessment of the value of the company taking into account all sources of its financing: debt obligations, preferred shares, minority interests and ordinary shares of the company .

Enterprise value = value of all common shares of the enterprise (calculated at market value)
+ cost of debt obligations (calculated based on market value)
+ value of minority interest (calculated at market value)
+ the cost of all preferred shares of the enterprise (calculated based on market value)
- cash and cash equivalents.

Investors use valuation ratios to compare companies. The lower the valuation ratio, the more return the investor will receive on the invested capital.

Using EV in Enterprise Value Multiples

EV/Sales (Revenue) is an indicator that compares the value of a company with its annual revenue. Typically used to evaluate low-profit companies.
- EV/EBITDA is an indicator that compares the value of an enterprise with its EBITDA.
Often used to estimate how many years it will take for an investment to pay off. - EV/EBIT is an indicator that compares the value of an enterprise with its EBIT.
- EV/Net Income - an indicator that compares the value of an enterprise with its net profit.

Economic added value

Economic value added (EVA) can be considered as a modified approach to determining residual income.

Economic value added can be calculated in several ways:

1. EVA = NOPAT - WACC*C, where NOPAT (Net Operating Profit After Taxes) is net operating profit less taxes before interest; WACC (Weighted Average Cost of Capital) – weighted average; C – invested capital.
2. EVA = IC*(ROIC - WACC), where IC is invested capital. At the same time, the value of the invested capital should also include the value of assets transferred to the division (company), which for one reason or another were not recognized in the financial statements (for example, exclusive technologies, patents, know-how); ROIC (Return on Invested Capital) is the return on invested capital, calculated as the ratio of net operating profit before taxes to capital invested in the company's core activities.

The main advantages of using the indicator of economic added value include the fact that this indicator, like ROI, takes into account the cost of invested capital. In addition, when calculating EVA, it is necessary to take into account those assets that were not reflected in accounting. This allows you to evaluate the effectiveness of the use of new technologies, patents, licenses, know-how, etc., that is, it takes into account a greater number of factors affecting the efficiency of the unit.

The disadvantages of using this indicator in practice include the need to calculate two different indicators for the purposes of motivating managers and for assessing the performance of a department, which will significantly increase the complexity of calculations. In the first case, from the calculation of the EVA indicator, those assets that management cannot manage due to certain powers should be excluded.

The main and most significant drawback of the company's market value indicator is the large number of assumptions and forecasts that have to be used when calculating it. At the same time, this indicator allows us to most fully take into account all the factors influencing the efficiency of the enterprise.

EVA allows you to combine in one indicator the requirements of both shareholders and company managers for assessing its activities. The indicator is quite simple to calculate - the profit and loss statement and balance sheet can be used as initial data. Perhaps the most difficult thing is to correctly calculate WACC - it is influenced by quite a lot of external factors beyond the control of the company, so it is best to involve corporate finance specialists in these calculations.

We typically use the first method to calculate EVA, with WACC being defined as follows:

WACC = Percentage of Debt x Cost of Debt After Taxes + Percentage of Equity*Cost of Equity.

The use of EVA allows you not to “miss out” on any component of the company’s activities. Operating indicators (profitability, tax management and others), the amount of capital used, including working capital management, as well as the cost of capital used are taken into account.

Market value of the Company

For investors and shareholders, a company's market value (MV) is an indicator that determines the amount of their potential income. Since owners' expectations of future dividends and stock returns are based on the enterprise's true value or ability to generate cash flows, changes in market value can be considered one of the most important indicators of how shareholders evaluate a company's performance.

When determining the value of a company, two main approaches are usually used:

1. Market value is defined as the product of a company's shares by their fair market price for which stock market participants are willing to purchase these shares.
2. The value of a company is calculated based on the cash flows that, according to experts, it is capable of generating over a long period of time.

The classic formula for calculating the value of a company based on cash flows is as follows:

MV = NPVt + NCFt+1 /(WACC - g),
where NPVt is the net discounted cash flow generated by the company for the forecast period t. Typically, the forecast period is five years;
NCFt+1 – normal net cash flow in the first year after the end of the forecast period;
WACC – weighted average cost of capital;
g – expected growth rate of net cash flow in perpetuity.

Minority interest is an item on the consolidated balance sheet that reflects the share of participation of external owners in the share capital of subsidiaries.

The book value of a company or the net value of a company (Book value or Carrying value) is the total assets of the company minus intangible assets and liabilities, as they are shown on the company's balance sheet, i.e. at historical cost. The book value of a company may (or rather, almost always) differ from its market value.

Return on equity (ROE) is a relative indicator of operational efficiency, the quotient of dividing the net profit received for the period by the organization’s equity capital. One of the financial ratios is included in the group of profitability ratios. Shows the return on shareholder investment in terms of accounting profit.

Return on Equity = Net Profit/Average Shareholders' Equity for a period of profit (or profit before tax) for a given period divided by the cash value of sales for the same period.

Own capital or share capital (English equity, ownership equity, net worth) is equal to its total assets (English assets) minus total liabilities (English liabilities). Represents the excess of the fair market value of the property over the outstanding debt.

As a balance sheet indicator, it represents:

Paid up share capital;
retained earnings earned by an enterprise as a result of effective operations and remaining at its disposal.
Return on assets

Return on sales or ROS (Return On Sales)

ROS = Net profit / Revenue (TO)

Or it is possible to calculate return on sales based on EBITDA: ROS by EBITDA = EBITDA / TO

Return on sales (ROS) is an indicator of a company's pricing policy and its ability to control costs. Differences in competitive strategies and product lines cause significant variation in return on sales values ​​across companies. Often used to evaluate the operating efficiency of companies. However, it should be taken into account that with equal values ​​of revenue, operating costs and profit before tax for two different companies, the profitability of sales can vary greatly due to the influence of the volume of interest payments on the amount of net profit.

Return on assets (ROA) is a relative indicator of operational efficiency, the quotient of dividing the net profit received for the period by the total assets of the organization for the period. One of the financial ratios is included in the group of profitability ratios. Shows the ability of a company's assets to generate profit.

Return on assets is an indicator of the profitability and efficiency of a company, cleared of the influence of the volume of borrowed funds.

It is used to compare enterprises in the same industry and is calculated using the formula:

Ra = P / A, where:
Ra - return on assets, P - profit for the period, A - average value of assets for the period.

Liquidity

Liquidity is an economic term that refers to the ability of assets to be quickly sold at a price close to the market price. Liquid - convertible into money.

Typically, a distinction is made between highly liquid, low liquid and illiquid values ​​(assets). The easier and faster you can get the full value of an asset, the more liquid it is. For a product, liquidity will correspond to the speed of its sale at the nominal price.

Liquidity ratios

Financial indicators calculated on the basis of the enterprise’s reporting to determine the company’s nominal ability to repay current debts from existing current (current) assets. In practice, the calculation of liquidity ratios is combined with a modification of the company’s balance sheet, the purpose of which is to adequately assess the liquidity of certain assets. For example, some inventory balances may have zero liquidity; part of the receivables may have a maturity of more than one year; issued loans and bills formally refer to current assets, but in fact they can be funds transferred for a long period to finance related structures. Such components of the balance sheet are taken outside the scope of current assets and are not taken into account when calculating liquidity indicators.

Current liquidity

Current ratio or coverage ratio (English: Current ratio, CR) is a financial ratio equal to the ratio of current (current) assets to short-term liabilities (current liabilities). The source of data is the company’s balance sheet (form No. 1): (Line 290 - line 230 - amount of debt of the founders for contributions to the authorized capital) / line 690.

Ktl = (OA - DZd - ZU) / KO, where:
Ktl - current liquidity ratio;
OA - current assets;
DZd - long-term receivables;
ZU - debt of the founders for contributions to the authorized capital;
KO - short-term liabilities.

The ratio reflects the company's ability to pay off current (short-term) obligations using only current assets. The higher the indicator, the better the solvency of the enterprise. Taking into account the degree of liquidity of assets, it can be assumed that not all assets can be sold urgently. A coefficient value of 1.5 to 2.5 is considered normal, depending on the industry. A value below 1 indicates a high financial risk associated with the fact that the company is not able to reliably pay current bills. A value greater than 3 may indicate an irrational capital structure.

Quick liquidity

Quick ratio (acid test, QR) is a financial ratio equal to the ratio of highly liquid current assets to short-term liabilities (current liabilities). The source of data is the company’s balance sheet in the same way as for current liquidity, but inventories are not taken into account as assets, since if they are forced to be sold, losses will be maximum among all current assets.

Kbl = (Current assets - Inventories) / Current liabilities

Kbl = (Short-term accounts receivable + Short-term financial investments + Cash) / (Short-term liabilities - Deferred income - Reserves for future expenses)

The ratio reflects the company's ability to pay off its current obligations in the event of difficulties with the sale of products.

Absolute liquidity

Absolute liquidity ratio is a financial ratio equal to the ratio of cash and short-term financial investments to short-term liabilities (current liabilities). The source of data is the company’s balance sheet in the same way as for current liquidity, but only cash and cash equivalents are taken into account as assets:

Cal = (Cash + short-term financial investments) / Current liabilities

Cal = Cash / (Short-term liabilities - Deferred income - Reserves for future expenses)

Features of liquidity calculation

A common “stamp” of financial analysis is the search for reasons for changes in an indicator in its calculation formula. In most cases, the components of the calculation formula are only indicators of the financial position of the enterprise, but not the reasons determining this situation. On the eve of summer, it is appropriate to draw an analogy with the temperature resulting from sunstroke. In this case, high temperature is only an indicator of problems that have arisen in the body. The real reason for the deterioration of a person’s condition is the abuse of the sun. To improve the condition, it is necessary to combat the root cause - reduce exposure to the sun. In diagnosing the financial condition of a company, the situation is similar: to determine the reasons for changes in indicators, it is necessary to go a little further than analyzing the components of the calculation formula. We will trace the reasons for changes in financial indicators using the example of the total liquidity ratio.

Financial accounting indicators

Based on the system of indicators, generalized analysis, forecasting and current profit planning are carried out.

The advantage of the indicators of this group is their infection, since they are based on generally accepted standardized accounting principles (which allows the use of standard technologies and algorithms for financial calculations on certain aspects of the formation and distribution of profit, as well as comparison of these indicators with other similar enterprises); clear regularity of formation (within established regulatory deadlines); high degree of reliability (reporting generated on the basis of financial accounting is provided to external users and is subject to external audit).

At the same time, the information base formed on the basis of financial accounting also has certain disadvantages, the main ones of which are: reflection of informative indicators only for the enterprise as a whole (which does not allow its use when making management decisions in individual areas of activity, centers responsibility, types of products, etc.); low frequency of development (usually once a quarter, and certain reporting forms - only once a year): use of only cost indicators (which makes it difficult to analyze the impact of price changes on profit generation).

The indicators included in the group are divided into three main blocks:

The first block contains indicators reflected in the “Balance Sheet of the Enterprise”. This balance sheet contains two main sections "Asset" and "Liability".

The second block contains indicators reflected in the “Report on financial results and their use.”

This report includes indicators for the following main sections:

1) financial results;
2) use of profits;
3) payments to the budget;
4) costs and expenses taken into account when calculating benefits for and others.

The third block contains indicators reflected in the “Report on the financial and property status of the enterprise.” This report, although it contains a wide range of indicators used in profit management, is developed only once a year, which does not allow the use of this information in the operational management process.

Calculation of financial analysis indicators

The current solvency ratio is calculated as the ratio of the actual value of the enterprise's current assets in the form of cash, short-term financial investments, inventories, accounts receivable and other current assets to the amount of the enterprise's current liabilities, including short-term loans, borrowings, and various accounts payable. It characterizes the overall provision of an enterprise with working capital for conducting business activities and repaying its urgent obligations. This ratio is used as one of the main indicators of the solvency and liquidity of an enterprise, since it shows to what extent the short-term liabilities of the enterprise are covered by its current assets, which are assumed to be capable of; convert into monetary form within a time frame coinciding with the repayment of debts.

An enterprise experiencing financial difficulties begins to repay its existing debts more slowly, “eat up” revenue from current activities, and, if possible, resort to the use of borrowed funds. In this regard, short-term debt may grow faster than current assets, which will lead to a decrease in the solvency and liquidity ratio.

If an enterprise has a shortage of working capital from year to year, then the situation is risky. This may indicate, for example, the immobilization of working capital for.

The immobilization of working capital is justified in amounts that do not lead to a reduction in core activities, otherwise it leads to a decrease in the solvency of the enterprise and difficulties in carrying out its operating activities.

The intermediate solvency and liquidity ratio makes it possible to assess solvency better than the current liquidity ratio, since it includes their most liquid part in the calculation of assets. It is calculated as the ratio of the amount of cash, short-term financial investments and accounts receivable to the amount of short-term accounts payable. Inventories, the forced sale of which may result in losses, are excluded when calculating this coefficient.

The absolute liquidity ratio is calculated as the ratio of the amount of cash and short-term financial investments to the amount of short-term accounts payable. It shows what part of urgent obligations can be repaid with the most mobile working capital.

If necessary, based on the balance sheet and analytical data, the solvency ratio is calculated as the ratio of the cash balance to the amount of urgent payments, or as the ratio of ready means of payment (money and liquid short-term financial investments) to the amount of the most urgent (for example, up to one month) financial obligations of the enterprise .

All of these coefficients are modifications of the general indicator for assessing the ability of an enterprise to cover short-term debt while maintaining the ability to conduct statutory activities.

Solvency and liquidity ratios characterize current assets in their balance sheet valuation in comparison with short-term liabilities, but do not reflect the quality of assets. Current assets may include “low-quality” assets from the point of view of their possible conversion into cash in an amount equal to their book value. Thus, corporate securities and other financial assets may have a market value lower than the book value, accounts receivable may include bad or difficult to collect debts, part of the accounts receivable may not have the potential to turn into cash (advanced work, the completion of which is not confirmed by acts reporting date, prepayment for products will not turn into money, but into costs and inventories).

Thus, current assets may include illiquid or low-liquidity assets in the form of bad receivables, securities, inventories, finished products, goods, poorly performed work; the enterprise may have insufficient inventory available for production activities. All this is a consequence of non-payments, market instability, including the stock market, ineffective use of existing assets by the enterprise and a number of other reasons. In this case, despite a possible positive assessment of solvency based on the ratios, the enterprise may experience a shortage of cash for current payments on obligations and (or) operating activities. That is, solvency indicators may be quite high, while the company will not be able to pay its obligations on time. In this regard, it is important to make not only a general assessment of solvency ratios, but also the real ability of the enterprise to repay its current debts.

It should be noted that when calculating the current solvency ratio using the official methodology, the influence of the structure of current assets on the value of this indicator is not taken into account.

To predict real solvency, it is necessary to consider the structure of the enterprise's current assets from the point of view of their liquidity, that is, the ability to be converted into cash within the time frame corresponding to the repayment of debt. It should be remembered that the market valuation of individual working capital, for example, accounts receivable, inventories, does not coincide with their balance sheet valuation. Accordingly, the liquidity ratios of individual working capital will differ depending on the estimates.

Relative financial performance

A relative indicator is the result of dividing one absolute indicator by another and expresses the relationship between the quantitative characteristics of socio-economic processes and phenomena. Therefore, in relation to absolute indicators, relative indicators or indicators in the form of relative values ​​are derivative, secondary. Without relative indicators, it is impossible to measure the intensity of development of the phenomenon being studied over time, to assess the level of development of one phenomenon against the background of others interconnected with it, and to carry out spatial and territorial comparisons, including at the international level.

When calculating a relative indicator, the absolute indicator located in the numerator of the resulting ratio is called current or compared. The indicator with which the comparison is made and which is in the denominator is called the basis or basis of comparison. Thus, the calculated relative value shows how many times the compared absolute indicator is greater than the base one, or what proportion of it it is, or how many units of the first are per 1,100,1000, etc. units of the second.

Relative indicators can be expressed as ratios, percentages, ppm, prodecimal, or named numbers. If the comparison base is taken as 1, then the relative indicator is expressed in coefficients; if the base is taken as 100, 1000 or 10,000, then the relative indicator is respectively expressed as a percentage (%), ppm (%0) and prodecimal (% 00).

A relative indicator obtained as a result of correlating different absolute indicators should, in most cases, be named. Its name is a combination of the names of the compared and basic indicators (for example, the production of any product in the corresponding units of measurement per capita).

All relative statistical indicators used in practice can be divided into the following types:

1) speakers;
2) plan;
3) implementation of the plan;
4) structures;
5) coordination;
6) intensity and level of economic development;
7) comparisons.

The relative indicator of dynamics is the ratio of the level of the process or phenomenon under study for a given period of time (as of a given point in time) to the level of the same process or phenomenon in the past.

The value calculated in this way shows how many times the current level exceeds the previous (basic) one or what share of the latter it is. This indicator can be expressed as a multiple or converted into a percentage.

There are relative indicators of dynamics with a constant and variable basis of comparison. If the comparison is made with the same base level, for example the first year of the period under consideration, relative indicators of dynamics with a constant base (baseline) are obtained. When calculating relative dynamics indicators with a variable base (chain), comparison is carried out with the previous level, i.e. the basis of relative magnitude changes successively.

Important financial indicators

One of the most important elements of the planning process is the preparation of business plans. This term became widespread in the country relatively recently - only in the early 90s.

A business plan is a document that reflects in a concentrated form the core indicators that justify the feasibility of a certain project; it clearly and clearly reveals the essence of the proposed new direction of the company’s activities. The absence of such a document leads to the ineffective distribution of limited financial and material resources, and does not allow concentrating the efforts of all personnel on solving the most promising problems creates difficulties for carrying out effective control due to the lack of another generalizing document that allows assessing the degree of deviation of the actually achieved results from the planned ones.

It can be said without exaggeration that a business plan is one of the most effective tools in the arsenal of the top management of a company, regardless of its size, scope and scale of activity. Before starting a business activity, you need to be sure that it will generate income sufficient to ensure the normal life of the enterprise, service current payments to suppliers and creditors, and expand production. A business plan not only makes it possible to justify how much money will be needed for this, but and is a certain standard by which the company’s activities are assessed. From the perspective of economic theory, this document performs four functions.

The first function is related to the possibility of using a business plan to formulate a development concept, i.e. business strategies. This function is extremely necessary during the creation of a company, as well as when developing fundamentally new areas of activity. In this case, the business plan is used as a kind of formalized means of qualitative and quantitative justification of the feasibility and correctness of the chosen course. The second function is planning itself. It is necessary for the economic assessment of the chosen direction of activity and identification of the main guidelines, and in the case of the implementation of a business plan - to monitor its implementation. The third function is to attract loans and credits in order to insure oneself against the very possible non-repayment of loans provided by banks As a rule, they require - and their demands should be recognized as justified - not only guarantees and real collateral, but also a carefully developed concept of business strategy. Not a single serious lender or bank will issue loans for a new business if it is not provided with a convincing and justified plan for the company’s work, therefore a well-prepared business plan becomes one of the main factors in deciding the issue of attracting sources of financing. The fourth function is advertising and propaganda. It is necessary to attract potential partners to a new business who can invest their own capital in the planned project or help mobilize other sources. In this case, a business plan can be developed as a document designed to convince potential partners or investors of the prospects of a future business and the possibility of personal participation in it.

The volume, degree of detail and structure of the business plan are determined by the purpose and specifics of the business entity, its size, and field of activity. However, in any of its variants, we must present answers to the most common questions: who, what, when, in what way, at what cost and how effectively to carry out their business?

A business plan is developed for a year or a longer period depending on the scale of the target project. The shorter the planned period, the more detailed the elaboration of the main aspects of the activity should be. If the project is designed for several years, the main indicators and guidelines for the first year are presented by month; for subsequent years, they are usually limited to annual data.

Naturally, there are no forms strictly regulating a business plan and its structure; they depend on the purpose of the business plan, the characteristics of the enterprise, the products manufactured, and a number of other factors.

However, any business plan must sufficiently clearly and convincingly justify the following issues:

The essence of the business (project);
- material, technical, resource and technological support;
- marketing activities;
- organization of the business, including its staffing;
- degree of reliability and characteristics of means to improve it;
- financial support.

The financial section occupies a special place in the structure of the business plan, since it is a generalization of the previous stages of planning in monetary terms.

The objectives of this section are:

Determining the size and timing of investments required to implement the business plan;
- calculation of planned profit by year (quarter);
- determination and forecast of profitability of the presented version of the business plan;
- construction of forecast reporting.

The source of information for this section is accounting and reporting data, information from individual sections of the business plan and, above all, forecasts of sales volumes and production and distribution costs. The main results of this planning stage, that is, the essence of the section, are forecast versions of the profit and loss statement and cash flow statement built by year; in the calculation process, data on planned sales volumes, production costs broken down by individual items, and commercial expenses are used. It is recommended to additionally calculate the point of critical sales volume (payback) of the project, this will allow us to establish the relationship between profit, sales volume and cost of products sold. The main idea of ​​the calculations obtained is to determine the minimum volume of sales to it, ensuring break-even production and sales of a certain type of product. The calculation can be performed either graphically or analytically.

A cash flow forecast is necessary, since a change in profit is not necessarily accompanied by a corresponding change in funds in the account (the moment of product sales does not always coincide with the actual receipt of money; some payments are made quarterly or once a year, depreciation reduces profit, but this does not affect the amount of cash) Therefore, for effective management it is important to plan not only the profit margin, but also cash flow, this allows you to coordinate the real need for money with its availability.

The final summary section of the business plan is the financing strategy. Based on forecasts of financial indicators, a forecast of sources of funds for the implementation of the planned business is developed.

This section should provide answers to the following questions:

How much funds are needed to implement the business plan;
- what are the sources, forms and dynamics of financing;
- what investments.

So, the process of drawing up a business plan is quite complex and requires the efforts of various departments of the company or the involvement of a third-party design organization. Financial indicators make up only a small, although very significant, part of it. All of them are connected by two forms: a profit and loss statement and a cash flow statement, consisting of forecast data. The degree of detail of the data required (for example, the nomenclature of items of production and distribution costs) is determined by the complexity of the project, the degree of confidentiality, the circle of persons for whom a business plan is drawn up, etc.

Production and financial indicators

One of the most important factors in increasing the volume of production at industrial enterprises is the provision of their fixed assets in the required quantity and range and their more complete and efficient use.

The objectives of the analysis are to determine the provision of the enterprise and its structural divisions with fixed assets and the level of their use according to general and specific indicators; establish the reasons for changes in their level; calculate the impact of the use of fixed assets on the volume of production and other indicators; study the degree of utilization of the production capacity of the enterprise and equipment; identify reserves for increasing the efficiency of use of fixed assets.

Sources of data for analysis: business plan of the enterprise, technical development plan, form No. 1 “Balance sheet of the enterprise”, form No. 5 “Appendix to the balance sheet of the enterprise” section. 2 "Composition and movement of fixed assets", form No. 11 "Report on the availability and movement of fixed assets", BM form "Balance of production capacity", data on the revaluation of fixed assets (form No. 1-revaluation), inventory cards for recording fixed assets, design - estimates, technical documentation, etc.

Fixed assets of the enterprise are divided into industrial-production and non-industrial, as well as funds for non-production purposes. The production capacity of an enterprise is determined by industrial production assets. In addition, it is customary to distinguish the active part (working machines and equipment) and the passive part of funds, as well as separate subgroups in accordance with their functional purpose (industrial buildings, warehouses, working and power machines, equipment, measuring instruments and devices, vehicles and etc.). Such detail is necessary to identify reserves for increasing the efficiency of using fixed assets based on optimizing their structure. Of great interest in this case is the ratio of the active and passive parts, power and working machines, since capital productivity, capital profitability and the financial condition of the enterprise largely depend on their optimal combination.

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Let's look at the 12 main ratios of financial analysis of an enterprise. Due to their wide variety, it is often difficult to understand which ones are basic and which are not. Therefore, I tried to highlight the main indicators that fully describe the financial and economic activities of the enterprise.

In the activity of an enterprise, its two properties always collide: its solvency and its efficiency. If the solvency of the enterprise increases, then efficiency decreases. One can observe an inverse relationship between them. Both solvency and operational efficiency can be described by coefficients. You can focus on these two groups of coefficients, however, it is better to split them in half. Thus, the Solvency group is divided into Liquidity and Financial Stability, and the Enterprise Efficiency group is divided into Profitability and Business Activity.

We divide all financial analysis ratios into four large groups of indicators.

1. Liquidity ( short-term solvency),
2. Financial stability ( long-term solvency),
3. Profitability ( financial efficiency),
4. Business activity ( non-financial efficiency).

The table below shows the division into groups.

In each group we will select only the top 3 coefficients, in the end we will get a total of 12 coefficients. These will be the most important and main coefficients, because in my experience they are the ones that most fully describe the activities of the enterprise. The remaining coefficients that are not included in the top, as a rule, are a consequence of these. Let's get down to business!

Top 3 liquidity ratios

Let's start with the golden three of liquidity ratios. These three ratios provide a complete understanding of the liquidity of the enterprise. This includes three coefficients:

1. Current ratio,
2. Absolute liquidity ratio,
3. Quick ratio.

Who uses liquidity ratios?

The most popular among all ratios, it is used primarily by investors in assessing the liquidity of an enterprise.

Interesting for suppliers. It shows the company’s ability to pay contractors-suppliers.

Calculated by lenders to assess the quick solvency of an enterprise when issuing loans.

The table below shows the formula for calculating the three most important liquidity ratios and their standard values.

	Odds	Formula	Calculation	Standard
1	Current ratio	Current ratio = Current assets/Current liabilities	Ktl= p.1200/ (p.1510+p.1520)
2	Absolute liquidity ratio	Absolute liquidity ratio = (Cash + Short-term financial investments) / Current liabilities	Cable = page 1250/(p.1510+p.1520)
3	Quick ratio	Quick ratio = (Current assets - Inventories) / Current liabilities	Kbl= (p.1250+p.1240)/(p.1510+p.1520)

Top 3 financial stability ratios

Let's move on to consider the three main factors of financial stability. The key difference between liquidity ratios and financial stability ratios is that the first group (liquidity) reflects short-term solvency, and the latter (financial stability) reflects long-term solvency. But in fact, both liquidity ratios and financial stability ratios reflect the solvency of an enterprise and how it can pay off its debts.

1. Autonomy coefficient,
2. Capitalization rate,
3. Provision ratio of own working capital.

Autonomy coefficient(financial independence) is used by financial analysts for their own diagnostics of their enterprise for financial stability, as well as by arbitration managers (in accordance with the Decree of the Government of the Russian Federation of June 25, 2003 No. 367 “On approval of the rules for conducting financial analysis by arbitration managers”).

Capitalization rate important for investors who analyze it to evaluate investments in a particular company. A company with a large capitalization ratio will be more preferable for investment. Too high values ​​of the coefficient are not very good for the investor, since the profitability of the enterprise and thereby the income of the investor decreases. In addition, the coefficient is calculated by lenders; the lower the value, the more preferable it is to provide a loan.

recommendatory(according to the Decree of the Government of the Russian Federation of May 20, 1994 No. 498 “On some measures to implement legislation on the insolvency (bankruptcy) of an enterprise", which became invalid in accordance with Decree 218 of April 15, 2003) is used by arbitration managers. This ratio can also be attributed to the Liquidity group, but here we will assign it to the Financial Stability group.

The table below presents the formula for calculating the three most important financial stability ratios and their standard values.

	Odds	Formula	Calculation	Standard
1	Autonomy coefficient	Autonomy ratio = Equity/Assets	Kavt = page 1300/p.1600
2	Capitalization rate	Capitalization ratio = (Long-term liabilities + Short-term liabilities)/Equity	Kcap=(p.1400+p.1500)/p.1300
3	Provision ratio of own working capital	Working capital ratio = (Equity capital - Non-current assets)/Current assets	Kosos=(p.1300-p.1100)/p.1200

Top 3 profitability ratios

Let's move on to consider the three most important profitability ratios. These ratios show the effectiveness of cash management at the enterprise.

This group of indicators includes three coefficients:

1. Return on assets (ROA),
2. Return on equity (ROE),
3. Return on Sales (ROS).

Who uses financial stability ratios?

Return on assets ratio(ROA) is used by financial analysts to diagnose the performance of a business in terms of profitability. The ratio shows the financial return from the use of the enterprise's assets.

Return on equity ratio(ROE) is of interest to business owners and investors. It shows how effectively the money invested in the enterprise was used.

Return on sales ratio(ROS) is used by the sales manager, investors and the owner of the enterprise. The coefficient shows the efficiency of sales of the main products of the enterprise, plus it allows you to determine the share of cost in sales. It should be noted that what is important is not how many products the company sold, but how much net profit it earned from these sales.

The table below shows the formula for calculating the three most important profitability ratios and their standard values.

	Odds	Formula	Calculation	Standard
1	Return on assets (ROA)	Return on assets ratio = Net profit / Assets	ROA = p.2400/p.1600
2	Return on equity (ROE)	Return on Equity Ratio = Net Profit/Equity	ROE = line 2400/line 1300
3	Return on Sales (ROS)	Return on Sales Ratio = Net Profit/Revenue	ROS = p.2400/p.2110

Top 3 business activity ratios

Let's move on to consider the three most important coefficients of business activity (turnover). The difference between this group of coefficients and the group of Profitability coefficients is that they show the non-financial efficiency of the enterprise.

This group of indicators includes three coefficients:

1. Accounts receivable turnover ratio,
2. Accounts payable turnover ratio,
3. Inventory turnover ratio.

Who uses business activity ratios?

Used by the CEO, commercial director, head of sales, sales managers, financial director and financial managers. The coefficient shows how effectively the interaction between our enterprise and our counterparties is structured.

It is used primarily to determine ways to increase the liquidity of an enterprise and is of interest to the owners and creditors of the enterprise. It shows how many times in the reporting period (usually a year, but it can also be a month or a quarter) the company repaid its debts to creditors.

Can be used by commercial director, head of sales department and sales managers. It determines the efficiency of inventory management in an enterprise.

The table below presents the formula for calculating the three most important business activity ratios and their standard values. There is a small point in the calculation formula. The data in the denominator are usually taken as averages, i.e. The value of the indicator at the beginning of the reporting period is added up with the end one and divided by 2. Therefore, in the formulas, the denominator is 0.5 everywhere.

	Odds	Formula	Calculation	Standard
1	Accounts receivable turnover ratio	Accounts Receivable Turnover Ratio = Sales Revenue/Average Accounts Receivable	Code = p.2110/(p.1230np.+p.1230kp.)*0.5	dynamics
2	Accounts payable turnover ratio	Accounts payable turnover ratio= Sales revenue/Average accounts payable	Kokz=p.2110/(p.1520np.+p.1520kp.)*0.5	dynamics
3	Inventory turnover ratio	Inventory Turnover Ratio = Sales Revenue/Average Inventory	Koz = line 2110/(line 1210np.+line 1210kp.)*0.5	dynamics

Resume

Let's summarize the top 12 ratios for the financial analysis of an enterprise. Conventionally, we have identified 4 groups of enterprise performance indicators: Liquidity, Financial stability, Profitability, Business activity. In each group, we have identified the top 3 most important financial ratios. The resulting 12 indicators fully reflect all financial and economic activities of the enterprise. It is with their calculation that financial analysis should begin. A calculation formula is provided for each coefficient, so you will not have any difficulties calculating it for your enterprise.