FEDERAL AGENCY FOR EDUCATION

State educational institution

higher professional education

"Tver State University"

(GOUVPO TvGU)

Department accounting

Course work

on a comprehensive economic analysis financial and economic activities

Analysis of financial ratios

Completed by: student of group 38

"Accounting, analysis and audit"

Kozlova Oksana Andreevna

Scientific adviser:

Fedorova Tatyana Nikolaevna

Tver 2009

Introduction…………………………….…………………………………...3

Chapter 1. Components of the analysis of financial ratios and indicators…….………….................................... ..........................………...4

1.1 Information for financial analysis………………………

1.2 Concepts underlying the analysis financial indicators…

1.3 System of financial indicators and ratios

Chapter 2. Analysis of financial ratios as important tool financial analysis………………………………………………………

2.1 The essence of financial ratio analysis

2.2 Analysis of coefficients for assessing the efficiency of resource use………………………………………………………………………………..

2.3 Limitations of coefficient analysis…………………………………

Conclusion…………………………………………………….……….29

List of references………………………………………………………30

Introduction

The main purpose of financial analysis is to help financial managers make sound management decisions.

In this course work you will get acquainted with the system of coefficients that are actively used in the practice of financial analysis. The relevance of the topic “Analysis of financial ratios” is that it is not easy to penetrate into the essence of financial documents, to “read” them without the help of financial ratios, which today are recognized as the main means of financial analysis, which is why the analysis of financial ratios is an integral part of financial analysis.

Purpose course work is the rationale for the indispensability of the analysis of financial ratios for an objective assessment financial condition enterprises, assessment of financial stability, solvency of the enterprise, turnover of funds and their effective use.

The main task is not easy to give descriptive story on this topic, but to reveal the essence of the analysis on specific examples, calculations, describe exactly what certain coefficients should be for the normal operation of an enterprise, delimit the scope of a particular indicator depending on the scale of the enterprise and the relevance of this coefficient.

The course work consists of an introduction, two chapters, a conclusion and a list of references. The introduction reveals the relevance of the topic, purpose, and objectives. The first chapter reveals the economic content of the analysis of financial ratios and reveals the components on the basis of which the analysis is carried out. The second chapter discusses the main financial ratios using specific examples, a conclusion is drawn for each example. In conclusion, conclusions are drawn on the topic.

Chapter 1. Components of the analysis of financial ratios and indicators

Financial analysis is carried out by companies not only to assess the current financial condition of the company, it also makes it possible to predict its further development. At the same time, analysts need to carefully consider the list of indicators that will be used for strategic planning.

Level analysis sustainable growth is a dynamic analytical framework that integrates financial analysis with strategic management to explain critical relationships between strategic planning variables and financial variables, and to test the alignment of corporate growth objectives and financial policies. This analysis allows you to determine the company's existing opportunities for financial growth, establish how the company's financial policies will influence the future and analyze strengths and weaknesses competitive strategies companies.

Any measures to implement strategic programs have their own cost. A necessary part of planning and implementing a strategy is calculating the necessary and sufficient financial resources that the company must invest.

1.1 Information for financial analysis

Financial analysis is a set of methods for determining property and financial situation of an economic entity in the past period, as well as its capabilities for the short and long term 1. The purpose of financial analysis is to determine the most effective ways achieving the profitability of the company, the main tasks are to analyze profitability and assess the risks of the enterprise.

Analysis of financial indicators and ratios allows you to understand the competitive position of the company at the current time. Published reports and company accounts contain a lot of numbers, the ability to read this information allows analysts to know how efficiently and effectively their company and competing companies are performing.

Ratios allow you to see the relationship between sales profit and expenses, between fixed assets and liabilities. There are many types of ratios, they are usually used to analyze the five main aspects of a company's activities: liquidity, equity ratio and borrowed money, asset turnover, profitability and market value.

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1 “Financial and Credit Encyclopedic Dictionary” (edited by A.G. Gryaznova, M.: “Finance and Statistics”, 2004)

Rice. 1. Structure of the company’s financial indicators

Analysis of financial ratios and indicators is an excellent tool that provides insight into the financial condition of the company and competitive advantages and prospects for its development.

1. Performance analysis. The ratios allow you to analyze changes in the company's productivity in terms of net profit, capital use and control the level of costs. Financial ratios allow you to analyze the financial liquidity and stability of the enterprise due to effective use systems of assets and liabilities.

2. Assess market business trends. By analyzing the dynamics of financial indicators and ratios over a period of several years, it is possible to study the effectiveness of trends in the context of the existing business strategy.

3. Analysis of alternative business strategies. By changing the coefficients in the business plan, it is possible to analyze alternative options company development.

4. Monitoring the company's progress. Having chosen the optimal business strategy, company managers, continuing to study and analyze the main current ratios, can see a deviation from the planned indicators of the implemented development strategy.

Ratio analysis is the art of interrelating two or more indicators of a company's financial performance. Analysts can see a more complete picture of the company's performance over several years, and additionally by comparing the company's performance with industry averages.

It is worth noting that the system of financial indicators is not a crystal ball in which you can see everything that has happened and what will happen. This is just a convenient way to summarize a large number of financial data and compare the performance of different companies. Financial ratios themselves help the company's management to focus attention on weak and strengths the company's activities, correctly formulate questions that these coefficients can rarely answer. It is important to understand that financial analysis does not end with the calculation of financial indicators and ratios, it only begins when the analyst has carried out their full calculation.

The real usefulness of the calculated coefficients is determined by the tasks set. First of all, ratios provide an opportunity to see changes in financial position or results. production activities, help determine trends and structure of planned changes; which helps management see the threats and opportunities inherent in this particular enterprise.

A company's financial reports are a source of information about the company not only for analysts, but also for the company's management and a wide range of stakeholders. For effective ratio analysis, it is important for users of financial ratio information to know the basic characteristics of major financial statements and the concepts of ratio analysis. However, when conducting financial analysis, it is important to understand: the main thing is not the calculation of indicators, but the ability to interpret the results obtained.

When analyzing financial indicators, it is always worth keeping in mind that the assessment of operating results is made on the basis of data from past periods, and on this basis extrapolation of the future development of the company may be incorrect. Financial analysis should be focused on the future.

1.2 Concepts underlying financial performance analysis

Financial analysis is used when constructing budgets, to identify the reasons for deviations of actual indicators from planned indicators and to adjust plans, as well as when calculating individual projects. Horizontal (dynamics of indicators) and vertical (structural analysis of articles) analysis of reporting documents are used as the main tools management accounting, as well as calculation of coefficients. Such an analysis is carried out for all main budgets: BDDS, BDR, balance sheet, sales budgets, purchases, inventory.

The main features of financial analysis are the following:

1. The vast majority of financial indicators are relative values, which makes it possible to compare enterprises of different scales of activity.

2. When conducting financial analysis, it is important to apply the comparison factor:

compare company performance indicators in trends over different periods of time;

compare the performance of a given company with the industry average or with similar performance of enterprises within a given industry.

3. To conduct financial analysis, it is important to have a complete financial description of the company for selected periods of time (usually years). If the analyst has data for only one period, then there must be data from the enterprise’s balance sheet at the beginning and end of the period, as well as a profit statement for the period under review. It is important to remember that the number of balance sheets for analysis should be one more than the number of profit reports.

Accounting management is an important element in the analysis of financial ratios and ratios. The basic accounting equation expressing the interdependence of assets, liabilities and property rights is called accounting balance:

ASSETS = LIABILITIES + EQUITY

1. Current assets include cash and other assets that must be converted into cash within one year (for example, publicly traded securities; accounts receivable; notes receivable; working capital and advances).

2. Land property, fixed assets and equipment (fixed capital) include assets that are characterized by a relatively long service life. These products are generally not intended for resale and are used in the production or sale of other goods and services.

3. Long-term assets include the company's investments in securities, such as stocks and bonds, as well as intangible assets, including: patents, expenses for monopoly rights and privileges, copyrights.

Liabilities are usually divided into two groups:

1. Current liabilities include amounts payable that must be paid within one year; for example, accumulated liabilities and bills payable.

2. Long-term obligations are the rights of creditors that do not necessarily have to be realized within one year. This category includes bond obligations, long-term bank loans, and mortgages.

Own capital is the rights of the owners of the enterprise. In accounting terms, it is the remaining amount after deducting liabilities from assets. This balance is increased by any profits and decreased by any losses of the company.

Measures commonly considered by analysts include the statement of operations, the balance sheet, measures of changes in financial position, and measures of changes in equity.

A company's operating statement, also referred to as a profit and loss statement or income statement, summarizes the results of a company's options activities over a specific reporting period of time. Net income is calculated using the periodic method financial statements used in calculating profits and costs. It is generally considered the most important financial indicator. The report shows whether the percentage of income on the company's shares decreased or increased during the reporting period after the appointment of dividends or after the conclusion of other transactions with the owners. The income statement helps owners assess the amount, timing, and uncertainty of future cash flows.

The balance sheet and income statement are the main sources of metrics used by companies. A balance sheet is a report that shows what a company owns (assets) and what it owes (liabilities and equity) as of a specific date. Some analysts call the balance sheet a "snapshot of a company's financial health" at a particular point in time.

1.3 System of financial indicators and ratios

The total number of financial ratios that can be used to analyze a company’s activities is about two hundred. Typically, only a small number of basic coefficients and indicators are used and, accordingly, the main conclusions that can be drawn on their basis. For the purpose of more orderly consideration and analysis, financial indicators are usually divided into groups, most often into groups that reflect the interests of certain interested parties (stakeholders). The main groups of stakeholders include: owners, management of the enterprise, creditors. It is important to understand that the division is conditional and indicators for each group can be used by different stakeholders.

As an option, it is possible to organize and analyze financial indicators into groups that characterize the main properties of the company’s activities: liquidity and solvency; efficiency of company management; profitability (profitability) of activities.

The division of financial indicators into groups characterizing the characteristics of the enterprise’s activities is shown in the following diagram.

Rice. 2. Structure of the company’s financial indicators

Let's take a closer look at the groups of financial indicators.

Transaction cost indicators:

Analysis of transaction costs allows us to consider the relative dynamics of shares various types costs in the structure of the enterprise's total costs and is a complement to operational analysis. These indicators allow us to find out the reason for changes in the company's profitability indicators.

Indicators effective management assets:

These indicators make it possible to determine how effectively the company's management manages the assets entrusted to it by the company's owners. The balance sheet can be used to judge the nature of the assets used by the company. It is important to remember that these indicators are very approximate, because On the balance sheets of most companies, a wide variety of assets acquired at different times are reported at historical cost. Consequently, the book value of such assets often has nothing to do with their market value, a condition that is further aggravated in conditions of inflation and when the value of such assets increases.

Another distortion of the current situation may be associated with the diversification of a company’s activities, when specific activities require attracting a certain amount of assets to obtain a relatively equal amount of profit. Therefore, when analyzing, it is advisable to strive to separate financial indicators by certain types of company activities or by types of products.

Liquidity indicators:

These indicators allow us to assess the degree of solvency of the company for short-term debts. The essence of these indicators is to compare the amount of the company's current debts and its working capital, which will ensure the repayment of these debts.

Profitability (profitability) indicators:

They allow assessing the effectiveness of the company's management in using its assets. Operating efficiency is determined by the ratio of net profit, determined different ways, with the amount of assets used to generate this profit. This group of indicators is formed depending on the emphasis of the effectiveness study. Following the objectives of the analysis, the components of the indicator are formed: the amount of profit (net, operating, profit before tax) and the amount of the asset or capital that forms this profit.

Capital structure indicators:

Using these indicators, it is possible to analyze the degree of risk of bankruptcy of a company in connection with the use of borrowed financial resources. With an increase in the share of borrowed capital, the risk of bankruptcy increases, because the volume of the company's obligations increases. This group of ratios is primarily of interest to the company’s existing and potential creditors. Management and owners evaluate the company as a continuously operating business entity; creditors have a two-fold approach. On the one hand, creditors are interested in financing the activities of a successfully operating company, the development of which will meet expectations; on the other hand, creditors assess how significant the claim for debt repayment will be if the company experiences significant difficulties in repaying a long-term loan.

A separate group is formed by financial indicators that characterize the company’s ability to service debt using funds received from current operations.

The positive or negative impact of financial leverage increases in proportion to the amount of debt capital used by the company. The lender's risk increases along with the owners' risk.

Debt service indicators:

Financial analysis is based on balance sheet data, which is an accounting form that reflects the financial condition of a company at a certain point in time. Whatever coefficient characterizing the capital structure is considered, the analysis of the share of borrowed capital, in essence, remains statistical and does not take into account the dynamics of the company’s operating activities and changes in its economic value. Therefore, debt service indicators do not provide a complete picture of the company's solvency, but only show the company's ability to pay interest and the principal amount within the agreed time frame.

Market indicators:

These indicators are among the most interesting for company owners and potential investors. In a joint stock company, the owner - the holder of shares - is interested in the profitability of the company. This refers to the profit received through the efforts of the company’s management using funds invested by the owners. The owners are interested in the impact of the company's performance on market value their shares, especially those freely traded on the market. They are interested in the distribution of their profits: what share of it is reinvested in the company, and what part is paid to them as dividends.

The main analytical purpose of analyzing financial ratios and indicators is to acquire the skills of making management decisions and understanding the effectiveness of its work.

Chapter 2. Analysis of financial ratios as an important tool of financial analysis

Financial statements of an enterprise are the most objective source of information about the enterprise and the effectiveness of its activities, which is available to managers, investors and competitors. Investors based financial statements draw a conclusion about the advisability of investing in the shares of the enterprise. Published financial statements help competitors assess the relative strength of a business in an industry.

Within an enterprise, financial reporting documents are used to assess the strengths and weaknesses of the enterprise's financial performance, its readiness to take advantage of the opportunities provided and its ability to withstand the looming risks arising from external environment business, as well as compliance of the results achieved by the enterprise with the expectations of its investors. It is necessary to compare the results of the enterprise with the results of its closest competitors and with industry average standards.

Analysis of historical data is the first step in determining the financial strategy of the enterprise and setting clear goals for the future. Such analysis creates some control over the activities of the enterprise in the future.

Financial ratios are relative indicators of the financial condition of an enterprise. They are calculated as ratios absolute indicators financial condition or their linear combinations. Analysis of financial ratios consists of comparing their values ​​with basic values, as well as studying their dynamics for the reporting period and for a number of years. The values ​​of indicators of a given enterprise, averaged over a time series, relating to past favorable periods from the point of view of financial condition, are used as basic values. In addition, theoretically based or expertly obtained values ​​can be used as a basis for comparison. Such values ​​actually serve as standards for financial ratios, although methods for calculating them depending on the industry have not been created, since at present a set of relative indicators used to assess the financial condition of an enterprise has not been established. For an accurate and complete description of the financial condition, a fairly small number of indicators is needed. It is only important that each of these indicators reflects the most significant aspects of the financial condition.

The system of relative coefficients can be divided into a number of characteristic groups:

Indicators for assessing the profitability of an enterprise.

Indicators for assessing management effectiveness or profitability.

Indicators for assessing market sustainability.

Indicators for assessing the liquidity of balance sheet assets as the basis for solvency.

2.1 The essence of financial ratio analysis

You need a simple tool to help you focus on the most important areas of your business and compare performance results. various enterprises. One such tool is financial ratio analysis, which uses the calculation of financial ratios as a starting point for interpreting financial statements.

A coefficient is the ratio of one indicator to another. Analysis of financial ratios is used to control economic activity enterprise and to identify the strengths and weaknesses of the enterprise relative to competitors, as well as when planning the enterprise’s activities for the future.

The calculation of financial ratios focuses mainly on three key areas of business:

profitability (managing the buying and selling process);

resource utilization (asset management);

investor income.

How to determine those opportunities that ensure the efficiency of an enterprise’s economic activity (that is, the highest return with the minimum possible amount of investment and a reasonable degree of risk)? The answer to this question is provided by financial indicators such as resource efficiency and profitability.

2.2 Analysis of coefficients as efficiency of resource use

Let's try to answer the following question: what is the sales volume for each ruble invested by the investor in the reporting period under review?

Asset turnover ratio. The asset turnover ratio is calculated using the following formula:

Asset turnover ratio = Sales / Total net assets

where, total net assets = non-current assets + current assets - short-term liabilities.

The asset turnover ratio shows the sales volume for each ruble invested by the investor in the reporting period under review.

Example 1. At the end of the financial year, the non-current assets of the enterprise are equal to 100,000 rubles, current assets - 40,000 rubles, and short-term liabilities - 30,000 rubles. During the reporting financial year, sales volume is 300,000 rubles. Let's determine the asset turnover ratio.

Total net assets = 100,000 + 40,000 - 30,000 = 110,000 rubles.

Then the asset turnover ratio = 300,000 / 110,000 = 2.73, that is, for every ruble invested by the investor, there is a sales volume of 2.73 rubles. in the reporting period under review.

The asset turnover ratio of a retailer is always higher than that of a manufacturer because the manufacturer needs to make large investments in machinery and equipment (i.e. production is more capital intensive). A retailer sells goods made by someone else.

The asset turnover ratio can be influenced by changing either the sales volume (using marketing activities), or the amount of invested capital (by changing the structure of the enterprise's short-term capital or by changing investments in non-current assets).

Liquidity. Liquidity is an indicator of an enterprise's ability to pay off short-term obligations using current assets. An enterprise is considered liquid if it has sufficient current assets to cover all short-term debt obligations.

Liquidity is analyzed using two financial ratios: the ratio current liquidity and quick liquidity ratio.

The current ratio is calculated using the following formula:

Current ratio = Current assets / Current liabilities

The current ratio shows the relationship between the value of a company's current assets, which are liquid in the sense that they can be converted into cash in the next financial year, and debt, which must be repaid in the same financial year.

The optimal amount of liquidity is determined by the economic activities of the enterprise. Most industrial enterprises The current liquidity ratio remains at a relatively high level (about 1.25-1.85), since inventories mainly consist of raw materials, semi-finished products and finished products. Therefore, if necessary, it is difficult to quickly sell them at full cost.

Example 2. At the end of the financial year, the company's inventories are equal to 30,000 rubles, accounts receivable - 15,000 rubles, cash on hand - 5,000 rubles, and short-term liabilities - 55,000 rubles. Let's determine the current liquidity ratio.

Current assets = Inventories + Accounts receivable + Cash = 30,000 + 15,000 + 5,000 = 50,000 rubles.

Then current ratio = 50,000 / 55,000 = 0.91.

We see that the company is illiquid, since in the case of immediate repayment of all short-term obligations, in addition to the sale of all its own current assets, it must find additional funds from other sources.

To repay each ruble of short-term obligations, the enterprise will be able to immediately mobilize 0.91 rubles. through the sale of inventories, collection of accounts receivable and the use of cash, and 1 - 0.91 = 0.09 rubles. will have to be brought in from outside.

A very large value of the current liquidity ratio indicates undynamic management of the enterprise. This can happen when there is excessive stockpiling or when credit is extended to consumers for too long.

The main disadvantage of the current ratio is that it values ​​the business as if it were on the verge of liquidation. The current liquidity ratio reflects a static state and does not take into account the dynamic changes constantly occurring in the enterprise. For a more reasonable assessment of the company's creditworthiness, the company's cash flow should be analyzed.

The quick liquidity ratio is calculated using the following formula:

Quick ratio = (Current assets - Inventories) / Current liabilities

The quick ratio shows how much of the debt can be repaid in short term at the expense of current assets, if it is not possible to convert inventories into cash. For an industrial enterprise, this assumption is quite reasonable.

Accounts receivables turn into cash in a relatively short period of time. Therefore, most likely, all receivables will be repaid. But it can take a long time for inventory to move through production, sale, and into accounts receivable. And enterprising buyers will not miss the opportunity to purchase goods at reduced prices, taking advantage of the desperate situation of the seller.

An acceptable value for the quick liquidity ratio is in the range from 0.8 to 1.2.

Example 3. Let's determine the quick liquidity ratio based on the data from the previous example.

Current assets - Inventories = Accounts receivable + Cash = 15,000 + 5,000 = 20,000 rubles.

Then the quick ratio = 20,000 / 55,000 = 0.36.

We see that in the case of immediate repayment of all short-term obligations, if the company for some reason cannot sell its reserves, it will have to attract 1 - 0.36 = 0.64 rubles from outside. for every ruble of short-term liabilities.

Very often in practice there is a situation where an enterprise, with a constant current liquidity ratio, experiences a decrease in its quick liquidity ratio. This indicates that the company's inventory is growing relative to accounts receivable and cash.

Financial institutions providing lending services have difficulty assessing the liquidity of inventories and feel more confident when working only with accounts receivable and cash. Therefore, the quick ratio is more popular than the current ratio.

Let's try to find the answer to the question of how profitable each sale is.

The profitability of an enterprise is the ratio of actual profit to sales volume. Using the profit and loss account, two indicators of enterprise profitability are calculated: net margin and gross margin.

Net margin is calculated using the following formula:

Net Margin = (Net Profit / Sales Volume) x 100%

Net margin shows what share of sales volume remains with the enterprise in the form of net profit after covering the cost of products sold and all expenses of the enterprise. This indicator can serve as an indicator of the acceptable level of profitability at which the enterprise does not yet suffer losses. Net margin can be influenced pricing policy enterprise (gross margin and markup) and cost control.

Gross margin is calculated using the following formula:

Gross Margin = (Gross Profit / Sales Volume) x 100%.

There is an inverse relationship between gross margin and inventory turnover: the lower the inventory turnover, the higher the gross margin; The higher the inventory turnover, the lower the gross margin.

Manufacturers must provide themselves with higher gross margins compared to trade, since their product spends more time in production process. Gross margin is determined by pricing policy.

Gross margin should not be confused with another pricing tool - markup, which is calculated using the following formula:

Markup = (Gross Profit / Cost of Goods Sold) x 100%.

When setting a markup, one should proceed from the desired strategic position of the enterprise relative to competitors. At one end of the market spectrum are enterprises that provide high quality and knowingly appointing high prices(that is, having a low sales volume). At the other end of the market spectrum are businesses that sell large volumes of goods at low prices.

Example 4. In April, sales volume amounted to 200,000 rubles. The cost of products sold is 90,000 rubles, other expenses are 30,000. Let's determine the net margin, gross margin and markup.

Net Margin = (Net Profit) / (Sales) x 100% = [(200,000 - 90,000 - 30,000) / 200,000 ] x 100% = 40%. Therefore, from each 1 rub. sales volume, net profit after covering the cost of products sold and all expenses of the enterprise is 0.4 rubles.

Gross Margin = (Gross Profit) / (Sales Volume) x 100% = (200,000 - 90,000) / 200,000 x 100% = 55%.

Markup = (gross profit) / (cost of goods sold) x 100% = (200,000 - 90,000) / 90,000 x 100% ≈ 122%.

Discount from price (markdown). It is extremely important for wholesalers and retailers to understand the essence of not only markups, but also discounts. The percentage of the discount made from the price is calculated using the following formula:

Discount Percentage = Discount Monetary Amount / Total Sales Volume

Example 5. In March, 500 units of products were purchased for sale at a price of 10 rubles. In April-July, 300 units of products were sold at a price of 20 rubles. At the beginning of August, unsold goods were discounted to 15 rubles. for a unit. 100 units of product were sold at this price. Let's determine the discount percentage.

The monetary amount of the discount is 100 x (20 - 15) = 500 rubles, and the total sales volume was 300 x 20 + 100 x 15 = 7,500 rubles.

Then discount percentage = 500 / 7500 x 100% ≈ 6.7%.

2.3 Limitations of coefficient analysis

Differences in the accounting policies of enterprises, the principle of accounting at cost, the lack of acceptable comparable data, differences in the operating conditions of enterprises, changes in the purchasing power of money, intra-annual fluctuations in accounting information - all this imposes restrictions on the possibilities of analyzing ratios. When analyzing coefficients, the qualitative characteristics of goods and services are not taken into account, work force, labor relations.

It is impossible to evaluate the entire set of considered ratios as “bad” or “good” until a detailed analysis or comparison of these indicators with the previous results of the enterprise and with standard indicators for the industry as a whole is carried out. Therefore, caution should be exercised in interpreting financial indicators and not making hasty conclusions without complete information about the enterprise and the industry as a whole.

It is important to be able not only to calculate coefficients, but also to interpret them correctly. Interpreting financial ratios is a complex job that requires analysts to highly qualified and great experience. For there is no right or wrong interpretation - it is a creative and subjective process.

Although financial ratios are subject to the influence of conventions that arise when using accounting calculations or valuation methods, taken together these indicators can prepare the basis for further analysis of the enterprise's activities.

Conclusion

The financial condition of an enterprise is most fully characterized by financial ratios and are the most important indicators for assessing the production and financial activities of enterprises. Based on calculations and analysis of financial ratios, we can conclude that each group of ratios reflects a certain aspect of the financial condition of the enterprise. We must not forget that relative financial indicators are only indicative indicators of the financial position of the enterprise and its solvency.

The main source for the calculation and analysis of financial ratios is Form No. 1 “Balance Sheet”, Form No. 2 “Report on Financial Results” and other forms of financial reporting, as well as additional primary accounting data.

Let's look at the 12 main ratios of financial analysis of an enterprise. Due to their wide variety, it is often difficult to understand which ones are basic and which are not. Therefore, I tried to highlight the main indicators that fully describe the financial and economic activities of the enterprise.

In the activity of an enterprise, its two properties always collide: its solvency and its efficiency. If the solvency of the enterprise increases, then efficiency decreases. One can observe an inverse relationship between them. Both solvency and operational efficiency can be described by coefficients. You can focus on these two groups of coefficients, however, it is better to split them in half. Thus, the Solvency group is divided into Liquidity and Financial Stability, and the Enterprise Efficiency group is divided into Profitability and Business Activity.

We divide all financial analysis ratios into four large groups of indicators.

1. Liquidity ( short-term solvency),
2. Financial stability ( long-term solvency),
3. Profitability ( financial efficiency),
4. Business activity ( non-financial efficiency).

The table below shows the division into groups.

In each group we will select only the top 3 coefficients, in the end we will get a total of 12 coefficients. These will be the most important and main coefficients, because in my experience they are the ones that most fully describe the activities of the enterprise. The remaining coefficients that are not included in the top, as a rule, are a consequence of these. Let's get down to business!

Top 3 liquidity ratios

Let's start with the golden three of liquidity ratios. These three ratios provide a complete understanding of the liquidity of the enterprise. This includes three coefficients:

1. Current ratio,
2. Absolute liquidity ratio,
3. Quick ratio.

Who uses liquidity ratios?

The most popular among all ratios, it is used primarily by investors in assessing the liquidity of an enterprise.

Interesting for suppliers. It shows the company’s ability to pay its counterparties-suppliers.

Calculated by lenders to assess the quick solvency of an enterprise when issuing loans.

The table below shows the formula for calculating the three most important liquidity ratios and their standard values.

Top 3 financial stability ratios

Let's move on to consider the three main factors of financial stability. The key difference between liquidity ratios and financial stability ratios is that the first group (liquidity) reflects short-term solvency, and the latter (financial stability) reflects long-term solvency. But in fact, both liquidity ratios and financial stability ratios reflect the solvency of an enterprise and how it can pay off its debts.

1. Autonomy coefficient,
2. Capitalization rate,
3. Provision ratio of own working capital.

Autonomy coefficient(financial independence) is used by financial analysts for their own diagnostics of their enterprise for financial stability, as well as by arbitration managers (in accordance with the Decree of the Government of the Russian Federation of June 25, 2003 No. 367 “On approval of the rules for conducting financial analysis by arbitration managers”).

Capitalization rate important for investors who analyze it to evaluate investments in a particular company. A company with a large capitalization ratio will be more preferable for investment. Too high values ​​of the coefficient are not very good for the investor, since the profitability of the enterprise and thereby the income of the investor decreases. In addition, the coefficient is calculated by lenders; the lower the value, the more preferable it is to provide a loan.

recommendatory(according to the Decree of the Government of the Russian Federation of May 20, 1994 No. 498 “On some measures to implement legislation on the insolvency (bankruptcy) of an enterprise", which became invalid in accordance with Decree 218 of April 15, 2003) is used by arbitration managers. This ratio can also be attributed to the Liquidity group, but here we will assign it to the Financial Stability group.

The table below presents the formula for calculating the three most important financial stability ratios and their standard values.

Top 3 profitability ratios

Let's move on to consider the three most important profitability ratios. These ratios show the effectiveness of cash management at the enterprise.

IN this group indicators includes three coefficients:

1. Return on assets (ROA),
2. Return on equity (ROE),
3. Return on Sales (ROS).

Who uses financial stability ratios?

Return on assets ratio(ROA) is used by financial analysts to diagnose the performance of a business in terms of profitability. The ratio shows the financial return from the use of the enterprise's assets.

Return on equity ratio(ROE) is of interest to business owners and investors. It shows how effectively the money invested in the enterprise was used.

Return on sales ratio(ROS) is used by the sales manager, investors and the owner of the enterprise. The coefficient shows the efficiency of sales of the main products of the enterprise, plus it allows you to determine the share of cost in sales. It should be noted that what is important is not how many products the company sold, but how much net profit it earned from these sales.

The table below shows the formula for calculating the three most important profitability ratios and their standard values.

Top 3 business activity ratios

Let's move on to consider the three most important coefficients of business activity (turnover). The difference between this group of coefficients and the group of Profitability coefficients is that they show the non-financial efficiency of the enterprise.

This group of indicators includes three coefficients:

1. Accounts receivable turnover ratio,
2. Accounts payable turnover ratio,
3. Inventory turnover ratio.

Who uses business activity ratios?

Used general director, commercial director, head of the sales department, sales managers, financial director and financial managers. The coefficient shows how effectively the interaction between our enterprise and our counterparties is structured.

It is used primarily to determine ways to increase the liquidity of an enterprise and is of interest to the owners and creditors of the enterprise. It shows how many times in the reporting period (usually a year, but it can also be a month or a quarter) the company repaid its debts to creditors.

Can be used by commercial director, head of sales department and sales managers. It determines the efficiency of inventory management in an enterprise.

The table below presents the formula for calculating the three most important business activity ratios and their standard values. There is a small point in the calculation formula. The data in the denominator are usually taken as averages, i.e. The value of the indicator at the beginning of the reporting period is added up with the end one and divided by 2. Therefore, in the formulas, the denominator is 0.5 everywhere.

Summary

Let's summarize the top 12 ratios for the financial analysis of an enterprise. Conventionally, we have identified 4 groups of enterprise performance indicators: Liquidity, Financial stability, Profitability, Business activity. In each group, we have identified the top 3 most important financial ratios. The resulting 12 indicators fully reflect all financial and economic activities of the enterprise. It is with their calculation that financial analysis should begin. A calculation formula is provided for each coefficient, so you will not have any difficulties calculating it for your enterprise.

One simple tool that allows you to focus on the most important areas of a business and compare the performance of different businesses is financial ratio analysis, which uses the calculation of financial ratios as a starting point for interpreting the financial results of a business.

Analysis of financial ratios is used to monitor the economic activities of an enterprise and to identify the strengths and weaknesses of the enterprise relative to competitors, as well as when planning the enterprise’s activities for the future.

The calculation of financial ratios focuses primarily on three key areas of business: profitability (managing the buying and selling process); resource utilization (asset management); investor income.

Financial indicators such as resource efficiency and profitability show the opportunities that ensure the efficiency of the enterprise’s economic activities, that is, the highest return with the minimum possible amount of investment and a reasonable degree of risk.

The asset turnover ratio shows the sales volume for each ruble invested by the investor in the reporting period under review and is calculated using the following formula:

Asset turnover ratio = Sales volume / Total net assets,

where, total net assets = non-current assets + current assets - current liabilities.

The asset turnover ratio can be influenced by changing either the volume of sales (through marketing activities) or the amount of capital invested (by changing the short-term capital structure of the enterprise or by changing investments in non-current assets).

Liquidity. This is an indicator of the company's ability to pay off short-term obligations using current assets. Liquidity is analyzed using two financial ratios: the current ratio and the quick ratio.

The current ratio is calculated using the following formula: Current ratio = Current assets / Current liabilities.

The current ratio shows the relationship between the value of a company's current assets, which are liquid in the sense that they can be converted into cash in the next financial year, and debt, which must be repaid in the same financial year.

The optimal amount of liquidity is determined by the economic activities of the enterprise. For most industrial enterprises, the current ratio is kept at a relatively high level, since inventories mainly consist of raw materials, semi-finished products and finished products. Therefore, if necessary, it is difficult to quickly sell them at full cost.

The quick liquidity ratio is calculated using the following formula: Quick liquidity ratio = (Current assets - Inventories) / Current liabilities.

The quick liquidity ratio shows how much of the debt can be repaid in a short time using current assets if it is not possible to convert inventories into cash.

Accounts receivables turn into cash in a relatively short period of time. Therefore, most likely, all receivables will be repaid. But it can take a long time for inventory to move through production, sale, and into accounts receivable. And enterprising buyers will not miss the opportunity to purchase goods at reduced prices, taking advantage of the desperate situation of the seller.

An acceptable value for the quick liquidity ratio is in the range from 0.8 to 1.2.

Financial institutions providing lending services have difficulty assessing the liquidity of inventories and feel more confident when working only with accounts receivable and cash. Therefore, the quick ratio is more popular than the current ratio.

The profitability of an enterprise is the ratio of actual profit to sales volume. Using the profit and loss account, two indicators of enterprise profitability are calculated: net margin and gross margin.

Net Margin is calculated using the following formula: Net Margin = (Net Profit / Sales Volume) x 100%.

Net margin shows what share of sales volume remains with the enterprise in the form of net profit after covering the cost of products sold and all expenses of the enterprise. This indicator can serve as an indicator of the acceptable level of profitability at which the enterprise does not yet suffer losses. Net margin can be influenced by the company's pricing policy (gross margin and markup) and cost control.

Gross Margin is calculated using the following formula: Gross Margin = (Gross Profit / Sales Volume) x 100%.

There is an inverse relationship between gross margin and inventory turnover: the lower the inventory turnover, the higher the gross margin; The higher the inventory turnover, the lower the gross margin.

Manufacturers must ensure higher gross margins compared to trade because their product spends more time in the production process. Gross margin is determined by pricing policy.

Differences in the accounting policies of enterprises, the principle of accounting at cost, the lack of acceptable comparable data, differences in the operating conditions of enterprises, changes in the purchasing power of money, intra-annual fluctuations in accounting information - all this imposes restrictions on the possibilities of analyzing ratios. When analyzing coefficients, the qualitative characteristics of goods and services, labor, and labor relations are not taken into account.

It is impossible to evaluate the entire set of coefficients considered until a detailed analysis or comparison of these indicators is carried out with the previous results of the enterprise and with standard indicators for the industry as a whole. Therefore, caution should be exercised in interpreting financial indicators and not making hasty conclusions without complete information about the enterprise and the industry as a whole.

Although financial ratios are subject to the influence of conventions that arise when using accounting calculations or valuation methods, taken together these indicators can prepare the basis for further analysis of the enterprise's activities.

Method of financial ratios - calculation of relationships between financial statements data, determination of relationships between indicators. When carrying out the analysis, one should take into account the following factors: the effectiveness of the planning methods used, the reliability of financial statements, the use of various accounting methods (accounting policies), the level of diversification of the activities of other enterprises, the static nature of the coefficients used.

Expressing relative values, financial ratios make it possible to evaluate indicators in dynamics and compare the results of an enterprise’s activities with industry and parameters of competing organizations, as well as compare them with recommended values. The use of financial ratios makes it possible to quickly assess the financial condition of an enterprise.

Financial ratios can be systematized according to certain criteria:

• - based on the underlying measurements: cost and natural;
• - depending on which aspect of phenomena and operations they measure: quantitative and qualitative;
• - based on the use of individual indicators or their ratios: volumetric and specific.

Specific indicators include financial ratios, which are widely used in analytical work.

The indicators of each group include several basic generally accepted parameters and many additional ones, determined based on the purposes of the analysis.

The most widespread are four groups of financial indicators:

Indicators of financial stability.

Meters of solvency and liquidity.

Profitability (profitability) indicators.

Parameters of business activity and production efficiency.

The condition for the financial stability of an enterprise is an acceptable value of solvency and liquidity indicators. They express its ability to pay off short-term obligations with quickly realizable assets. The financial balance of the organization is ensured by a sufficiently high level of its solvency. The low value of solvency and liquidity ratios characterizes the situation of cash shortage to maintain normal current (operating) activities. On the contrary, high values ​​of these parameters indicate irrational investment of funds in current assets. Therefore, the closest attention is always paid to the study of the solvency and liquidity of the balance sheet of an enterprise.

Profitability indicators make it possible to obtain a generalized assessment of the efficiency of using assets (property) and equity capital of an enterprise.

Business activity parameters are also designed to assess the efficiency of using assets and equity capital, but from the perspective of their turnover. The volume of assets must be optimal, but sufficient to fulfill the enterprise's production program. If it experiences a shortage of resources, it must take care of sources of financing for their replenishment. Such sources can be both own and borrowed funds. If assets are redundant, the company incurs additional costs for their maintenance, which reduces their profitability.

In the group of indicators characterizing business activity enterprise, includes parameters expressing the value and profitability of its shares on the stock market. Market activity ratios relate the market price of a stock to its nominal value and earnings per share. They allow the management and owners of the enterprise to assess the attitude of investors towards its current and future activities.

In table 1.1. individual indicators recommended for analytical work. These measures can be used by external users of financial statements such as investors, shareholders and creditors.

An enterprise is considered solvent if the following condition is met:

where OA are current assets (section II of the balance sheet); KO - short-term liabilities (section V of the balance sheet).

A more special case of solvency: if own working capital covers the most urgent obligations (accounts payable):

where SOS is own working capital (OA - KO); SO - the most urgent obligations (items from section V of the balance sheet).

In practice, the solvency of an enterprise is expressed through the liquidity of the balance sheet.

Thus, to conduct a financial analysis and to identify the insolvency of Master Yug LLC, we can use the indicators given in this chapter and compare them with the standard value.

Analysis of financial ratios

Financial ratio analysis is integral part financial analysis, which is a broad area of ​​research that includes the following main areas: analysis of financial statements (including analysis of ratios), commercial calculations (financial mathematics), generation of forecast reports, assessment of the investment attractiveness of a company using a comparative approach based on financial indicators [ Teplova, Grigorieva, 2006].

First of all we're talking about about analysis of financial statements, which allows you to evaluate:

• o financial structure(property status) of the enterprise;
• o capital adequacy for current activities and long-term investments;
• o capital structure and the ability to repay long-term obligations to third parties;
• o trends and comparative effectiveness of the company’s development directions;
• o liquidity of the company;
• o the emergence of a threat of bankruptcy;
• o the company’s business activity and other important aspects characterizing its condition.

Financial statement analysis is very important for financial management because “what you cannot measure cannot be managed.”

At the same time, the analysis of financial statements must be considered in the context of the goals that the researcher sets for himself. In this regard, there are six basic motives for conducting regular analysis of financial statements:

• 1) investing in company shares;
• 2) provision or extension of credit;
• 3) assessment of the financial stability of the supplier or buyer;
• 4) assessment of the company’s possibility of obtaining monopoly profits (which provokes antimonopoly sanctions from the state);
• 5) forecasting the probability of bankruptcy of the company;
• 6) internal analysis of the company’s performance in order to optimize decisions to increase financial result and strengthening its financial condition.

As a result of regular such analysis, it is possible to obtain a system of basic, most informative parameters that give an objective picture of the financial condition of the organization, characterizing the effectiveness of its functioning as an independent economic entity (Fig. 2.4).

In the process of analysis, the analysis of three types of activity of the enterprise must be linked - main (operational), financial and investment.

Rice. 2.4.

Ratio analysis is one of the most popular methods of financial statement analysis. Financial ratios - These are correlations of data from different forms of enterprise reporting. The coefficient system must meet certain requirements:

• o each coefficient must have economic meaning;
• o coefficients are considered only in dynamics (otherwise they are difficult to analyze);
• o At the end of the analysis, a clear interpretation of the calculated coefficients is required. Interpreting coefficients means giving correct answers to the following questions for each coefficient:
• - how is it calculated and in what units is it measured?
• - what is it intended to measure, and why is it interesting for analysis?
• - what do high or low coefficient values ​​indicate, how deceptive can they be? How can this indicator be improved?

In order to correctly analyze the state of a particular enterprise, it is necessary to have a certain standard. For this purpose, standard and industry average indicators are used, i.e. a basis for comparison of the obtained indicator calculations is selected.

It should be remembered that coefficient analysis must be systematic. "You need to think of ratios as clues in a detective story. One or even several ratios may mean nothing or be misleading, but when combined correctly, combined with knowledge about the company's management and the economic situation in which where it is located, analysis of the coefficients will allow you to see the correct picture."

Financial ratios are traditionally grouped into the following categories (Fig. 2.5):

• o short-term solvency (liquidity);
• o long-term solvency (financial stability);
• o asset management (turnover indicators);
• o profitability (profitability);
• o market value.

Liquidity and financial stability ratios together characterize solvency companies. Turnover and profitability ratios indicate the level business activity enterprises. Finally, market value ratios can characterize investment attractiveness companies.

Rice. 2.5.

Liquidity ratios characterize the company's ability to pay off its short-term obligations. Current ratio (current ratio) is defined as the ratio of current assets to short-term liabilities:

Where OA - current assets of the enterprise as of a certain date; A - its short-term liabilities.

For creditors enterprises, especially short-term ones (suppliers), an increase in the current liquidity ratio means an increase in confidence in the solvency of the enterprise. Therefore, the higher the current ratio, the better. For managers For an enterprise, too high a current ratio may indicate ineffective use of cash and other short-term assets. However, the value of the current liquidity ratio less than one indicates an unfavorable situation: the net working capital of such an enterprise is negative.

Like other indicators, the current ratio is affected by different types of transactions.

Example 2.3

Let's assume that a company must pay invoices to its suppliers. At the same time, the value of its current assets is 4 million rubles, the total value of short-term liabilities is 2 million rubles, and the amount of invoices presented for payment reaches 1 million rubles. Then the current ratio will change as follows.

As is obvious from the table, the value of the current liquidity ratio has increased, i.e. The company's liquidity position has improved. However, if the situation before the operation was the opposite (current assets amounted to 2 million rubles, and short-term liabilities - 4 million rubles), it is easy to see that the operation with the payment of supplier bills would further worsen the situation of the enterprise.

This simple point should be kept in mind by business managers: reducing the base of short-term financing in a situation where liquidity is unsatisfactory seems like a natural step, but in fact leads to an even greater deterioration of the situation.

Quick (quick) liquidity ratio (quick ratio) is also called the “litmus paper test” (acid test). Its calculation allows us to “highlight” the situation with the structure of current assets. The quick ratio is calculated as follows:

OA-Inv

"""CL"

Where Inv (inventories) - the amount of inventories (industrial, finished goods and goods for resale) in the balance sheet of the enterprise as of a certain date.

The logic for calculating this ratio is that inventories, although they belong to the category of current assets, often cannot be sold quickly if necessary without a significant loss in value, and therefore are a rather low-liquid asset. Using cash to purchase inventory does not change the current ratio, but it does reduce the quick ratio.

If we exclude the amount of inventories from current assets, the structure of current assets will remain cash (and highly liquid securities accounted for under the item “Short-term financial investments”) and accounts receivable. If the share of receivables in the structure of current assets is large, and the repayment period is long (long-term receivables predominate), then an enterprise, even with a good quick liquidity ratio, may find itself in a difficult situation when it is necessary to immediately pay its short-term obligations. Therefore, another liquidity ratio is calculated.

Absolute liquidity ratio (cash ratio) is defined as the ratio of the amount of cash and highly liquid securities (short-term financial investments) to short-term liabilities:

_ Cash + MS * "CL"

Where Cash- amount of funds (in cash and in current accounts); MS (market securities) - highly liquid securities (short-term financial investments) taken into account in the balance sheet of an enterprise as of a certain date. In different sectors of the economy, the value of this coefficient may vary; moreover, it is highly susceptible to the peculiarities of the credit policy adopted by the enterprise. However, the value of the absolute liquidity ratio less than 0.1 suggests that the company may experience difficulties when it is necessary to immediately pay accounts to creditors.

Financial stability indicators also called leverage ratios (leverage ratios). They aim to measure the ability of an enterprise to meet its long-term financial obligations. In the most general view these measures compare the book value of a company's liabilities with the book value of its assets or equity.

Equity concentration ratio (equity ratio) characterizes the degree of independence of the enterprise from borrowed sources of financing and is calculated as the ratio of equity capital to the value of the total assets of the enterprise:

Where E (shareholders equity) - the amount of own (shareholder) capital; A (assets) - the total amount of the company's assets.

Total debt ratio (debt-to-assets ratio) is calculated as the ratio of borrowed funds to the value of total assets:

Where TL (total liabilities) - the total amount of the company’s liabilities; LTD (long-term debt) - the amount of long-term liabilities; CL- amount of short-term liabilities2. In general, this ratio shows what share of the company’s assets is financed various types its creditors. It can be modified and refined depending on the purposes of the analysis (for example, only net assets can be taken into account in the denominator, and only long-term liabilities in the numerator).

Similar functions are performed by another coefficient often used to assess financial stability - coefficient (multiplier) of equity capital (assets-to-equity ratio), calculated as the ratio of a company’s assets to its own (shareholder) capital:

Where D- the total amount of liabilities taken into account for analysis (may or may not coincide with total amount obligations TL).

Coefficient D/e obtained by transforming formula (2.1) is called leverage ratio (debt-to-equity ratio), kFV and characterizes the capital structure of the company, i.e. debt to debt ratio own funds, used by it to finance its activities.

Ratios indicating the financial stability of an enterprise include interest coverage ratio (times interest earned), which measures how well a company can meet its obligations to pay interest on borrowed funds:

Where EBIT- profit before interest and taxes; / - the amount of interest on the loan paid during the analyzed period.

Since interest is cash payments, and for calculation EBIT in Since the company's expenses take into account depreciation, which is not a payment, then to clarify this indicator they often use cash supply ratio, taking into account earnings before depreciation, interest and taxes in the numerator EBITDA. Earnings before depreciation, interest, and taxes are a basic measure of a business's ability to generate cash from its operations. It is often used as a measure of available cash to meet financial obligations.

The interest coverage ratio indicates the level of riskiness of a company's operations. The higher the business risk (operating risk), the less predictable the company's profits are, as a rule, and, consequently, the less willing the suppliers of long-term debt capital are to lend to the company. Consequently, such a company's interest coverage ratio should be higher than that of a company with lower operational risk, whose earnings are predictable and access to financial resources It's much easier for creditors.

In conditions of a financial crisis, the so-called financial safety factor (financial safety ratio), calculated as the ratio of the company’s liabilities to its profits:

The value of this coefficient is determined by industry characteristics, as well as the development strategy of companies. A value not exceeding 3 is considered relatively safe.

Turnover indicators(turnover ratios) characterize the ability of an enterprise to manage assets and working capital. Total asset turnover ratio (assets turnover ratio) reflects the efficiency of the company's use of all available resources, regardless of the sources of their attraction. This coefficient shows how many times during the analyzed period1 the full cycle of production and circulation is completed. The total asset turnover ratio is calculated as the ratio of revenue from sales of products (performance of work, provision of services) to the average value of the enterprise’s assets for the analyzed period:

Where S (sales) - sales volume (revenue from sales) for the analyzed period; L - average value total assets for the same period1.

The asset turnover ratio measures the volume of sales generated by each unit of currency invested in an asset. So, if the asset turnover ratio is 1, this means that for every ruble invested in assets, the company will receive 1 ruble. revenue from product sales. A low value of the asset turnover ratio is typical for capital-intensive sectors of the economy, high for industries whose enterprises are not encumbered big amount assets. The asset turnover ratio, as a rule, is in inverse proportion to the liquidity ratio: a high value of the current liquidity ratio is usually possible where the company maintains high level current assets, which negatively affects the turnover ratio. The choice of priorities here is determined by the short-term financial policy of the enterprise.

Similarly to this indicator, turnover ratios are calculated for specific categories of assets: for non-current assets (non-current assets turnover ratio is also called return on assets), on current assets, inventories, receivables, payables. However, we note that depending on the purposes of the analysis, it is possible different ways calculation of turnover ratios reserves And accounts payable. Since, at the expense of accounts payable, the enterprise forms inventories that do not participate in the formation of profit, a more correct approach to calculating these indicators is based on the fact that the numerator of the formula indicates production cost (cost of goods sold, COGS). At the same time, analysts [Grigorieva, 2008] recommend uniformity in calculations when it is necessary to calculate All turnover indicators.

Asset turnover period (assets turnover period) shows the number of days required to complete one turnover of assets. For the analyzed period of one year1 this indicator will be calculated using the following formula:

The turnover period is also determined by categories of assets and liabilities. Turnover periods are most important accounts receivable (receivables collection period, RCP) And accounts payable (payables collection period, PCP). The first shows how many days on average it takes to convert sales revenue into real cash receipts. The second characterizes the average length of deferment that an enterprise enjoys in making payments to its creditors, and, consequently, the period of short-term debt financing of the company.

Turnover indicators also include the duration of the net operating and financial cycle. Clean operating cycle (net operation cycle period) shows the number of days for which a company on average needs working capital financing.

It is equal to the sum of the inventory turnover periods and accounts receivable:

Where ITP (inventories turnover period) - inventory turnover period.

The larger the net operating cycle, the longer the company requires financing and the higher the liquidity risks. However, since current assets are financed partly from short-term liabilities, primarily accounts payable, the real need of the enterprise for cash in days - pure financial cycle (net financial cycle period) - calculated by subtracting the accounts payable turnover period from the net operating cycle:

Profitability ratios characterize the efficiency of company management, measured as profitability.

Return on sales (return on sales) is calculated as the ratio of net profit to sales revenue for the analyzed period of time (in percent):

Where N1 (net income) - net profit.

Return on sales in a broad sense characterizes the efficiency of the operating activities of an enterprise. She reflects pricing policy the company, as well as the effectiveness of management’s actions to control and reduce costs. In order to emphasize the importance of a particular element of operating activity, return on sales is also calculated using modified methods: the numerator of the formula may contain, in addition to the net profit indicator, an indicator of profit before interest and taxes (EBIT) or earnings before interest, taxes, depreciation and amortization (EBITDA).

Note that there is an inverse relationship between return on sales and asset turnover. Companies with high performance return on sales is usually characterized by low asset turnover and vice versa. This is due to the fact that companies with high return on sales usually belong to industries with a high share of added value, i.e. value created directly from this enterprise by processing the product and promoting the product to the market. In such industries, due to the complexity technological processes, enterprises are forced to have significant inventories and expensive non-current assets, which naturally reduces their turnover ratio. In industries with a low share of added value, enterprises adhere to the policy low prices and do not show high return on sales, however, the need for assets is low, which increases the asset turnover ratio.

Return on assets (return on assets) reflects the efficiency of using the company's assets. It is calculated as the ratio of net profit to the average value of the enterprise’s assets for the period:

Return on assets is a very important indicator that can be used to measure the effectiveness of how a company generates its capital and manages the resources at its disposal. The fact is that assets are formed both by the owners of the company and by its creditors (see Table 2.2). Therefore, the return on assets must be sufficient to both satisfy the company's profitability requirements from its owners (the profitability of its own captain) and ensure the payment of interest on the loan, as well as the payment of taxes. Therefore, for various management and analytical purposes, this indicator is also modified: in the numerator of the formula, the most correct indicator, in addition to net profit, can be net operating profit after taxes (NOPAT) in the denominator it is possible to use the indicator “net assets” (LI), obtained by deducting the balance of short-term liabilities from the currency. If net operating profit after tax is allocated to net assets enterprises, we are talking about an indicator called return on invested capital (return on capital employed), ROCE which is widely used for the purposes of analyzing and managing the value of a company.

Return on equity (return on equity) characterizes the effectiveness of investing in a company on the part of its owners. It is calculated using the following formula:

Return on equity refers to the resulting indicators of financial management. As R. Higgins put it, “it is not an exaggeration to say that many top managers have risen and fallen with the return on equity of their companies.” In the next section we will discuss in detail the factors influencing return on equity.

Market value ratios are a broad group of indicators used by external users of information (investors) and characterizing the investment attractiveness of a company. Calculating these indicators is not difficult for public companies listed on the market, however, for closed forms of business, market value indicators can be used with reservations.

Most objectively characterizes the attractiveness of a company market value of an ordinary share (price per share), R. An increase in this indicator means an increase in the company's value for its shareholders, so managers should pay close attention to stock prices. If managers act in the interests of shareholders, they should make financial decisions that will be aimed at increasing the market price of shares. The total value of all company shares is market capitalization (market value of shareholders" equity, MVE).

Earnings per share (earnings per share) shows the amount of net profit (in monetary units) per one ordinary share. This indicator

used when evaluating shares and the company as a whole and is calculated using the formula

Where Qcs- quantity ordinary shares companies.

Share price to earnings per share ratio (price-to-earnings ratio) characterizes the company from the point of view of investors. This indicator is widely used in investment analytics and business valuation:

The value of this coefficient is determined, firstly, by how shareholders (investors) assess the company’s development prospects, as well as their assessment of the risks with which the company is associated. This indicator cannot serve as an indicator of the current state of the enterprise, since it reflects investors' expectations regarding the future development of the company. There are known situations when a company showing low profits at the end of the year was characterized by a growing ratio, since investors believed that the difficulties were temporary and the company had good growth prospects.

Other indicators characterizing the market value of a company are discussed below.

Analysis of factors influencing company efficiency

The issue of indicators characterizing the effectiveness of both the company’s activities and its management remains controversial. IN last years within the framework of the theory of value-based management, new systems and indicators characterizing efficiency were developed. Although return on equity (ROE) As an indicator based on profit, it has significant disadvantages (listed in Chapter 1), it can be considered as a measure of efficiency, since it characterizes the profitability of investments in the company for its owners.

Let's look at the difference between return on equity and return on assets (ROA). This difference reflects the financing of the enterprise through the use of borrowed funds (financial leverage). If we multiply the numerator and denominator of formula (2.4), showing the calculation ROE for a fraction equal to 1 (L/L), we get 1:

Thus, return on equity is influenced by return on assets (i.e., the efficiency of using the entire capital of the company) and the equity ratio, which contains the financial leverage ratio [see. formula (2.1)], i.e. showing management's efforts to attract debt financing.

In turn, the return on assets indicator [see. formula (2.2)] can be transformed by multiplying by a fraction equal to one (%):

It follows that a high share of profit in revenue does not always lead to an increase in return on assets, i.e. It is necessary to efficiently manage the assets at the disposal of the enterprise.

Then return on equity can be expressed by the following formula:

Formulas (2.5) and (2.6) characterize the model of the influence of factors on the company’s efficiency (Dupont model). Thus, company management can increase efficiency (return on equity) by paying attention to:

• o efficiency of management of current activities (measured by profitability of sales);
• o efficiency of asset use (measured by the asset turnover ratio), characterizing the amount of resources required to achieve a given sales volume;
• o the efficiency of raising borrowed funds (measured by the equity ratio), as well as the share of own funds necessary for sustainable financing of the business.

These coefficients, in turn, are determined by more specific indicators that characterize various aspects of the enterprise’s activities. Thus, if we take return on equity as target characterizing the efficiency of the enterprise, you can build a tree of financial indicators (Fig. 2.6).

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