One of the most important characteristics financial condition of an enterprise lies in its ability to meet its obligations.

The activities of an economic entity can be characterized from various aspects, but in the most general case it can be represented as a set of alternating inflows and outflows of funds. Part cash flows refers to the characteristics of the enterprise’s activities from a short-term perspective, the other part characterizes this activity from a long-term perspective. The balance of cash flows of an enterprise is related to the total financial structure enterprise, the degree of its dependence on creditors and investors.

Maintaining a balanced inflow and outflow of cash is the basis for maintaining the ability of an enterprise to meet its obligations, the most important task and, often, a problem financial manager enterprises.

The essence of the problem is quite obvious and is predetermined by the fact that any enterprise has many sources of financing. By choosing their size, composition and structure, the enterprise simultaneously acquires certain capabilities and imposes on itself certain obligations. The possibility of varying the methods of raising funds is determined by the following features of the market relations system.

Firstly, resources (material, financial, intellectual, information, etc.) are distributed unevenly among the owners.

Secondly, physical and legal entities who either know how and where resources of a certain volume and composition can be profitably applied, but do not possess them, or, conversely, have temporarily free resources at their disposal, but do not know a clear path for their application.

Thirdly, the system for regulating the process of redistribution of resources has two sides: regulatory (various aspects of doing business are regulated by law, for example, the sequence of satisfying creditors’ claims) and incentive (providing a resource for temporary use is encouraged by establishing some kind of remuneration: wages, rent, interest , dividends, etc., and the amount of incentives is determined by many factors, including the risk factor of losing the provided resource).

When applied to a financial resource, the formulated features of the market are expressed in the provision of capital by its owners to borrowers. It turns out that this procedure is mutually beneficial; Moreover, from the borrower’s perspective, a justified attraction of capital is often more economically profitable compared to additional mobilization of sources of own funds.

At the same time, the desire to receive some benefit is always accompanied by the need to bear certain obligations, including those associated with taking on a certain risk. Mandatory regular payments must be made for funds received for temporary use; In addition, the funds raised must be returned.

In addition, the funds of the enterprise can be used in its domestic turnover and beyond (accounts receivable, acquisition of securities, shares, bonds of other enterprises).

Accordingly, the problem arises of determining sources of financing for its activities, determining their structure, identifying more effective sources of financing, determining the optimal way to allocate enterprise funds, determining the ability of the enterprise to stably carry out its activities and at the same time be able to meet its obligations - this is the essence of ensuring the solvency of the enterprise .

An enterprise is considered solvent if its existing cash, short-term financial investments ( securities, temporary financial assistance to other enterprises) and active settlements (settlements with debtors cover its short-term obligations) cover its short-term liabilities.

Thus, the main signs of solvency are:

a) availability of sufficient funds in the current account;

b) absence of overdue accounts payable.

Solvency is the ability to timely repay its short-term payment obligations with cash resources and the external manifestation of the financial condition of the enterprise.

The concept of solvency is inextricably linked with the concept of liquidity.

Theorists distinguish the following concepts: solvency, balance sheet liquidity and enterprise liquidity.

Balance sheet liquidity is the ability of a business entity to convert assets into cash and pay off its payment obligations, or more precisely, it is the degree to which the enterprise’s debt obligations are covered by its assets, the period of conversion of which into cash corresponds to the period of repayment of payment obligations. It depends on the degree of correspondence between the amount of available means of payment and the amount of short-term debt obligations.

Liquidity of an enterprise is more general concept than balance sheet liquidity. Balance sheet liquidity involves finding means of payment only from internal sources (sale of assets). But an enterprise can attract borrowed funds from outside if it has an appropriate image in the business world and a sufficiently high level of investment attractiveness.

Liquidity of an enterprise is a synthetic accounting and analytical indicator that characterizes the ability of an enterprise to repay obligations on time (and in some cases, in violation of payment deadlines) both at the expense of its own and borrowed funds.

Its solvency depends on the degree of liquidity of an enterprise.

The assessment of solvency is carried out on the basis of the liquidity characteristics of current assets, i.e. the time required to convert them into cash. At the same time, liquidity characterizes not only the current state of settlements, but also the future, including short-term.

On the contrary, the financial condition in terms of solvency can be very changeable: just yesterday the enterprise was solvent, but today the situation has changed dramatically - the time has come to pay off the next creditor, and the enterprise does not have money in its account because payment for previously delivered products was not received on time, i.e. .e. it became insolvent due to the financial indiscipline of its debtors, while the enterprise has a liquid balance sheet and the ability to attract borrowed funds.

If the delay in receipt of payment is short-term or accidental, then the situation in terms of solvency may soon change for the better, but other, less favorable options cannot be excluded. Such peak situations occur especially often in commercial organizations, for some reason not maintaining a sufficient safety reserve of funds in the current account.

Liquidity is less dynamic compared to solvency. The fact is that as the production activity of an enterprise stabilizes, it gradually develops a certain structure of assets and sources of funds, sudden changes in which are relatively rare. Therefore, liquidity ratios usually vary within certain quite predictable limits, which, by the way, partly gives analytical agencies the basis to calculate and publish industry average and group average values ​​of these indicators for use in inter-farm comparisons and as guidelines when opening new areas of production activity.

Balance sheet liquidity is the basis (foundation) of the solvency and liquidity of the enterprise. In other words, liquidity is a way to maintain solvency. But at the same time, if an enterprise has a high image and is constantly solvent, then it is easier for it to maintain its liquidity.

Sometimes, instead of the term “solvency,” they speak, and this is generally correct, about liquidity, i.e., the ability of certain objects that make up a balance sheet asset to be sold. This is the broadest definition of solvency. In a narrower, more specific sense, solvency is the presence of cash and cash equivalents at the enterprise sufficient to pay accounts payable that require repayment in the near future.

Solvency and liquidity have a positive impact on performance production plans and providing production needs with the necessary resources. Therefore, they are aimed at ensuring systematic receipt and expenditure monetary resources, implementation of calculation discipline, achieving rational proportions of equity and borrowed capital and its most effective use.

The importance of solvency and liquidity lies, among other things, in the fact that a solvent enterprise has an advantage over other enterprises of the same profile in attracting investments, obtaining loans, choosing suppliers and selecting qualified personnel. Finally, it does not come into conflict with the state and society, because pays taxes to the budget, contributions to social funds on time, wages- to workers and employees, dividends - to shareholders, and banks are guaranteed the repayment of loans and the payment of interest on them.

The higher the solvency of an enterprise, the more independent it is from unexpected changes in market conditions and, therefore, the lower the risk of being on the verge of bankruptcy.

During the financial crisis, many firms are in deplorable condition. And often the main reason for this is the lack of cash and other assets.

A sign indicating a deterioration in liquidity is an increase in the immobilization of own working capital, manifested in an increase in illiquid assets, overdue accounts receivable and bills received (overdue), etc. Some similar assets and their relative importance can be judged by the presence and dynamics of the same-named items in the statements.

Insolvency is usually indicated by the presence of other “sick” items in the statements: “Losses”, “Loans and loans not repaid on time”, “Overdue accounts payable”, “Overdue bills issued”.

Thus, solvency and liquidity are achieved with adequacy of equity capital, good quality assets, a sufficient level of profitability taking into account operational and financial risk, sufficient balance sheet liquidity, stable income and ample opportunities to attract borrowed funds.

To ensure solvency and liquidity, an enterprise must have a flexible capital structure and be able to organize its movement in such a way as to ensure a constant excess of income over expenses in order to maintain solvency and create conditions for self-financing.

Consequently, solvency and liquidity is not a fluke, but the result of competent, skillful management of the entire complex of factors that determine results economic activity enterprises.

The term "liquidity" refers to the ease of converting material assets into money. Enterprise liquidity indicators include several local parameters.

Balance sheet liquidity indicators reflect the current situation at a certain moment in the ratio of the enterprise's liquid assets and its liabilities. In other words, it is the ability recorded on the balance sheet to convert assets into means of payment in a timely manner to meet its obligations.

Absolute liquidity indicators are a broader concept than balance sheet liquidity that characterizes the ability to fulfill obligations by partners or other parties to the relationship. Here it should be taken into account that an enterprise is considered liquid if it has a liquid balance sheet. But ensuring liquidity cannot be identified only with the fulfillment of this condition. Row external factors can destroy the liquidity of an enterprise, even if it has a balance sheet close to ideal.

Enterprise liquidity indicators are a complex, multi-level concept, representing a system of relations regarding the fulfillment by enterprises of their obligations in order to obtain a certain effect, according to each level of functioning.

The liquidity of an enterprise is defined as the ability of an enterprise at a certain point in time to fully pay off obligations that require immediate repayment. This is a basic condition, non-compliance with which calls into question the continued existence of any enterprise. In addition, strict liquidity requirements require, in the short term, continuous revision of cash flow forecasts for each day. Therefore, it is advisable to highlight enterprise liquidity management as a separate set of problems.

The criteria for managing the liquidity of an enterprise include both the liquidity criterion and the profitability criterion. The first criterion is met by measures to maintain liquidity, aimed at overcoming cash shortages, generally speaking, requiring certain costs; according to the second criterion, available funds can be invested to generate income.

Currently, the terms liquidity and liquidity management are also used in relation to such economic entities as goods, money, market, enterprise, balance sheets, etc. Within the designated areas of application, liquidity is a certain relationship created for the correct realization of the value of exchange (for example, goods and money). Moreover, liquidity in this case is the ability of the advanced value to return after some time. With high liquidity, the repayment period decreases.

A comprehensive analysis of an enterprise is an assessment of a number of factors in the development of the enterprise. The analysis includes both external and internal market factors, as well as directly manufactured products and financial indicators. It allows you to assess the capabilities of the enterprise in terms of further development in the chosen field.

Enterprise liquidity management methods include:

· Distribution of funds through various channels;

· Distribution of assets in accordance with the terms of liabilities;

· Scientific management.

Enterprise liquidity management involves placing the enterprise's finances in such a way that will allow, if necessary, to quickly pay off obligations.

The most important aspect of an enterprise’s activity is maintaining its ability to strictly fulfill its obligations without additional costs and losses, which is defined by the concept of liquidity.

Financial stability management is the actions of the financial management of an enterprise based on an analysis of solvency and liquidity, as well as indicators financial stability aimed at achieving and maintaining a certain state of the enterprise’s financial resources.

Managing financial stability also includes forecasting changes in the movement of financial flows and taking timely measures to prevent the state of financial resources from deviating from what is desired and necessary.

The effective functioning of a company requires economically sound management of its activities, which is based on financial analysis.

The main areas of analysis of the efficiency of production and economic activities of an enterprise can be identified as follows:

Express analysis of balance sheet and financial performance statements (before 2012 - profit and loss statement);

Financial stability analysis;

Liquidity analysis;

Analysis of the efficiency of use of basic resources;

Profit and profitability analysis.

The balance sheet and profit and loss account provide a very informative description of the organization’s activities for a certain period. Many estimates can be made from these reporting forms as part of a rapid analysis, i.e. without lengthy and cumbersome calculations that require special knowledge. Below is a set of such estimates:

1. Financial result: positive financial results in the income statement indicates the profitable operation of the organization, a negative result means a loss; the higher the profit, the more effective the financial and economic activities of the organization.

2. Capitalization: most general view capitalization is an increase in equity capital on the balance sheet; an increase in the third section of the balance sheet, as a rule, is a consequence of the organization’s profitable operation and is assessed positively.

3. Property: an increase in property, as a rule, is indicated by an increase in the balance sheet currency; Special attention when assessing trends in changes in property status, we pay attention to the real part of the property - means of production (means of labor and objects of labor), which are reflected in the balance sheet in Section I and in reserves from Section II.

4. Working capital: the organization must be provided with working capital (own working capital, operating capital, net assets); in this case, the organization, after settlement of short-term debts, has a free balance of liquid funds to continue financial and economic activities; a sign of working capital provision is inequality:

section II - section V > 0. (1)

5. Balance sheet liquidity: the liquidity criterion is a twofold excess of current assets (section II) of short-term liabilities (section V); An organization is considered liquid if

section II / section V? 2. (2)

6. Financial stability: an indicator of the financial stability / instability of an organization is the capital structure (structure of liabilities); a formal sign of financial stability is the excess own capital borrowed capital:

section III > section IV + section V. (3)

7. The “left and right hand” rule indicates the ability of an enterprise to pay off long-term obligations while maintaining its long-term assets; the rule states that long-term assets (non-current assets reflected in section 1) must be covered by long-term capital (sections III and IV); Thus, one of the signs of financial stability in the long term is inequality:

section I? section III + section IV. (4)

From the set of express assessments of financial statements given, special attention is paid to the criteria of liquidity and financial stability, as well as the “left and right hand” rule. These areas of assessment are also criteria for optimality, otherwise it is appropriate to talk about a gross error.

Possession of express analysis tools is a mandatory part of the professional qualifications of specialists. It allows one to draw significant conclusions about the state and development trends of the organization based on “dry” figures at first glance, which, as a rule, are confirmed by the calculation of analytical coefficients. Khotinskaya G.I. Financial management(using the example of the service sector): textbook. allowance. - 2nd ed., revised. and additional - M.: Publishing House "Delo and Service", 2010. - P. 44-45.

To analyze the financial stability of an organization based on balance sheet data, you can use the following methodology (three-factor model):

1. Determine the amount of reserves and costs.

2. Determine the sources of reserves and costs. The main sources of reserves and costs are the following groups:

1st group (IS1) - own working capital, which are defined as the difference between equity and non-current assets:

IS1=SOS=SK-VA, (5)

where SOS is the enterprise’s own working capital;

SK - equity capital;

VA - non-current assets.

Group 2 (IS2) - normal sources of formation of reserves and costs, including own working capital and long-term borrowed capital(IS2):

IS2=SOS+DZK, (6)

where DZK is long-term borrowed capital.

Group 3 (IS3) - the total value of the sources of formation of reserves and costs, including the groups listed above and short-term loans and borrowings:

IS3=IS2+KKZ, (7)

where KKZ - short-term loans and borrowings.

Absolute financial stability is achieved when all inventories and costs (ZiZ) are fully covered by own working capital:

ZiZ<СОС (ИС1), (8)

where ZiZ - inventories and costs.

In this case, there is a surplus of own working capital. This situation rarely occurs in practice.

Normal financial stability - all reserves and costs are fully covered by normal sources of financing:

IS1<ЗиЗ<ИС2. (9)

There may be a lack of own working capital, as well as an excess of long-term sources of reserves and costs.

Unstable financial condition - all inventories and costs are covered from all sources of coverage:

IS2<ЗиЗ<ИС3. (10)

In this case, the enterprise has the opportunity to restore solvency through bank loans against inventory items, taking into account the amounts offset by the bank when lending.

Crisis financial condition - general sources of coverage are not enough to cover inventories and costs:

ZiZ>IS3. (eleven)

In this case, the company is on the verge of bankruptcy. The company needs to reasonably reduce its inventories.

The financial stability of an enterprise is also characterized by a system of financial ratios:

Autonomy coefficient (Ka):

Vasilyeva L.S., Petrovskaya M.V. Financial analysis: textbook. - M.: KNORUS, 2010. - P. 478. (12)

where SK is equity capital;

VB - balance sheet currency.

The dynamic growth of the autonomy coefficient is a positive factor. The normal minimum value of the autonomy coefficient is estimated at 0.5.

Provision ratio of own working capital (Ksos):

Bank V.R., Bank S.V., Taraskina L.V. Financial analysis: Textbook. - M.: TK Welby, Prospekt Publishing House, 2010. - P. 112. (13)

where OA - current assets;

SOS - own working capital, which are calculated according to formula (5).

The standard value of the working capital ratio is greater than or equal to 0.1.

Debt to equity ratio (Ks/w):

A decrease in the level of the ratio of equity and borrowed funds in dynamics indicates an increase in the level of financial stability.

The normal limitation of the ratio of equity and borrowed funds is greater than 1. Zhulina E.G., Ivanova N.A. Analysis of financial statements: Textbook. - M.: Publishing and trading corporation "Dashkov and Co", 2010. - P. 119.

Liquidity is a momentary characteristic of an enterprise, reflecting the availability of free settlement funds in an amount sufficient to immediately repay the claims of creditors, which cannot be extended. Grass E.Yu. Analysis of balance sheet liquidity according to new forms of financial statements for 2011 // Economic analysis: theory and practice. - 2012. - No. 27. - P. 54.

The concept of financial stability is closely related to the concepts of solvency and liquidity. If financial stability is its internal side, reflecting the balance of cash flows, income and expenses, funds and sources of their formation, then solvency and liquidity are the external manifestation of the financial condition of the enterprise. Therefore, when analyzing financial stability, it is necessary to assess the solvency and liquidity of the enterprise.

Analysis of balance sheet liquidity comes down to checking whether the liabilities on the balance sheet are covered by assets whose conversion period into cash is equal to the maturity period of the liabilities. Grass E.Yu. Analysis of balance sheet liquidity according to new forms of financial statements for 2011 // Economic analysis: theory and practice. - 2012. - No. 27. - P. 60.

To assess the solvency of an organization, three relative indicators of liquidity are used, differing in the set of liquid funds considered as covering short-term obligations:

Current liquidity ratio (Ctek.liq.):

where OA - current assets;

KO - short-term liabilities.

Using the current liquidity ratio, the potential solvency of an enterprise in a relatively long term is assessed.

Quick liquidity ratio (Quick liquidity):

where NLA are the most liquid assets: cash and short-term financial investments;

BRA - quickly realizable assets: accounts receivable, payments for which are expected within 12 months after the reporting date, other current assets.

The quick liquidity ratio shows the possibility of repaying the company's short-term obligations using the most liquid and quickly realizable part of current assets.

Absolute liquidity ratio (Kab.liq.):

The absolute liquidity ratio characterizes the ability of an enterprise to immediately fulfill its financial obligations, showing what part of the existing short-term debt can be repaid at the moment.

The next direction of analysis of the efficiency of production and economic activities is the analysis of the efficiency of using the main resources of the enterprise.

The main resources of the enterprise are material resources (fixed and working capital), labor resources (personnel), and financial resources.

Fixed assets include assets with a service life of more than one year, used by the enterprise to carry out production activities. Fixed assets retain their natural form throughout their entire service life and, as they wear out, lose their value, which is transferred in parts to the finished product and returned to the owner in cash in the form of depreciation.

Fixed assets - the material and technical base of production. The production capacity of an enterprise and its technical equipment depend on their volume, and their accumulation increases and enriches the cultural and technical level of society. Polyak G.B. Financial management: textbook. - M.: Wolters Kluwer, 2009. - P. 178. Types of fixed assets are: buildings, structures, machinery and equipment, vehicles, etc.

Unlike fixed assets, working capital is very dynamic. Many of them, as a rule, are consumed within a year and fully transfer their value to the cost of manufactured products. The main types of working capital are: inventories, accounts receivable, short-term financial investments and cash.

To analyze the effectiveness of the organization’s material resource management, the following indicators are used:

1. The efficiency of fixed asset management is characterized by indicators of capital productivity (Fo) and capital intensity (Fe):

where B is sales revenue;

OS is the average annual cost of fixed assets.

Capital productivity shows how much revenue is generated per 1 ruble. fixed assets of the enterprise.

2. The efficiency of management of current assets is characterized by the following indicators:

The turnover ratio of current assets (Ооа) is calculated using the formula:

The turnover ratio of current assets reflects the intensity of use of working capital. It shows the turnover rate of current (mobile) assets, or how many rubles of revenue are per ruble of current assets.

The duration of circulation of current assets (POoa) is calculated using the formula:

where D is the number of days in the analyzed period.

The effectiveness of labor resources management is characterized by indicators of labor productivity (Pt) and average wages per 1 employee (average annual or average monthly):

Labor productivity is calculated as follows:

where H is the average number of employees.

Labor productivity shows the average output per employee (the amount of revenue per 1 employee).

Average salary per 1 employee:

where payroll is the wage fund.

In the process of analysis, it is necessary to establish a correspondence between the growth rate of average wages and labor productivity. It is important that the growth rate of labor productivity outpace the growth rate of its payment, otherwise there will be overspending and a decrease in the value of profit. Savitskaya G.V. Analysis of the economic activities of an enterprise: Textbook. - 5th ed., rev. and additional - M.: INFRA-M, 2010. - P. 175.

One of the important indicators of the effectiveness of the production and economic activities of an enterprise is profitability. This indicator summarizes the state of income, costs, turnover, use of fixed assets, labor, equity and borrowed capital. The profitability indicator indicates the profitability of the enterprise’s economic activities in the past period and the possibilities of its further functioning. Profitability indicators are practically not affected by inflation; they can be compared with industry average ratios, in dynamics, with the indicators of competitors. Profitability indicators characterize the efficiency of using the financial resources of an enterprise.

The main profitability indicators are:

Return on assets (capital) (RA) shows how much net profit falls on the ruble of capital invested in the enterprise:

where VB is the balance sheet currency;

PE is the net profit of the enterprise.

Return on current assets (ROA) is calculated as the amount of net profit earned by each ruble working capital:

where OA is the average value of current assets.

Return on equity (ROE) characterizes the share of book profit in equity:

where BP is balance sheet profit (profit before tax);

SK - average equity capital;

Return on sales (RP) shows how much profit is generated per ruble of products sold:

where PP is profit from sales;

B - sales revenue. Bank V.R., Bank S.V., Taraskina L.V. Financial analysis: Textbook. - M.: TK Welby, Prospekt Publishing House, 2010. - P. 131.

Summarizing the consideration of the proposed methodology for analyzing the efficiency of production and economic activities, we can draw the following conclusion.

Characteristics of the efficiency of the production and economic activities of an enterprise can be determined both in relative terms - the ratio of individual balance sheet items, the ratio of the goal and the result obtained, effect and costs - and in general terms, for example, in the volume of its own working capital, assets or profit. In this case, all considered indicators should be assessed together. As can be seen from the presented coefficients, the main indicator of financial stability is debt capital and its ratio to equity.

ECONOMIC ESSENCE OF ASSESSING THE SOLVENT CAPACITY OF AN ENTERPRISE

Kovalenko Oksana Grigorievna
Tolyatti State University
Candidate of Economic Sciences, Associate Professor of the Department of Finance and Credit

annotation
The purpose of writing this article is to consider the economic essence of the solvency of an enterprise. The relevance of this article lies in the fact that assessing the solvency of an enterprise is one of the important factors that characterizes the overall financial position of the company. In the article, based on research in the field of interpretation of this category, the authors identified the main signs of solvency, such as the presence of sufficient funds in the current account and the absence of overdue accounts payable from the enterprise. In the article, the category “solvency” is considered inextricably with the concept of enterprise liquidity. Since the indicators of these economic categories are aimed at ensuring the systematic receipt and expenditure of funds of the organization, the implementation of accounting discipline, as well as ensuring the most rational ratio of own and borrowed funds and their more effective use.

THE ECONOMIC SUBSTANCE OF THE EVALUATION OF THE SOLVENCY OF THE COMPANY

Kovalenko Oksana Grigorievna
Togliatti State University
candidate of economic sciences, associate professor of “Finance and credit”

Abstract
The purpose of writing this article is to examine the economic nature of the company's solvency. The relevance of this article lies in the fact that the assessment of solvency of the enterprise is one of the important factors that characterizes the overall financial position of the company. The article based on the research in the field of interpretation of this category, the authors identified the main characteristics of solvency, such as the presence of a sufficient amount of funds on the current account and the absence of overdue accounts payable of the enterprise .In the article the category of "ability to pay" is considered inseparable from the concept of liquidity of the enterprise. As the economic indicators data categories oriented to ensure efficient and orderly receipt and expenditure of funds of the organization, the implementation of discipline , as well as ensure the most efficient ratio of own and borrowed funds and their more effective use.

Currently, all subjects of market relations are interested in obtaining objective information about the financial condition of their business partners. A signal indicator of financial condition is solvency. The ability to cover its obligations is the most important factor characterizing the financial position of a company. That is why assessing the general financial condition and, in particular, the solvency of the company is not just an important element of enterprise management. The results of this assessment serve as a calling card, an advertisement, a dossier that allows one to determine the position and place of the enterprise in the market.

The most general indicator that quickly signals the financial well-being of an enterprise is its solvency, that is, the ability to repay its financial obligations in a specific period of time. The most important signs of solvency are the availability of funds in bank accounts, the absence of overdue debt, and the ability to cover current obligations by mobilizing working capital.

Solvency is the ability of a company to pay its debts on time. This is the main indicator of the stability of its financial condition. In some cases, instead of the concept of “solvency” they use, which, in general terms, is also correct, the concept of “liquidity”, which implies the possibility of various objects that form the active part of the enterprise’s balance sheet to be realized. This concept is a broader definition of solvency. However, in a narrower and clearer sense, solvency means that the organization has at its disposal sufficient cash and cash equivalents to pay accounts payable accounts that require payment in the near future.

Solvency is the real state of an enterprise’s finances, which can be determined on a specific date or for the analyzed period of time.

However, there are different opinions regarding the general definition of the concept of solvency, as well as its identity with the concept of liquidity. So, for example, L.E. Basovsky believes that the concept of solvency should be understood as the ability of an enterprise to pay its current obligations on time and on time based on current assets of varying degrees of liquidity.

In accordance with the opinion of O.V. Gubin, liquidity and solvency mean the ability of an enterprise to make cash payments in full and within the time limits established by contracts. An enterprise can be considered solvent if it is able to pay wages to employees in full and without delays.

The financial condition of an enterprise should be considered from both a short-term and long-term perspective. However, the management of the enterprise needs to identify the most optimal level of solvency and liquidity of its own assets, since low liquidity of assets can lead to general insolvency of the company, in turn, high liquidity can cause a decrease in the profitability of the organization.

According to other experts, the definitions of solvency and liquidity need to be separated. So, for example, M.V. Kosolapova believes that liquidity is the ability of an enterprise to repay its obligations within a clearly defined time frame using current assets, while the author considers solvency to be the presence of free cash and short-term financial investments in the company, sufficient to immediately repay debts whose terms cannot be extended.

The designation of a clear framework for the solvency of an organization should be considered one of the most important problems of economic practice. Since unsatisfactory, and sometimes too low, solvency and liquidity can cause the company to lack the funds necessary for further expansion and improvement of production, and ultimately lead to bankruptcy of the entire organization. However, “excess liquidity” can create obstacles and slow down the overall development of the company, burdening its expenses with additional and excess inventories, reserves and cash that are not included in turnover and are not aimed at production development.

The value of a company is always positively reflected by its profits and assets, and negatively by the risks that arise during the development of its economic and financial activities.

In the conditions of current economic development, enterprises operate in a fairly high dynamism of financial processes, increased uncertainty that arises when choosing the most effective direction for further development, as well as the high influence of external factors. All of the above significantly increases the role of analysis and overall assessment of the company's solvency.

Conducting a solvency assessment makes it possible to study and evaluate the ability of an enterprise to generate cash in the amount and time frame necessary to meet planned expenses and, thus, determine whether the company is able to pay its obligations. Such an analysis is necessary not only for the enterprise itself in order to evaluate and make forecasts for its future activities, but also for its partners and potential investors. For example, before issuing a loan or credit, the bank needs to make sure of the full creditworthiness of the borrower. Companies planning to enter into various financial cooperation with other enterprises should do the same. It is especially necessary to have complete information about the financial condition, as well as the economic capabilities of partners, in case it becomes necessary to provide him with a loan or deferred payment.

An organization is truly solvent if all its short-term obligations can be covered by short-term financial investments, cash and active accounts receivable owned by the company.

The presence of reserves and reserves of financial strength is the basis for the solvency of any enterprise. A key manifestation of solvency is the ability of an enterprise to improve and develop with the help of the funds at its disposal. An enterprise needs to have a flexible structure of financial resources. Increasing the solvency of an enterprise is considered the most important issue of modern financial management.

Therefore, based on the above, the main signs of solvency can be identified as follows:

1) availability of sufficient funds in the current account;

2) absence of overdue accounts payable.

In general, solvency is the ability of an organization to pay its short-term obligations on time using its own monetary resources, and is also a certain reflection of the financial condition of the organization.

The main purpose of analyzing a company's solvency is:

Timely detection and elimination of shortcomings in the company’s financial activities;

Search and determination of reserves for increasing the overall solvency of the organization.

It should not be denied that the concept of solvency, if not identical, is definitely inseparably dependent on the definition of liquidity.

Among the fundamental concepts of the solvency of an organization, scientists identify the following: the solvency of the organization itself, the liquidity of the balance sheet and the liquidity of the organization.

Balance sheet liquidity refers to the ability of an enterprise to transform its assets into cash and pay current payment obligations. More specifically, balance sheet liquidity can be called the amount of reimbursement of an organization’s debt obligations from its own assets, the period of conversion of which into cash is in accordance with the period of payment (liquidation) of payment obligations. This concept depends on the degree of correlation between the volume of estimated funds that are currently available and the volume of short-term debt obligations.

Liquidity of an organization is a more complete definition than balance sheet liquidity. Balance sheet liquidity implies the search and attraction of means of payment exclusively from the organization’s own sources, such as the sale of assets. However, an organization also has the opportunity to attract borrowed capital from various external sources, if it has a good business reputation in this business and a fairly high degree of investment attractiveness.

The liquidity of an organization is understood as a generalized accounting and analytical indicator that characterizes the fact that the organization is able to pay its obligations within a clearly established period of time, both with its own funds and borrowed funds.

The solvency of a company is directly dependent on the level of liquidity of the organization. Solvency, in turn, characterizes the viability and stability of the enterprise.

An assessment of an organization's solvency is carried out based on data on currently available assets, that is, the time required to convert them into cash. However, in addition to the current situation of the company’s calculations, liquidity also characterizes the future perspective, both long-term and short-term.

Balance sheet liquidity represents the foundation of an organization's solvency and liquidity. In other words, liquidity can be called a method of maintaining the solvency of a company. However, if an organization has a good reputation in this field of activity and is also continuously solvent, it is much easier for it to maintain its own liquidity.

Liquidity and solvency have a positive impact on the implementation of the organization's production plans, and also provide production with the required funds and resources. As a result, these indicators are aimed at ensuring the systematic receipt and expenditure of funds of the organization, the implementation of accounting discipline, as well as ensuring the most rational ratio of own and borrowed funds and their more effective use.

The role of solvency and liquidity also lies in the fact that in terms of attracting investments, acquiring loans, selecting suppliers, as well as finding highly qualified employees, a solvent company has a clear superiority over other organizations of a similar profile. Ultimately, such an organization has no conflicts with the state and society as a whole. Since it pays taxes to the budget, contributions to social and medical security funds, wages to the employees of the enterprise, dividend payments to the shareholders of this company, and provides banks with a guarantee of full repayment of loans and payment of interest on them within a clearly established time frame.

An organization is less dependent on unforeseen changes in market conditions and conditions if it has high solvency, and accordingly has the least risk of becoming bankrupt.

The essence of determining the solvency indicator of an enterprise is to determine the risks associated with investing in its work using various sources of funds raised from outside.

When assessing a company's solvency, it is necessary to take into account all the causes of financial difficulties, their frequency of occurrence, as well as the duration of non-payment of the company's debts. The reasons for non-payments can be considered: failure to fulfill the production plan and sale of finished products; increase in its cost; failure to fulfill the profit plan; increased tax obligations.

During a financial crisis, many organizations are not in the best financial position. Most often, the main reason for this is the lack of own financial resources and other assets.

The fact that an organization is in a state of insolvency is often indicated by the presence of such “sick” items in the enterprise’s reporting as: “Losses”, “Credits and loans not repaid on time”, “Overdue accounts payable”.

From the above it follows that solvency and liquidity can only be achieved with:

Sufficient amount of own funds;

A decent level of quality of the company’s assets;

The organization has regular income;

A satisfactory level of profitability, taking into account financial and operational risks;

A sufficiently high degree of balance sheet liquidity;

Availability of ample opportunities for further attraction of borrowed capital.

In order for a company to be considered solvent and liquid, it must have a sufficiently flexible capital structure and be able to properly carry out its movement, while ensuring a continuous predominance of the organization's income over its expenses, in order to maintain solvency and create good conditions for self-financing.

Thus, solvency and liquidity cannot be called a fluke. Since these indicators are the result of competent and truly professional management of the entire set of circumstances and reasons that directly determine the final result of the organization’s economic activities.

Bibliography

1. Yuldasheva L.F. Assessment of the financial condition of an enterprise based on balance sheet data / International Academic Bulletin, (), 63-65
2. Morozova S.N., Kraschenko S.A. Analysis of the financial stability and solvency of an enterprise / Current issues in education and science, (), 1-2 (March), 62-71
3. Zaema L.M. Features of the development of the factoring services market in Russia / Terra Economicus, (), 2-3, 95-99
4. Grachev A.V. The concept of dynamic assessment of the financial stability of an enterprise / Audit and financial analysis, (), (June), 390-397
5. Basovsky, L.E. Modern strategic analysis / L.E. Basovsky. – M.: INFRA-M, 2013. – 256 p.
6. Gubina, O.V. Comparative analysis of financial condition and business activity
   organizations [Text] / O.V. Gubina, E.V. Ivaneeva // Bulletin of OrelGIET. – 2010. – No. 4. – P.25-31.
7. Karlova Yu.S.

Definition 1

Solvency and liquidity are key characteristics of the financial condition of an enterprise, the first of which means the expected ability to repay debt, and the second means the sufficiency of funds to pay debt at the current moment.

The essence of solvency and liquidity of assets

The need to analyze the solvency of borrowers arises constantly, since the process of relationships between enterprises and credit institutions, suppliers, buyers and other counterparties is continuous.

Definition 2

Solvency is the ability of an enterprise to fulfill its debt obligations on time and in full. In other words, solvency is the presence of a company with sufficient financial resources to repay its debt. Solvency must be ensured at any time, therefore a distinction is made between current and long-term solvency.

With current solvency, the company has the ability to fulfill obligations in the near future, and with long-term solvency, the company has the ability to pay off long-term obligations.

An enterprise is solvent if its assets are higher than its external liabilities.

The following characteristics of solvency are distinguished:

• Financial resources on the company's current accounts allow you to pay off short-term obligations;
• The organization has no expired short-term liabilities.

When analyzing solvency, you should also carry out calculations on the liquidity of both assets and the balance sheet of the enterprise.

Liquidity represents the company's ability to pay short-term obligations through current assets. In other words, liquidity is the ability to convert assets into cash.

Liquidity is considered from two sides:

1. In terms of the time required to convert assets into cash;
2. From the perspective of the probability of selling an asset at a given price.

The asset liquidity indicator is characterized by the time inverse to the time required to convert assets into means of payment. The less time spent converting assets, the more liquid the assets are.

A characteristic of balance sheet liquidity is the degree to which the company's liabilities are covered by its assets, the period of conversion into money for which is equal to the period of debt repayment. Balance sheet liquidity is achieved when the organization's liabilities and assets are equal.

The liquidity of an enterprise is the ability to quickly transform its assets into a means of payment with minimal financial losses.

Based on these definitions, it can be established that solvency and liquidity, although similar in content, are not the same.

An important liquidity ratio is an indicator that reflects the level of working capital, i.e. net working capital must be greater than 0.

CHOC = OA - KO,

Where KO are short-term liabilities, JSC are current assets.

The purpose of net working capital is to maintain the financial stability of the company, since if current assets exceed short-term liabilities, the company cannot pay off its short-term obligations and will not have the funds to resolve current issues. Exceeding the NER indicates the company's ineffective use of its resources.

Determining the nature of balance sheet liquidity consists of comparing funds for assets, grouped by liquidity and arranged in descending order, with liabilities for liabilities, which are grouped by maturity and arranged in ascending order.

All assets of the company are conventionally divided into four groups based on their liquidity (Figure 1).

Figure 1. Grouping of assets and liabilities by degree of liquidity. Author24 - online exchange of student work

The balance is absolutely liquid if the following inequalities are satisfied:

$A_1 ≥ P_1, A_2 ≥ P_2, A_3 ≥ P_3, A_4 ≤ P_4$.

Note 1

If one of the inequalities is not satisfied, then the balance is not considered absolutely liquid.

Bankruptcy concept

The most important indicator characterizing solvency and liquidity is own working capital, equal to the difference between working capital and short-term liabilities.

The enterprise has its own working capital (WCC) until the moment when current assets are higher than short-term liabilities. This indicator is also called net current asset.

In many cases, the main reason for changes in the level of SER is the amount of profit or loss received by the organization.

With the growth of SOC, caused by an outpacing increase in current assets in comparison with short-term liabilities, an outflow of funds is observed. If the SOC decreases, then there is a slowdown in the growth rate of current assets compared to the increase in short-term liabilities.

The SOC must be converted into cash without any difficulty, otherwise the solvency of the enterprise will be low.

If an organization is declared insolvent, proposals are prepared for financial support of the company, their reorganization or liquidation.

In addition, the inability of an organization to repay short-term obligations may be the reason for declaring it insolvent, i.e. bankrupt.

Bankruptcy is divided into:

• Simple, which applies to a debtor who performs his activities poorly;
• Malicious, which is caused by illegal actions with the aim of misleading creditors.

There are also criteria that allow us to predict the likelihood of a company going bankrupt.

Let's list the criteria for bankruptcy:

• Unsatisfactory composition of current assets, a tendency to increase the share of hard-to-sell assets, i.e. inventories that have a slow turnover;
• Slowdown in the rate of turnover of funds caused by the accumulation of excessive inventories and the presence of overdue customer debt;
• The company's liabilities are dominated by expensive loans and borrowings;
• There are overdue accounts payable that are growing;
• There are significant amounts of receivables that are written off as losses;
• The most urgent liabilities increase predominantly in relation to the growth of liquid assets;
• The liquidity ratio decreases;
• Non-current assets are formed through short-term sources of funds.

During the analysis process, the listed criteria in the enterprise’s activities should be promptly identified and eliminated.

Dependence of an enterprise's solvency on liquidity

Balance sheet liquidity is the basis of the liquidity and solvency of an enterprise. We can say that liquidity is a method of maintaining solvency. An enterprise that has a high image and is continuously solvent can easily maintain its liquidity. Figure 2 shows the dependence of an enterprise's solvency on its liquidity and balance sheet liquidity.

Figure 2. The relationship between liquidity and solvency of an enterprise. Author24 - online exchange of student work

Insolvency of an enterprise can occur for several reasons:

• Failure to fulfill production and sales plans;
• Increase in production costs;
• Failure to meet profit plans;
• High tax rate;
• Incorrect use of working capital.

Conducting liquidity and solvency analysis is an important stage of financial management in any company.

Financial condition is assessed from a short-term and long-term perspective. The evaluation criteria at the current time are liquidity and solvency. In the long term, the financial condition is characterized by financial stability, reflecting the internal side of the financial condition and balance:

• cash and commodity flows;
• income and expenses;
• means and sources of their formation.

Solvency - This is the ability to pay your obligations on time and in full: to satisfy the payment demands of creditors, to pay staff, i.e. the ability to repay your payment obligations in a timely manner in cash. From this definition it follows that an enterprise is solvent if it currently has no overdue debt. Such solvency is assessed as current, established at the current time and indicating the availability of a sufficient amount of cash and cash equivalents for settlements on accounts payable requiring immediate repayment. Hence, the main indicator of current solvency is the availability of sufficient funds. However, delays in the payment of upcoming obligations may be caused by the absence or shortage of cash as a result of the excess of borrowed capital over equity. At the same time, while continuing economic activity, the enterprise receives cash, acting, as a rule, at the same time as a creditor. Temporary delays in payments indicate practical insolvency, i.e. a situation that is resolved within a certain period (not exceeding three months). Overdue obligations within three months from the date of payment give creditors grounds to apply to the arbitration court to declare the debtor bankrupt (Federal Law of October 26, 2002 No. 127-FZ “On Insolvency (Bankruptcy)”).

If an enterprise is unable to pay off its obligations in the course of further ongoing activities due to the amount of borrowed capital exceeding its own income, losses received from financial and economic activities, absolute insolvency of the debtor occurs. Bankruptcy proceedings are initiated against such an organization at the request of creditors or at the initiative of the debtor himself.

Prospective solvency is assessed from the point of view of the ability to pay long-term obligations in the medium and long term and the future provision of solvency by balancing liabilities and income from core activities.

Solvency analysis is carried out to solve the following problems:

• give an assessment of current solvency, i.e. the ability to pay off obligations that have become due at the expense of available funds;
• assess future solvency, i.e. potential future ability to maintain consistency between payment instruments and obligations in terms of volume and timing;
• determine the possibility of paying off obligations using the results of your own activities.

The assessment of solvency and the calculation of key indicators are carried out on a specific date and can be performed with varying degrees of accuracy depending on the research methods and techniques used. To assess solvency, the following basic techniques are traditionally used, presented in Fig. 11.2.

One of the generally accepted methods of solvency analysis is to assess balance sheet liquidity. In economic literature it is customary to distinguish:

• asset liquidity;
• balance sheet liquidity;
• liquidity of the enterprise.

Under liquidity of current assets refers to the ability and speed of their transformation into cash in the process of production and economic activity. Each type of asset requires individual time to fully go through all stages of the operating cycle - from the acquisition of raw materials to the receipt of cash.

Rice. 11.2.

funds from the sale of products. The shorter the period of transformation of a given asset into cash, the higher its liquidity. It is the liquidity of current assets that ensures current solvency.

The liquidity of total assets has a completely different meaning and is understood as the possibility of their rapid sale in the event of bankruptcy or self-liquidation of an enterprise.

Balance sheet liquidity - This is the degree to which the enterprise's debt obligations are covered by assets, the period of transformation of which into cash corresponds to the period of repayment of payment obligations.

Liquidity of the enterprise a more general concept than balance sheet liquidity, and is understood as the ability to repay its obligations, attracting various sources due to its market reputation and high level of investment attractiveness.

When analyzing balance sheet liquidity, assets grouped by the degree of their liquidity are compared with liabilities by their maturity dates (Table 11.6).

Table 11.6

Grouping of assets by the degree of their liquidity and liabilities by the urgency of their repayment

GP - finished products; Comrade OT1. - goods shipped; 3 - production inventories; VAT - value added tax; DZ d - long-term accounts receivable; (taken from the Explanations to the Balance Sheet and Profit and Loss Statement, Section 5.1 “Availability and Movement of Accounts Receivable”); AB - non-current assets; KZ - accounts payable; PO cr - other short-term liabilities from section V of the balance sheet; ZS K - borrowed funds from section V of the balance sheet (short-term loans and credits); KO (Ш - estimated liabilities from section V of the balance sheet, DO - long-term liabilities; SC - capital and reserves ill section of the balance sheet (equity); DBP - future income; TA - current assets; TO - current liabilities.

Assets are distributed according to the degree of decreasing liquidity, i.e. rate of conversion into cash, but to the following groups:

• first group (L1) - the most liquid assets: this includes the company’s cash and cash equivalents;
• second group (L2 ) - quickly realizable assets, includes short-term financial investments, receivables with maturity dates in the reporting period. This group of assets may also include finished products in demand and shipped goods. The analyst can make the decision to classify these articles into group A2 independently, based on the individual characteristics of the implementation process;
• third group (AZ) - slowly selling assets: represented by the sum of inventories minus finished products and goods shipped, if they were classified as group A2, VAT, long-term accounts receivable and other current assets. Regarding the issue of classifying other current assets into the group of slow-moving assets: if this line takes into account identified shortages and losses from damage to valuables or amounts of excise taxes, VAT on export transactions that will not be reimbursed, in this case these amounts must be classified as illiquid assets.

The listed groups of assets are at the very beginning of the production cycle, so it takes a fairly long time to convert them into cash;

• fourth group (A4) - hard to sell assets. This includes all items in Section I of the balance sheet “Non-current assets”: fixed assets, intangible assets, long-term financial investments, etc.;
• fifth group of assets (L5 ) - illiquid assets. This group is formed if there are assets such as bad receivables, slow-moving, stale material assets, defective products, etc.

Liabilities are collected according to the degree of urgency of their repayment:

• P1 - most short-term liabilities : these include the items “Accounts Payable”, bank loans with a maturity date and “Other Liabilities” from Section V of the balance sheet; Debt to owners for payment of dividends;
• 112 - medium-term liabilities : short-term bank loans from section V of the balance sheet “Short-term liabilities”;
• LP - long-term liabilities, under section IV of the balance sheet “Long-term liabilities”;
• P4 - permanent liabilities: consist of equity capital, which is reflected in section III of the balance sheet, and items in section V “Deferred income”;
• /75 - revenue of the future periods. This group is formed if there are allocated illiquid assets A5.

The value of liquidity group indicators is rather arbitrary, since liquidity for individual asset items is associated with many internal factors of the enterprise. Thus, the liquidity of inventories depends on their turnover, the share of scarce, stale materials. The liquidity of accounts receivable is determined by the speed of its turnover, the proportion of overdue payments and unrealistic amounts for collection. Therefore, when calculating and assessing individual liquidity groups, it is necessary to use an individual approach for each enterprise, based on the characteristics of its activities and the duration of the production cycle, which includes the storage of inventories from the moment they are received until the moment they are released into production, the production process itself, the period of storage of finished products at warehouse, etc. The accuracy of liquidity assessment can be obtained through internal analysis based on analytical accounting data.

Balance sheet liquidity is determined by the ratio of groups of assets and liabilities. The following types of liquidity are distinguished:

absolute balance sheet liquidity : a necessary condition is the fulfillment of the first three inequalities when

assets exceed liabilities. Then in the fourth inequality assets A4 will be less than P4 (A4< 114), характеризуя наличие у предприятия собственных оборотных средств:

Negative value of the fourth inequality (A4< А4) показывает отсутствие собственных средств в обороте;

current liquidity : the amount of the most liquid and quickly realizable assets is greater than current liabilities (A1 + A2) > (P1 + P2).

Current liquidity rather conditionally characterizes the solvency of an enterprise at the nearest point in time, since the lack of funds in one group of assets is only theoretically compensated by an excess in another, and in practice, less liquid funds cannot be used to pay off the most urgent obligations;

forward-looking liquidity - this is a forecasting of solvency based on a comparison of future receipts and payments with long-term liabilities (AZ > PZ). This ratio reveals information about the ability to repay long-term loans and credits using future products.

When assessing liquidity, it is important to take into account not only the shortage of funds for individual groups of assets that should cover liabilities, but also the risk of excess liquidity in the presence of an excess of highly liquid assets that are low-yielding, which leads to missed opportunities as a result of inefficient use of financial resources.

Assessing liquidity based on absolute indicators of compared groups of assets and liabilities (Table 11.7) does not answer a number of questions, in particular about the sufficiency of the remaining funds after debt repayment for further current activities, therefore, about future solvency, the level of missing funds necessary to repay debt obligations . Liquidity ratio analysis complements the study of solvency from the perspective of possible prospects for current activities with timely repayment of obligations. For this purpose, the following coefficients are calculated:

absolute liquidity ratio", characterizes the payment capabilities of the enterprise, i.e. answers the question what part of current liabilities (accounts payable and short-term credits, loans) can be immediately paid using available cash:

The normative value of the ratio is 0.2, indicating that at least 20% of current liabilities must be covered by cash.

The level of the absolute liquidity ratio cannot be used to judge the solvency of an enterprise, since the speed of cash turnover and the speed of turnover of short-term liabilities will play a large role in the assessment. If means of payment turn over faster than the debt deferment period, then even with a small value of this coefficient, claims will be provided by an influx of cash, and the enterprise’s payment ability at a particular point in time can be considered normal. A constant lack of funds is a sign of chronic insolvency, which can be regarded as the first step towards bankruptcy;

critical liquidity ratio (quick liquidity ratio) is calculated by the ratio of the most liquid and quickly realizable assets to short-term liabilities:

In the line-by-line algorithm for calculating the critical liquidity ratio using the methodology for training and certification of professional accountants, finished products and shipped goods are not included in assets.

The permissible, set value of the coefficient is in the range of 0.7-1.0, and its desired value is more than 1.5. In a situation where a large share of liquid funds is occupied by accounts receivable, among which there may be some that have not been collected in a timely manner, it is necessary to focus on the maximum recommended value - 1.5. The minimum acceptable value will be assessed positively if cash and cash equivalents (securities) constitute a significant amount of current assets.

The ratio shows what part of short-term liabilities can be repaid in a relatively short time using funds in various accounts, short-term securities, as well as proceeds from debtors;

current ratio gives an assessment of the enterprise's provision with working capital for conducting business activities with timely repayment of obligations. In general, it is calculated by the ratio of liquid assets to current liabilities:

When calculating the ratio, adjustments may be allowed for individual items of the balance sheet. In particular, according to the training and certification program for professional accountants, it is proposed to calculate the coefficient without including in current assets the amounts of VAT on acquired assets and long-term receivables:

The ratio gives an idea of ​​the remaining current assets of the company if all current liabilities are paid. The standard value of this coefficient is in the range from 1 to 2, suggesting that the funds allocated to current activities should ideally be twice as large as current liabilities, and with an acceptable minimum value - the same as short-term liabilities. Excess of current assets by more than twice is considered undesirable, since it indicates irrational investment of capital and ineffective use;

complex liquidity indicator calculated by weighted shares of groups of assets and liabilities using the formula

The optimal level of this indicator will be considered one or more, and its dynamics can be used to assess the emerging positive or negative trend in the formation of the liquid structure of the balance sheet.

The coefficient provides a general assessment of changes in the financial situation as a whole from the point of view of balance sheet liquidity;

• solvency ratio for the period (year). As part of the training and certification program for professional accountants, it is proposed to calculate one hundred using the form of a cash flow statement:
• (Cash balance at the beginning of the period + Cash received for the period) / Total amount of cash spent.

There is no standard value for the solvency ratio for the period, but, obviously, its value should be equal to or greater than one, showing the sufficiency of cash flow and timely payment for current activities.

Additional indicators that provide an opportunity to comprehensively assess the company’s ability to repay obligations are given in table. 11.8. This is a group of relative indicators that characterize the long-term, long-term solvency of the organization. The optimal values ​​for many of the given coefficients for each organization are determined based on the characteristics of their functioning, the rate of turnover of funds and the duration of the operating cycle. At the same time, acceptable values ​​within the recommended limits for each ratio will help assess the current situation and future opportunities for stable solvency.

Table 11.8

Indicators for assessing long-term and future solvency

Receivables to payables ratio as of a certain date can provide additional information about the possibility of repaying the most urgent obligations (accounts payable) using funds in the settlement. In the absence of overdue receivables and doubtful receivables, this indicator will assess the company’s ability to pay off creditors in the short term. Multiple excesses of one of the debts are undesirable, so you can focus on the value of this coefficient equal to one.

Receivables collection period shows how many days on average the company will receive accounts receivable and be able to pay its obligations from it. The shorter the recovery period for funds from receivables, the better. Therefore, based on the value of this indicator, you can adjust the required level of the ratio of receivables and payables. The faster accounts receivable takes cash form, the faster accounts payable can be repaid, therefore, the acceptable level of the ratio of accounts receivable to accounts payable will be less than one.

Net asset coverage ratio of total liabilities - This is an indicator of the enterprise’s ability to pay off its obligations without regard to time using its existing potential, i.e. accumulated equity capital. A low value of the ratio indicates a high dependence on borrowed capital and the inability to pay off all obligations with property formed from equity capital.

Net current assets coverage ratio for accounts payable characterizes the share of own funds in turnover that can be used to repay accounts payable. The minimum recommended value of the ratio should be in the range of 0.3-0.4, indicating the possibility of repaying at least 30-40% of accounts payable using own funds in circulation.

Share of net current assets in total net assets shows what part of the total net assets consists of own funds allocated to finance current activities in the reporting year. Based on the minimum recommended value of the share of the own turnover captain, equal to 0.1-0.2, we can assume that this coefficient should not be lower than this level.

Interest coverage ratio - This is an indicator of the organization’s ability to pay for specific obligations using the results of its own activities. Shows how many times during the reporting period the company can pay interest on loans. Assess the degree of risk of a decrease in operating profit at which it is possible to service bank loans. For creditors, it provides information about the level of protection against non-payment of debts. The normal value of the indicator is from 3 to 4. When the coefficient is less than one, attracting borrowed capital for the organization itself becomes unprofitable, and possibly unprofitable, and for creditors - extremely risky, since the cash flow from operating activities is not enough to service interest payments.

Cash flow ratio (Cash Flow Liquidity) is defined as the ratio of cash flow from operating activities to the current liabilities of the organization. Cash flow from operating activities can be calculated as the sum of net profit and depreciation minus the increase in own working capital (except cash) for the reporting period. The inverse of the ratio shows how many years the organization is able to pay off its current obligations through its operating activities.

Solvency recovery ratio equal to six months and similar to the loss of solvency ratio. The forecast period for restoration of solvency is six months, and for calculating a possible loss of solvency - three months. The criterion level for both coefficients is a value greater than one: K VP > 1 and K UP > 1. If the actual value of the coefficients turns out to be less than one, this means that the enterprise does not have the opportunity to restore its solvency within six months, and in the next three months there is a threat loss of solvency is obvious.

Degree of solvency for current obligations determines the current solvency of the organization and the period of possible repayment of urgent debts to creditors from proceeds. An increase in the coefficient over time indicates a deterioration in solvency. An increase above the critical value of 3 indicates the impossibility of paying off debts through current activities within three months.

The absolute indicator of a qualitative assessment of solvency is net working capital, which characterizes the amount of the enterprise’s own funds in circulation and long-term sources (Section IV). It is calculated by the difference between current assets and short-term liabilities.

In table 11.9 shows liquidity and long-term solvency ratios.

Table 11.9

Liquidity and prospective solvency ratios

Continuation of the table. 11.9

Odds	Tx				Deviation from pip criterion
Absolute coverage of accounts payable
Solvency ratio for the period (year)
Comprehensive liquidity indicator
Indicators qualitative characteristics solvency
Net working capital, thousand rubles.
Indicators for assessing the long-term solvency of an organization
Receivables to payables ratio
Receivables collection period, days.
Net asset coverage ratio for total liabilities
Net current assets coverage ratio for accounts payable
Share of net current assets in total net assets

End of table. 11.9

Liquidity ratios, which characterize the level of possible repayment of obligations at the current time, as well as in the future, indicate an extremely difficult current situation. All ratios have values ​​much lower than the criteria: an absolute liquidity ratio of 0.014 says that the company will immediately be able to repay no more than 1.4% of its urgent obligations, which in itself increases the risk of bankruptcy. The critical liquidity ratio is 1.1 percentage points less than the recommended level, which indicates the impossibility in the near future of reaching a solvent level and repaying urgent debt obligations. A current liquidity ratio with a value of 0.5 characterizes the enterprise as insolvent in the long term, since working capital is not enough to cover current liabilities. For every ruble of short-term liabilities there are only 50 kopecks in the reporting year. liquid funds. A negative factor is also the declining dynamics of many coefficients. Negative values ​​of the indicator of the qualitative characteristic of solvency are evidence of deep, rapidly growing crisis phenomena. Net working capital, having a negative value, decreased even more and amounted to -32,618 thousand rubles, therefore, the level of short-term borrowed capital exceeded current assets. Additional solvency indicators confirm the existence of a payment crisis. The situation is further aggravated by the diversion of funds into receivables and the increase in the period for their return (the ratio of receivables to payables increased by 0.2 times, while the time for returning receivables increased by almost 14.9 days). The dynamics of other indicators is a clear confirmation of the conclusions drawn. The predicted value of the solvency restoration coefficient is less than one, which means that in the future the company does not have the opportunity to pay off its debts.

The current situation requires the immediate adoption of a set of anti-crisis measures aimed at restoring solvency.