home Ideas Financial analysis is all about financial analysis. Analysis of the financial condition of the enterprise

Financial analysis is all about financial analysis. Analysis of the financial condition of the enterprise

As a result of studying the material in this chapter, the student should:

know

theoretical foundations of financial analysis;
types of analysis financial condition enterprises;

be able to

systematize and summarize information about the financial condition of the enterprise;
use various modern methods for analyzing the financial condition;

own

special terminology for financial analysis;
skills of professional reasoning when choosing one or another method of financial analysis.

Financial analysis in the enterprise management system

AT modern conditions financial analysis is one of the main tools for managing the financial condition of an enterprise; it is based on the analysis and evaluation of the effectiveness of managing the financial resources of economic entities by calculating various indicators, parameters, coefficients and multipliers.

The financial analysis used both by the enterprise itself and by external market participants in the implementation of various transactions or to provide information about the financial condition of the enterprise to third parties. In operational activities, financial analysis is used to assess the financial condition of the enterprise, establish restrictions in the formation of plans and budgets of the enterprise, evaluate the predicted and achieved results of activities, etc.

Analysis(from Greek. analysis- decomposition)- scientific method research(cognition) of phenomena and processes, based on lies studying components, elements of the system under study 1 . Analysis allows you to identify the essence, patterns, trends and relationships of various processes, including economic activity at all levels (in the country, industry, region, enterprise) and in different sectors of the economy (industrial, investment, social), which makes it possible to study the inner essence and nature of the issue depending on and taking into account factors.

Theoretical, methodological and practical aspects of the financial analysis of enterprises and organizations are quite deeply and fully reflected in the works of a number of domestic authors: M.I. Bakanova, I.T. Balabanova, V.I. Boronenkova, V. V. Bocharova, D. Kh. Bukharova, L. T. Gilyarovskaya, A. I. Ginzburg, L. V. Dontsova, D. A. Endovitsky, O. V. Efimova, N. N. Ilyicheva, V. V. Kovaleva, L. I. Kravchenko, S. I. Krylova, E. I. Krylova, N. II. Lyubutina, A. A. Maksyutova, M. V. Melnik, I. E. Mizikovsky, N. S. Necheukhina, N. A. Nikiforova, L. N. Pavlova, V. V. Pankova, G. B. Polyak, V. M. Rodionova, N. A. Rusak, G. V. Savitskaya, N. N. Selezneva, E. M. Sorokina, L. S. Sosnenko, E. S. Stoyanova, A. F. Chernenko, V. A. Chernov, A. D. Sheremet, L. F. Shilova and others. A significant contribution to the study of the problem was made by foreign scientists: L. A. Bernstein, J. K. Van Horn, T. R. Karlin, A. R. McMin, D. Stone, C. Hedderwick, E. Helfert, K. Hit- ching and others.

In Russia, there are two main approaches to defining the essence of financial analysis. According to the first financial analysis covers all sections of the analytical work that are included in the system financial management, i.e. associated with the management of the finances of an economic entity, taking into account the influence of its environment, including various types of markets, including the capital market. The second approach limits its scope to the analysis of financial statements only (O. V. Efimova, A. D. Sheremet, E. V. Negashev).

A more complete definition of this term is given in the “Financial and Credit Encyclopedic Dictionary” by A. G. Gryaznova: “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 near and long term.” The purpose of financial analysis is to determine the most effective ways achievement of profitability of the company, the main tasks - the analysis of profitability and risks of the enterprise.

Thus, the financial analysis should be considered as a set of analytical procedures, consisting in the identification, systematization and analytical processing of available data of a financial nature, the result of which is to provide the user with information that can serve as the basis for making management decisions regarding the object of analysis.

Financial analysis is part of the analysis of the financial and economic activities of an enterprise, which consists of two interrelated sections: financial and managerial analysis (Fig. 1.1).

Rice. 1.1.

Features of external financial analysis are:

plurality of subjects of analysis;
the presence of different goals and interests of the subjects of analysis;
the existence of standard methods, accounting and reporting standards;
orientation of the analysis only to the public, external reporting of the enterprise;
limitation of analysis tasks;
maximum openness of the analysis results.

Features of management analysis are:

orientation of the results of the analysis to the goals and interests of the enterprise management;
use of all available sources of information for analysis;
lack of regulation of the analysis procedure by government agencies;
the complexity of the analysis, the study of all aspects of the enterprise;
integration of accounting, analysis, planning and decision making;
maximum closeness of the analysis results.

The subject of financial analysis is the totality of the analyzed financial relations, flows financial resources, cause-and-effect relationships and methods for their study.

The object of financial analysis is the financial and economic activity of the enterprise, in particular the processes associated with changes in the resource base of the enterprise (own and borrowed capital); assets of the enterprise (current and non-current); income and expenses of the enterprise; positive and negative cash flows of the enterprise, etc.

Financial analysis allows you to identify changes in the indicators of the financial condition of the enterprise; determine the factors affecting the financial condition of the enterprise; assess the financial position of the enterprise on a certain date; assess the quantitative and qualitative changes in the financial condition of the enterprise; determine trends in the financial condition of the enterprise.

Thus, the main tasks of financial analysis are:

study of the theoretical foundations of financial analysis;
general assessment of the financial condition of the enterprise (assessment of the composition and structure of sources of financial resources, analysis of sources of own and borrowed funds, analysis of accounts payable, assessment of the composition and structure of assets, their condition and movement, analysis of fixed and working capital, analysis of receivables);
analysis financial stability;
solvency and liquidity analysis;
cash flow analysis;
analysis of the efficiency of capital use;
assessment of the creditworthiness of the enterprise;
analysis business activity enterprises;
forecasting the financial performance of the enterprise;
analysis of the financial condition of insolvent enterprises and search for ways to prevent bankruptcy.

In the management system of any enterprise, there is always a large number of periodically recurring functions, processes and actions for making managerial decisions. To understand the role and place of financial analysis in making managerial decisions, it is necessary to disclose its content; in economic theory it boils down to the following. To make informed management decisions, it is necessary to have relevant information that fully characterizes the state of the object under study. By itself, information cannot yet serve as the basis for making managerial decisions, since its analytical processing is necessary. In addition, depending on the target setting and methods of analytical processing of information, different types of management decisions are made.

Financial analysis is not only the most important component of any of the management functions, but is itself a type of management activities preceding the adoption of managerial decisions aimed at the sustainable development of the organization. Thus, financial analysis occupies an intermediate place between the collection of information and the decision-making process, and, depending on the nature of the decision, uses appropriate methods (Fig. 1.2).

Rice. 1.2.

The financial analysis Russian enterprises in terms of the types and forms used, it does not fundamentally differ from similar procedures carried out within the framework of the traditional (Western) approach. The conducted studies allow us to group the existing forms and types of financial analysis according to various classification criteria (Table 1.1).

financial	- Based on data only from financial statements, which contain limited information about the activities of the enterprise; - characterized by a variety of goals and interests of the subjects of analysis, the presence of standard methods, accounting and reporting standards; - focuses only on public, external reporting; - involves maximum openness of the analysis results for users of information about the activities of the enterprise
Interior financial	- Involves the use of a variety of information available within the enterprise to conduct meaningful deep financial analysis; - characterized by a narrow circle of subjects of analysis, the maximum closeness of the results of the analysis, the orientation of the results of the analysis only to the internal user; - allows the use along with standard methods of analysis of non-regulated methods of analytical research; - carried out as needed, in connection with the needs of management
According to the regularity of the analysis
Periodic financial analysis	Conducted regularly at appropriate periods of time (annual, quarterly, monthly, daily, shift, etc.)
financial	It is carried out at a time due to circumstances of a different nature
By time horizon
financial	- Conducted mainly on the database accounting and reporting of the enterprise; - allows you to evaluate the work of the organization for the past periods of time on a cumulative basis
Operational financial analysis	- Carried out for the purpose prompt response to changes in the internal and external environment that are unfavorable for the organization; - puts main task continuous monitoring and operational assessment of various parameters of the organization's functioning, identification of shortcomings and their causes

Type of analysis	Features of the
predictive financial	Represents an analysis of future results financial and economic activities of the organization; - sets the most important tasks of preparing the necessary analytical information to substantiate the long-term and current plans of the enterprise; - involves an analysis of long-term and current plans for the development of the organization, an assessment of the reality of the implementation of the planned plans

Express-	- Carried out on the basis of forms of external financial statements; - designed to be received in one to two days general idea on the financial position of the company
Thematic financial analysis	Includes the study of certain areas of financial and economic activity that are of the greatest interest at a given time
Comprehensive in-depth financial analysis	- Conducted on the basis of forms of external financial statements, as well as transcripts of reporting articles, analytical accounting data, results of an independent audit, etc.; - designed to be received in three to four weeks integrated assessment financial position of the enterprise

As a result of the financial analysis, the financial diagnostics of the enterprise is carried out and a rating is assigned to it. At the same time, the analysis financial reporting serves the interests of different user groups. The analysis of the financial condition is carried out not only by the managers and relevant services of the enterprise, but also by its founders, investors - in order to study the efficiency of the use of resources; banks - to assess lending conditions and determine the degree of risk; suppliers - for timely receipt of payments; tax authorities- to fulfill the plan for the receipt of funds to the budget, etc.

Financial analysis is the prerogative of the highest level of the management structures of an enterprise that can influence the formation of financial resources and flows Money. The effectiveness or inefficiency of private management decisions related to determining the price of a product, the size of a batch of purchases of raw materials or product deliveries, the replacement of equipment or technology, must be evaluated in terms of the overall success of the enterprise, the nature of its economic growth and the growth of overall financial efficiency.

Thus, the rationale for any management decisions is achieved primarily through a comprehensive financial analysis of the economic activity of the enterprise.

Kovalev VV, Volkova ON Analysis of economic activity of the enterprise: textbook. M.: Velby, 2010.
Financial and Credit Encyclopedic Dictionary / ed. ed. A. G. Gryaznova. M .: Finance and statistics, 2004.
Kovalev VV, Volkova ON Analysis of economic activity of the enterprise.
Sheremet L.D., Saifulin R.S. Methods of financial analysis. M.: IPFRA-M, 2000.
Bocharov VV Financial analysis. St. Petersburg: Peter, 2009.

Financial analysis is important element financial management. To ensure the effectiveness of the organization's activities in modern conditions, management needs to be able to realistically assess the financial condition of their organization, as well as the financial condition of partners and competitors.

Financial condition- a complex concept, which is characterized by a system of indicators that reflect the availability, placement and use of financial resources of the organization.

In practice, it often happens that even a well-functioning organization experiences financial difficulties associated with insufficiently rational allocation and use of available financial resources. Therefore, financial activity should be aimed at ensuring the systematic receipt and efficient use of financial resources, compliance with settlement and credit discipline, achieving a rational ratio of own and borrowed funds, financial stability for the effective functioning of the organization. An essential role in achieving a stable financial position belongs to the analysis.

With the help of financial analysis, decisions are made on:

short-term financing of the organization (replenishment of current assets);

long-term financing (capital investment in effective investment projects and issuance securities);

payment of dividends to shareholders;

mobilization of reserves for economic growth (growth in sales and profits).

The main purpose of financial analysis is to obtain a certain number of key parameters that give an objective and reasonable description of the financial condition of the organization. These are, first of all, changes in the structure of assets and liabilities, in settlements with debtors and creditors, in profit and loss.

The main objectives of financial analysis:

determination of the financial condition of the organization;

identification of changes in the financial condition in the spatio-temporal context;

establishing the main factors causing changes in the financial condition;

forecast of the main trends in financial condition.

The alternativeness of the goals of financial analysis depends on its time limits, as well as on the goals set by users of financial information.

The objectives of the study are achieved as a result of solving a number of tasks:

Preliminary review of financial statements.

Characteristics of the property of the organization: non-current and current assets.

Assessment of financial stability.

Characteristics of sources of funds (own and borrowed).

Analysis of profit and profitability.

Development of measures to improve the financial and economic activities of the organization.

These tasks express the specific goals of the analysis, taking into account the organizational, technical and methodological possibilities of its implementation. The main factors in the end are the volume and quality of analytical information.

The basic principle of studying analytical indicators is the deductive method (from general to particular).

Financial analysis is part of a general, complete analysis of economic activity, which consists of two closely related sections:

The financial analysis.

Management (production) analysis.

The division of analysis into financial and managerial is due to the division of the accounting system into financial and managerial accounting that has developed in practice. The main feature of the separation of analysis into external and internal is the nature of the information used.

External Analysis is based on published reporting data, i.e. on a very limited part of the information about the activities of the organization, which is the property of the whole society. The main source of information for external analysis is the balance sheet and its appendices.

Internal analysis uses all information about the state of affairs in the organization, including information available only to a limited circle of people who manage the organization's activities.

Scheme of business analysisorganizations

Business activity analysis

Management analysis

The financial analysis

Interior production analysis

Internal financial analysis

External financial analysis

Analysis in the justification and implementation of business plans

Analysis of the effectiveness of capital advances

Analysis in the marketing system

Analysis of absolute profit indicators

Complex economic analysis business efficiency

Analysis of relative profitability indicators

Analysis of production conditions

Analysis of liquidity, solvency and financial stability

Analysis of the use of production resources

Usage Analysis equity

Product volume analysis

Analysis of the use of borrowed funds

Product cost analysis

The division of analysis into internal and external is also associated with the goals and objectives facing each of them. Tasks of external analysis determined by the interests of users of analytical material.

Internal financial analysis aims a deeper study of the causes of the current financial condition, the effectiveness of the use of basic and working capital, the relationship of indicators of production (sales), cost and profit. To do this, additional financial accounting data (normative and planned information) is used as sources of information.

Exclusively internal is managerial analysis. It uses the whole range of economic information, is operational in nature and is completely subordinate to the will of the organization's management. Only such an analysis makes it possible to realistically assess the state of affairs in the organization, to explore the structure of the cost of not only the entire output and products sold, but also its individual types, the composition of commercial and administrative expenses, especially carefully study the nature of the responsibility of officials for the implementation of the business plan.

Management analysis data play a decisive role in developing the most important issues of the organization's competitive policy: improving technology and organizing production, creating a mechanism for achieving maximum profit. Therefore, the results of management analysis are not subject to publicity, they are used by the organization's management to make management decisions, both operational and long-term.

More clearly, the differences between the characteristics of financial and managerial analysis are presented in Table 1.

The financial condition of an enterprise is an economic category that reflects the state of capital in the process of its circulation and the ability of a business entity to self-develop at a fixed point in time.

In the process of supply, production, marketing and financial activities, there is a continuous process of capital circulation, the structure of funds and sources of their formation, the availability and need for financial resources and, as a result, the financial condition of the enterprise, the external manifestation of which is solvency, are changing.

The financial condition can be stable, unstable (pre-crisis) and crisis. The ability of an enterprise to make payments on time, finance its activities on an extended basis, withstand unforeseen shocks and maintain its solvency in adverse circumstances indicates its sound financial condition, and vice versa.

To ensure financial stability, an enterprise must have a flexible capital structure, be able to organize its movement in such a way as to ensure a constant excess of income over expenses in order to maintain solvency and create conditions for self-reproduction.

Consequently, the financial stability of an enterprise is the ability of a business entity to function and develop, to maintain a balance of its assets and liabilities in a changing internal and external environment, guaranteeing its constant solvency and investment attractiveness within the boundaries acceptable level risk .

The financial condition of the enterprise, its sustainability and stability depend on the results of its production, commercial and financial activities. If the production and financial plans are successfully implemented, then this has a positive effect on the financial position of the enterprise. And, conversely, as a result of underfulfillment of the plan for the production and sale of products, there is an increase in its cost, a decrease in revenue and the amount of profit and, as a result, a deterioration in the financial condition of the enterprise and its solvency. Consequently, a stable financial condition is not a fluke, but the result of a competent, skillful management of the entire complex of factors that determine the results of an enterprise's economic activity.

A stable financial position, in turn, has a positive impact on the implementation of production plans and the provision of production needs with the necessary resources. Therefore, financial activity as an integral part of economic activity should be aimed at ensuring the planned receipt and expenditure of financial resources, the implementation of settlement discipline, the achievement of rational proportions of equity and borrowed capital and its most efficient use.

The main goal of financial activity comes down to one strategic task - to increase the assets of the enterprise. To do this, it must constantly maintain solvency and profitability, as well as the optimal structure of the asset and liability balance.

The main objectives of the analysis of the financial condition are:

Timely identification and elimination of shortcomings in financial activities and the search for reserves to improve the financial condition of the enterprise and its solvency.

Forecasting possible financial results, economic profitability based on the actual conditions of economic activity and the availability of own and borrowed resources, developing models of financial condition for various options for using resources.

Development of specific activities aimed at more effective use financial resources and strengthening the financial condition of the enterprise.

The financial condition of the enterprise is expressed in the ratio of the structures of its assets and liabilities, i.e. enterprise funds and their sources. The main tasks of analyzing the financial condition are to determine the quality of the financial condition, study the reasons for its improvement or deterioration over the period, and prepare recommendations for improving the financial stability and solvency of the enterprise. These tasks are solved on the basis of a study of the dynamics of financial indicators and are divided into the following analytical blocks:

structural analysis of assets and liabilities;

analysis of financial stability;

solvency (liquidity) analysis;

analysis of the required increase in own capital.

The information sources for calculating indicators and conducting analysis are annual and quarterly financial statements (more detailed description– see paragraph 1.2.1).

The main methods of analyzing the financial condition are horizontal, vertical, trend, coefficient and factorial. During horizontal analysis absolute and relative changes in the values of various balance sheet items for a certain period are determined. Target vertical analysis- calculation specific gravity individual items as a result of the balance sheet, i.e. clarification of the structure of assets and liabilities for a certain date. trend analysis consists in comparing the values of balance sheet items for a number of years (or other related reporting periods) in order to identify trends that dominate the dynamics of indicators. Ratio analysis is reduced to the study of the levels and dynamics of relative indicators of financial condition, calculated as the ratio of the values of balance sheet items or other absolute indicators obtained on the basis of reporting or accounting. When analyzing financial ratios, their values are compared with base values, as well as their dynamics for the reporting period and for a number of adjacent reporting periods is studied. The following are used as basic values: theoretically justified, characterizing the optimal or critical values in terms of the stability of the financial condition of the enterprise, averaged over the time series of the values of the indicators of this enterprise, etc. In addition to financial ratios, absolute indicators calculated on the basis of reporting play an important role in the analysis of the financial condition , such as net assets (real equity capital), own working capital, indicators of the provision of stocks with own working capital. These indicators are criteria, since with their help criteria are formulated to determine the quality of the financial condition. The analysis of the financial condition of the enterprise is based mainly on relative indicators, since the absolute balance sheet indicators in terms of inflation are very difficult to bring into a comparable form.

To identify the reasons for the change in absolute and relative financial indicators, as well as the degree of influence of various reasons on the magnitude of the change in the indicator, factor analysis.

Questions for self-examination:

Formulate the relevance of the application of financial analysis.

Name the main purpose of the financial activity of the enterprise.

List the main tasks of the analysis of the financial condition.

What are the main methods of analyzing the financial condition. Briefly describe the essence of each of them.

It is a process of studying the financial condition and the main results of the financial activity of an enterprise in order to identify reserves to increase its market value and ensure further effective development.

The results of financial analysis are the basis for making management decisions, developing a strategy further development enterprises. Therefore, financial analysis is an integral part, its most important component.

Basic methods and types of financial analysis

There are six main methods of financial analysis:

horizontal(temporal) analysis— comparison of each reporting position with the previous period;
vertical(structural) analysis- identification of the specific weight of individual articles in the final indicator, taken as 100%;
trend analysis- comparing each reporting position with a number of previous periods and determining the trend, i.e. the main trend in the dynamics of the indicator, cleared of random influences and individual characteristics individual periods. With the help of the trend, possible values of indicators are formed in the future, and therefore, a prospective predictive analysis is carried out;
analysis of relative indicators(coefficients) - calculation of the ratios between separate positions reporting, determination of interrelations of indicators;
comparative(spatial) analysis- on the one hand, this is an analysis of the reporting indicators of subsidiaries, structural divisions, with another - comparative analysis with the performance of competitors, industry averages, etc.;
factor analysis – analysis of the influence of individual factors (reasons) on the resulting indicator. Moreover, factor analysis can be both direct (analysis itself), when the resulting indicator is divided into its component parts, and reverse (synthesis), when its individual elements are combined into a common indicator.

The main methods of financial analysis carried out at the enterprise:

Vertical (structural) analysis- determination of the structure of the final financial indicators (the amounts for individual items are taken as a percentage of the balance sheet currency) and identifying the impact of each of them on the overall result of economic activity. Transition to relative performance allows for inter-farm comparisons of the economic potential and performance of enterprises that differ in the amount of resources used, and also smoothes out the negative impact of inflationary processes that distort absolute indicators.

Horizontal (dynamic) analysis is based on the study of the dynamics of individual financial indicators over time.

Dynamic analysis is the next step after the analysis of financial indicators (vertical analysis). At this stage, it is determined which sections and items of the balance sheet have undergone changes.

The analysis of financial ratios is based on the calculation of the ratio of various absolute indicators of financial activity among themselves. The source of information is the financial statements of the enterprise.

The most important groups of financial indicators:

Turnover indicators (business activity).
Market Activity Indicators

When analyzing financial ratios, the following points should be kept in mind:

the value of financial ratios has a great influence accounting policy enterprises;
diversification of activities makes it difficult to compare coefficients by industry, since the standard values can vary significantly for different industries;
normative coefficients chosen as a basis for comparison may not be optimal and may not correspond to the short-term objectives of the period under review.

Comparative financial analysis is based on comparing the values of individual groups of similar indicators with each other:

indicators this enterprise and industry averages;
financial indicators of the given enterprise and indicators of the enterprises-competitors;
financial indicators of individual structural units and divisions of the enterprise;
comparative analysis of reporting and planned indicators.

Integral () financial analysis allows you to get the most in-depth assessment of the financial condition of the enterprise.

The internal and external business environment is changeable, so the ability of a firm to maintain its solvency and financial stability can say a lot about its prospects. Economics and business require precision in numerical terms and do not tolerate subjective and artistic descriptions. To identify the true state of affairs, financial analysis was created. It is impartial and clear, because it is related to numbers and indicators. A financially literate person must distinguish a profitable company from an unprofitable one if he intends to make money in business and investment.

The financial analysis is an assessment of the economic health of any company. are being studied financial indicators, coefficients, ratings and multipliers, and on their basis a conclusion is made about the financial condition of the organization.

Who may need financial analysis? For example, the top management of the company. Or investors who want to explore whether it is worth investing in it. Even banks, which decide whether to give this organization a loan. The company can also list its shares on the stock exchange and for this you will also need to understand its financial condition.

Many people are interested in the financial analysis of a particular company, because sometimes even the leaders themselves do not understand that things are very bad. Everything may look great at this stage, but in many cases a simple analysis can show that in a year or two the company will go bankrupt. That is why analysis is so important, because it helps to see what the eyes are not capable of.

In this lesson, we will look at situations in which a person has access to all possible company information. But not every person has access to the true state of affairs in the organization in which he wants to invest money or cooperate with it. To do this, you can use indirect sources of information. Of course, this will not always be enough, but you can draw some conclusions. We offer you tools such as:

Exchange rates.
The state of the economy, the financial sector, the political and economic state.
Courses valuable papers, yield on securities.
Indicators of the financial condition of other companies.

This is the so-called external data and it can be your tool to evaluate the prospects of your investments. For example, if you want to buy shares of a company, but you do not have access to financial statements, then the above indicators may partially help you.

Let's proceed directly to the financial analysis. It has its own goals and objectives, in which all existing tools are revealed. Let's consider what tasks are facing financial analysis and what tools will be required for this.

Financial analysis tools

Profitability analysis

In economic language, “profitability” is understood as “profitability”, so we will continue to use this term in the future. The profitability ratio is calculated as the ratio of profit to assets, resources and flows. Profitability rates are often expressed as a percentage.

Understand the difference between income and profit. Income is all the funds that you receive from your activities. Profit is financial results. That is, if you received $ 500 from the sale of goods, then this is your income. You took these goods somewhere or made them and they cost you $300. So your profit is $200.

There can be quite a few indicators of profitability. Let's consider the most important of them:

Profitability of sold products. This is the ratio of profit from sales to the cost of goods sold. If your profit is $1,000 and the cost of the product you sold is $800, then this figure is calculated as follows: (1000/800)*100% 125%. We hope you make such calculations without a calculator.
Return on assets. Reflects the efficiency of using the company's assets to generate profits. That is, you can find out how efficiently you use the assets of your company. If you received $1,000 in profit per month, and the average value of your assets is $2,000, then this figure is calculated as follows: (1000/2000) * 100% 50%.
Return on equity. This is the ratio of profit to the average equity for the period. Let's say you earn $5,000 in a month and invest an average of $1,000 of your own capital per month. Then you will calculate this indicator as follows: (5000/1000) * 100% 500%. A very good indicator. True, it may not be very objective and will not say anything about the state of affairs of your company if you do not calculate other indicators.

Financial stability analysis

The financial stability ratios of an enterprise are indicators that clearly demonstrate the level of stability of an enterprise in financial terms.

Financial Independence Ratio- This financial ratio equal to the ratio of equity and reserves to the total assets of the enterprise. For this, the balance sheet of this organization is used. This indicator reflects the proportion of the organization's assets that are covered by equity. This ratio is needed by banks issuing loans. The higher it is, the more likely the bank will give a loan to your company, because you will be able to repay the debt with your assets. Remember, we already said that the bank considers your liabilities as its assets? In this case, the difference is that the assets of the company are simply necessary, because without most of them, it simply cannot function.

Financial dependency ratio is an indicator that is the opposite of the financial independence ratio. It shows to what extent the company depends on external sources of financing. This indicator is also necessary for banks to make a decision on issuing a loan.

Solvency and liquidity analysis

Solvency is the company's ability to timely fulfill monetary obligations stipulated by law or contract. Insolvency on the contrary, it shows the inability of the company to pay its obligations to the creditor. May lead to bankruptcy.

Analysis of the liquidity of assets (property) calculates an indicator that indicates how quickly the organization's assets can be sold if it cannot repay its loan debts.

Investment analysis

This is a set of techniques and methods for developing and evaluating the feasibility of making investments in order to make an effective decision by the investor.

Based on this analysis, management decides whether the company will invest in short-term and long term investment. Some investments are more profitable than others, so the challenge is also to find the most effective ones. Several tools are used for this: discounted payback period, net present value, internal form return and ROI index .

Discounted payback period (DPP) characterizes the change in the purchasing power of money, the value of which, as we remember, decreases over time. You, as an investor, need to know how long it will take to start receiving income from your investments and bring this amount in line with the present moment. Sometimes it doesn’t even make sense to invest, because it will either not pay off or pay off minimally.

On the Internet, you can find a calculator for calculating the discounted payback period, so we will not give the formula here. Besides, it is quite complicated. To put it simply, for example, you or your company invests $50,000. Every year, say, you will receive 15 thousand dollars in income. Enter this data into the calculator along with other indicators and get, for example, 3 and a half years. That is, after 3 and a half years, your investments will begin to bring you a real net profit, taking into account inflation.

There is a tool called net present value (NPV). This is the present value of an investment project, determined by taking into account all current and future receipts at the appropriate rate of interest. If this indicator is positive, then funds can be invested in the project.

Net present value can be used not only in investments, but also in business. With this tool, a company can calculate the feasibility of expanding its products. Everything is exactly the same here: if this indicator is positive, then it is worth expanding production.

The third tool is called internal rate of return (IRR) and it is also used both in business and in assessing the feasibility investment projects. You can also calculate this indicator online. If you get a value of zero, then you will only beat off your additions, but nothing more. The higher the internal rate of return, the better.

Return on investment index (PI)— investment efficiency indicator, which is the ratio of discounted income to the amount of investment capital. It is also sometimes referred to as the yield index or profitability index.

Bankruptcy Probability Analysis

As history shows, very often, in the months before bankruptcy, no one in the company even suspects the collapse of the company. Everything outwardly goes well and there are no prerequisites to think that something will go wrong.

What are the criteria for assessing the probability of bankruptcy? We have already met with some indicators:

Current liquidity ratio.
Coefficient of financial dependence.
Solvency recovery ratio.
autonomy coefficient.
Covering fixed financial expenses.

This analysis is important for banks issuing loans. They often analyze the probability of bankruptcy and issue or not issue a loan depending on the results. Also, such indicators are important for shareholders, investors and partners of this company, because they must understand that they are investing in a promising enterprise. Of course, they must look for this information themselves, because the company itself will hide it or block access to it.

Analysis of the market value of the business

This may be useful for those who want to buy ready business. A businessman hires a financial analyst who makes all the calculations - the recommended value of the business and the potential income of the enterprise after a certain period of time. If an investor hires a financial analyst, then it is first of all important for him to understand one simple thing - whether the indicated value corresponds to his investment interests.

This is very hard work. The average business market value analysis report is about 300 pages long.

Exist three approaches to business valuation: income, expenditure and comparative. By the way, it is also used before acquiring real estate.

The more income, which brings the company, the greater the value of its market value. But at the same time important factors are the duration of the income generation period, as well as the degree and type of risks in doing so. The subsequent resale of the business is also taken into account - if it turns out that this is quite likely, then this is another plus when buying it.

essence consumable The approach is that all assets of the enterprise (buildings, machinery, equipment) are first evaluated and summarized, and then liabilities are deducted from this amount. The resulting figure shows the cost of equity capital of the enterprise.

Comparative (market) approach is based on the principle of substitution. Competing organizations are selected for comparison. Usually, with this approach, it is difficult to compare two companies due to some differences, so it is necessary to adjust the data. All possible information about the company, which is possible to acquire, is collected and compared with an organization similar to it.

The comparative approach uses the methods of the capital market, transactions, industry coefficients (market multiplier).

Capital market method is focused on assessing the enterprise as an operating one, which intends to continue functioning. It is based on stock market prices.

Deal method is used in the case when the investor intends to close the enterprise or significantly reduce production volumes. Therefore, this method is based on precedent - cases of sale of similar enterprises.

Market multiplier method is focused on assessing the enterprise as an operating one, which will continue to function. The most commonly used valuation multiples are price/gross revenue, price/net profit, price/cash flow.

All three approaches are interconnected, because none of them separately can serve as an objective factor. Therefore, it is recommended to use all approaches. Some companies provide their business valuation services, but these services are quite expensive.

Analysis of the sources of financing of the enterprise

Company management must determine which sources are more profitable and available to them. It is also important to determine for how long to take a loan and whether it is worth it at all. Should there be more own or borrowed funds? When should you list your shares on the stock exchange?

In the fourth lesson, we have studied several sources of income for the average person. In this case, it's about the same. There are many ways, and all of them are quite risky. Therefore, banks first of all look at what assets the company has, so that, if necessary, the debt will be repaid from them.

Breakeven point

Breakeven point (BEP)- the volume of production and sales of products at which costs will be offset by income, and in the production and sale of each subsequent unit of production, the enterprise begins to make a profit. It is also sometimes called the critical point or CVP point.

The break-even point is calculated in units of production, in monetary terms or taking into account the expected profit margin.

Break-even point in monetary terms This is the minimum amount of income at which the costs are fully paid off.

BEP TFC/(C/P), where TFC is the value fixed costs, P is the cost of a unit of production (realization), C is the profit per unit of production, excluding fixed costs.

Break-even point in units of production- such a minimum quantity of products at which the income from the sale of this product completely covers all the costs of its production.

BEP TFC/C TFC/(P-AVC), where AVC is the value variable costs per unit of production.

stock exchanges

We simply cannot ignore the stock exchange and some indicators related to the global economy.

Stock Exchange is a financial institution that ensures the regular functioning of the securities market. Some stock exchanges are real places (New York Stock Exchange), others are purely virtual (NASDAQ).

Why would a company list its shares on a stock exchange? There are many reasons, but the most important is that this will allow the company to get a large income from the shares sold. The downside is that such a company partially loses its independence. For example, Sergey Brin and Larry Page delayed the placement of shares on the stock exchange to the last and applied various strategic tricks. By law, they were forced to do this, so Page and Brin found a way out: the shares had two classes - A and B. The first was privileged and was intended only for company employees, while the second class is somewhat limited and is sold to anyone.

Why would any person buy shares? He can make a big profit, and also participate in the management of this company. The downside is that he can lose a lot of his money if the company does poorly. History knows thousands of cases when people went bankrupt in the game on the stock exchange.

There are, however, those who became a billionaire by playing on the stock exchange. It could be a genius like Buffett or just a random investor who got incredibly lucky. Some people use insider information. For example, when shares are listed on the stock exchange by a successful company, the prices per share are quite high. Suppose that this company wants to change management soon - then the share price would go down. However, the head of the company does not publicly talk about this, and also may not talk about the significant problems of the company. This alone is already a criminal offense, and if such information is given to a large future shareholder (who wants to speculate on these shares), then punishment may await him. Withholding information is one form of .

Ten largest financial exchanges in the world

NYSEEuronext. This is a group of companies formed as a result of the merger of the world's largest New York Stock Exchange (NYSE) and the European stock exchange Euronext.
NASDAQ. This exchange specializes in shares of high-tech companies. It lists shares of 3,200 companies.
Tokyo Stock Exchange. The exchange is a member of the Federation of Stock Exchanges of Asia and Oceania. The value of all securities traded on the Tokyo Stock Exchange exceeds $5 trillion.
London Stock Exchange. Officially founded in 1801, however, its history actually began in 1570, when the Royal Exchange was built. In order for a company to list its shares on this exchange, it must meet several conditions: have a market capitalization of at least £700,000 and disclose financial, commercial and management information.
shanghai stock exchange. The capitalization of the stock market is $286 billion, and the number of companies that have placed their shares is 833.
Hong Kong Stock Exchange. It has a capitalization of 3 trillion US dollars.
Toronto Stock Exchange. The volume of capitalization is 1.6 trillion dollars.
Bombay Stock Exchange. It has a capitalization of $ 1 trillion, and the number of companies that have placed their shares is about 5 thousand.
National Stock Exchange of India. The second stock exchange from this country.
Sao Paulo Stock Exchange. The largest stock exchange in Latin America.

As you can see, stock exchanges are usually developed in those countries that themselves have a powerful economy. India's dual presence on this list may come as a bit of a surprise, but for people interested in the economy, this is nothing new.

Dow Jones

It's time to get acquainted with the Dow Jones index (Dow Jones Industrial Average). You will understand how simple it is, what it means and how to interpret it.

The Dow Jones Industrial Average covers 30 largest companies America. The prefix "industrial" is a tribute to history, because at the moment, many of the companies included in the index do not belong to this industry. Now, when calculating the index, a scaled average is used - the sum of prices is divided by a certain divisor, which is constantly changing. With some adjustments, we can say that this index is the arithmetic average of the stock prices of 30 American companies.

What does the Dow Jones index have to do with financial analysis, you may ask? The fact is that this index is unofficially called an indicator of the state of the economy of the United States and the whole world. Of course, this is an indirect indicator, but very eloquent. If the top 30 US companies are in crisis, then so is the entire economy. The higher the index, the better the state of the economy.

This index reached its historical low in percentage terms on Black Monday in 1987. This led to huge losses on other exchanges - Australian, Canadian, Hong Kong, British. What is most curious, there were no visible reasons for the collapse. This event called into question many of the important assumptions underlying modern economics. Also, strong failures were recorded during the Great Depression and the global crisis of 2008.

We will not give the names of all thirty companies, we will give only the ten most interesting and familiar to everyone.

The ten companies included in the Dow Jones Index are:

Apple. The company entered the index only in 2015.
coca-Cola. Entered the index in 1987.
Microsoft. Entered the index in 1999.
Visa. Entered the index in 2013.
wal-March. Entered the index in 1997.
WaltDisney. Entered the index in 1991.
Procter&Gamble. Entered the index in 1932.
McDonald"s. Entered the index in 1985.
Nike. Entered the index in 2013.
Intel. Entered the index in 1999.

Companies are constantly pushing each other off this list. For example, in 2015, Apple ousted the largest telecommunications corporation AT&T.

Some economists believe that the best indicator of the US economy is the S&P 500. This is a stock index that includes 500 selected US stock companies in a basket.

Both indexes are popular and represent a barometer of the American economy. Now you are armed with this tool.

In this lesson, we have covered many tools for financial analysis.

In the next lesson, we will understand how financial thinking is formed and what needs to be done to leave the old way of thinking and acquire a new one. Many people without a financial education are making millions simply because they were either taught financial thinking from childhood, or they themselves came to understand finance. This is a skill and you can learn it too.

Test your knowledge

If you want to test your knowledge on the topic of this lesson, you can take a short test consisting of several questions. Only 1 option can be correct for each question. After you select one of the options, the system automatically proceeds to the next question. The points you receive are affected by the correctness of your answers and the time spent on passing. Please note that the questions are different each time, and the options are shuffled.