Analysis of the financial condition of an enterprise is a necessary procedure for maintaining the financial security of an enterprise
Qualitatively conducted analysis of financial andeconomic aspects of the functioning of an enterprise helps to make an assessment of the work done and correctly predict the changes in order to obtain the greatest profit. To conduct such a procedure, as an analysis of the financial condition of the enterprise, the financial manager of the enterprise is involved or, more objectively, a qualified specialist is employed by the relevant company. In order to analyze the financial condition of the enterprise fully, the financial manager must use all the accounting and statistical reporting of the company at the current time and for the previous periods.
In the analysis it is important to take into account absolute indicatorsprofit, relative profit indicators, financial stability and liquidity of the balance sheet, the effectiveness of using the attracted capital (if any). Deep analysis of the financial and economic activities of the enterprise takes place in several stages. First, the existing reports are read, then deeper professional types of analytical work are carried out, they include a vertical analysis method, a trend analysis method, and finally a calculation of the so-called financial-factor analytics. During the reading of the reports, the company's performance indicators are studied, the analysis of the financial condition of the enterprise, the property status, the use of long-term and short-term investments, sources of capital formation of the enterprise, relations with buyers and suppliers, financial and credit enterprises are performed, and the income from the activities and profits of the current year is estimated. The horizontal analysis of a financial condition of the enterprise reflects the tendency of changes in the reporting part of the report in comparison with the previous quarter, half-year, month. Vertical analysis refers to the estimation of the specific weight of certain individual indicators, for example, accounts receivable, in general activity. Conducting a trend analysis allows you to identify the main ways of development of the enterprise in terms of reporting. A more accurate analysis of the financial condition is obtained by comparing the indicators for several years of activity.
Particular importance for the financial manager havefinancial ratios, which are the basis for the analysis of the activities of the enterprise. The coefficients show the financial proportions and are based on data from a certain base: generally accepted standards, average indices in a certain industry, the performance of the enterprise of previous years, data on the activities of other enterprises, and other performance indicators of the company. Calculations on the coefficients are not particularly complicated, but they make it possible to make more accurate conclusions and make more feasible and optimally probable forecasts, to identify the weakest places in the enterprise's activities. The analysis of financial and economic activities of an enterprise conducted by qualified managers is not only a document for the manager, who, based on the results, will be able to evaluate the company's work and outline measures to improve it. Such a document can be drawn up for external users - banks, which, on the basis of its indicators, decide on the issuance of loans, participants in the stock market that determine the value of the shares of the enterprise or investors who decide on the appropriateness of investments.
The manager conducting the analysis must possessskills and experience in this type of activity, as he is responsible to the head of the company for the proposed recommendations for improving the work, the accuracy of the data that constitute the "financial image" of the enterprise.