Analysis of the balance sheet

Analysis of the balance sheet will help to identify errors in the management of financial affairs. And identifying weaknesses contributes to explaining some of the company's difficulties, crises, as well as to eliminate them and thereby increase profits. As practice shows, doing this is extremely useful.

Why conduct an analysis of the balance sheet of the enterprise? The fact is that the balance sheet is just a report on the assets, liabilities and own capital of the enterprise. For a philistine - it's just a set of figures, but an experienced person, looking at the balance sheet will be able to say whether the enterprise will come out of the crisis, whether it will last during inflation and whether it is successful in its field.

By the way, the analysis of the liquidity of the balance sheet is also important. In this case, liquidity indicates whether the enterprise is coping with its direct obligations, that is, repaying the loan with liabilities. Agree, for any leader this information is extremely important. Liquidity is calculated and viewed using the table. In the first column, we enter the normative indicators, in the second, third and fourth - the indicators that you obtained as a result of the calculations. So you can see if your firm is coping with difficulties or not.

There are several types of analysis of this kind. The most common of these is an analysis without changing the articles, a corrected analysis taking into account inflation. Popular and analytical analysis of the balance sheet, with which you can see how dynamically the enterprise develops. By the way, any analysis is very useful if you want to visually see the results of the work of your company.

Most often, the analysis of the balance sheet is carried out at the end or at the beginning of the year: summing up the annual indicators, it turns out whether the firm has advanced or vice versa, has surrendered its positions.

Conclusions can contribute to improving the work of the enterprise, carrying out reforms and solving problems. Due to the visibility of this method of diagnostics, weaknesses are visible, as in the palm of your hand, and this helps to quickly eliminate them.

The simplest table of such an analysis consists of 15 rows and 4 columns. The first line of the first column remains empty, in the second we write - "Active", the third one is called "Cash and Attachments". The fourth is accounts receivable, 5 - it is often the reserves and costs, and in the sixth line is usually marked - "Total current assets." Line 7 - "Non-current assets", and 8 - "Assets" and "Total". In line 9 there are already "Liabilities", in 10 - "Debt on loans", in 11 line - "Short-term loans", in 12 - "Total short-term loans", 13 - "Long-term total", 14 left to write - "Own capital", and in 15 - "The result of the passive". The second column assumes that you are able to use conventional symbols. This is what is called line 1 of column 2. 2 line is empty, in 3 we write - DS, in 4 DZ, in 5 - ZZ, in 6 - OA, in 7 line we place - VA, in 8, respectively, SVA, 9 line is empty, in 10 we write the notation - KZ, then in 11 - KK, in 12 - KO, and in 13 - KO. It remains to fill 14 - SC, and accordingly 15 - ICB. The third and fourth columns are called "At the beginning of the year" and "at the end of the year", respectively. The balance sheet analysis table is ready. It remains only to fill it with all the necessary data on articles, and this is easy to do.

With this data table you will be able to analyze all the milestones of your business. One condition: the information should be as accurate as possible. In accordance with these data, certain conclusions are drawn about how promising the enterprise is and how consistently and clearly it worked. But the main thing that the authorities are interested in is the coefficient of profitability. And it can also be calculated from this table. By the way, in order to conduct a report at a management meeting, it is best to create a diagram on this table or graphs - visibility is always in high esteem.