Financial analysis reflects the process of studying the financial condition and key performance results of an enterprise in order to identify and mobilize reserves to increase its market value and ensure sustainable economic growth.
AT modern conditions the importance of financial analysis in assessing production and commercial activities enterprises, and above all in the formation and use of their capital, income and cash funds,
in management cash flows, in saving all kinds of resources. The results of such an analysis are necessary for the management of the enterprise to make informed financial and investment decisions, as well as for owners (shareholders, founders), creditors, investors, suppliers, tax authorities and other persons interested in successful work enterprises.
The key goal of financial analysis is to obtain a certain number of basic (most representative) parameters that give an objective and reasonable description of the financial condition of the enterprise. This applies primarily to changes in the composition and structure of assets and liabilities, in settlements with debtors and creditors, and in profit and loss.
Local goals of financial analysis:
Determination of the financial and economic condition of the enterprise;
Identification of changes in the financial condition in the spatio-temporal context;
Identification of the main factors causing changes in the financial condition;
Forecast of the main trends in financial condition.
Therefore, goal setting is a priority stage of financial analysis. A correctly set goal saves analysts from unnecessary analytical procedures. Having set the goal, the analyst must choose the main ways to achieve it. If the goal is to achieve acceptable financial stability and solvency, then it is necessary to calculate the appropriate analytical coefficients characterizing the financial independence of the enterprise from external sources of financing, the efficiency of using its own working capital, sustainable economic growth.
To assess the creditworthiness of an economic entity, it is advisable to determine the liquidity of its balance sheet in the forecast period. For this purpose, sources of repayment of loans are established and cash flow budgets are drawn up according to the balance sheet for the coming quarters. Some banks assess the creditworthiness of borrowers for the relevant class, and also require customers to submit a cash flow forecast for the entire period of lending.
When assessing the investment attractiveness of an enterprise - an issuer of securities, it is advisable to conduct a comprehensive financial analysis for all parameters of its activities: financial stability, solvency, profitability, business and market activity.
The choice of goal determines the tools and methodology for conducting financial analysis.
The financial director is interested in both the current financial position of the enterprise (for a month, quarter, year), and the forecast for a more distant future.
The alternativeness of the goals of financial analysis determines not only its time limits. It also depends on the goals that users of financial information set for themselves (for example, the investment of investors' capital in a large-scale project, the acquisition of a large block of shares in the issuing company, a merger or acquisition this enterprise etc.).
The objectives of the study are achieved as a result of solving a number of analytical problems:
Preview financial statements;
Characteristics of the property of the enterprise: non-current and current assets;
Assessment of financial stability and solvency;
Determination of indicators of asset turnover and equity;
Characteristics of sources of funds: own and borrowed;
Assessment of cash flow in temporal and spatial aspects (for the enterprise as a whole and its divisions, branches);
Analysis of profit and profitability;
Development of measures to improve the financial and economic activities of the enterprise;
Acceptance based on financial analysis management decisions;
Using the results of analytical work for planning and forecasting the main parameters of production and commercial activities (production and sales, costs, profits, investments, etc.).
The listed tasks express the specific goals of the analysis, taking into account the organizational, technical, informational and methodological possibilities of its implementation.
The financial analysis is a method of assessing and forecasting the financial condition of an enterprise based on its financial statements.
The financial analysis is the process of researching the financial condition and the main results financial activities enterprise in order to identify reserves to further increase its market value.
This kind of analysis can be performed both by the management personnel of the enterprise and by any external analyst, since it is mainly based on publicly available information.
The basis of information support analysis of the financial condition, as noted above, should be financial statements. Of course, additional information, mainly of an operational nature, can be used in the analysis, but it is only of an auxiliary nature.
As the main sources of information for financial analysis can be used:
1. External data (-state of the economy, financial sector, political and economic state; - exchange rates; - exchange rates valuable papers, return on securities; - alternative returns; - indicators of the financial condition of other companies;)
2. Internal data (-Accounting reporting; -Management reporting.)
main goal financial analysis is to obtain a small number of key (most informative) parameters that give an objective and accurate picture of the financial condition of the enterprise, its profits and losses, changes in the structure of assets and liabilities, in settlements with debtors and creditors.
As a result of financial analysis, both the current financial condition of the enterprise and the parameters of the financial condition expected in the future are determined.
Thus, financial analysis can be defined as a way of accumulating, transforming and using information of a financial nature, which has goal :
- assess the current and prospective financial condition of the enterprise;
- assess the possible and appropriate pace of development of the enterprise from the standpoint of their financial support;
- identify available sources of funds and assess the possibility and expediency of their mobilization;
- predict the position of the enterprise in the capital market.
The goals of financial analysis are achieved as a result of solving a certain interconnected set of analytical tasks
Tasks of financial analysis:
1. Analysis of assets (property).2. Analysis of funding sources.3. Analysis of solvency (liquidity) .4. Financial stability analysis.5. Analysis financial results and profitability.6. Analysis of business activity (turnover) .7. Analysis of cash flows.8. Analysis of investments and capital investments.9. Market value analysis.10. Bankruptcy probability analysis.11. Comprehensive assessment of the financial condition.12. Preparation of forecasts financial position.13. Preparation of conclusions and recommendations.
Types of fin. Analysis:
1) depending. From organizational forms of conduct: internal, external (Internal analysis is carried out by employees of the enterprise. The information base of such an analysis is much wider and includes any information circulating within the enterprise and useful for making management decisions. The possibilities of analysis are expanding accordingly. External financial analysis is carried out by analysts , which are outsiders for the enterprise and therefore do not have access to the internal information base of the enterprise. External analysis is less detailed and more formalized.)
2) depending. From the scope of the study: full, thematic
3) depending. From the scope of the analysis: for the enterprise as a whole, for a division or structural unit, for a separate fin. Operations
4) depending. From the period of the study: preliminary, current, subsequent
To solve specific problems of financial analysis, a whole a number of special methods , allowing to obtain a quantitative assessment of certain aspects of the enterprise. In financial practice, depending on the methods used, the following systems of financial analysis conducted at the enterprise are distinguished: trend, structural, comparative and ratio analysis.
1. trendy (horizontal) financial analysis is based on the study of the dynamics of individual financial indicators over time. In the course of this analysis, the growth rates (growth) of individual indicators are calculated and the general trends their changes (or trend). The most widespread are the following forms of trend (horizontal) analysis:
1) comparison of financial indicators of the reporting period with indicators of the previous period (for example, with indicators of the previous decade, month, quarter);
2) comparison of financial indicators of the reporting period with those of the same period last year (for example, indicators of the second quarter of the reporting year with those of the second quarter of the previous year). This form of analysis is used in enterprises with pronounced seasonal characteristics. economic activity;
3) comparison of financial indicators for a number of previous periods. The purpose of this analysis is to identify trends in individual indicators that characterize the results of the financial activities of the enterprise. The results of such an analysis are usually drawn up graphically in the form of line graphs or a bar chart of changes in the indicator over time.
2. Structural (vertical) financial analysis is based on the structural decomposition of individual indicators. In the process of this analysis, the proportions of individual structural components of financial indicators are calculated. The most widespread are the following forms of structural (vertical) analysis: analysis of assets, capital, cash flows.
3. Comparative financial analysis is based on comparing the values of individual groups of similar financial indicators with each other. In the process of this analysis, the sizes of absolute and relative deviations of the compared indicators are calculated. The following forms of comparative analysis are most widely used: analysis of financial indicators of an enterprise and industry average indicators, analysis of financial indicators of a given enterprise and competing enterprises, analysis of financial indicators of individual structural units and divisions of a given enterprise, analysis of reporting and planned (normative) financial indicators:
4. Analysis of financial ratios is based on the calculation of the ratio of various absolute indicators to each other. In the process of implementing this analysis, various relative indicators characterizing various aspects of financial activity are determined. The most widespread are the following aspects of such an analysis: financial stability, solvency, asset turnover and profitability.
Financial analysis is a method of accumulation, transformation and use of information of a financial nature, with the aim of:
assess the current and prospective financial condition of the enterprise;
assess the possible and appropriate pace of development of the enterprise from the standpoint of their financial support;
identify available sources of funds and assess the possibility of their mobilization;
predict the position of the enterprise in the capital market.
The main purpose of financial analysis is to obtain a small number of key (most informative) parameters that give an objective and accurate picture of the financial condition of the enterprise, its profits and losses, changes in the structure of assets and liabilities, in settlements with debtors and creditors, while the analyst or manager (manager ) may be of interest to both the current financial condition of the enterprise and its projection for the near or more distant future, i.e. expected parameters of the financial condition.
But not only time limits determine the alternativeness of the goals of financial analysis. They also depend on the goals of the subjects of financial analysis, i.e. specific users of financial information. The subjects of analysis are, both directly and indirectly, users of information interested in the activities of the enterprise.
The first group of users includes owners of enterprise funds, lenders (banks, etc.), suppliers, customers (buyers), tax authorities, enterprise personnel and management. Each subject of analysis studies information based on their interests. So, the owners need to determine the increase or decrease in the share of equity capital and evaluate the efficiency of the use of resources by the administration of the enterprise; creditors and suppliers - the feasibility of extending the loan, credit conditions, loan repayment guarantees; potential owners and creditors - the profitability of investing their capital in the enterprise, etc. It should be noted that only the management (administration) of the enterprise can deepen the analysis of reporting using data production accounting as part of a management review conducted for management purposes.
Second group of users financial reporting- these are the subjects of analysis, which, although not directly interested in the activities of the enterprise, must, under the contract, protect the interests of the first group of reporting users. These are audit firms, consultants, exchanges, lawyers, press, associations, trade unions.
The objectives of the analysis are achieved as a result of solving a certain interrelated set of analytical tasks. The analytical task is a specification of the goals of the analysis, taking into account the organizational, informational, technical and methodological capabilities of the analysis. The main factor in the end is the volume and quality background information. At the same time, it should be borne in mind that the periodic accounting or financial statements of an enterprise are only "raw information" prepared in the course of accounting procedures at the enterprise.
To make management decisions in the field of production, marketing, finance, investment and innovation, management needs constant business awareness on relevant issues, which is the result of the selection, analysis, evaluation and concentration of the original raw information. An analytical reading of the source data is also necessary based on the goals of analysis and management.
The basic principle of analytical reading of financial statements is the deductive method, i.e. From general to specific. In the course of such an analysis, as it were, the historical and logical sequence of economic facts and events, the direction and strength of their influence on the results of activity are reproduced.
The practice of financial analysis has already developed the main types of analysis (method of analysis) of financial statements. Among them, 6 main methods can be distinguished:
horizontal (temporal) analysis- comparison of each reporting position with the previous period;
vertical (structural) analysis- determination of the structure of the final financial indicators with the identification of the impact of each reporting position on the result as a whole;
trend analysis- comparing each reporting position with a number of previous periods and determining the trend, i.e. the main trend of the indicator dynamics, 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 relations between separate positions of the report or positions of different forms of reporting, determination of interrelations of indicators;
comparative (spatial) analysis- this is both an on-farm analysis of summary reporting indicators for individual indicators of an enterprise, branches, divisions, workshops, and an inter-farm analysis of the indicators of a given enterprise in comparison with those of competitors, with average industry and average economic data;
factor analysis - analysis of the influence of individual factors (reasons) on the performance indicator using deterministic or stochastic methods of research. Moreover, factor analysis can be both direct (analysis itself), when the analysis is divided into component parts, and reverse, when a balance of deviations is made up and at the stage of generalization all the identified deviations are summed up, the actual indicator from the baseline due to individual factors.
The methodology of financial analysis consists of three interrelated blocks:
- 1. analysis of the financial condition;
- 2. analysis of the financial results of the enterprise;
- 3. analysis of the effectiveness of financial and economic activities.
There is a variety of economic information about the activities of enterprises and many ways to analyze these activities. Financial analysis according to financial statements is called the classic method of analysis.
Financial analysis is part of a general, complete analysis of economic activity, which consists of two closely related sections: financial analysis and production management analysis.
The division of analysis into financial and managerial is due to the division of the system that has developed in practice accounting enterprise-wide for financial accounting and management accounting. This division of analysis is somewhat arbitrary, because internal analysis can be seen as a continuation of external analysis and vice versa. In the interests of the case, both types of analysis feed each other with information.
Features of external financial analysis are:
the plurality of subjects of analysis, users of information about the activities of the enterprise;
variety of goals and interests of the subjects of analysis;
availability of standard methods of analysis, accounting and reporting standards;
orientation of the analysis only to the public, external reporting of the enterprise;
limited analysis tasks as a consequence of the previous factor;
maximum openness of the analysis results for users of information about the activities of the enterprise.
Financial analysis, based on data only from financial statements, acquires the character of an external analysis, i.e. analysis carried out outside the enterprise by its interested counterparties, owners or government bodies. This analysis, based only on reporting data, which contains only a very limited part of information about the activities of the enterprise, does not allow revealing all the secrets of success or failure in the activities of the enterprise.
analysis of absolute indicators of profit;
analysis of relative profitability indicators;
analysis of the financial condition, market stability, liquidity of the balance sheet, solvency of the enterprise;
analysis of the effectiveness of the use of borrowed capital;
economic diagnostics of the financial condition of the enterprise and the rating assessment of issuers.
On-farm financial analysis uses data on the technical preparation of production, regulatory and planning information, and other system accounting data as a source of information.
In the system of on-farm management analysis, it is possible to deepen financial analysis by attracting management production accounting data, in other words, it is possible to conduct a comprehensive economic analysis and evaluation of the effectiveness of economic activity. The issues of financial and managerial analysis are interrelated in the justification of business plans, in monitoring their implementation, in the marketing system, i.e. in the management system for the production and sale of products, works and services oriented to the market.
Features of management analysis are:
orientation of the results of the analysis to their management;
use of all sources of information for analysis;
lack of regulation of analysis from the outside;
the complexity of the analysis, the study of all aspects of the enterprise;
integration of accounting, analysis, planning and decision making;
maximum secrecy of the analysis results in order to preserve commercial secrets.
Introduction of a new chart of accounts of accounting, bringing the forms of accounting statements in line with the requirements international standards necessitates the use new methodology financial analysis, corresponding to the conditions of a market economy. Such a technique is needed for a reasonable choice of a business partner, determining the degree of financial stability of an enterprise, assessing business activity and the effectiveness of entrepreneurial activity.
The main (and in some cases the only) source of information about the financial activities of a business partner is the financial statements, which have become public. The reporting of an enterprise in a market economy is based on the generalization of data financial accounting and is an information link connecting the enterprise with society and business partners - users of information about the activities of the enterprise.
AT certain cases To achieve the goals of financial analysis, it is not enough to use only financial statements. Separate user groups, such as management and auditors, have the opportunity to involve additional sources (production and financial accounting data). However, most often annual and quarterly reports are the only source of external financial analysis.
According to the order of the Ministry of Finance of the Republic of Belarus No. 23 dated January 20, 2000, new standard forms annual financial statements of legal entities.
The main source of information for financial analysis is the balance sheet of the enterprise (Form No. 1). Its importance is so great that the analysis of the financial condition is often called the analysis of the balance sheet. The source of data for the analysis of financial results is the income statement (Form No. 2). source additional information for each of the blocks of financial analysis, there are explanations to the balance sheet and profit and loss statement, namely: statement of movements of funds and other funds (Form No. 3), statement of cash flows (Form No. 4), appendix to the balance sheet ( Form No. 5).
How useful are such sources of information for enterprises?
First of all, by the fact that without preparing data for analysis, already on the basis of the balance sheet of the enterprise (Form No. 1) and (Form No. 2), a comparative express analysis of the company's reporting indicators for previous periods can be made.
Secondly, with the advent of special automated accounting programs for analyzing the financial condition of an enterprise, it is convenient, immediately after compiling reporting forms, without leaving the program, to perform the simplest express analysis of the enterprise based on ready-made forms of financial statements using the built-in financial analysis block.
Detailing the procedural side of the methodology for analyzing the financial condition depends on the goals set, as well as various factors of informational, temporary, methodological, personnel and technical support. The logic of analytical work assumes its organization in the form of a two-module structure:
express analysis of the financial condition;
detailed analysis of the financial condition.
The long-term development of any enterprise depends on the ability of management to identify emerging problems in a timely manner and competently neutralize them. To achieve this goal, financial analytics is used, the purpose of which is to identify all the problematic elements in the company's management tools.
What is the financial analysis of the enterprise
Financial analysis should be understood as the complex use of certain procedures and methods for an objective assessment of the state of the enterprise and its economic activity. The basis for the assessment is quantitative and qualitative accounting information. It is after its analysis that specific managerial decisions are made.
Financial analysis is focused on studying the economic, technical and organizational level of the enterprise, as well as the departments related to it. The goals of financial analysis include the assessment of the financial and industrial economic activity of the company, including the diagnosis of bankruptcy.
Financial Analysis Priorities
The financial and economic analysis of the state of the enterprise sets specific tasks, the fulfillment of which determines the accuracy of the analytics result. We are talking about the discovery of reserves and production opportunities that were not used, about assessing the quality, establishing the impact of specific activities on the overall results of management and identifying the factors that caused deviations from the standards. In the process of analysis, a forecast of the expected results of the enterprise's activities and the preparation of information necessary for making a management decision are also carried out.
It can be argued that the financial analysis of the enterprise plays a role financial management both in the company itself and in the process of cooperation with partners, tax authorities, financial and credit system. At the same time, business activity, financial stability, profitability and profitability are taken into account. The analysis itself can also be defined as a tool for managing, planning, as well as monitoring the company's activities and its diagnostics.
At the same time, it should be noted that the analysis of specific aspects of the enterprise's activity is based on the analysis of the system of indicators, moreover, in a dynamic state. This is explained by the fact that the financial and production and economic activities of the company, as well as its divisions, have interrelated indicators. For this reason, changes in specific indicators can affect the final financial technical and economic indicators of the enterprise.
Financial and economic analysis of the enterprise: goals
Speaking about this form of analysis of the company's activities, it is worth noting that it involves a combination of deduction and induction methods. In other words, during the study of single indicators, the analyst should also take into account the general ones.
Another important principle is that when analyzing an enterprise, all types of business processes are studied taking into account their interdependence, interdependence and interconnection. As for the analysis of factors and causes, in this case, the analytics is based on the understanding of the following principle: each factor and cause must receive an objective assessment. Therefore, both causes and factors are initially studied, after which their classification into groups follows: secondary, main, insignificant, essential, little determining and determining.
The next step is to study the influence on economic processes of the determining, basic and significant factors. On the other hand, little-determining and insignificant factors are studied only if necessary and only after the completion of the main part of the analysis. It is worth considering the fact that financial analysis does not always involve the study of all factors, since this is relevant only in some cases.
At the same time, if we talk about the exact goals of the financial analysis of the enterprise, it makes sense to define the following components of the assessment process:
- analysis of the ability to repay loans;
- tracking the state of the enterprise at the time of assessment;
- bankruptcy prevention;
- assessment of the value of the company in case of its merger or sale;
- tracking the dynamics of the financial condition;
- analysis of the enterprise's ability to finance investment projects;
- making a forecast of the financial activity of the enterprise.
It should be noted that in the process of studying the financial condition of an enterprise, the help of a financial analyst can be used by those economic entities that are focused on obtaining extremely accurate and objective information about the activities of the enterprise.
These entities can be divided into two categories:
- External: creditors, auditors, government agencies, investors.
- Internal: shareholders, audit and liquidation commission, management and founders.
Another purpose for which financial analysis can be carried out, but not at the initiative of the enterprise, is to assess the investment potential and creditworthiness of the company. Such analytics, as a rule, is of interest to banks, for which it is important to ensure the solvency and profitability of the enterprise. This is logical since any potential investor is interested in obtaining information regarding the liquidity of the company and the degree of risk regarding the loss of the deposit.
Features of internal and external analysis
Internal financial accounting and analysis is necessary in order to meet the needs of the enterprise itself. It can be focused both on identifying the degree of liquidity of the company, and on a thorough assessment of its results within the last reporting period. Such valuation methods are relevant when a financial analyst or firm's management intends to determine how realistic and relevant the allocation of funds for the expansion of production that was planned, and what effect additional costs can have on it.
With regard to external financial analysis, it is carried out by analysts who are not related to the enterprise. They also do not have access to internal information of the company.
If an internal analysis is carried out, then there will be no problems with attracting information of any category, including one that is not available. In the case of external analysis, some limitations of assessment methods are initially taken into account due to the lack of information in full.
Types of financial analysis
Analytics, with the help of which the state of the enterprise is assessed, can be divided into several key types according to the content of the management process:
- retrospective, or current analysis;
- perspective (preliminary, predictive);
- operational financial and economic analysis;
- analysis that takes into account the results of a particular period of time.
Each of the types is used depending on the key task.
Methods of financial analysis
The current methods of financial analytics include the following areas:
- Vertical analysis. This is one of the types of assessment of the financial statements of an enterprise, in which the share of balance sheet items and various types of liabilities and assets is analyzed. With this technique, the distribution of resources is shown in shares.
- Horizontal analysis. We are talking about the financial analytics of the company, in which a dynamic assessment of the balance sheet items is made. Both the nature and the direction of the trend are assessed.
- Ratio analysis. With this type, financial, economic and production figures based on financial statements. Such financial and accounting analysis also examines reports of losses, profits and other normative documentation. The calculation of the coefficients makes it possible to evaluate the effectiveness and efficiency of various resources, activities and capital of the company, including.
- Trend analysis. With such an assessment, each reporting position is compared with specific previous periods, as a result, the trend of the enterprise's movement is determined. With the help of the established trend, the possible values of future indicators are formed. In other words, a prospective analysis is carried out.
- Factor analysis. In this case, an assessment of the impact of specific factors on the final results of the company's activities is used. Stochastic and deterministic methods are used for research.
- Comparative analysis. We are talking about on-farm analytics of the summary indicators of workshops, divisions, subsidiaries, etc. An inter-farm financial analysis of the organization is also carried out in relation to the indicators of competing enterprises.
Ratio analysis as the main tool of financial analytics
As a key method of financial analysis, you can define the coefficient. This is explained by the fact that quantification company status and adoption various solutions of a managerial nature, aimed at changing specific indicators, are made on the basis of financial and economic ratios. In this case, one can observe a direct relationship between those resources of the company that were taken into account and the efficiency of their operation, expressed through the values of financial and economic ratios and data in the balance sheet items.
This method of financial analysis involves the evaluation of four relevant groups of economic indicators:
- Profitability (profitability) ratios. Such data serves to reflect the profitability of the company's capital when generating income through the use of assets of various types.
- Coefficients of financial reliability (stability). In this case, the level of own and borrowed capital of the company is demonstrated, and the capital structure of the company is also displayed.
- Solvency (liquidity) ratios. Reflect the ability and ability of the organization to timely short-term and long-term debt obligations.
- Turnover ratios (business activity). Using this information, you can determine the number of company assets for a particular reporting period and the intensity of their turnover, among other things.
The method of financial analysis, in which the coefficients of the enterprise are taken as the basis for calculations, is considered important because it makes it possible to timely identify crisis phenomena in the company and take relevant measures to stabilize the situation.
This type analysis is part of the strategic management of the organization.
Examples of financial analytics
In order to understand the essence of assessing the state of the organization, it is necessary to study the example of financial analysis. For example, for the entire period of the period under study, the margin was stable, but there was a certain decrease.
During the study period, an increase in the turnover rate of goods by 35 days was revealed. This indicates the presence of illiquid stocks and an increase in the number of stocks of goods. At the same time, the optimal value of turnover for hardware stores is 80-90 days.
As for accounts receivable, the enterprise does not have it - all retail of the company is made on the terms of payment upon delivery. Accounts receivable turns over within 4-7 days, which can be defined as a positive indicator.
At the same time, the operating cycle also increased by 35 days within the period covered by the analysis. It is obvious that it (the cycle) corresponds to an increase in the duration of the turnover. Due to the increase in the term of trade turnover, the term of the financial cycle has also increased.
The financial analysis of the enterprise defines an example of this kind as a fairly stable activity, in which overstocking of the warehouse is possible. To optimize the process as much as possible, it is necessary to revise the procurement policy in order to reduce the turnover period.
How to analyze bank activity
The financial analysis of the bank is focused on ensuring quality management through the development of key parameters of its activities. We are talking about such indicators as the profitability of operations, capital and payment turnover, the structure of assets and liabilities, the efficiency of the bank's divisions, portfolio risks financial resources and intrabank pricing.
In order for the study of the state of the bank to be successful, certain conditions must be met: the information used for the analysis must be reliable, accurate, timely and complete. If the provided data does not correspond to reality, the applied methods of financial analysis will not be able to lead to objective conclusions. This means that the impact of some problems will be underestimated, which may worsen the situation.
The reliability of information is assessed in the process of inspection checks and during documentary supervision.
Methods for researching the state of the bank
Various aspects of the bank's activities are evaluated through the use of scientific and methodological tools. It is with their help that you can develop the optimal solution to specific problems of a managerial nature.
There are popular methods of bank financial analysis:
- Dynamic balance sheet equation. This technique involves accounting for profits and losses. Through such management, a factorial financial assessment of the state of the bank and the fact how profitable its activities are is carried out.
- Modified balance sheet management (liabilities are equal to assets). In this case, financial analysis involves a quick assessment of the effectiveness of the bank's liability management.
- Basic balance sheet management (assets are equal to the sum of equity and paid liabilities). The key principle of this valuation technique is the effective disposal and ownership of all bank assets.
- The capital balance equation (the bank's capital is equal to assets minus paid liabilities). This type of equation is relevant when it is necessary to obtain a final assessment of how effective the management of existing capital was as part of the increment of own capital. This methodology is also used to identify and exploit higher yield reserves.
Thus, we can conclude that the financial analysis of the enterprise, an example of which was given above, is a necessary measure for determining the state and profitability of the company. Without such analytics, the efficiency of the enterprise can be significantly reduced, and at the same time, rehabilitation measures may not be relevant if the assessment is not timely.
Analysis of the financial condition of the enterprise:
The concept, goals and objectives of the analysis of the financial condition.
The main stages of financial analysis.
Basic techniques and Information Support analysis of the financial condition of the organization.
Analysis of the composition, structure and dynamics of the property of the enterprise.
Analysis of business activity of the enterprise.
Analysis of liquidity and solvency of the enterprise.
Analysis of financial stability.
Goals, objectives and stages of cash flow analysis.
Analysis of the effectiveness of the use of own and borrowed capital.
1. The concept, goals and objectives of the analysis of the financial condition.
Financial analysis is a system of methods for studying economic processes about the financial position of an enterprise and the financial results of its activities, which are formed under the influence of objective and subjective factors, according to financial statements and some other types of information.
Financial analysis is a set of analytical procedures based on available information of a financial nature and designed to assess the state and efficiency of using the economic potential of an enterprise, as well as making management decisions regarding the optimization of its activities.
The main features of financial analysis include:
providing a general description of the property and financial position of the enterprise;
priority of assessments: solvency, financial stability, profitability;
based on publicly available information;
information support for tactical and strategic decisions;
access to the results of the analysis of any users;
the possibility of unifying the composition and content of calculation and analytical procedures;
the predominance of the monetary meter in the system of criteria;
high level of reliability of the results of the analysis.
The purpose of financial analysis is:
an objective assessment of the financial condition of the enterprise, its solvency, financial stability and business activity;
identifying ways to increase equity capital, net assets, stock returns and improved leverage;
development of forecasts of growth (decrease) of financial results and reasoned forecasts about the degree of reality of the bankruptcy of an enterprise and, on this basis, in developing options for sound management decisions in order to increase the efficiency of management for the content of financial analysis depends on the demand for its results by external and internal users;
requests from users (investors, partners, etc.) of analytical information to assess the real financial condition of the organization;
the expediency of the most complete disclosure of available information on the financial stability of the organization in an effort to make it the most "open";
the need for practice in the calculation of new indicators for assessing the financial position of economic entities;
production and financial necessity in connection with the promotion of goods and services on the domestic and international markets;
the need for additional information about the financial condition of the enterprise in order to develop optimal management decisions
The objectives of financial analysis are:
substantiation of operational and strategic plans and programs for strengthening and developing the financial position of the organization;
forecasting the growth of financial flows in the coming future;
optimization of production costs and sales of products, works, services;
increase in income, capital, assets and decrease in expenses and overdue liabilities;
identification of ways to improve the efficiency of management;
search for unused opportunities and means to strengthen the financial stability of the organization, its solvency, financial independence and financial solvency in order to avoid bankruptcy;
mitigation of the degree of impact of associated risks on the return of borrowed capital, investors, banks, creditors;
using the results of the analysis to develop new business development programs and management decisions
