3.3 Analysis of the return on equity and the influence of factors on its change

Every enterprise needs to know all the information about the profitability of its activities. This indicator may be the profitability of the enterprise (assets).

The profitability of an enterprise (assets) is an indicator that is an important characteristic of the factor environment for the formation of an enterprise's profit.

This indicator is a mandatory element of the analysis and assessment of the financial condition of the enterprise. It is calculated as the ratio of profit (gross, operating, net) to the average annual asset value of the enterprise.

Where P cap is the return on equity,%

PE - net profit, thousand UAH

Average annual asset value, thousand UAH

In the economic literature, this indicator is most often called general, economic profitability, profitability of production or return on capital.

The level and dynamics of this type of profitability can be influenced by various factors of production and economic activity. The main ones include (according to Moshensky):

1) the level of organization of production and management;

2) capital structure;

3) the degree of use of production resources;

4) volume, quality and structure of products;

5) production costs and production costs;

6) profit by type of activity and directions of its use.

The return on equity indicator is of interest primarily to investors. And also for existing and potential owners and shareholders. Return on equity shows how much profit each monetary unit invested by capital owners brings. Return on equity is calculated using the formula:

It is the main indicator used to characterize the effectiveness of investments in activities of a particular type.

In foreign practice, the concept of a profitability threshold, or a break-even point, and a margin of financial strength of an enterprise is often used.

The profitability threshold is usually understood to mean such a volume of proceeds from sales at which the profit is zero, but at the same time the enterprise fully covers its costs.

In addition to this indicator, the indicator of financial strength is also used, which shows how much the proceeds from sales exceed the profitability threshold. If this value is negative, then the enterprise is unprofitable.

To assess the level of return on equity of the enterprise we are considering, it is necessary to draw up a table with the initial information for calculating the indicator.

Tab. 3.3 Indicators for the analysis of the return on capital of the enterprise CJSC "ZZHRK"

Rice. 3.3 Dynamics of the return on capital of the enterprise ZZHRK CJSC

As you can see from the table. 3.3, the return on equity at the ZZHRK CJSC increased significantly in 2009 compared to 2008 from 15.5% to 136% due to changes in the company's net profit. The return on equity was virtually unaffected by the change in the cost of capital. But, due to the fact that the profit factor influenced the profitability indicator more than the change in the amount of capital, this brought in a total increase in the return on equity, which means the fact that the company rationally organized its activities and responded well to changes in the market ...

The return on equity increased from 7.3% to 81.9%. The equity capital indicator indicates that each hryvnia invested by the capital owners brought a profit of 7.3 kopecks. in 2008, and 81.9 kopecks. in 2009.

In order to increase the level of return on capital in the future, the enterprise needs to carefully think over all the planned indicators for the next year and improve its trade policy in order to quickly respond to all external changes in the structure of the goods market.

Analysis of optimization of the structure of working capital and management of accounts receivable of LLC "Belogorskoe"

In the system of measures aimed at improving the efficiency of the enterprise and strengthening the financial condition, an important place is occupied by the issues of rational use of working capital ...

Analysis of the financial situation of the enterprise

Analyze the influence of individual factors on the change in profit from sales (Table 2). The factorial model has the form (1): "right"> P = VR H Rpr. (1) Based on model (1), we calculate the notional value of profit on revenue in 2009 ...

Analysis of financial results from the sale of crop production in OAO OPKh PZ "Leninsky Put"

The absolute change in the amount of profit (loss) from the sale of products in the reporting period compared to the baseline:, (25) where is the profit of the base year ...

Table 6 No. Indicators Plan Actually Deviation from the plan (+, -) 1 2 3 1 Production output, thous. Rub. 21700.00 22648.00 +948 2 Average number of workers, people ...

Analysis of the economic activity of the enterprise

The principal generalizing sign of the cost of production is the cost per ruble of marketable output ...

Dynamics and structure of the cost of crop production

Factors Affecting Product Quality At each enterprise, a variety of factors, both internal and external, affect the quality of products. Internal factors include such ...

Commercial risk and factors affecting it

It is known that in any economic model, equilibrium reflects such a balance of forces that the variables it describes do not increase or decrease relative to absolute values ​​or their proportions ...

The concepts of solvency and liquidity. Factor profit model

Indicators, thousand rubles Base year Reporting year amount level amount level Trade turnover 5820 100 6790 100 Trade impositions 1396.8 24 1643.2 24.2 Circulation costs 640.2 11 706.2 10.4 Profit. 756.6 13 937.0 13 ...

Profitability of the enterprise in the previous year: R 0 = = (68029.7 * (14.629 - 11.195) - 5581.3) / (68029.7 * * 11.195 + 5581.3) = 0.29723% : RUSL1 = = (74106.6 * (14.629 - 11.195) -5581.3) / (74106.6 * 11.195 + 5581.3) = 0.29800% Profitability ...

Making management decisions based on the analysis of production and economic activities

The profitability of the company's services in the previous year: R0 = (68,029.7 * 0.66 * (13 -9.6) + (68,029.7 * 0.34 * (17.8 - 14.3)) - 5581.3) / (68029.7 * 0.66 * 13 + 68029.7 * 0.34 * 17.8) = 0.22913% Profitability of services obtained when changing the volume of traffic: RUSL1 = (74106.6 * 0.66 * ( 13 -9.6) + (74106.6 * 0.34 * (17.8 - 14.3)) - 5581.3) / (74106.6 * 0.66 * 13 + 74106 ...

Product profitability is an indicator that characterizes the cost-effectiveness of an enterprise for the production and sale of products. It is equal to the ratio of gross or net profit to the amount of costs of goods sold. (3 ...

Ways to Increase Enterprise Profitability

The return on sales ratio is used to assess the effectiveness of economic activities and pricing processes. Profitability of sales refers to this ratio of profitability ...

Organization profitability

Let's consider the definition of profit from the sale of grain and leguminous products by factors at the enterprise Plemzavod-collective farm "Aurora" according to the plan and in fact for 2004. (table 3) ...

Organization profitability

Despite the fact that profit is the most important economic indicator of the enterprise's work, it does not finally characterize the efficiency of its work. You can get the same profit, but with different costs ...

Economic and statistical analysis of the financial results of the sale of grain in LLC "Harvest XXI century"

Develop proposals to improve the financial results of grain sales and increase the economic efficiency of its production. Research methods used in the work: monographic, graphic, index ...

The identification of factors affecting the return on equity is possible by modifying the formula for the return on equity, namely, multiplying and dividing formula (60) by the amount of total assets and sales proceeds, as well as its subsequent transformation through formula (61.1) into formula (61.2 ).
_ 411 Revenue Total assets
Profitability C k = = x x (61.1)
C To Revenue Total assets
... d. 411 Revenue Total assets
Profitability Ch = x x - (61.2)
Revenue Total assets С К
Here 411 is the net profit for the period; Sales proceeds for the period;
SK is the average value of equity capital;
Total assets is the average value of the assets of the enterprise.
The formula obtained as a result of the transformations establishes the relationship between the return on equity and three main financial indicators of the company's activities: profitability (Net profit / Sales revenue), turnover of all assets (Sales revenue / Total assets) and the structure of funding sources
(Total assets і Equity). For the profitability of total capital, there will be two defining parameters: profitability and asset turnover (Figure 6.1).
Reasons for reduction
return on equity
Losses

Changing the structure of funding sources (structure of liabilities)
REASONS for reduced ROI
Losses
Decrease in asset turnover
Rice. 6.1. Reasons for the decline in return on equity indicators
It is very useful to analyze the indicators of profitability and resource efficiency in relation to each other. The degree of influence of individual factors on the change in the return on equity can be expressed in the form of specific figures by conducting a factor analysis of the change in the return on equity. Factor analysis involves going through several steps.
Determination of the absolute change in the return on equity for the period as Return on equity (/) - Return on equity (, "- 1).
Determination of the sign and degree of influence of the turnover of all assets as Turnover of all assets (/) х Profitability of all activities (i - 1) х Ratio of average assets to average equity capital (z - 1) - - Turnover of all assets (i - I) х Profitability of all activity (/ "- 1) x Ratio of average assets to average equity (i - 1).
Determination of the sign and degree of influence of the profitability of all activities as
Turnover of all assets (z) х Profitability of operations (i) Ratio of average assets to average equity capital (i - 1) - Turnover of all assets (/) х Profitability of operations (i - 1) х Ratio of average assets to average equity capital (i - 1).
Determination of the sign and degree of influence of the structure of funding sources as Turnover of all assets (d) x Profitability of operations (i) x Ratio of average assets to average equity capital (i) - Turnover of all assets (d) x Profitability of activities (i) x x Ratio of average assets to the average equity capital (i - 1).
Here (/) denotes the current analysis interval, (/ "- I) - the previous interval;
Turnover of all assets = Revenue / Average assets; Profitability of the activity = Net profit! Revenues from sales.
An example of carrying out factor analysis on specific values ​​is presented in table. 7.9 (see chapter 7).
All companies are trying to increase the return on assets, but their opportunities are limited by competition. Then, under the influence of competition, the expected return on assets takes on a fixed value, and the company has to choose between asset turnover or the rate of return.
If the dynamics of the return on equity indicators differs from the dynamics of the return on equity, the only reason for this situation is the influence of the structure of funding sources, the influence of financial leverage.
Practical example. Analysis of the reasons for the change in the Company's return on equity 4
Analysis of the data presented in table. 6.1 allows us to draw the following conclusions. The reason for the growth in return on equity in the second reporting period is the combination of growth in profitability of sales and growth in asset turnover. It should be noted that the growth of the return on equity could have been higher if the company had not allowed some decrease in the turnover of current assets.
In the last reporting period, the return on equity was positively influenced by further profitability DOCT, however, the EGC "outweighed" the negative impact of the decrease in asset turnover, while the decrease in turnover is observed in terms of current assets.
A decrease in the efficiency of current assets management (a note for this example: a more significant increase in the period of accounts receivable turnover and a slight increase in the volume of finished products in the warehouse) led to a decrease in the return on capital - both overall and equity. I o, that the return on equity increased with a decrease in the return on equity, is explained by the influence of the structure of funding sources - the outstripping growth in the share of borrowed capital in the structure of liabilities (the influence of financial leverage).
Table 6.1. Analysis of the relationship between the return on equity and the turnover of assets and the profitability of the Company 4 Name of positions 01.01.4 01.01.05 01.01.06 Return on total equity 12.4% 27.8% 26.4% Return on equity 14.0% 31.9% 38 , 1% Turnover of all assets 0.55 0.97 0.88 Cost cycle, days 88.9 106.6 167 Net profit, thousand rubles. 30 645 80 281 126 772 Profitability of sales 29% 32% 34%
Evaluating the effect of financial leverage
To analyze the effectiveness of managing the structure of the company's funding sources, the so-called leverage effect is calculated. The essence of the effect is as follows.
The company, using borrowed funds, increases or decreases the profitability of equity capital. Decrease or increase in the return on equity will depend on the average cost of borrowed capital and the size of the financial leverage.
The influence of the structure of funding sources on the return on equity can be represented as follows:
Profitability
Leverage effect,
+
(62)
(Profitability
equity capital
V
total capa tai a The effect of the leverage can be expressed as follows:
Effect _ ZK
- Return on total capital - Cost of ZK 1x. (63)
lever
(TO
Here, the value (Return on Equity - Cost of ZK) is the differential of the leverage, and the actual financial leverage is the ratio of the company's debt and equity capital.
, ^ Debt capital
Financial Leverage = - (64)
Equity
It is recommended to use in the calculations the average values ​​of debt and equity for the analyzed period: (Data at the beginning of the period + Data at the end of the period) / 2. However, there is an approach in which not the average, but the absolute values ​​of equity and debt capital for a specific analyzed date are used. The choice of the calculation method - based on average values ​​or values ​​for a specific reporting date - is carried out on an individual basis.
The cost of borrowed capital is calculated as the ratio of the payment for the use of borrowed capital in the analyzed period to the amount of borrowed capital. It is necessary to distinguish the cost of borrowed capital from the interest rate on loans. They will be equal only if all borrowed capital is loans. The cost of borrowed capital means the cost to the company for each monetary unit of borrowed capital (but not only credit resources), therefore, the average interest rate will be lower than the cost of the credit resources attracted by the organization.
Interest х (1 - Rate І11IP ¦ + Penalties Cost of ZK - - 1 (65)
ZK
Here Interest is the amount of interest on loans accrued in the analyzed period;
Tax rate income tax rate;
Fines fines, ponies and other sanctions for overdue debts;
ЗК - the average amount of the company's borrowed capital ((borrowed capital for
beginning of the period + Equity at the end of the period) !!).
The difference between the return on total capital and the cost of borrowed capital is called the leverage differential. The differential leverage provides information for selecting an appropriate structure for funding sources. In this case, the choice of an appropriate structure of funding sources is understood as the choice of the "cheapest" sources for the organization.
The product of the financial leverage by its differential determines the magnitude of the leverage effect. The sign of the leverage effect (leverage differential) reflects the advisability of increasing the borrowed capital.
The leverage effect is positive. The increase in debt capital increases the return on equity.
If the return on total capital is greater than the cost of borrowed sources of financing (cost of the borrowed captain), from the point of view of increasing the return on equity, it is advisable to increase the share of borrowed funds.
The leverage effect is negative. The increase in debt capital reduces the return on equity.
If the return on total capital is less than the cost of borrowed sources of finalization, from the point of view of increasing the return on equity, it is advisable to increase the share of own funds.
The absolute value of the leverage reflects the degree of influence of the structure of funding sources on the return on equity.
The effect of financial leverage occurs if the total return on assets is higher than the "price" of borrowed funds (usually loans, bonds, preferred shares) or the average interest rate on borrowed funds. The strength of its impact is determined by the amount of financial leverage. With an increase in financial leverage, the bank can compensate for the increase in its risk by increasing the cost of the loan (interest). The greater the ratio of borrowed funds to own funds, the greater the financial risk associated with the organization's activities: the risk of non-repayment of a loan for a banker increases; the risk of falling dividends and stock prices for the investor increases.
The rule of financial management states that, having ensured financial stability, it is advisable to increase the return on equity. In other words, the growth of the Ї return on equity when financial stability falls below the permissible level can hardly be called expedient, although everything may depend on the goals set by the owners. Therefore, making a decision on the advisability of increasing or reducing the share of borrowed (equity) capital should be carried out taking into account both factors - financial stability and profitability (Fig. 6.2).
Autonomy Ratio = Equity
Borrowed capital
Return on equity = Net profit
Equity


Practical example. Conducting a profitability analysis in conjunction with an analysis of financial stability
In Company 4, information about which is presented in table. 6.2, there is an increasing ^ growth in the return on equity. During the entire analyzed period, the growth in the share of borrowed capital in total liabilities had a positive effect on the return on equity (the leverage effect is positive and increasing). At the same time, the financial stability of the company was ensured in all periods.
"Thus, a change in the structure of the company's financing sources towards an increase in the share of borrowed capital can be recognized as acceptable and effective. Further growth in the share of borrowed capital will also help to increase the return on equity (even in the case of attracting a loan, the average interest rate on borrowed capital will be lower than the profitable capital). total capital) However, this may reduce the financial stability of the company.
Taking into account the need to ensure financial stability, it is not advisable to recommend long-distance tires to increase the borrowed capital. In practice, this means compliance with the rule: Increase (non-current assets + least liquid current assets)

In this article, we will analyze one of the key indicators of a company's financial stability - the return on equity. It is used both to assess the financial condition of a business and investment projects.

(EnglishROE, Return on shareholders' Equity) Is an indicator characterizing the profitability of the company's equity capital. The return on equity capital shows the efficiency of management of the enterprise with its own funds and directly determines the investment attractiveness for investors and creditors. The higher the profitability, the higher the return on equity.

This ratio is used by investors for a comparative assessment of various investment projects and investment options, comparing the return on equity capital with alternative investments: stocks, bank deposits, futures, indices, etc. If the return on equity exceeds the minimum established level of return for the investor, then the company becomes attractive for investment. The minimum acceptable level may be the return on a risk-free asset. In practice, government securities, which have the highest level of reliability, are considered a risk-free asset. In Russia, such securities include government corporate bonds (GKO) and federal loan bonds (OFZ).

The formula for calculating the return on equity of a business

The data for calculating the return on equity is taken from the balance sheet (Equity) and the income statement (Net profit). The calculation of the ratio is the ratio of the company's net profit to the size of its own funds.

To obtain a more accurate indicator value, the average values ​​of net profit and equity capital are used, which are calculated as the arithmetic mean at the beginning and end of the year.

The calculation of the return on equity for a period other than a year uses the following modification of the formula:

One of the approaches to calculating the return on equity is to estimate the indicator based on. This model represents a three-factor analysis of the main parameters that form the return on equity.

ROS ( Return on Sales) - profitability of sales of the enterprise;

TAT ( TotalAssetsTurnover) – ;

LR ( Leverage Ratio) - financial leverage.

An example of calculating the return on equity ratio

Analysis of the return on equity indicator

The higher the value of the return on equity capital, the higher the profitability and efficiency of management of the enterprise only by equity capital. Since this indicator is used in evaluating investment projects by strategic investors, its value is compared with the profitability of alternative investments or. It is advisable to apply the coefficient for the assessment only if the company has equity capital, in other words, positive net assets. Otherwise, the indicator is not relevant for analysis.

Summary

The return on equity indicator is the most important coefficient for assessing the financial condition of an enterprise and the level of investment attractiveness and is actively used by managers, owners and investors to diagnose the financial condition.

Purpose of the profitability analysis- to assess the ability of the company to generate income for the capital invested in the company.

The investment attractiveness of the organization, the amount of dividend payments depends on the level of profitability.

The characteristic of the profitability of the enterprise is based on the calculation of three main indicators - the profitability of total capital, equity and equity (table 19, p. 205).

Return on total capital of all assets shows how much net profit, excluding the cost of borrowed capital, falls on the ruble of capital invested in the company. In the international practice of financial analysis, the rate of return on total capital is determined by the formula:

where Interest 2- the amount of interest accrued in the analyzed period on loans that reduce taxable profit, den. units;

Interest 1- accrued in the analyzed period interest on loans that do not reduce taxable profit, den. units

NP rate- income tax rate,%.

Balance currency is defined as the average value of the total value of liabilities in the period under review, that is, as

[Total liabilities (at the beginning of the period) + Total liabilities (at the end of the period)] / 2

The calculations use data for the period (not cumulative).

Currently, it is not uncommon for a situation when, when calculating the profitability of the entire capital, they somewhat deviate from the classical calculation algorithm - in the numerator of the formula, only net profit is considered. This move makes the three main indicators of profitability more comparable, since in this case a single calculation base is used - the amount of net profit.

Return on equity characterizes the efficiency of using the own funds invested in the organization. The return on equity shows how much of the net profit falls on the ruble of equity.

Similarly calculated and the return on equity is interpreted, defined as the ratio of net profit to the value of the share (authorized) capital of the organization .

To assess the performance of individual enterprises and compare enterprises with each other it is necessary that the indicators of profitability were presented in an adequate form for comparison.

Since the calculation of profitability indicators uses data for the analyzed period, the result of the calculations will directly depend on the duration of this period. Comparison of profitability indicators Re1 = 5% (Enterprise 1) and Re2 = 8% (Enterprise 2) is correct only if both coefficients are determined for the same analysis periods - that is, both indicators are calculated for a month, quarter, six months, a year.

If Enterprise1 performed the calculation by quarters, and Enterprise2 - by years, then in a comparable form the profitability indicators will have the values ​​Re1 = 5% * = 20%, Re2 = 8%. Thus, the comparability of profitability indicators will be ensured if the indicators are reduced to a single analysis interval, for example, to a year.

The presentation of profitability indicators in annual terms is most convenient. The cost of capital in the market (interest and deposit rates) and the macroeconomic environment (inflation, refinancing rate) are characterized by indicators in annual terms. When calculating profitability in annual terms, an adequate basis is created for assessing the performance of a particular enterprise and comparing various enterprises with each other.

To analyze the effectiveness of managing the structure of the company's financing sources, the so-called leverage effect. The essence of the leverage effect is as follows:

The company, using borrowed funds, increases or decreases the return on equity. The decrease or increase in the return on equity depends on the average cost of borrowed capital (average interest rate) and the amount of financial leverage.

Financial leverage is the ratio of the debt and equity capital of the organization:

It is recommended to use in the calculations the average values ​​of debt and equity in the analyzed period - (data at the beginning of the period + data at the end of the period) / 2. However, there is an approach in which not the average, but the absolute values ​​of equity and debt capital for a specific analyzed date are used. The choice of the calculation method - based on average values ​​or values ​​for a specific reporting date - is carried out on an individual basis.

It is not difficult to see that financial leverage is the inverse of the equity ratio (1 / Equity ratio).

Average interest rate calculated as the ratio of the total cost of borrowed capital in the analyzed period to the amount of borrowed capital.

where Interest in SB- interest accrued in the analyzed period

on loans included in the cost of production, den. units;

Interest from profit- accrued in the analyzed period interest on loans attributed to financial results, den. units; Interest attributable to financial performance is not cleared by the income tax rate.

Borrowed capital is defined as [Debt capital (at the beginning of the period) + Debt capital (at the end of the period)] / 2

The difference between the return on total capital and the average interest rate is called differential lever... The differential leverage provides information for selecting an appropriate structure for funding sources. In this case, the choice of an appropriate structure of funding sources is understood as the choice of the "cheapest" sources for the organization.

The product of financial leverage by its differential determines the magnitude of the leverage effect

The sign of the leverage effect (leverage differential) reflects the advisability of increasing the borrowed capital:

· positive leverage- an increase in borrowed capital increases the return on equity.

· negative leverage- an increase in borrowed capital is impractical, it reduces the return on equity.

That is, if the return on total capital is less than the cost of borrowed sources of financing, it is advisable to increase the share of own funds.

The absolute value of the leverage reflects the degree of influence of the structure of funding sources on the return on equity.

The influence of the structure of funding sources on the return on equity can be represented in the form of the formula:

When calculating profitability indicators, it is necessary to use a unified approach - to carry out the calculation based on average values ​​for the analysis period, or based on values ​​for a specific reporting date. This will ensure the comparability of the calculation results.

The analysis of the factors that influenced the change in the return on equity is carried out using the DUPONT formula. The DUPONT formula establishes the relationship between the return on equity and the three main financial indicators of an enterprise: profitability of sales, turnover of all assets and financial leverage in one of its modifications.

The assessment of the impact of changes in the listed indicators on the return on equity is carried out using the method of chain substitutions. According to this technique, the greatest influence is exerted by the indicator having the maximum absolute value of the coefficient of influence.

Return on equity and financial stability are inversely related. It is enough to pay attention to the formulas of the autonomy ratio and the return on equity.

With an increase in equity capital, the financial stability of the organization increases and the profitability of equity capital decreases. In this regard, the statement that it is always advisable for an enterprise to increase its equity capital is controversial. Own funds should be sufficient to ensure financial stability. The task of financial management at the enterprise is to ensure financial stability, to contribute to the growth of the return on equity capital.

97. Indicators of business activity of the enterprise.

Business activity a commercial organization is measured using a system of quantitative and qualitative indicators. Business ratios allow you to analyze how effectively the company uses its funds. The analysis of business activity is to study the levels and dynamics of financial turnover ratios.

Qualitative criteria are the breadth of sales markets (internal and external), the business reputation of the company, its competitiveness, the presence of regular suppliers and buyers of finished products. These criteria should be weighed against those of competitors in the industry. The data is taken mainly not from the financial statements, but from market research.

Quantitative criteria of business activity are characterized by absolute and relative indicators. The number of absolute indicators includes: the volume of sales of finished products, the amount of assets and capital used, including equity, profit.

It is advisable to compare these quantitative parameters in dynamics over a number of periods (quarters, years). The optimal ratio between them: Growth rate of net profit> Growth rate of revenue from product sales> Growth rate of assets value> 100%

That is, the profit of the enterprise should increase at a higher rate than the rest of the parameters of business activity. This means that assets (property) should be used more efficiently, and production costs should be reduced. However, in practice, even in stable operating organizations, deviations from the indicated ratio of indicators are possible. The reasons for this may be: the development of new types of products and technologies, large capital investments in the modernization and development of fixed assets, reorganization of the management and production structure and other factors.

Relative indicators of business activity characterize the efficiency of using the organization's resources, these are financial ratios, turnover indicators. The average value of indicators is determined as a chronological average for a certain period (according to the amount of available data); in the simplest case, it can be defined as a half-sum of indicators at the beginning and end of the reporting period.

All coefficients are expressed in times, and the duration of the turnover is expressed in days. These indicators are very important for the organization. First, the size of the annual turnover depends on the rate of turnover of funds. Secondly, the relative value of production (circulation) costs is associated with the size of the turnover, and, consequently, with the turnover: the faster the turnover, the less costs fall on each turnover. Thirdly, the acceleration of turnover at one stage or another of the circulation of funds entails an acceleration of turnover at other stages. The financial position of the organization, its solvency depend on how quickly the funds invested in assets turn into real money.

Indicators of assets turnover and equity turnover characterize the level of business activity of the enterprise and are calculated as the ratio of annual proceeds from the sale of products (works, services) to the average annual value of assets and equity, respectively.

This group of coefficients allows you to analyze how efficiently the company uses its funds. Business activity is especially important to compare with industry averages, as these can fluctuate significantly across industries.

To analyze the business activity of an organization, two groups of indicators are used: general indicators of turnover; asset management indicators.

The turnover of funds invested in the property of an organization can be assessed: turnover rate- the number of revolutions that the organization's capital or its components make during the analyzed period; turnover period- the average period for which the funds invested in production and commercial operations are returned to the economic activities of the organization.

The turnover analysis includes four types of analysis:

• the turnover of the firm's assets;
• accounts receivable turnover;
• accounts payable turnover;
• inventory turnover.

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Assessment of the influence of factors on the change in the return on equity by net profit due to changes in:

Return on sales by net profit

where, - the change in the return on equity due to the change in the return on sales by net profit;

Return on sales based on net profit for 2007 and 2005, respectively,%;

asset turnover ratio for 2005;

financial dependence ratio for 2005

Total assets turnover

where, - change in the return on equity due to changes in the turnover of current assets;

asset turnover ratio for 2007

Dependency ratio

where, the change in the return on equity due to changes in the structure of sources of financing of working capital (coefficient of financial dependence);

financial dependence ratio for 2007

The total influence of factors

11+-4,2+4,2=-11% (4)

according to the factor analysis, it can be concluded that the decrease in the return on equity in terms of net profit by 11% is practically due to the decrease in the profitability of sales by 4.6%.

where, N - sales proceeds, thousand rubles;

- the average annual cost of fixed assets, thousand rubles;

- return on assets of the active part of fixed assets, RUB / RUB;

- the share of the active part of fixed assets,%.

the external manifestation of the financial stability of an enterprise is its solvency. It characterizes the degree of protection of creditors' interests. An enterprise is considered solvent if its available funds, short-term financial investments and active settlements (settlements with debtors) cover its short-term liabilities. the analysis of the indicators of the solvency (capital structure) of the enterprise in the reporting year is shown in Table 4.

Table 4. Indicators of solvency of the enterprise OJSC "Belgorod Khladokombinat" for 2005-2007.

Indicator name	Calculation procedure	Normative value	Actual value			The change
Absolute liquidity ratio
Intermediate liquidity ratio
Current liquidity ratio

According to the table of solvency indicators of OJSC Belgorod Khladokombinat, it can be concluded that the company's solvency in 2007 is lower than in 2006, although the values ​​of absolute and intermediate liquidity indicators are within the standard values. So the absolute liquidity of the enterprise in 2007 was 19%. This indicator is within the normative value, and means that in terms of its short-term liabilities the enterprise meets its most current assets by 19%, while in 2005 this indicator reached 22%. In 2007, the current liquidity ratio is below the standard value. This is due to a sharp increase in the company's short-term liabilities. But, despite this, the company is responsible for its short-term obligations with its most liquid assets.

The financial stability of an organization is characterized by the degree of protection of the attracted capital, which is characterized by such indicators as the ownership ratio, the flexibility ratio, and the debt capital concentration ratio.

Table 5 shows that the value of own circulating assets is negative at the beginning of 2005 -6897.5 thousand rubles, for 2006 -10312.5 thousand rubles, for 2007 -21987 thousand rubles. This means that the sources of formation of current assets are borrowed. This statement is also confirmed by the indicator of the provision of current assets with their own sources. In 2007, not a single ruble of own funds was allocated to the formation of circulating assets, therefore the indicator of the provision of own sources of circulating assets is negative and amounts to -17%, which is 8% more than in the previous year, when the provision of assets with own sources of formation of funds was 9 %.