Autonomy coefficient(financial independence ratio) characterizes the ratio of equity capital to the total amount of capital (assets) of the organization. The ratio shows how independent the organization is from creditors. The lower the value of the coefficient, the more dependent the organization is on borrowed sources of financing, the less stable its financial position.

Calculation (formula)

Autonomy ratio = Equity / Assets

Both the numerator and the denominator of the formula are reflected in the organization’s balance sheet, where the value of assets is always equal to the sum of the organization’s own and borrowed capital.

Normal value

The generally accepted normal value of the autonomy coefficient in Russian practice is 0.5 or more (optimal 0.6-0.7). In world practice, up to 30-40% of equity capital is considered the minimum acceptable. But in any case, this indicator strongly depends on the industry, or more precisely on the ratio in the structure of the organization of non-current and current assets. The greater the share of non-current assets of an organization (capital-intensive production), the more long-term sources are required to finance them, which means the greater the share of equity capital (the higher the autonomy coefficient).

An increase in the autonomy ratio indicates that the organization is increasingly relying on its own sources of funding.

In world practice, the more common one is the opposite in meaning to the autonomy coefficient, but also characterizing the ratio of equity and borrowed capital. Another similar indicator used in Western practice is the debt to equity ratio.

The autonomy coefficient characterizes the degree of financial independence from creditors. There is an opinion that the autonomy coefficient should not fall below 0.5 - 0.6.

It is practically impossible to establish a standard value for this coefficient. The normal value for a particular enterprise should be established by the analyst. The higher this value, the higher the stability of the enterprise. On the other hand, an extremely low value indicates a high financial risk. It is believed that with a low value of this coefficient it is impossible to count on trust in the enterprise from banks and other investors. buy thermal insulation material wholesale

The value of the autonomy coefficient at the beginning of the year was 0.78, indicating an increase in the financial independence of the enterprise, which allows it to attract additional funds. At the end of the year, the autonomy coefficient is 0.62, it is less than at the beginning of the year - this is caused by an increase in accounts payable, but it is above the threshold value, which guarantees that the company will pay off its obligations. The coefficient shows the share of own funds in all sources of the enterprise. In fact, the value of this indicator is calculated by analyzing the structure of the balance sheet. The main factors influencing this indicator include:

duration of the enterprise’s activity (structure of liabilities at the initial stage of the enterprise’s operation);

peculiarity of industry (the more capital-intensive the technological process, the higher the normal value of this indicator);

demand for products;

turnover indicators;

liquidity indicators.

the value of the debt-to-equity ratio shows dependence on external sources of funds. The coefficient at the beginning of the year (0.28) and the end of the year (0.62) correspond to the normal limit, but the coefficient at the end of the year has increased, which indicates the greater dependence of the enterprise on external investors and creditors (in our case, accounts payable).

This ratio characterizes the organization’s own working capital, which is necessary for its financial stability. The value of the equity ratio increased from 0.02 to 0.31, which indicates that the financial condition of the enterprise has improved. This provides great opportunities for achieving financial independence.

the agility coefficient increased from 0.01 to 0.58, which indicates an increase in the mobility of the enterprise’s own funds and increased freedom in maneuvering these funds.

the ratio of mobile and mobilized funds decreased from 0.59 (at the beginning of the year) to 0.45 (at the end of the year), this indicates that at the beginning of the year more funds were invested in current assets than at the end of the year.

the coefficient of value of industrial property changed by 2 times (0.83 at the beginning of the year and 0.4 at the end of the year, with

. – 0.5) due to the growth of accounts receivable, so we can say that the property structure has deteriorated greatly. In this case, it is advisable to attract long-term funds.

The bankruptcy threat coefficient shows the share of net current assets in the value of all assets of the enterprise. During the analyzed period, it increased more than 2 times. This means that the company is not in danger of bankruptcy.

The autonomy coefficient is an important indicator of the success of any enterprise. It refers to financial stability ratios. This technique allows you to evaluate the activities of an organization in the long term and, based on the data obtained, improve their condition in the planning period.

General characteristics

The autonomy coefficient is an indicator of the degree of freedom of an enterprise from borrowed capital. It reflects part of own liabilities in the structure of the balance sheet currency. An enterprise, of course, can use borrowed funds to increase its profits. However, the payment for the use of investors' capital should not exceed the expected profit.

The low value of this indicator indicates the rather low attractiveness of the company's activities for new creditors.

The autonomy coefficient is used by arbitration managers when analyzing the activities of an enterprise. Therefore, financial management within the company should also rely on the data of the presented assessment methodology.

In the literature you can find many names for this indicator. This should not confuse the analyst, since the essence of the coefficient remains the same, regardless of its name.

Calculation formula

The generally accepted formula for determining this indicator is as follows:

KA = Own sources/Balance currency

If we rely on the data in Form No. 1 of the accounting report, then the autonomy coefficient, the formula of which was presented above, will have the following interpretation.

KA = s. 1300/s. 1600.

In financial international sources and educational literature you can find this type of formula:

EtTA = EC/TA, where EU is Equity Capital; TA - Total Assets.

Normative value

In our country, the coefficient of financial autonomy has its normative significance. This ratio should be equal to 0.5. Financial analysts believe that its optimal value is higher - 0.6-0.7.

This indicator depends on the type and direction of the company’s economic activity, as well as the country of its operation. The figure may be a little less. For example, for the USA the optimal value of the autonomy coefficient is 0.5, and for South Korea - 0.3. To be able to draw adequate conclusions, the presented indicator should be compared with its value among other enterprises in the industry. The standard value is only recommended; the decision is made in each specific case individually.

Example of calculation and analysis

In order to better understand the essence of such a criterion of a company’s activity as the autonomy coefficient, we should consider an example of its calculation at an enterprise.

Let's say the company had the amount of its own resources in the reporting period at the end of each quarter:

1 sq. - 1.876 million rubles;

2 sq. - 1.91 million rubles;

3Q. - 1.82 million rubles;

4 sq. - 1.928 million rubles.

The balance sheet currency at the end of each quarter was:

1 sq. - 3.961 million rubles;

2 sq. - 3.999 million rubles;

3Q. - 3.913 million rubles;

4 sq. - 3.88 million rubles.

The coefficient calculated for each quarter will be as follows:

K1 = 1.876/3.961 = 0.47;

K2 = 1.91/3.999 = 0.47;

K3 = 1.82/3.913 = 0.46;

K4 = 1.928/3.88 = 0.5.

The results of the analysis demonstrated that the company did not have significant changes in the aspect of the considered indicator in the reporting period, which indicates the structure of its financial condition and the harmonious management of the capital structure by the management of the enterprise. Minor changes in the amount of own liabilities are a result of the normal operating activities of the organization. The balance sheet currency did not increase by attracting innovative capital.

Having familiarized yourself with such an indicator as the autonomy coefficient, you can analyze the capital structure of the enterprise and draw conclusions about the financial stability of the object under study.

The autonomy coefficient is one of the analytical coefficients used as part of financial analysis to obtain information about the financial stability of an enterprise. We'll talk about it in our article.

The autonomy coefficient is calculated as the ratio of balance sheet indicators

What does the financial autonomy ratio show?

Financial independence (autonomy) coefficient and alternative coefficients

Autonomy coefficient - standard value

The autonomy coefficient is calculated as the ratio of balance sheet indicators

For the autonomy coefficient, the formula is derived by dividing the value of equity capital by the amount of assets of the enterprise:

CFA = SK / A,

KFA - coefficient of autonomy;

SK - equity capital;

A - assets.

Equity is the portion of capital that remains with an organization after deducting all liabilities. According to the balance, this is the sum of lines 1310–1370.

More details about the concept of equity capital and the methodology for calculating it can be found in the material “Equity capital on the balance sheet is...”.

Assets are the totality of an organization’s property. In the balance sheet this is line 1600.

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As a result, the formula for the balance sheet autonomy coefficient will look like:

CFA = (1310 + 1340 + 1350 + 1360 + 1370) / 1600

What does the financial autonomy ratio show?

The autonomy coefficient shows what part of the assets is formed from equity capital, for example, authorized capital, retained earnings.

A high CFA value indicates the stable operation of the enterprise.

Let's take the case when the autonomy coefficient is 0.4. This value can be explained as follows: 40% of the organization’s property is formed from its own funds.

CFA must be considered in dynamics. We can talk about strengthening financial autonomy if the coefficient has a positive trend. A decrease in value over time reflects a decrease in financial stability and the emergence of financial risks.

When studying this indicator, you also need to conduct a comparative analysis - consider the average values ​​of the coefficient for the industry.

Financial independence (autonomy) coefficient and alternative coefficients

In Europe and the USA, the financial dependence ratio is used to assess the impact of debt capital. It is opposite in meaning and inversely proportional to the autonomy coefficient. The indicator is calculated as the ratio of the enterprise's assets to equity capital and reflects the number of enterprise assets per each ruble of equity capital.

The relationship between borrowed and equity funds and the impact of this proportion on the organization is also characterized by the financial leverage ratio.

Autonomy coefficient - standard value

In the economic literature you can find different standards for the autonomy coefficient - from 0.3 to 0.7. The wide variation is explained by the fact that the autonomy of an enterprise is largely determined by its industry. In high-capacity industries, the CFA is likely to be low because bank loans are required to purchase high-tech production equipment.

During the work process, the financial analyst derives an individually acceptable autonomy ratio for a particular enterprise. The task of management is to prevent the autonomy coefficient from falling below the established critical level.

Like any analytical element, the autonomy coefficient has a dual nature. On the one hand, its growth indicates an increase in net worth and strengthening of financial independence. On the other hand, an increase in the volume of equity capital reduces its profitability. There are also times when an enterprise needs borrowed funds, for example, when expanding and modernizing production.

CFA analysis can also be carried out for the strategic assessment of counterparties-buyers. The data can be used to provide deferred payment and determine the credit limit when concluding supply contracts.

Results

The autonomy coefficient reveals the organization's dependence on credit funds. The growth of the indicator in dynamics indicates strengthening of financial independence. The value of the coefficient largely depends on the industry, so to obtain objective information it is necessary to conduct a comparative analysis of the coefficients of similar enterprises.

Source: https://nalog-nalog.ru/analiz_hozyajstvennoj_deyatelnosti_ahd/chto_pokazyvaet_koefficient_avtonomii_formula_po_balansu/

Autonomy coefficient is an indicator of the stability of the company’s financial position

The autonomy ratio is a convenient and effective indicator of the financial stability of a company. It is calculated as the ratio of equity capital to business assets, based on the balance sheet information (Form No. 1).

The meaning of Equity to Total Assets is of interest to partners, creditors, investors, and owners. Its standard value is from 0.5.

If the indicator approaches one, then the company is stable, but does not use debt financing enough, which hinders its growth.

Lenders are willing to cooperate with companies that are able to repay their financial obligations on time. That is why they assess in advance whether the company is able to cover its obligations with its own capital and reserves. This criterion also characterizes the financial stability of the business.

Autonomy coefficient(Equity to Total Assets - EQ/TA, KA) or indicator of financial independence is a relative financial indicator that allows you to determine the degree of dependence of a company on debt financing, as well as its ability to repay obligations using its own funds.

Reference! CA is used in the practice of arbitration managers, who are obliged to establish the financial condition of the company before starting bankruptcy proceedings in relation to it (Resolution of the Government of the Russian Federation of June 25, 2003 No. 367 “On approval of the rules for conducting financial analysis by an arbitration manager”).

Analysts use the financial independence ratio to assess the financial strength of a business and assess the likelihood of its bankruptcy.

Reference! The inverse of the autonomy indicator is the financial dependence coefficient, and its analogue is the bankruptcy forecast coefficient.

The reduction in Equity to Total Assets is the first sign that the company requires checking for the likelihood of bankruptcy (bankruptcy forecast coefficient, capitalization ratio, etc.). If this trend is prolonged, then investors and business lenders should consider their injections.

Formula for calculating the autonomy coefficient

The current value of the EQ/TA indicator can be determined on the basis of information from reporting form No. 1 - balance sheet. To do this, you need to take information from it:

• Total assets (p. 1300).
• Total equity capital and reserves (p. 1700).

Important point! When calculating the KA indicator, all assets are taken into account, regardless of their degree of liquidity.

The theory of financial analysis uses the following formula for determining EQ/TA:

KA = SK/SA, where:

CA – total assets;

SC – equity capital and reserve reserves.

In the practice of Russian companies, the above formula is expressed through the lines of the balance sheet (form No. 1):

KA = page 1300 / page 1700

Important point! If you add long-term liabilities to equity when calculating, you get a financial stability ratio.

Standard indicator value

The Equity to Total Assets indicator can be applied to organizations of any sector of the economy, any scale of activity and form of ownership. Its normative meaning is also universal and uniform for all business entities.

Important point! When conducting detailed financial analysis, they compare the obtained value with the average indicators in the selected sector of the economy.

When analyzing the indicator, it is important to take into account some assumptions:

• the higher the value of the financial autonomy indicator, the more stable the position of the enterprise seems;
• if the autonomy coefficient is close to 1, then it is believed that business development is hampered by insufficient use of debt financing.

Examples of coefficient calculation

The calculation and analysis of the EQ/TA indicator is most conveniently presented using the example of specific Russian companies. The objects of study were selected:

• oil company PJSC Bashneft;
• one of the leaders in online retail trade NEPAO Yulmart.

Conclusion! An analysis of the financial independence of PJSC Bashneft showed that in 2015-2017. the company is becoming increasingly dependent on debt sources of financing. In 2017, the indicator falls below the normative limit. This state of affairs is due to the reorganization of the oil giant in 2015, which led to a gradual reduction in the amount of equity capital.

Conclusion! The Yulmart company's degree of independence from external sources of financing is growing due to the fact that, in conditions of an unstable macroeconomic situation and the volatility of the ruble exchange rate, it decided to follow the strategy of using its own sources of financing its activities.

The overall result of the analysis: the position of the Yulmart trading company in 2017 is more stable than that of the oil giant Bashneft. The sample shows an algorithm for using the autonomy coefficient formula in the Excel spreadsheet editor.

Questions and answers on the topic

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Source: http://MoneyMakerFactory.ru/spravochnik/koeffitsient-avtonomii/

Financial stability ratios

One of the characteristics of a stable position of an enterprise is its financial stability.

Below financial stability ratios, characterize independence for each element of the enterprise’s assets and for property as a whole, making it possible to measure whether the company is financially stable enough.

Autonomy coefficient

Financial dependency ratio

Debt to equity ratio

Maneuverability coefficient of own working capital

Ratio of mobile and immobilized assets

Working capital coverage ratio from own sources of financing

Own funds ratio

Inventory coverage ratio with own funds

Capital preservation ratio

The simplest financial stability ratios characterize the relationship between assets and liabilities as a whole, without taking into account their structure. The most important indicator of this group is the coefficient of autonomy (or financial independence, or concentration of equity capital in assets).

The stable financial position of an enterprise is the result of skillful management of the entire set of production and economic factors that determine the results of the enterprise.

Financial stability is determined both by the stability of the economic environment within which the enterprise operates, and by the results of its functioning, its active and effective response to changes in internal and external factors.

The main task of analyzing the financial stability of an enterprise is to assess the degree of independence from borrowed sources of financing. In the process of analysis, it is necessary to answer the questions: how independent is the company from a financial point of view, is the level of this independence increasing or decreasing, and whether the state of its assets and liabilities meets the objectives of its financial and economic activities.

In the classical theory of financial reporting analysis, financial stability is understood as such a ratio of assets and liabilities of an organization that guarantees a certain level of risk of insolvency of the organization.

Thus, as indicators of financial stability, coefficients characterizing the structure of assets and liabilities of the balance sheet, as well as the relationship between individual items of assets and liabilities ( relative indicators of financial stability).

Autonomy coefficient (financial independence, concentration of equity capital in assets)

Characterizes the independence of the enterprise from borrowed funds and shows the share of its own funds in the total cost of all funds of the enterprise. The higher the value of this coefficient, the more financially sound, stable and more independent the enterprise is from external creditors:

Autonomy (independence) coefficient = Own capital / Assets

Ka = (p. 490 + p. 640 + p. 650) / p. 700 form No. 1

Ka = page 490 / page 700

According to the form of the balance sheet since 2011, the formula has the form: Ka = line 1300 / line 1600

The normative generally accepted value of the indicator is considered to be a value of the autonomy coefficient greater than 0.5 but not more than 0.7. But it is necessary to take into account that the independence coefficient significantly depends on industry specifics (the ratio of non-current and current assets).

The higher the share of non-current assets of an enterprise (production requires a significant amount of fixed assets), the more long-term sources are needed to finance them, which means that the share of equity capital should be greater (the higher the autonomy coefficient).

Let us note that in international practice, the debt ratio (financial dependence ratio) indicator is widespread, which is the opposite in meaning to the autonomy ratio, but also characterizes the ratio of equity and borrowed capital.

A fairly high level of independence coefficient in the USA and European countries is considered to be 0.5-0.6. At the same time, the amount of liabilities does not exceed the amount of own funds, which provides creditors with an acceptable level of risk. In Asian countries (Japan, South Korea), a value of 0.3 is considered sufficient.

In the absence of justified standards, this indicator is assessed dynamically. A decreasing value indicates an increase in risk and a decrease in financial stability.

Moreover, with an increase in the share of liabilities, not only does the risk of non-repayment increase, in addition, interest expenses increase, and the company’s dependence on possible changes in interest rates increases.

Financial dependency ratio

Financial dependence coefficient, which characterizes dependence on external sources of financing (i.e., what share in the entire capital structure is borrowed funds). The indicator is widely used in the West. The indicator is defined as the ratio of total debt (the sum of short-term liabilities and long-term liabilities) and total assets.

Financial dependence ratio = Liabilities / Assets

In accordance with the Order of the Ministry of Regional Development of the Russian Federation dated April 17, 2010 No. 173, the financial dependence coefficient is determined by the formula:

Kfz = (D0 + KO - Zu + Dbp + R) / P

where, Kfz - coefficient of financial dependence; D0 - long-term liabilities; KO - short-term liabilities; Zu - debt to the founders; Dbp - deferred income; R - reserves for future expenses;

P - liabilities.

Kfz = (p. 590 + p. 690 - p. 630 - p. 640 - p. 650) / p. 700 f. No. 1

Kfz = (page 1400 + page 1500 - Zu - page 1530 - page 1540) / page 1700

Note that the line “Debt to participants (founders) for payment of income” (in the previous form - code 630) is excluded from the new form, since this debt is a payable and can be disclosed in the notes to the financial statements.

The recommended value of this coefficient should be less than 0.8. The optimal ratio is 0.5 (i.e. an equal ratio of equity and debt capital). If the indicator is less than 0.8, it means that liabilities should occupy less than 80% of the capital structure.

Debt to equity ratio

This ratio provides the most general assessment of financial stability. Shows how many units of borrowed funds account for each unit of equity:

Debt to Equity Ratio = Debt Capital / Equity Capital

Kzs = (p. 590 + p. 690 - p. 640 - p. 650) / (p. 490 + p. 640 + p. 650) form No. 1

Kzs = (p.590 + p.690) / p.490

Kzs = (page 1500 + page 1400) / page 1300

Analyze the change in the value of the indicator over time. The growth of the indicator in dynamics indicates the increasing dependence of the enterprise on external investors and creditors. The recommended Kzc value of 0.7 signals that the financial stability of the enterprise is in doubt.

The higher the value of the indicator, the higher the risk level of investors, since in case of failure to fulfill payment obligations, the possibility of bankruptcy increases.

The coefficient of maneuverability of own working capital (the coefficient of maneuverability of equity capital)

This ratio shows how much of the company's own working capital is in circulation. The agility factor must be high enough to provide flexibility in the use of own funds:

Maneuverability coefficient of own working capital = Own working capital / Own capital

Km = (page 490 - page 190) / page 490 form No. 1

Km = (page 1300 - page 1100) / page 1300

A sharp increase in this ratio cannot indicate normal activity of the enterprise, because an increase in this indicator is possible either with an increase in own working capital, or with a decrease in own sources of financing. The recommended coefficient value is 0.2 – 0.5.

Ratio of mobile and immobilized assets

Shows how many non-current assets account for each ruble of current assets:

Ratio of mobile and immobilized assets = Current assets / Non-current assets

Km/i = (page 190 + page 230) / (page 290 - page 244 - page 252) form No. 1

Km/i = page 190 / page 290

Km/i = page 1100 / page 1200

No standard values ​​have been established for this indicator.

Working capital coverage ratio from own sources of financing

The ratio shows whether the enterprise has its own funds necessary for its financial stability:

Working capital coverage ratio with own sources of financing = (Equity capital - Non-current assets) / Current assets

Ko = (p. 490 - p. 190)/(p. 290 - p. 230) form No. 1

Ko = (p. 1300 - p. 1100) / p. 1200

The methodological literature indicates that the enterprise is provided with its own sources of working capital financing with a coefficient value of ≥0.1.

Own funds ratio

The coefficient of provision with own working capital shows the sufficiency of the enterprise's own funds necessary to finance current (operating) activities, i.e. ensuring financial stability. This indicator was introduced normatively by the Order of the Federal Fund for Financial Affairs of August 12, 1994 No. 31-r, and is not widespread in Western practice of financial analysis.

The formula for calculating the working capital ratio is as follows:

Equity ratio = (Equity capital - Non-current assets) / Current assets

Xos = (p. 490 - p. 190) / p. 290 form No. 1

Xos = (p. 1300 - p. 1100) / p. 1200

According to the above order, the indicator is used as a sign of insolvency (bankruptcy) of the enterprise. The normal value of the equity ratio should be at least 0.1.

Inventory coverage ratio with own funds

The coefficient of provision of material inventories with own funds is an indicator characterizing the level of financing of inventories from the enterprise’s own sources (funds).

The formula for calculating the coefficient is:

Inventory coverage ratio with own funds = Own working capital / Inventories

Goats = (p. 490 + p. 590 - p. 190) / p. 210

Goats = (p. 1300 + p. 1400 - p. 1100) / p. 1210

In practice, there is a modified method for calculating this indicator; inventories are supplemented by costs (costs in construction in progress and advances to suppliers and contractors). In this case, the formula for calculating the ratio of supply of inventories and costs with own working capital will take the form:

Goats = (Equity + Long-term liabilities - Non-current assets) / (Inventories + Work in progress costs + Advances to suppliers and contractors)

The standard value of the coefficient lies in the range from 0.6 to 0.8, i.e. the formation of 60-80% of the enterprise's reserves should be carried out at its own expense. The higher the value of the indicator, the less dependence of the enterprise on borrowed capital in terms of the formation of reserves and, consequently, the higher the financial stability of the organization.

Capital preservation ratio

The indicator characterizes the dynamics of equity capital. The ratio is calculated as the ratio of equity at the end of the period to equity at the beginning of the period:

Equity retention ratio = Equity at the end of the period / Equity at the beginning of the period

Ksks = line 490 k.p. / page 490 n.p.

Ksks = line 1300 k.p. / page 1300 n.p.

The optimal coefficient value is greater than or equal to 1.

Note that, unlike other stability coefficients, this indicator is not structural, but dynamic, so it can correspond to the required value even if the financial situation generally deteriorates.

The rules for conducting financial analysis by an arbitration manager, indicated above in the list of standard methods for analyzing financial condition, also require calculating indicators such as:

• share of overdue accounts payable in liabilities;
• the ratio of accounts receivable to total assets.

Moreover, the accounts receivable account takes into account not only short-term and long-term accounts receivable on the balance sheet, but also “potential current assets for return,” which mean: the amount of accounts receivable written off at a loss and the amount of issued guarantees and sureties. Information about these “assets” is disclosed in a certificate attached to the balance sheet about the presence of assets recorded in off-balance sheet accounts. It is assumed that if the combination of obligations is favorable for the organization, these amounts can be received by it and used to pay off obligations.

An analysis of the stability of the financial condition as of a particular date makes it possible to find out how correctly the enterprise managed financial resources during the period preceding this date.

It is important that the state of financial resources meets the requirements of the market and meets the development needs of the enterprise, since insufficient financial stability can lead to the insolvency of the enterprise and a lack of funds for the development of production, and excess financial stability can hinder development, burdening the enterprise’s costs with excess inventories and reserves. Thus, the essence of financial sustainability is determined by the effective formation, distribution and use of financial resources.

The financial position of an enterprise is considered stable if it covers with its own funds at least half of the financial resources necessary for normal business activities, effectively uses financial resources, maintains financial, credit and accounting discipline, in other words, is solvent.

The financial position is determined based on an analysis of liquidity and solvency, as well as an assessment of financial stability. Analysis of the financial stability of a company is carried out both by the coefficient method and by analyzing the net assets indicator and by analyzing absolute indicators.

Source: http://afdanalyse.ru/publ/finansovyj_analiz/fin_koefitcienti/analiz_finansovoj_ustojchivosti/3-1-0-22

What does the autonomy coefficient show on the balance sheet?

Probably all companies whose activities are aimed at making a profit are quite naturally interested in competent financial analysis.

The financial stability of an enterprise is determined by making a series of calculations - the information base for them is the balance sheet.

An important role here is played by the autonomy coefficient, which in some sources has a “talking” name - the financial independence coefficient.

Let's discuss how to calculate the autonomy coefficient, its economic meaning, regulatory values, and also consider an example of calculation.

The autonomy coefficient is...

Economists distinguish four main groups of financial ratios:

• business activity;
• liquidity;
• profitability;
• financial stability.

The autonomy coefficient is included in the last group. There is often some confusion between liquidity and financial strength - obviously there is money everywhere... so what's the difference? The key difference in assessing a company's welfare: calculating liquidity ratios allows one to assess the company's short-term solvency, while determining financial stability is aimed at obtaining information about the long-term.

The autonomy ratio is an effective indicator to assess the financial stability and independence of a company

The autonomy ratio is the ratio of an organization's own capital to the total amount of its assets.

It is calculated to find out how dependent the company is on creditors.

The higher the value that the coefficient takes, the more stable the financial position of the company (it is autonomous, creditors cannot greatly influence the state of affairs if they suddenly demand debts).

In fact, everything is very logical - a company has independence when it is able to pay its debt obligations without affecting its normal activities. Of course, in our time, having loans is more of a necessity than a luxury.

However, today this approach to entrepreneurship is catastrophically outdated: accounts payable is not just the norm, it is even necessary for the effective development and expansion of a business.

How to change your phone number in Sberbank Online?

But there is still a catch - you cannot accumulate a wagon and a small cart of loans without increasing assets, otherwise the company’s activities will resemble a soap bubble, which, undoubtedly, is beautiful, but is extremely short-lived. Calculating the autonomy coefficient allows you to find out whether management is going too far in their desire to carefreely spend borrowed money without creating or increasing their own capital.

Advice: investments and loans are standard components of any modern business, but you should not happily respond to every letter with a commercial offer for a loan, since first you need to decide on the financial stability of the company. Perhaps another debt is an overwhelming burden that can ruin your life’s work.

What does the autonomy coefficient show?

If you think about the meaning of the calculation formula, then everything will become extremely clear - the autonomy coefficient allows you to find out how much the company depends on creditors; it is a kind of indicator of stability. The higher its value, the more stable the company is financially, and vice versa.

But you shouldn’t go to the extreme and assume that if the indicator tends to one, then the business is thriving and things are going great. Everything is different, because in such a case the enterprise can easily lose its position in the competition due to the lack of the opportunity to purchase new equipment, keeping up with progress.

Autonomy coefficient - standard value

Everything is learned by comparison, so it is not trivial to calculate the coefficient of autonomy using the formula presented above. The resulting value must be correlated with something in order to understand how things are going in the company. Experts have formulated a normative value, knowing which one can assess the financial independence of an organization. In Russia it is 0.5 or more, with the optimal independence coefficient being 0.6-0.7.

World practice operates with slightly different figures - it is believed that equity capital should be at least 30-40% of the balance sheet currency.

But in Russian reality, this is too little, since our business is periodically stormy due to frequent economic crises, which leave behind many problems for entrepreneurs.

In any case, it must be borne in mind that the value of the autonomy coefficient naturally and significantly depends on the industry to which the company belongs.

An example of calculating the autonomy coefficient

For those who have an idea of ​​the process of drawing up basic accounting entries and understand how they affect the balance sheet of an enterprise, it will not be difficult to calculate the autonomy coefficient and use it to assess the financial position of the company.

Example: Let's calculate the autonomy coefficient according to the balance sheet of an organization (for 2017) engaged in the sale of building materials.

ActivePassive

The required values ​​that should be substituted into the formula are highlighted in red rectangles. For convenience, let's summarize the data in a table:

The calculations made allow us to draw the following conclusion: the company does not have sufficient financial independence, because the autonomy coefficient deviates significantly for the worse from the standard value of 0.5. That is, there is no talk of stability in this situation, since there are very few own funds.

Let's sum it up

Any business related to numbers (be it analyzing a balance sheet or accounting for gasoline using fuel cards) requires care and a clear understanding of the situation. Calculating the autonomy ratio will take a couple of minutes and will not be difficult even for beginners in the field of financial calculations, but it will allow you to fairly accurately assess the state of affairs of the company and its independence from creditors.

According to Russian standards, the autonomy coefficient should exceed 0.5, but in each situation it is necessary to take into account the specifics of a particular organization and its belonging to a certain industry: that is, for an adequate analysis it is necessary to know what indicators other stable companies from the same field of activity have.

Autonomy coefficient is one of the key indicators of the group, so it is often called financial independence ratio. In the economic literature there are also other names for the autonomy coefficient, used as synonyms:

• independence coefficient;
• ownership ratio;
• equity concentration ratio;
• Equity Ratio (Equity to Total Assets).

The autonomy ratio is a financial formula that reflects the share of equity capital used to finance the company's assets. The autonomy ratio excludes any debt financing used by the company to raise funds.

What is the autonomy coefficient?

Autonomy coefficient- this is calculated as the company’s ratio to its . The values ​​of these two components are often taken from (the so-called), but the ratio can also be calculated using assets and capital if companies are listed on.

The balance sheet formula is as follows:

Assets = Capital + Liabilities

Consequently, all assets of an organization are formed from two sources: capital (own funds) and liabilities (borrowed funds). Based on the above formula, it follows that the company’s capital is equal to the amount of assets minus liabilities, or the so-called amount. That's why it is sometimes said that autonomy coefficient represents the ratio net assets To common assets enterprises.

The autonomy ratio is a fairly popular financial ratio, especially in Europe and Japan, while in the United States the ratio commonly used is , which is calculated as a ratio to .

Calculation of the autonomy coefficient

The financial independence ratio is calculated by dividing a company's equity by its total assets. To the amount own funds (equity capital) refers to target (special) financial funds, and other items reflected in the “capital” line of the balance sheet. Total assets represent the sum of all and taken into account on .

Formula for calculating the autonomy coefficient:

Autonomy ratio = Equity / Total assets

An example of calculating the autonomy coefficient

The company's balance sheet shows that equity is $540,000 and total assets are $1 million. The autonomy coefficient in this case will be:

Autonomy coefficient = 540,000 / 1,000,000 = 0.54

This means that the assets that the company has are 54% financed by business owners, i.e. For every $1 of assets, the owners' contribution is 54 cents, so 46 cents is the contribution.

Autonomy coefficient value

The autonomy coefficient reflects the overall level of the company and allows you to analyze. A higher equity ratio (autonomy) or higher shareholder contribution to capital indicates a better long-term company. A low autonomy coefficient, on the contrary, carries a higher one.

The ownership ratio highlights two important financial concepts for a solvent and sustainable business. The first component shows what proportion of the company's assets belongs directly to the owners (shareholders). In other words, how many assets will remain “in the hands” of business owners after repaying all existing ones.

The second component, on the contrary, shows how effectively the company uses borrowed resources. If the autonomy ratio shows how many of the company's assets were financed by shareholders (investors), then the reverse calculation (1 - autonomy ratio) shows the share of assets that were financed by creditors.

In world practice, the normative value of the autonomy coefficient is at the level 0.5 and above. The higher the better, because a higher value of the autonomy coefficient indicates a higher level of financial stability of the company, and, accordingly, a higher level of . For companies with a high rate, it is not only easier to attract borrowed funds, in particular, but also cheaper - it can be close to the rate.

A low value of the autonomy coefficient indicates increased risks for creditors, which can provoke not only payments, but also lead the company to. Therefore, creditors fix the maximum permissible values ​​of the equity capital concentration ratio. For example, it sets the maximum permissible value of the autonomy coefficient at 0.3 (taking into account the size of the loan that the potential intends to attract). In domestic practice, banks sometimes issue loans to borrowers with a low autonomy coefficient (0.3 and below), but only against highly liquid collateral or after provision or a third party with a high level of solvency.

Standard values ​​for the autonomy coefficient may also vary depending on the industry of the company. Thus, for enterprises in capital-intensive industries, the value of the financial independence coefficient will be significantly higher than, for example, for companies in the trade sector. This is explained by the fact that in practice, long-term (non-current) assets are usually financed from equity capital.

The importance of the autonomy coefficient

The autonomy ratio is a good indicator of the level of financial leverage used by a company. A low equity concentration ratio will produce good results for shareholders if the company earns a return on assets that exceeds the interest rate paid to creditors.

The importance of the autonomy coefficient is as follows. Companies with a higher equity ratio must pay less interest, so the “saved” money can be used to grow the company or make an additional payment. On the contrary, a company with a low autonomy ratio is more susceptible to losses, since a significant part of its income is spent on paying interest to creditors.

Additionally, a high equity ratio allows for greater access to capital at lower interest rates. On the other hand, the low autonomy coefficient makes it difficult to obtain and. Even if such companies manage to obtain a loan, its cost will be significantly higher.