Estimation of financial stability of the enterprise on the basis of a branding approach on the example of MMZ

Over the past 20 years, there has been a certain gap between the real value of enterprises recorded in the reports and the valuation by investors. The basis for this discrepancy is the impact factor of the enterprise's financial stability indicators, market capitalization, intangible assets (NMA). Today it is not a secret for anyone that the increase of financial stability of the enterprise is largely based on intellectual capital, including on the brands owned by the firm.

It is obvious that the competent management of the NMA, the maintenance of brands, can affect the investment attractiveness of the company. And from this directly depends on the assessment of financial stability of the enterprise. Hence the logical consequence is the need to pay more attention to the management of intangible assets than was previously in domestic practice.

It is proved that the NMA in most companies with a strong brand is superior to material ones. Evaluation of financial stability of the enterprise, as a rule, fixes this excess both in value and in contribution to the growth and development of the firm.

In Belarus, the problem of accounting for NMA and brand as an integral part of the company's value is very acute. This is especially true for companies that have changed their form of ownership of the company, which changes their value in the eyes of potential investors. In OJSC MMZ (OJSC "Minsk Motor Plant"), incorporated in 2008, for 2009, the NMA in the asset of the organization is 0.38%, and in non-current assets - 0.97%. These figures demonstrate quite well that there is a need to maximize the use of NMA in order to increase the value of business, where the main form of intangible assets is a brand that is created through innovation and organizational structure.

In the field of mechanical engineering it is extremely difficult to remain competitive, and, therefore, attractive to potential investors. Evaluation of the financial stability of an enterprise, investment attractiveness in focus is mainly the only financial condition that is analyzed using techniques based on the coefficients of financial condition and solvency. At MMZ, at the end of 2010, the financial independence ratio was 0.312, the liquidity ratio was 1.580. In general, these indicators indicate a satisfactory financial condition of the enterprise, and this is attractive for potential investors.

But the quality of the financial condition - this is only part of the complex evaluation of the company. The assessment of the financial stability of an enterprise in its modern parameters includes the value of assets, including brand assets, which are also important for investors. Despite the fact that the brand as such exists only in the minds of consumers, it is a means of generating additional revenues, ie, the asset of the company, while the value of the brand may constitute a significant part of the NMA, which increases the importance of the organization in the eyes of potential investors.

In addition, the role of IT-technologies in the provision of economic processes, and in particular in accounting, is constantly increasing. This leads to the fact that the assessment of the financial situation becomes a complex indicator, reflecting not only the financial position of the company, but I also have a number of other important indicators that affect the evaluation of its effectiveness.

That is why the use of the branding campaign is one of the most promising innovative technologies and the direction of activity at the same time, which can significantly affect both the overall economic situation, investment attractiveness, and the image of the company.