Analysis of the financial activities of the enterprise. Financial analysis and investment appraisal of the enterprise Main groups of financial ratios

Before proceeding directly to the topic of the article, you should understand the essence of the concept financial activities enterprises.

Financial activity at the enterprise Is financial planning and budgeting, financial analysis, financial relationship management and monetary funds, definition and implementation of investment policy, organization of relations with budgets, banks, etc.

Financial activity solves such problems as:

providing the enterprise with the necessary financial resources for financing its production and sales activities, as well as for the implementation of investment policy;
seizing opportunities to improve efficiency the activities of the enterprise;
ensuring timely repayment current and long-term liabilities;
identifying optimal credit conditions to expand the volume of sales (deferral, installments, etc.), as well as the collection of generated accounts receivable;
traffic control and redistribution financial resources within the boundaries of the enterprise.

Analysis feature

Financial indicators allow you to measure the effectiveness of work in the above areas. For example, liquidity indicators make it possible to determine the possibility of timely repayment of short-term obligations, while the ratios financial sustainability, which represent the ratio of equity and borrowed capital, allow us to understand the ability to meet obligations in the long term. The financial stability ratios of the second group, which show the adequacy of working capital, make it possible to understand the availability of financial resources for financing activities.

Indicators of profitability and business activity (turnover) show how the company uses the available opportunities to improve work efficiency. Analysis of receivables and payables allows you to understand the credit policy. Considering that profit is formed under the influence of all factors, it can be argued that the analysis of financial results and analysis of profitability allows you to obtain an overall assessment of the quality of the financial activities of the enterprise.

The efficiency of financial activity can be judged by two aspects:

Results financial activities;
The financial condition enterprises.

The first is expressed by how efficiently the company can use its existing assets, and most importantly, whether it is able to generate profit and to what extent. The higher the financial result for each ruble of invested resources, the better the result of financial activities. However, profitability and turnover are not the only indicators of a company's financial performance. An opposite and related category is the level of financial risk.

The current financial condition of the enterprise just means how much sustainable is the economic system. If the company is able to meet its obligations in the short and long term, to ensure the uninterrupted production and sales process, as well as to reproduce the expended resources, then it can be assumed that while maintaining the current market conditions the enterprise will continue to operate. In this case, the financial condition can be considered acceptable.

If the company is able to generate high profits in the short and long term, then we can talk about effective financial performance.

In the process of analyzing the financial activities of the enterprise, both in the analysis of financial results and in the process of assessing the state, the following methods should be used:

horizontal analysis - analysis speakers financial result, as well as assets and sources of their financing, will determine the general trends in the development of the enterprise. As a result, one can understand the medium and long term of his work;
vertical analysis - assessment of the formed structures assets, liabilities and financial results will help identify imbalances or ensure the stability of the company's current performance;
comparison method - juxtaposition data with competitors and industry averages will help determine the effectiveness of the company's financial performance. If the company demonstrates higher profitability, then we can talk about quality work in this direction;
method of coefficients - in the case of a study of the financial activity of an enterprise, this method is important, since its use will allow obtaining a set indicators, which characterize both the ability to demonstrate high results and the ability to maintain stability.
factor analysis - allows you to determine the main factors that influenced the current financial position and financial performance of the company.

Analysis of the financial results of the enterprise

Investors are interested in profitability, as it allows them to assess the effectiveness of management and the use of capital that was provided by the latter for the purpose of making a profit. Other participants in financial relations, for example, lenders, employees, suppliers and customers, are also interested in understanding the profitability of the company, as this allows you to estimate how smoothly the company will operate in the market.

Therefore, the analysis of profitability allows you to understand how effectively the management implements the strategy of the company to generate financial results. Given the large number of tools that are in the hands of the analyst when assessing profitability, it is important to use a set of different methods and approaches in the process.

Although firms report net income, the more important metric is the total financial bottom line, as the metric that better indicates the performance of a company's stock. There are two main alternative approaches to measuring profitability.

The first approach provides for the consideration of various transformations of the financial result. Second approach- indicators of profitability and profitability. In the case of applying the first approach, such indicators are used as the profitability of the company's shares, horizontal and vertical analysis, assessment of the growth of indicators, consideration of various financial results (gross profit, profit before tax, and others). In the case of applying the second approach, indicators of return on assets and return on equity are used, which provide for obtaining information from the balance sheet and the statement of financial results.

These two metrics can be broken down into profit margin, leverage, and turnover to provide a better understanding of how a company generates wealth for its shareholders. In addition, indicators of margin, turnover and leverage can be analyzed in more detail and broken down into different lines of financial statements.

Analysis of financial indicators of the enterprise

It should be noted that the most important method is the method of indicators, it is also the method of relative indicators. Table 1 shows the groups financial ratios which are best suited for analyzing activities.

Table 1 - The main groups of indicators that are used in the process of assessing the company's financial result

It is worth considering each of the groups in more detail.

Turnover indicators (indicators of business activity)

Table 2 presents the most commonly used PM ratios. It shows the numerator and denominator of each coefficient.

Table 2 - Indicators of turnover

Business activity indicator (turnover)	Numerator	Denominator
	Cost price	Average inventory value
	The number of days in the period (for example, 365 days if using data for a year)	Inventory turnover
		Average value of receivables
	Number of days in the period	Accounts receivable turnover
	Cost price	Average cost of accounts payable
	Number of days in the period	Accounts payable turnover
Working capital turnover		Average cost of working capital
		Average cost of fixed assets
		Average asset value

Interpretation of turnover indicators

Inventory turnover and the period of one inventory turnover ... Inventory turnover is the basis of operations for many organizations. The indicator indicates resources (money) that are in the form of reserves. Therefore, such a coefficient can be used to indicate the effectiveness of inventory management. The higher the inventory turnover ratio, the shorter the period of inventory holding in the warehouse and in production. In general, inventory turnover and the period of one inventory turnover should be estimated against industry standards.

High an inventory turnover ratio relative to industry norms may indicate a high level of inventory management performance. However, another situation is possible when this turnover ratio (and a low indicator of one turnover period) could indicate that the company does not form an adequate stock, because of which its shortage could harm revenues.

To gauge which explanation is more likely, the analyst can compare the company's earnings growth with the industry's growth. Slower growth, coupled with higher inventory turnover, may indicate insufficient inventory levels. Revenue growth at or above industry growth supports the interpretation that high turnover reflects greater efficiency in inventory management.

Short the inventory turnover ratio (and, accordingly, a high turnover period) in relation to the industry as a whole can be an indicator of the slow movement of inventories in the operational process, possibly due to technological obsolescence or a change in fashion. Again, comparing the company's sales growth to the industry, one can understand the essence of the current trends.

Accounts receivable turnover and the period of one turnover of accounts receivable . The accounts receivable turnover period represents the time elapsed between sale and collection, which reflects how quickly a company collects funds from customers to whom it offers a loan.

Although it is more correct to use credit sales in the numerator, credit sales information is not always available to analysts. Therefore, the revenue shown in the income statement is usually used as the numerator.

A relatively high ratio of accounts receivable turnover may indicate a high efficiency of commodity lending to customers and their collection of money. On the other hand, a high receivables turnover ratio may indicate that the terms of lending or debt collection are too tight, which indicates a possible loss of some sales to competitors who offer softer terms.

Relatively low accounts receivable turnover usually raises questions about the effectiveness of credit and collection procedures. As with inventory management, comparing company and industry sales growth can help the analyst assess whether sales are lost due to tight credit policies.

In addition, by comparing bad accounts receivable and actual loan losses with past experience and with peers, it can be assessed whether low turnover reflects problems in managing commercial lending to customers. Companies sometimes provide information on the stitching of receivables. This data can be used in conjunction with turnover rates to make more accurate conclusions.

Accounts payable turnover and the period of accounts payable turnover ... The payables turnover period reflects the average number of days that a company pays its suppliers. The accounts payable turnover ratio indicates how many conventionally times a year the company covers debts to its creditors.

For the purposes of calculating these indicators, it is assumed that the company makes all its purchases using a commodity (commercial) credit. If the volume of purchases of goods is not available to the analyst, then the indicator of the cost of goods sold can be used in the calculation process.

High accounts payable turnover ratio (low period of one turnover) in relation to the industry may indicate that the company does not fully use the available credit funds. On the other hand, this may mean that the company is using a system of discounts for earlier payments.

Excessively low the turnover ratio may indicate problems with timely payment of debts to suppliers or active use of soft credit terms of the supplier. This is another example of when you should look at other metrics to make informed conclusions.

If liquidity ratios indicate that the company has sufficient cash and other short-term assets to pay liabilities, and yet the payables turnover period is high, then this would indicate lenient credit terms of the supplier.

Working capital turnover ... Working capital is defined as current assets less current liabilities. Working capital turnover indicates how efficiently a company is generating income from working capital. For example, a working capital ratio of 4 indicates that the company generates 4 rubles of income for every 1 ruble of working capital.

A high value of the indicator indicates greater efficiency (i.e. the company generates high level income of a relatively smaller amount of attracted working capital). For some companies, the amount of working capital can be close to zero or negative, which makes this indicator difficult to interpret. The following two factors will be useful in these circumstances.

Fixed assets turnover (return on assets) ... This indicator measures how efficiently a company generates income from its fixed capital investments. As a rule, more high fixed assets turnover ratio shows a more efficient use of fixed assets in the process of generating income.

Low the value may indicate that the business is inefficient, capital intensive, or that the business is not operating at full capacity. In addition, the turnover of fixed assets can be formed under the influence of other factors not related to business efficiency.

The return on assets ratio will be lower for companies whose assets are newer (and therefore less depreciated, which is reflected in the financial statements of a higher carrying amount) compared to companies with older assets (which are more depreciated and thus recorded at a lower carrying amount (subject to the use of the revaluation mechanism).

The rate of return on assets may be unstable, since revenues can have stable growth rates, and the increase in fixed assets occurs in leaps and bounds; therefore, every annual change in the metric does not necessarily indicate an important change in the company's performance.

Asset turnover ... The All Asset Turnover Ratio measures the overall ability of a company to generate income with a given level of assets. The ratio of 1.20 will mean that the company generates 1.2 rubles of income for every 1 ruble of attracted assets. A higher ratio indicates more efficient company operations.

Since this ratio includes both fixed and working capital, ineffective working capital management can distort the overall interpretation. Therefore, it is useful to analyze working capital and return on assets separately.

Short an asset turnover ratio can indicate poor performance or a relatively high level of capital intensity of the business. The indicator also reflects strategic management decisions: for example, the decision to take a more labor-intensive (and less capital-intensive) approach to your business (and vice versa).

The second important group of indicators is the profitability and profitability ratios. These include the following coefficients:

Table 3 - Indicators of profitability and profitability

Indicator of profitability and profitability	Numerator	Denominator
	Net profit	Average asset value
	Net profit
Gross margin	Gross profit
	Revenue from sales
	Net profit
	Average asset value	Net profit
	Average cost of equity	Net profit

Profitability indicator assets shows how much profit or loss the company receives for each ruble of invested assets. The high value of the indicator indicates the effective financial performance of the enterprise.

Return on equity is a more important indicator for the owners of the enterprise, since this coefficient is used when evaluating investment alternatives. If the value of the indicator is higher than in alternative investment instruments, then we can talk about the high-quality financial activities of the enterprise.

Margin metrics provide insight into sales performance. Gross margin shows how many resources the company still has for management and sales expenses, interest expenses, etc. Operating margin demonstrates the effectiveness of the organization's operational process. This indicator allows you to understand how much the operating profit will increase with an increase in sales by one ruble. Net margin takes into account the influence of all factors.

Return on assets and equity allows you to determine how much time is needed for the company in order for the attracted funds to pay off.

Analysis of the financial condition of the enterprise

Financial condition, as mentioned above, means the stability of the current financial and economic system of the enterprise. To study this aspect, you can use the following groups of indicators.

Table 4 - Groups of indicators that are used in the process of assessing the condition

Liquidity ratios (liquidity indicators)

Liquidity analysis, in the process of which attention is focused on movement Money, measures the company's ability to meet its short-term obligations. The core metrics in this group are a measure of how quickly assets are converted into cash. In day-to-day operations, liquidity management is usually achieved through the efficient use of assets.

The level of liquidity must be considered depending on the industry in which the company operates. The liquidity position of a particular company may also vary depending on the perceived need for funds at any given time.

Assessing the adequacy of liquidity requires an analysis of the company's historical funding needs, its current liquidity position, expected future funding needs, and options for reducing funding needs or raising additional funds (including actual and potential sources of such funding).

Large companies tend to have better control over the level and composition of their liabilities compared to smaller companies. Thus, they can have more potential sources of financing, including the capital of the owners and the funds of the credit market. Access to capital markets also reduces the required size of the liquidity buffer compared to companies without such access.

Contingent liabilities, such as letters of credit or financial guarantees, can also be relevant in assessing liquidity. The importance of contingent liabilities varies between the non-banking and banking sectors. In the non-banking sector, contingent liabilities (usually disclosed in a company's financial statements) represent potential cash outflows and should be included in assessing the company's liquidity.

Calculation of liquidity ratios

The main liquidity ratios are presented in table 5. These liquidity ratios reflect the position of the company at a particular point in time and, therefore, use data at the end of the balance sheet date, and not the average balance sheet values. Indicators of current, quick and absolute liquidity reflect the company's ability to pay current liabilities. Each uses a progressively stricter definition of liquid assets.

Measures how long a company can pay for its daily cash expenses using only existing liquid assets, without additional cash flows. The numerator of this ratio includes the same liquid assets used in quick liquidity, and the denominator is an estimate of daily cash expenditures.

To obtain daily cash expenses, the total cash expenses for the period are divided by the number of days in the period. Therefore, to obtain cash expenses for the period, it is necessary to summarize all expenses in the statement of financial results, including such as: cost price; sales and administrative expenses; other expenses. However, the amount of expenses should not include non-cash expenses, for example, the amount of depreciation.

Table 5 - Liquidity indicators

Liquidity indicators	Numerator	Denominator
	Current assets	Current responsibility
	Current assets - stocks	Current responsibility
	Short-term investments and cash and cash equivalents	Current responsibility
Guard interval indicator	Current assets - stocks	Daily expenses
	Inventory turnover period + accounts receivable turnover period - accounts payable turnover period

The financial cycle is a metric that is not calculated in the form of a ratio. It measures the length of time it takes for an enterprise to go from investing money (invested in activities) to receiving money (as a result of activities). During this period of time, the company must finance its investment operations from other sources (i.e. from debt or equity).

Interpretation of liquidity ratios

Current liquidity ... This indicator reflects current assets (assets that are expected to be consumed or converted into cash within one year), which are attributable to the ruble of current liabilities (liabilities occur within one year).

More high the ratio indicates a higher level of liquidity (i.e., a higher ability to meet short-term liabilities). A current ratio of 1.0 would mean that the book value current assets exactly equal to the carrying amount of all current liabilities.

More low the value of the indicator indicates less liquidity, which implies a greater dependence on operating cash flow and external financing to meet short-term liabilities. Liquidity affects a company's ability to borrow money. The current ratio is based on the assumption that inventories and receivables are liquid (if inventory and receivables turnover are low, this is not the case).

Quick ratio ... The quick ratio is more conservative than the current ratio, as it only includes the most liquid current assets (sometimes referred to as “quick assets”). Like the current ratio, a higher quick ratio indicates the ability to meet debt.

This indicator also reflects the fact that inventory cannot be easily and quickly converted into cash, and, in addition, the company will not be able to sell its entire stock of raw materials, materials, goods, etc. for an amount equal to its book value. especially if this inventory needs to be sold quickly. In situations where stocks are illiquid (for example, in the case of a low inventory turnover ratio), quick liquidity may be a better indicator of liquidity than the current liquidity ratio.

Absolute liquidity ... The ratio of cash to current liabilities is usually a reliable measure of the liquidity of an individual enterprise in a crisis situation. Only highly liquid short-term investments and cash are included in this indicator. However, it should be borne in mind that in a crisis, the fair value of liquid securities may significantly decrease as a result of market factors, and in this case it is advisable to use only cash and cash equivalents in the process of calculating absolute liquidity.

Guard interval indicator ... This ratio measures how long a company can continue to pay its expenses with its available liquid assets without receiving any additional cash inflow.

A safeguard score of 50 would mean the company can continue to pay its operating expenses for 50 days with fast assets without any additional cash inflows.

The higher the indicator of the guard interval, the higher the liquidity. If the company's watchband indicator is very low compared to peers or compared to the company's own history, the analyst needs to clarify whether there is sufficient cash flow to enable the company to meet its obligations.

Financial cycle ... This indicator indicates the amount of time that elapses from the moment an enterprise invests money in other forms of assets until the moment it collects money from customers. A typical operating process involves the receipt of inventory on a deferred basis, which forms accounts payable. The company then also sells that inventory on credit, resulting in an increase in receivables. After that, the company pays its invoices for the goods and services supplied, and also receives payments from customers.

The time between spending money and collecting money is called the financial cycle. More short cycle indicates more liquidity. It means that the company only needs to fund its inventory and receivables for a short period of time.

More long cycle indicates lower liquidity; this means that the company must fund its inventories and receivables for more long period time, and this may lead to the need to attract additional funds for the formation of working capital.

Indicators of financial stability and solvency

Solvency ratios are generally of two types. Debt indicators (the first type) focus on the balance sheet, and measure the amount debt capital towards own capital or the total amount of the company's funding sources.

Coverage ratios (the second type of metric) focus on the statement of financial performance, and measure the company's ability to cover its debt payments. All of these indicators can be used in assessing the creditworthiness of a company and, therefore, in assessing the quality of the company's bonds and its other debt obligations.

Table 6 - Indicators of financial stability

Indicators	Numerator	Denominator
	Total liabilities (long-term + short-term liabilities)	Total liabilities
	Equity	Total liabilities
Debt to Equity	Total liabilities	Equity
Financial leverage		Equity
Interest coverage ratio	Profit before tax and interest payments	Percentage to be paid
Fixed payment coverage ratio	Profit before tax and interest payments + lease payments + rent	Interest payable + lease payments + rent

In general, these indicators are most often calculated as shown in Table 6.

Interpretation of solvency ratios

Financial dependence indicator ... This ratio measures the percentage of total debt-financed assets. For example, a debt-to-asset ratio of 0.40 or 40 percent indicates that 40 percent of a company's assets are funded by debt. Typically, a higher proportion of debt means higher financial risk and thus weaker solvency.

Financial autonomy indicator ... The indicator measures the percentage of the company's equity (debt and own funds) represented by equity capital. In contrast to the previous ratio, a higher value usually means lower financial risk and thus indicates a strong solvency.

Debt to equity ratio ... The debt to equity ratio measures the amount of debt capital in relation to equity. The interpretation is similar to the first indicator (i.e., a higher ratio value indicates a weak solvency). A ratio of 1.0 would indicate equal amounts of debt and equity, equivalent to a debt-to-liability ratio of 50 percent. Alternative definitions of this ratio use the market value of shareholders' equity rather than its book value.

Financial leverage ... This metric (often referred to simply as the leverage metric) measures the amount of total assets supported by each monetary unit of equity. For example, a value of 3 for this indicator means that every 1 ruble of capital supports 3 rubles of total assets.

The higher the coefficient financial leverage, the more borrowed funds the company has to use debt and other liabilities in order to finance assets. This ratio is often defined in terms of average total assets and average total capital and plays an important role in decomposing the return on equity in the DuPont methodology.

Interest coverage ratio ... This metric measures how many times a company can cover its interest payments from profit before tax and interest payments. A higher interest coverage ratio indicates a stronger solvency and solvency, providing creditors with high confidence that the company can service its debt (i.e., banking sector debt, bonds, promissory notes, debt of other enterprises) through operating profits.

Fixed payment coverage ratio ... This metric takes into account fixed costs or liabilities that lead to a steady outflow of company cash. It measures the number of times a company's profit (before interest, taxes, rent and lease) can cover interest and lease payments.

Similar to the interest coverage ratio, a higher value of the rate of fixed payments implies a strong solvency, which means that an enterprise can service its debt through its core activities. The indicator is sometimes used to determine the quality and likelihood of receiving dividends on preferred shares. If the value of the indicator is higher, then this indicates a high probability of receiving dividends.

Analysis of the financial activity of the enterprise on the example of PJSC "Aeroflot"

You can demonstrate the process of analyzing financial activities using the example famous company PJSC Aeroflot.

Table 6 - Dynamics of PJSC Aeroflot assets in 2013-2015, million rubles

Indicators	Absolute deviation, +, -	Relative deviation,%
Indicators
Intangible assets
Research and development results
Fixed assets
Long-term financial investments
Deferred tax assets
Other noncurrent assets
NON-CURRENT ASSETS TOTAL

Value added tax on acquired assets
Receivables
Short-term financial investments
Cash and cash equivalents
Other current assets
CURRENT ASSETS TOTAL

As can be judged from the data in Table 6, during 2013-2015, there is an increase in the value of assets - by 69.19% due to the growth of current and non-current assets (Table 6). In general, the company is able to effectively manage working resources, because in the conditions of sales growth by 77.58%, the amount of working assets increased only by 60.65%. The credit policy of the enterprise is of high quality: in the conditions of significant growth in revenue, the amount of accounts receivable, the basis of which was the debt of buyers and customers, increased only by 45.29%.

The amount of cash and cash equivalents is growing from year to year and amounted to about 29 billion rubles. Taking into account the value of the absolute liquidity indicator, it can be argued that this indicator is too high - if the absolute liquidity of the largest competitor UTair is only 19.99, then in PJSC Aeroflot this indicator was 24.95%. Money is the least productive part of assets, therefore, if available funds are available, they should be directed, for example, to short-term investment instruments. This will allow you to receive additional financial income.

Due to the depreciation of the ruble, the cost of inventories increased significantly due to the increase in the cost of components, spare parts, materials, as well as due to the increase in the cost of jet fuel despite the decline in oil prices. Therefore, stocks grow faster than sales.

The main factor behind the growth of non-current assets is an increase in accounts receivable, payments on which are expected more than 12 months after the reporting date. The basis of this indicator is made up of advances for the supply of A-320/321 aircraft, which will be received by the company in 2017-2018. In general, this trend is positive, as it allows the company to ensure development and increase competitiveness.

The enterprise financing policy is as follows:

Table 7 - Dynamics of sources of financial resources of PJSC Aeroflot in 2013-2015, million rubles

Indicators	Absolute deviation, +, -	Relative deviation,%
Indicators
Authorized capital (share capital, authorized capital, partners' contributions)
Own shares repurchased as shareholders
Revaluation of non-current assets
Reserve capital
Retained earnings (uncovered loss)
EQUITY CAPITAL AND RESERVES
Long-term borrowed funds
Deferred tax liabilities
Provisions for contingent liabilities
LONG TERM COMMITMENT TOTAL
Short-term borrowed funds
Accounts payable
revenue of the future periods
Provisions for future expenses and payments
SHORT TERM COMMITMENTS TOTAL

An unambiguously negative trend is a decrease in the amount of equity capital by 13.4 over the study period due to a significant net loss in 2015 (Table 7). This means that the wealth of investors has decreased significantly, and the level financial risks grew due to the need to attract additional funds to finance the growing volume of assets.

As a result, the amount of long-term liabilities increased by 46%, and the amount of current liabilities - by 199.31%, which led to a catastrophic decline in solvency and liquidity indicators. A significant increase in borrowed funds leads to an increase in financial costs of debt servicing.

Table 8 - Dynamics of the financial results of PJSC Aeroflot in 2013-2015, million rubles

Indicators	Absolute deviation, +, -	Relative deviation,%
Indicators

Cost of sales
Gross profit (loss)
Business expenses
Administrative expenses
Profit (loss) from sales
Income from participation in other organizations
Interest receivable
Percentage to be paid
Other income
other expenses
Profit (loss) before tax
Current income tax
Change in deferred tax liabilities
Change in deferred tax assets

Net income (loss)

In general, the process of forming the financial result was ineffective due to an increase in interest payable and other expenses by 270.85%, as well as due to an increase in other expenses by 416.08% (Table 8). The write-off of PJSC Aeroflot's share in authorized capital LLC "Dobrolet" due to the termination of activities. While this is a significant loss of funds, the expense is not permanent, so it does not say anything bad about the ability to run smoothly. However, other reasons for the increase in other expenses may threaten the stable operation of the company. In addition to the write-off of part of the shares, other expenses also increased due to leasing expenses, expenses from hedging transactions, as well as due to the formation of significant reserves. All this speaks of ineffective risk management in the framework of financial activities.

Indicators

Absolute deviation, +, -

Current liquidity ratio

Quick ratio

Absolute liquidity ratio

The ratio of short-term receivables and payables

Liquidity indicators speak of serious problems with solvency already in the short term (Table 9). As mentioned earlier, absolute liquidity is excessive, which leads to an incomplete use of the financial potential of the enterprise.

On the other hand, the current liquidity ratio is well below the norm. If in UTair, a direct competitor of the company, the indicator was 2.66, then in PJSC Aeroflot it was only 0.95. This means that the company may experience problems with timely repayment of current obligations.

Table 10 - Indicators of financial stability of PJSC Aeroflot in 2013-2015

Indicators

Absolute deviation, +, -

Own working capital, mln. Rub.

Equity ratio of current assets

Maneuverability of your own working capital

Coefficient of provision with own circulating assets of inventories

Financial autonomy ratio

Dependency ratio

Financial Leverage Ratio

Equity capital flexibility ratio

Short-term debt ratio

Financial stability ratio (coverage of investments)

Asset mobility ratio

Financial autonomy also dropped significantly to 26% in 2015 from 52% in 2013. This indicates a lower level of lender protection and a higher level of financial risks.

The indicators of liquidity and financial stability made it possible to understand that the state of the company is unsatisfactory.

Consider also the company's ability to generate positive financial results.

Table 11 - Indicators of business activity of PJSC "Aeroflot" (turnover indicators) in 2014-2015

Indicators			Absolute deviation, +, -
Indicators
Equity capital turnover
Asset turnover, transformation ratio
Return on assets
Working capital turnover ratio (turnover)
The period of one turnover of working capital (days)
Inventory turnover ratio (turnover)
Period of one inventory turnover (days)
Accounts receivable turnover ratio (turnover)
Accounts receivable repayment period (days)
Accounts payable turnover ratio (turnover)
Accounts payable period (days)
Period production cycle(days)
Operating cycle period (days)
Financial cycle period (days)

In general, the turnover of the main elements of assets, as well as equity, increased (Table 11). However, it should be noted that the reason for this trend is the growth of the national currency, which led to a significant increase in the cost of tickets. It is also worth noting that the asset turnover is significantly higher than that of UTair's direct competitor. Therefore, it can be argued that, in general, the company's operating process is efficient.

Table 12 - Indicators of profitability (loss ratio) of PJSC "Aeroflot"

Indicators			Absolute deviation, +, -
Indicators
Return on assets (liabilities),%
Return on equity,%
Profitability of production assets,%
Profitability of sold products in terms of profit from sales,%
Profitability of products sold by net profit,%
Reinvestment ratio,%
Economic growth sustainability coefficient,%
Payback period of assets, year
Payback period of equity, year

The company was unable to generate profit in 2015 (Table 12), which led to a significant deterioration in the financial result. For each ruble of assets attracted, the company received 11.18 kopecks of net loss. In addition, the owners received 32.19 kopecks of net loss for each ruble of invested funds. Therefore, it is obvious that financial efficiency the company is unsatisfactory.

2. Thomas R. Robinson, International financial statement analysis / Wiley, 2008, 188 pp.

3.site - Online program for calculating financial indicators // URL: https: //www.site/ru/

Financial ratios reflect the relationship between various reporting items (revenue and assets, cost and payables, etc.).

The analysis procedure using financial ratios involves two stages: the actual calculation of financial ratios and their comparison with the base values. As the basic values of the coefficients, the industry average values of the coefficients, their values for previous years, the values of these coefficients for the main competitors, etc. can be selected.

The advantage of this method is its high "standardization". All over the world, the main financial ratios are calculated using the same formulas, and if there are differences in the calculation, then such ratios can easily be brought to generally accepted values using simple transformations. In addition, this method allows you to exclude the effect of inflation, since almost all ratios are the result of dividing some reporting items into others, that is, it is not the absolute values that appear in the reporting that are studied, but their ratios.

Despite the convenience and relative ease of use of this method, financial ratios do not always make it possible to unambiguously determine the state of affairs of the company. As a rule, a strong difference between a certain coefficient from the industry average value or from the value of this coefficient for a competitor indicates that there is a question that needs more detailed analysis, but does not indicate that the company clearly has a problem. A more detailed analysis using other methods can reveal the presence of a problem, but it can also explain the deviation of the coefficient by features economic activity enterprises that do not lead to financial difficulties.

For Internet companies, the regular calculation of financial ratios is a convenient tool for tracking the current state of the enterprise. In the conditions of a rapidly growing network market, their relative nature makes it possible to exclude the influence of many factors that distort the absolute values of reporting indicators.

Various financial ratios reflect certain aspects of the activity and financial condition enterprises. They are usually divided into groups:

· Liquidity ratios. Liquidity refers to the company's ability to meet its obligations on time. These ratios operate with the ratio of the values of the company's assets and the values of short-term and long-term liabilities;

· Ratios reflecting the effectiveness of asset management. These ratios are used to assess the suitability of the size of certain assets of the company to the tasks being performed. They operate with such quantities as dimensions material stocks, current and non-current assets, accounts receivable, etc .;

· Ratios reflecting the structure of the company's capital. This group includes ratios that operate with the ratio of equity and borrowed funds. They show from what sources the assets of the company are formed, and how much the company is financially dependent on creditors;

· Coefficients of profitability. These ratios show how much revenue the company derives from the assets at its disposal. Profitability ratios allow for a comprehensive assessment of the company's activities as a whole, based on the final result;

· Coefficients of market activity. The coefficients of this group operate with the ratios of market prices for the company's shares, their nominal prices and earnings per share. They allow you to assess the position of the company in the securities market.

Let us consider these groups of coefficients in more detail. The main liquidity ratios are:

· Ratio of current (total) liquidity (Current ratio). It is defined as the quotient of dividing the amount of the company's working capital by the amount of short-term liabilities. Working capital includes cash, accounts receivable (excluding doubtful ones), inventories and other quickly realizable assets. Short-term liabilities consist of accounts payable, short-term payables, accruals for wages and taxes and other short-term liabilities. This ratio shows whether the company has enough funds to pay off current liabilities. If the value of this ratio is less than 2, then the company may have problems in repaying short-term obligations, expressed in delayed payments;

· Quick ratio. In essence, it is similar to the current liquidity ratio, but instead of the full volume of working capital, it uses only the amount of working capital that can be quickly converted into money. The least liquid part of working capital is inventory. Therefore, when calculating the quick liquidity ratio, they are excluded from working capital. The coefficient shows the ability of the company to pay off its short-term obligations in a relatively short time. It is believed that for a normally functioning company, its value should be in the range from 0.7 to 1;

· Ratio of absolute liquidity. This ratio shows what part of short-term obligations the company can pay off almost instantly. It is calculated as the quotient of dividing the amount of funds in the company's accounts by the amount of short-term liabilities. Its value is considered normal in the range from 0.05 to 0.025. If the value is below 0.025, then the company may have problems with the repayment of current liabilities. If it is more than 0.05, then it is possible that the company is using its available funds irrationally.

To assess the effectiveness of asset management, the following coefficients are used:

· Inventory turnover ratio. It is defined as the quotient of dividing the proceeds from sales for the reporting period (year, quarter, month) by the average inventory value for the period. It shows how many times during the reporting period stocks were transformed into finished products, which, in turn, was sold, and inventories were again acquired for the proceeds from the sale (how many "turnovers" of inventories were made during the period). This is the standard approach to calculating the inventory turnover ratio. There is also an alternative approach based on the fact that the sale of products occurs at market prices, which leads to an overestimation of the inventory turnover ratio when using the proceeds from sales in its numerator. To eliminate this distortion, instead of revenue, you can take the cost of goods sold for the period or, which will give an even more accurate result, the total cost of the enterprise for the period for the purchase of inventory. The inventory turnover ratio is highly dependent on the industry in which the company operates. For Internet companies, it is usually higher than for conventional enterprises, since most Internet companies operate in the network trade or service industry, where the turnover is usually higher than in manufacturing;

· The ratio of assets turnover (Total asset turnover ratio). It is calculated as the quotient of dividing the sales proceeds for the period by the total assets of the enterprise (average for the period). This ratio shows the turnover of all assets of the company;

· Turnover of receivables. It is calculated as a quotient of dividing the proceeds from sales for the reporting period by the average amount of accounts receivable for the period. The coefficient shows how many times during the period the receivables were formed and repaid by the buyers (how many "turnovers" of the receivables were made). A more illustrative variant of this ratio is the average maturity of accounts receivable by buyers (in days) or the average collection period (ACP). To calculate it, the average accounts receivable for the period is divided by the average sales revenue for one day of the period (calculated as revenue for the period divided by the duration of the period in days). ACP shows how many days on average elapse from the date of shipment of products to the date of receipt of payment. The established practice of Internet companies in Russia, as a rule, does not provide for deferred payment to customers. For the most part, Internet companies operate on a prepaid basis or pay at the time of delivery. Thus, for the majority of Russian grid companies, the ACP indicator is close to zero. As the Internet business develops, this figure will increase;

· The turnover ratio of accounts payable. It is calculated as a quotient of dividing the cost of products sold for the period by the average amount of accounts payable for the period. The coefficient shows how many times the accounts payable have arisen and have been repaid during the period;

· The ratio of capital productivity or fixed assets turnover (Fixed asset turnover ratio). It is calculated as the ratio of sales proceeds for the period to the value of fixed assets. The coefficient shows how much revenue for the reporting period was brought by each ruble invested in the company's fixed assets;

· The equity capital turnover ratio. Equity is the total assets of the company less liabilities to third parties. Equity capital consists of the capital invested by the owners and all profits earned by the company, net of taxes paid on profits and dividends. The ratio is calculated as the quotient of dividing the proceeds from sales for the analyzed period by the average value of equity capital for the period. It shows how much revenue was brought by each ruble of the company's equity during the period.

The capital structure of a company is analyzed using the following ratios:

· The share of borrowed funds in the structure of assets. The ratio is calculated as the quotient of dividing the amount of borrowed funds by the total amount of the company's assets. Borrowed funds include short-term and long-term liabilities of the company to third parties. The ratio shows how dependent a company is on creditors. The normal value of this coefficient is about 0.5. In addition to this ratio, the ratio of financial dependence is sometimes calculated, which is determined as the quotient of dividing the amount of borrowed funds by the amount of own funds. The level of this coefficient exceeding one is considered dangerous;

· Security of interest payable, TIE (Time-Interest-Earned). The coefficient is calculated as the quotient of dividing profit before interest and taxes by the amount of interest payable for the analyzed period. The ratio demonstrates the company's ability to pay interest on borrowed funds.

Profitability ratios are very informative. Of these, the following are considered the most important:

· Profitability of sold products (Profit margin of sales). It is calculated as the quotient of dividing net profit by sales revenue. The coefficient shows how many rubles of net profit each ruble of revenue brought;

· Return on assets, ROA (Return of Assets). It is calculated as the quotient of dividing the net profit by the amount of the company's assets. This is the most general coefficient that characterizes the efficiency of using the assets at its disposal by the company;

· Return on equity, ROE (Return of Equity). Calculated as the quotient of net income divided by ordinary share capital. Shows profit for every ruble invested by investors;

· Coefficient of generation of income, BEP (Basic Earning Power). It is calculated as the quotient of profit before interest and taxes by the total assets of the company. This coefficient shows how much profit per ruble of assets the company would have earned in a hypothetical tax-free and interest-free situation. The coefficient is convenient for comparing the performance of enterprises that are in different tax conditions and have different capital structures (the ratio of equity and borrowed funds).

The coefficients of market activity of the company allow us to assess the position of the company in the securities market and the attitude of shareholders to the activities of the company:

· Share quotes ratio, М / В (Market / Book). It is calculated as the ratio of the market price of a share to its book value;

· Earnings per common share. It is calculated as the ratio of the dividend per ordinary share to the market price of the share.

Ratio analysis - calculation of financial ratios based on data from financial statements. Financial statements include the management balance sheet, income statement, retained earnings statement and cash flow statement.

Financial ratios can tell a professional a lot about current state enterprises. The figures obtained are compared with the standards or averages of the performance of other companies in the same industry and under similar conditions. That is, the coefficients for enterprises from different areas cannot be compared. They face different risks, capital requirements and different levels of competition.
There are 5 types of odds.

Liquidity ratios
Asset turnover ratios
Debt management ratios (Debt ratios)
Profitability ratios
Market value ratios

Benefits of financial ratios

The main reason for the popularity of financial ratios is that they are so simple: all you have to do is divide one absolute score by the other. For example:

Current liquidity ratio = working capital / short-term liabilities

Another important advantage of financial ratios is that you get relative values as a result. This means that the size of the absolute values does not play any role here, and you can compare the performance of any companies.

In addition, for most indicators, averaged normal values are determined (for example, the same current liquidity ratio must be at least 2), which allows not only comparing the financial ratios of one firm with another, but also seeing how acceptable they are in themselves.

Features of the analysis of financial indicators

But, unfortunately, everything is not so simple - otherwise why would we need financiers? Financial ratios have a number of features, without taking into account which you can come to completely wrong conclusions:

1. Difficulty of interpretation

Since financial ratios themselves do not carry practically any information about the company, they can often mean anything. The low profitability of sales can be caused by the fact that the company cannot sell its products at the desired price, and the price reduction to conquer the market. Or, say, a low value of financial leverage may be not only a consequence of real problems, but also the result of a policy of minimizing risks.

2. Dependency on reporting

Even if the financial statements are prepared in accordance with accepted standards, the values of many indicators required for ratio analysis can vary significantly due to different accounting methods. That is, even with the same initial data, you can get several different coefficients.

3. Lack of standardization

If in financial reporting there have long been certain standards and all terms are clearly defined, then anarchy still reigns in coefficient analysis. Different sources offer different definitions and even different methods for calculating the coefficients. Thus, when using financial ratios, it is always necessary to clarify what exactly they mean and by what algorithm they are obtained.

4. Reference values are relative

Despite the fact that for most of the coefficients certain universal values of the norm have been proposed, one should be guided by them with extreme caution. The "normality" of certain indicators largely depends on the business environment, and it is quite possible that the ratios of quite prosperous companies turn out to be significantly lower than the norm.

can the company invest in new projects;
how tangible and other assets and liabilities are related;
what is the credit load and the company's ability to repay them;
are there reserves that will help overcome bankruptcy;
whether there is a dynamics of growth or decline in economic or financial activity;
what reasons negatively affect the results of activities.

Financial ratios are relative indicators of the financial condition of the enterprise. They are calculated in the form of ratios of absolute indicators of financial condition or their linear combinations. The analysis of financial ratios consists in comparing their values with basic values, as well as in studying their dynamics for the reporting period and for a number of years. As the basic values, the values of the indicators of this enterprise, averaged over the time series, referring to the past favorable periods from the point of view of the financial condition, are used. In addition, theoretically justified or expertly derived values can be used as a basis for comparison. Such values actually play the role of standards for financial ratios, although the methodology for calculating them, depending on the industry, has not been created, since at present the 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 are 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 subdivided into a number of characteristic groups:

Indicators for assessing the profitability of the enterprise.

Indicators for assessing management efficiency or profitability.

Indicators for assessing market stability.

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

1. Indicators of profitability of the enterprise.

Index	Attitude	Characteristic
1. Overall profitability of the enterprise	gross (balance sheet) profit wednesday number of assets	Evaluation of the firm's ability to obtain the best results on the assets of the enterprise without taking into account the method of financing these assets and the effectiveness of the tax planning method.
2.Net profitability of the enterprise	net profit wednesday number of assets	Assessment of the firm's ability to obtain the best results on the assets of the enterprise without taking into account the method of financing these assets, but taking into account the method of tax planning
3. Net return on equity	net profit avg.vell-on own cap-la	Characterizes the relationship between profit and investment. Allows you to estimate the return on equity and compare its value with that which would be obtained with an alternative use of capital.

2. Indicators of profitability of products. Assessment of management efficiency.

profitability ratio = net profit
share capital

net profit NS volume of sales NS assets
sales volume assets share capital

coefficient = margin X turnover X financial
return asset profit leverage

3. Assessment of business activity (turnover rates).

Index	Attitude	Characteristic
1.Total asset turnover	volume of sales average weight of all assets	Shows the efficiency with which the firm uses all assets to achieve the main goal - production output.
2. Return of the main production. Medium and intangible. Assets	volume of sales average weight of main production average (fixed assets)	Shows the efficiency with which the firm uses the main production facilities to achieve the main goal - production.
3.Collection of all working capital	volume of sales average number of circulating assets	Shows the efficiency with which the company uses current (circulating) assets to achieve the main goal - production.
4 stock turnover	cost of goods sold average stocks	Average rate at which inventory transfers to receivables as a result of a sale final product... Used as an indicator of stock liquidity
5.Translability of receivables	volume of sales average debtor debt	Average rate of repayment of receivables for the period. It is used as an indicator of the liquidity of receivables.
6.Turnover own. capital	volume of sales avg.vell-on own cap-la

4. Assessment of the liquidity of the assets of the enterprise.

To assess solvency, 3 relative liquidity indicators are used, differing in the set of liquid assets considered as coverage of obligations. The following normal limits on liquidity ratios are derived from empirical data, expert assessments and mathematical modeling. They can serve as benchmarks in the analysis of the financial condition of domestic enterprises.

Index	Attitude	Characteristic
1. Absolute liquidity ratio	monetary funds + Central Bank(creditor's debt + + settlements ++ short-term loans ++ overdue loans)	The absolute liquidity ratio characterizes the company's solvency as of the balance sheet date. Normal. K value> = 0.2-0.5
1. Critical liquidity ratio	money-Central Bank + debit.zadol-t- - calculations loans + settlements + short-term loans + overdue loans	The critical liquidity ratio characterizes the expected solvency of the enterprise for a period equal to the average duration of one debt turnover. Normal. value K> = 1
3.Current liquidity ratio	all current assets Current responsibility	The current liquidity ratio characterizes the expected solvency of the enterprise for a period equal to the duration of the turnover of all current assets. Normal. K value> 2

Financial leverage

The use of borrowed funds at a fixed interest rate to increase the profits of ordinary shareholders.

Market value.

In preparing this work were used materials from the site studentu.ru

Financial Analysis: What Is It?

The financial analysis - This is the study of the main indicators of the financial condition and financial results of the organization's activities in order to make management, investment and other decisions by stakeholders. Financial analysis is part of broader terms: analysis of the financial and economic activities of an enterprise and economic analysis.

In practice, financial analysis is carried out using MS Excel tables or special programs. In the course of the analysis of financial and economic activities, both quantitative calculations of various indicators, ratios, coefficients, and their qualitative assessment and description, comparison with similar indicators of other enterprises are made. Financial analysis includes an analysis of the assets and liabilities of the organization, its solvency, liquidity, financial results and financial stability, analysis of asset turnover (business activity). Financial analysis allows you to identify such important aspects as the possible likelihood of bankruptcy. Financial analysis is an integral part of the activities of such specialists as auditors, appraisers. Banks are actively using financial analysis when deciding the issue of issuing loans to organizations, an accountant in the course of preparing an explanatory note for annual reports, and other specialists.

Fundamentals of Financial Analysis

The basis of financial analysis is the calculation of special indicators, often in the form of coefficients that characterize one or another aspect of the financial and economic activities of the organization. Among the most popular financial ratios are the following:

1) The coefficient of autonomy (the ratio of equity to the total capital (assets) of the enterprise), the ratio of financial dependence (the ratio of liabilities to assets).

2) Current liquidity ratio (the ratio of current assets to short-term liabilities).

3) Rapid liquidity ratio (the ratio of liquid assets, including cash, short-term financial investments, short-term receivables, to short-term liabilities).

4) Return on equity (the ratio of net profit to equity capital of the enterprise)

5) Profitability of sales (the ratio of profit from sales (gross profit) to the company's revenue), by net profit (the ratio of net profit to revenue).

Financial analysis techniques

The following methods of financial analysis are commonly used: vertical analysis (for example), horizontal analysis, predictive analysis based on trends, factorial and other analysis methods.

Among the legislatively (normatively) approved approaches to financial analysis and methods, the following documents can be cited:

Order of the Federal Office for Insolvency (Bankruptcy) of 12.08.1994 N 31-r
Resolution of the Government of the Russian Federation of June 25, 2003 N 367 "On Approval of the Rules for Conducting Financial Analysis by an Insolvency Trustee"
Regulation of the Central Bank of Russia dated June 19, 2009 N 337-P "On the procedure and criteria for assessing the financial position of legal entities - founders (participants) of a credit institution"
Order of the FSFR RF of January 23, 2001 N 16 "On approval" Methodical instructions on the analysis of the financial condition of organizations "
Order of the Ministry of Economy of the Russian Federation of 01.10.1997 N 118 "On approval Methodical recommendations on the reform of enterprises (organizations) "

It is important to note that financial analysis is not just about calculating various indicators and ratios, comparing their values in statics and dynamics. As a result qualitative analysis a well-grounded, calculated conclusion about financial situation organization, which will become the basis for decision-making by management, investors and other stakeholders (see example). It was this principle that served as the basis for the development of the program "Your Financial Analyst", which not only prepares a full report on the results of the analysis, but also does it without the participation of the user, without requiring him to have knowledge of financial analysis - this greatly simplifies the life of accountants, auditors, economists ...

Sources of information for financial analysis

Very often, stakeholders do not have access to the internal data of the organization, therefore, the organization's public accounting statements serve as the main source of information for financial analysis. The main reporting forms - the Balance Sheet and the Profit and Loss Statement - make it possible to calculate all the main financial indicators and coefficients. For a deeper analysis, you can use the statements of cash flows and capital of the organization, which are compiled at the end of the financial year. An even more detailed analysis of individual aspects of an enterprise's activities, for example, calculating a break-even point, requires initial data that lies outside the reporting (data of current accounting and production accounting).

For example, you can get a financial analysis based on your Balance Sheet and Profit and Loss Statement for free online on our website (both for one period and for several quarters or years).

Altman Z-model (Altman Z-score)

Altman Z-model(Altman Z-Score) is financial model(formula), developed by the American economist Edward Altman, designed to predict the likelihood of bankruptcy of an enterprise.

Enterprise analysis

Under the expression " enterprise analysis"usually means financial (financial and economic) analysis, or a broader concept, the analysis of the economic activity of an enterprise (AHD). Financial analysis, the analysis of economic activity refers to microeconomic analysis, that is, the analysis of enterprises as separate entities economic activity(as opposed to macroeconomic analysis, which involves the study of the economy as a whole).

Economic Activity Analysis (AHD)

Through business analysis organizations study general trends in the development of the enterprise, investigate the reasons for changes in the results of activities, develop and approve plans for the development of the enterprise and accept management decisions, the implementation of the approved plans and decisions is monitored, reserves are identified in order to increase production efficiency, the results of the company's activities are evaluated, and an economic strategy for its development is worked out.

Bankruptcy (Bankruptcy Analysis)

Bankruptcy, or insolvency is a recognized arbitration court inability of the debtor to fully satisfy the claims of creditors for monetary obligations and (or) to fulfill the obligation to pay mandatory payments. The definition, basic concepts and procedures related to the bankruptcy of enterprises (legal entities) are contained in Federal law dated 26.10.2002 N 127-FZ "On insolvency (bankruptcy)".

Vertical analysis of reporting

Vertical analysis of reporting- a technique for analyzing financial statements, in which the ratio of the selected indicator with other homogeneous indicators is studied within one reporting period.

Horizontal analysis of reporting

Horizontal analysis of reporting- This comparative analysis financial data for a number of periods. This method is also known as trend analysis.