Assessment of the financial condition of the enterprise

The assessment of the financial condition of an enterprise is based on the following actions:

• Collection of information and its analytical processing for a specific period of time to be assessed;
• Justification and classification of indicators used for such an assessment;
• Calculation of the resulting valuation indicator;
• Ranking of economic entities by rating.

As a result of the qualitative implementation of the third stage of analysis of the results of financial activities, the resulting rating takes into account the full range of key parameters of the financial and operational activities of the entity. In other words, a complete analysis of economic activity.

Indicators of the financial condition of the enterprise include the following data: the production potential of the business entity, the profitability of its products, the effectiveness of the use of available financial resources. Sources of formation, status and location of other resources of the organization can also be included here.

The rationale and choice of the initial performance indicators of the enterprise are based on the main provisions of the theory of finance, as well as the needs of the company's management in the assessment. After all, a qualitative assessment of the financial condition of an enterprise can not be based on an arbitrary choice of indicators.

So, let's try to systematize the generally accepted indicators and break them down into four groups.

The first group includes such important indicators as profitability of business entities. Proceeding from the theory, profitability is calculated as the ratio of the net profit received to the value of the enterprise's property (or its own funds).

The second group of indicators is responsible for assessing the effectiveness of company management. In this case, it is advisable to consider four generally accepted profit indicators: balance or gross, net, from sales of products, and, finally, the overall indicator - from the entire implementation. The effectiveness of the organization's management is determined by the ratio of these profit indicators to the revenue of the entity.

Assessment of the financial condition of the enterprise on the basis of indicators of the third group provides for an assessment of the business activity of the entity. This category of coefficients is calculated in several ways:

- the return of all types of assets - as a private revenue to the balance currency;

- capital productivity - the ratio of revenue to the value of fixed assets in conjunction with intangible assets;

- turnover of assets (the number of their turnover) - the ratio of all the same proceeds, but now to the value of working capital.

Similarly, the turnover of stocks, bank assets, accounts receivable is calculated, only in the formula as a denominator are used indicators of the value of stocks, cash and total receivables, respectively.

Analysis of the financial state of the organization using the fourth set of indicators is carried out by:

- assessment of current liquidity as the calculation of the ratio of all current assets to the amount of liabilities that require repayment on an urgent basis;

- calculation of the critical liquidity ratio by the ratio of the total of circulating assets including cash and receivables to term liabilities.

Also to this group can be attributed indicators of the market stability of the organization: the index of a permanent asset; Provision of working capital available at the disposal of the enterprise, to pay off arrears of inventories and other costs.

A full assessment of the financial condition of an enterprise can not be carried out without using such initial data as output and profit in the reporting period.