Yu.I. Sotnikova
Z.V. Chebotareva
UiIa 8oSh1koua
Zoya Ciebo1ageua
An objective and accurate assessment of the financial and economic condition is of paramount importance, especially in the context of insolvency and the application of bankruptcy procedures (insolvency) to enterprises. There are several criteria for such an assessment, among which the main ones are solvency indicators and the degree of liquidity of the enterprise.
It is noted that in a number of works of famous economists these concepts are often identified, for example, Kovalev V.V. Under the liquidity of an asset is understood the ability to transform it into cash during the envisaged production and technological process. The degree of liquidity is determined by the duration of the time period during which this transformation can be carried out. In his opinion, the shorter the period, the higher the liquidity of this type of asset. From this we can conclude that any assets that can be turned into money are liquid assets. The concept and essence of liquid assets was also considered by scientists from different angles. In particular, in the accounting and analytical literature, the concept of liquid assets is often narrowed down to assets consumed during one production cycle.
Speaking about the liquidity of an enterprise, we mean the presence of working capital in it in an amount sufficient to repay short-term obligations, even if with a violation of the repayment periods stipulated by the contracts. The meaning of such a definition is that if the processes of production and sale of products are going on in the normal mode, then the amounts of money received from buyers in payment for the products they received will be sufficient for settlements with creditors, i.e. settlements on current liabilities. The default clause means that, in principle, failures in the receipt of funds from debtors are not ruled out, but in any case, this money will come and it will be enough for settlements with creditors.
And from this it follows that the main sign of liquidity is a formal excess (in valuation) current assets over the value of short-term liabilities. The more this excess is, the more favorable will be the financial condition of the enterprise from the position of liquidity. If the value of current assets is not large enough compared to the value of short-term liabilities, the current position of the enterprise is unstable, then it may well arise
© Sotnikova Yu.I., Chebotareva Z.V., 2015
a situation where the company will not have enough cash to pay for its obligations. And then you will have to either disrupt the natural technological process (for example, urgently sell part of the reserves or burden yourself with new, more expensive debts), or sell off part of the long-term assets. The liquidity level of an enterprise is assessed using special indicators - liquidity ratios based on a comparison of working capital and short-term liabilities.
Solvency means that the enterprise has cash and cash equivalents sufficient to pay for accounts payable requiring immediate repayment. From this it follows that the main signs of solvency are:
Availability of sufficient funds in the current account;
No overdue accounts payable.
And then it becomes obvious that liquidity and solvency are not identical to each other. So, liquidity ratios can characterize the financial position as satisfactory, however, in essence, this assessment may be erroneous if there is a significant amount in the composition of current assets. specific gravity accounts for illiquid assets and overdue receivables. Illiquid assets are assets that are unlikely to ever be used in technological process and, which are either completely impossible to sell (as a commodity) on the market or they will have to be sold with a significant financial loss. As a rule, unjustified receivables cannot be determined from only one balance sheet, i.e. a qualitative characteristic of working capital according to the balance sheet is not impossible to determine by an external analyst. Therefore, to assess liquidity, assets are used, the actual value of which. doubtful.
Liquidity is less dynamic compared to solvency. The fact is that as the production activity of the enterprise stabilizes, it gradually develops a certain structure of assets and sources of funds, sharp changes in which are relatively rare. Therefore, liquidity ratios usually vary within some quite predictable limits. This partly provides a basis for analytical agencies to calculate and publish industry and group averages of these indicators for use in inter-farm comparisons and as benchmarks when opening new areas of production activity.
On the contrary, the financial condition in terms of solvency can be very volatile: for example, yesterday the company was solvent, but today the situation has changed dramatically. And when the time comes for the enterprise to pay off the next creditor, then there is no money on the account due to the lack of timely payment from buyers (customers) for the products delivered to them earlier. Those. the enterprise becomes insolvent due to the financial indiscipline of its debtors. If the delay in receipt of payment is of a short-term or accidental nature, then the situation in terms of solvency may soon change for the better. However, other, less favorable options are not excluded. Such critical situations are especially common in commercial organizations, for whatever reasons, do not support their safety stock in sufficient volume.
Currently, many authors interpret the concept of liquidity of an organization as its solvency to cover its obligations with assets, the period of transformation of which into cash corresponds to the maturity of these obligations. Liquidity means the unconditional solvency of the organization and implies a constant equality between its assets and liabilities simultaneously in two parameters:
By total amount;
By maturity (assets) and maturity (liabilities).
Distinguish:
Current liquidity - compliance of receivables and cash payables;
Estimated liquidity - compliance of asset and liability groups in terms of their turnover in the conditions of normal functioning of organizations;
Urgent liquidity - the ability to repay obligations in the event of liquidation of organizations.
The liquidity of assets is their ability, under certain circumstances, to turn into a monetary form (cash) to reimburse liabilities. Of all the assets of the organization, the most liquid are current assets, and of all current assets, cash, short-term financial investments are absolutely liquid ( securities, deposits, etc.), as well as non-overdue accounts receivable, the due date of which has come, or invoices accepted for payment. The other part of current assets cannot be called highly liquid assets with great certainty (for example, stocks, overdue receivables, debt on advances issued and funds to be accounted for). However, at certain conditions and competent methods of working with debtors-clients, this debt will still be returned, and stocks will be sold. However, it should be borne in mind that certain types non-current assets (transport, buildings, modern equipment, computers, etc.) can also, if necessary, be sold even with greater success than, for example, some stocks, and receive the required cash if it is in the interests of the company.
Solvency is characterized by the degree of liquidity of current assets and indicates the financial capabilities of the organization (cash and cash equivalents, accounts payable) to fully pay off its obligations as the debt matures. Thus, liquidity is a necessary and obligatory condition for solvency. And so these two terms are inseparable. At the same time, there is a different focus of each of them on the internal ability and external manifestation. The term "solvency" is somewhat broader, since it includes not only and not so much the ability to turn assets into marketable ones, but the ability to timely and fully fulfill one's obligations arising from trade, credit and other transactions of a monetary nature. At the same time, solvency is an external manifestation financial stability organizations. From the degree of liquidity of the balance, i.e. solvency depends on the degree of coverage of debt obligations by assets, the period of transformation of which into cash corresponds to the maturity of payment obligations. Thus, the liquidity of the balance sheet involves finding means of payment only from internal sources (realization of assets), but an organization can also 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 the enterprise - more general concept than the liquidity of the balance sheet. Liquidity characterizes both the current state of settlements and the future, while an enterprise may be solvent at the reporting date, but have unfavorable prospects. The level of liquidity depends on the field of activity, the ratio of current and non-current assets, the rate of turnover of funds, the composition of current assets, the size and urgency of current liabilities. To ensure a high level of liquidity, an organization must maintain a certain ratio between the conversion of current assets into cash and the maturity of short-term
ny obligations. On the one hand, liquidity is the ability to maintain solvency; on the other hand, if an enterprise has a high image and is constantly solvent, it is easier for it to maintain liquidity. all this further confirms that liquidity and solvency are interconnected (see Fig.).
Rice. The relationship between me^tsu indicators of liquidity and solvency of the enterprise
An enterprise is considered solvent if its available funds, short-term financial investments (securities, temporary financial assistance to other enterprises) and active settlements (settlements with debtors) cover its short-term obligations. The liquidity of assets is the reciprocal of the time required to turn them into money, i.e. the less time it takes to turn assets into money, the more liquid the assets are. The liquidity of the balance sheet is expressed in the degree of coverage of the obligations of the enterprise by its assets, the period of transformation of which into money corresponds to the maturity of the obligations. Balance sheet liquidity is achieved by establishing equality between the company's liabilities and its assets.
Solvency is the ability to pay off your payment obligations with cash resources in a timely manner. The liquidity of an asset is understood as its ability to be transformed into cash. When evaluating the methods of analyzing the solvency of an enterprise, it is advisable to proceed from these definitions of liquidity and solvency.
Thus, the economic essence of liquidity as a characteristic financial condition economic entity lies in its ability to respond quickly to unexpected financial difficulties and the ability to increase assets with an increase in sales, to repay short-term debts through the usual conversion of assets into cash, being an indisputable prerequisite for reducing financial risks.
Bibliographic list
1. Alekseenko H.A. Management accounting in anti-crisis management: theory and practice: monograph / H.A. Alekseenko, U.Yu. Blinova, N.K. Rozhkov. - Khabarovsk, 2011.
2. Kovalev V.V. The financial analysis. Capital Management. Choice of investments. Reporting analysis / V.V. Kovalev. - M.: Finance and statistics, 2011. - 56 p.
3. Titaeva A.B. Analysis of financial condition / A.B. Titaeva. - M.: KnoRus, 2011. - 613 p.
4. Chebotareva Z.V., Chebotareva L.V. Role and significance financial control in preventing the regrading of goods // Bulletin of the University ( State University management). - 2012. - No. 9. - S. 189-193.
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Discipline: Crisis management
Topic: The essence of the organization's solvency
1. Introduction
2. The essence of the solvency of the organization and indicators of its assessment
3. The purpose of the analysis of the solvency of enterprises
4. Internal and external analysis of the solvency of enterprises
5. Conclusion
6. References
Introduction
The transition to a market economy requires enterprises to increase production efficiency, competitiveness of products and services based on the implementation of achievements scientific and technological progress, effective forms of management and production management, overcoming mismanagement, enhancing entrepreneurship, initiative. An important role in the implementation of these tasks is given to the analysis of the solvency and creditworthiness of the enterprise. It allows you to study and evaluate the security of the enterprise and its structural divisions own working capital as a whole, as well as for individual divisions, to determine the solvency of the enterprise, to establish a methodology for rating assessment of borrowers and the degree of risk of banks.
Solvency assessment is also the main element of the analysis of the financial condition, necessary for control, allowing to assess the risk of violation of obligations under the company's settlements.
Solvency and financial stability are the most important characteristics of the financial and economic activity of an enterprise in a market economy. If an enterprise is financially stable and solvent, it 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 timely pays taxes to the budget, contributions to social funds, wages- to workers and employees, dividends - to shareholders, and guarantees to banks the return of loans and the payment of interest on them.
The essence of solvencyorganizationsand indicatorsherestimates
Market economic conditions oblige the enterprise at any time to be able to pay off external obligations (ie, be solvent) or short-term obligations (ie, be liquid).
An enterprise is considered solvent if its total assets are greater than its long-term and short-term liabilities. An enterprise is considered liquid if its current assets are greater than its short-term liabilities. In addition, for successful management financial activities, cash (cash) for the enterprise is more important than profit, since their absence in bank accounts at some point can lead to a financial crisis.
A preliminary assessment of the financial position of the enterprise is carried out on the basis of the data of the balance sheet, as well as the Appendix to the balance sheet of the enterprise.
At this stage of the analysis, an initial idea of the enterprise's activities is formed, changes in the composition of the enterprise's property and their sources are identified, and relationships between indicators are established.
For the convenience of such an analysis, it is advisable to use the so-called compacted analytical balance - net, formed by adding homogeneous elements of balance sheet items in the necessary analytical sections (real estate, current assets, etc.).
The ability of an enterprise to pay its short-term obligations is called liquidity. In other words, an enterprise is considered liquid if it is able to meet its short-term obligations by realizing current assets.
The financial position of an enterprise is considered stable if it covers with its own funds at least 50% of the resources necessary for the implementation of normal economic activity, effectively uses financial resources, observes financial credit and settlement discipline, in other words, is solvent.
The financial position is determined based on the analysis of liquidity and solvency, as well as an assessment of financial stability. The task of analyzing the liquidity of the balance arises in connection with the need to assess the creditworthiness of the organization in the process of the relationship of the enterprise with the credit system and other enterprises.
During the analysis of creditworthiness, calculations are carried out to determine the liquidity of the enterprise, which is characterized by liquidity ratios:
1. Determination of the current liquidity ratio - shows what part of current liabilities for loans and settlements can be repaid by mobilizing all current assets, i.e. how many financial resources account for 1 rub. current liabilities.
2. Quick liquidity ratio - reflects the predictive capabilities of the organization, subject to timely settlements with debtors, and characterizes the expected solvency for a period equal to the average duration of one turnover of receivables.
3. Absolute liquidity ratio, calculated as the ratio of cash and marketable securities to short-term liabilities. Short-term liabilities of the enterprise, represented by the sum of the most urgent liabilities and short-term liabilities, include: accounts payable and other liabilities (taking into account the comment on the accounts payable and other liabilities ratio; this comment also applies to the short-term debt ratio); loans not repaid on time; short-term loans and borrowings. The absolute liquidity ratio shows what part of the short-term debt the company can repay in the near future.
4. The overall solvency ratio - shows how much own funds account for 1 rub. both short-term and long-term liabilities. This ratio reflects the prospective solvency when it is analyzed whether the organization is able to repay all types of obligations at its own expense.
The purpose of the analysis of the solvency of enterprises
One of the indicators characterizing the financial condition of an enterprise is its solvency, i.e. the ability to pay off their payment obligations with cash resources in a timely manner.
Solvency analysis is necessary not only for an enterprise for the purpose of assessing and forecasting financial activities, but also for external investors (banks). Before issuing a loan, the bank must verify the creditworthiness of the borrower. The same should be done by enterprises that want to join the economic relations together. It is especially important to know about the financial capabilities of a partner if the question arises of providing him with a commercial loan or deferred payment.
Solvency has a positive impact on performance production plans and providing the needs of production with the necessary resources. Therefore, solvency component economic activity is aimed at ensuring the planned receipt and expenditure monetary resources, implementation of settlement discipline, achievement of rational proportions of own and borrowed capital and its most effective use.
In order to survive in a market economy and prevent the bankruptcy of an enterprise, you need to know well how to manage finances, what the capital structure should be in terms of composition and sources of education, what share should be occupied by own funds, and which should be borrowed.
The main purpose of the analysis is to timely identify and eliminate shortcomings in financial activity and find reserves for improving solvency.
In doing so, it is necessary to solve the following tasks:
Based on the study of the cause-and-effect relationship between various indicators of industrial, commercial and financial activities, assess the implementation of the plan for the receipt of financial resources and their use from the standpoint of improving the solvency and creditworthiness of the enterprise.
Forecasting possible financial results, economic profitability, based on the real conditions of economic activity and the availability of own and borrowed resources.
Development of specific measures aimed at more efficient use of financial resources.
The analysis of the solvency of the enterprise is carried out not only by the managers and relevant services of the enterprise, but also by its founders, investors. In order to study the efficiency of resource use, banks to assess credit conditions, determine the degree of risk, suppliers to receive payments in a timely manner, tax inspections to fulfill the plan for the receipt of funds to the budget, etc. In accordance with this, the analysis is divided into internal and external.
Internal and external analysis of the solvency of enterprises
Internal analysis - is carried out by the enterprise services and its results are used for planning, forecasting and control.
Its goal is to establish a systematic flow of funds and place own and borrowed funds in such a way as to ensure the normal functioning of the enterprise, maximizing profits and avoiding bankruptcy.
External analysis - carried out by investors, suppliers of material and financial resources, regulatory authorities on the basis of published reports.
Its goal is to establish an opportunity to invest funds profitably in order to ensure maximum profit and eliminate the risk of loss.
An analysis of the solvency of an enterprise is carried out by comparing the availability and receipt of funds with payments of essentials. There are current and expected (prospective) solvency.
Current solvency is determined on the balance sheet date. An enterprise is considered solvent if it has no overdue debts to suppliers, bank loans and other settlements.
The expected (prospective) solvency is determined on a specific upcoming date by comparing the amount of its means of payment with the urgent (priority) obligations of the enterprise on this date.
To determine the current solvency, it is necessary to compare the liquid assets of the first group with the payment obligations of the first group. Ideally, if the coefficient is one or a little more. According to the balance sheet, this indicator can be calculated only once a month or quarter. Enterprises make settlements with creditors every day. Therefore, in order to quickly analyze the current solvency, daily control over the receipt of funds from the sale of products, from the repayment of receivables and other cash receipts, as well as to control the fulfillment of payment obligations to suppliers and other creditors, a payment calendar is drawn up, in which, on the one hand , cash and expected means of payment are calculated, and on the other hand - payment obligations for the same period (1, 5, 10, 15 days, month).
When analyzing solvency, in addition to quantitative indicators, one should study quality characteristics, which do not have a quantitative change, which can be characterized as depending on the financial flexibility of the enterprise.
Financial flexibility is characterized by the ability of an enterprise to withstand unexpected interruptions in cash flow due to unforeseen circumstances. This means the ability to borrow from various sources, increase share capital, sell and move assets, change the level and nature of the enterprise in order to withstand changing conditions.
The ability to borrow money depends on various factors and is subject to rapid change. It is determined by profitability, stability, the relative size of the enterprise, the situation in the industry, the composition and structure of capital. Most of all, it depends on such an external factor as the state and direction of changes in the credit market. The ability to obtain credit is an important source of cash when it is needed, and is also important when a business needs to extend short-term loans. Pre-arranged financing or open credit lines (a loan that an enterprise can take out within a certain period of time and on certain conditions) are more reliable sources of obtaining funds when needed than potential financing. When assessing the financial flexibility of an enterprise, the rating of its bills, bonds and preferred shares is taken into account; limiting the sale of assets; the degree of randomness of spending; and the ability to respond quickly to changing conditions such as a strike, a drop in demand, or the elimination of sources of supply.
Conclusion
One of the most important criteria for the financial position of an enterprise is the assessment of its solvency, which is commonly understood as the ability of an enterprise to pay for its long-term obligations. Therefore, a solvent enterprise is one whose assets are greater than external liabilities.
The ability of an enterprise to pay its short-term obligations is called liquidity. An enterprise is considered liquid if it is able to meet its short-term obligations by selling current assets.
To assess the solvency of an enterprise in domestic practice, the value of net assets and their dynamics are studied. Net assets of the enterprise represent the excess of assets over liabilities taken into account.
The most general indicator of solvency is the coverage indicator (current liquidity), which is calculated as a quotient of current assets divided by short-term liabilities and shows whether the company has enough funds that can be used to pay off its short-term liabilities within a certain period.
Bibliography
1. Anti-crisis management.: Textbook. - 2nd ed.: add. and revised / Ed. Prof. EM. Korotkov. - M.: INFRA - M, 2007. - 620 p.
2. Anti-crisis management. Theory and practice: tutorial for university students studying in the specialties of economics and management / V.Ya. Zakharov, A.O. Blinov, D.V. Khavin - M.: UNITY-DANA, 2007. - 287 p.
3. Blank I.A. Anti-crisis financial management of the enterprise. - K .: Elga, Nika-Center, 2006. - 672 p.
4. Fundamentals of anti-crisis management of enterprises: textbook. Allowance for students of higher education. textbook institutions / ed. N.N. Kozhevnikov. - 2nd ed. - M.: Ed. Centre. "Academy", 2007 - 496 p.
5. Utkin E.A. Crisis management. - M.: Tandem, EKMOS, 2000.
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In conditions of mass insolvency and the application of bankruptcy procedures (insolvency) to many enterprises, an objective and accurate assessment of the financial and economic state is of paramount importance. The main criterion for such an assessment is the indicators of solvency and the degree of liquidity of the enterprise.
There are no unambiguous interpretations of the concepts of liquidity and solvency of an enterprise in the literature. Liquidity comes from the Latin "liquidus", which means fluid, liquid, i.e. liquidity gives this or that object a characteristic of ease of movement, movement. The term "liquidity" was borrowed from German language at the beginning of the twentieth century. The liquidity of an enterprise in the literature is most often understood as its ability to cover its obligations with assets, the period of transformation of which into cash corresponds to the maturity of obligations.
In the economic literature, different authors interpret the concept of liquidity in their own way. For example, Lyubushin N.P. believes that liquidity is the ability of an organization to quickly meet its financial obligations, and, if necessary, quickly realize its funds. Bank V.R., speaking of the liquidity of an enterprise, means that it has working capital in an amount that is theoretically sufficient to repay short-term obligations, albeit with a violation of the repayment periods stipulated by contracts. According to Kovalev V.V. liquidity is a property of the assets of an economic entity, namely mobility, mobility, which consists in their ability to quickly turn into money.
Thus, the following principle is generally accepted: the faster an asset of an enterprise can be converted into money without loss of value, the higher its liquidity. Therefore, most authors associate liquidity with the state of the asset, which can ensure the short-term solvency and creditworthiness of the enterprise, as well as the repayment of borrowed funds. Some experts, for example, Krinina M., associate liquidity with the current solvency of an enterprise.
Solvency is considered through the prism of the company's cash and cash equivalents sufficient to pay its obligations in each period under consideration. Accordingly, the main signs of solvency are the absence of overdue accounts payable and the availability of sufficient funds in the current account.
An analysis of the work of foreign and domestic scientists-economists made it possible to identify the following approaches to determining the essence of the concept of "solvency". So, supporters of the first approach - Danish scientists J. Worst and P. Reventlow - define solvency as "the ability to withstand losses." Thus, they emphasize the presence of a certain potential in the enterprise, which gives it the opportunity to cover losses. However, the authors do not take into account that the enterprise, first of all, should be able to meet the requirements of counterparties and pay for their needs, and not focus on losses and their repayment.
French scientists J. Depellens and J. Jobard argue that “solvent is an enterprise that has positive revolving funds(that is, there are own sources of working capital)” . From this definition it follows that the solvency is determined by the composition of the working capital of the enterprise. At the same time, a large part of own current assets is the basis of the solvency of the enterprise.
According to the Russian scientist V.V. Kovaleva's solvency is the willingness to repay accounts payable upon the maturity of payment by current cash receipts. In turn, Berdnikova T.B. believes that solvency is the ability of an enterprise to timely and in full make settlements on short-term obligations to counterparties. Bank V.R. adheres to a different point of view. and Taraskin A.V. , the authors argue that solvency means that the enterprise has cash and cash equivalents sufficient to settle accounts payable requiring immediate repayment.
Savitskaya gives the following definition: “Solvency is the ability to pay off your payment obligations with cash resources in a timely manner” . Here, emphasis is placed on the timeliness of repayment of obligations in cash, although obligations can be paid both non-cash and with the help of other financial instruments. A similar point of view is shared by Gilyarovskaya L.T. and Ignatov A.P. .
From the point of view of economists M.S. Abryutina and A.V. Grachev "solvency means the sufficiency of liquid assets to repay at any time all of its short-term obligations to creditors." The concept of “liquid assets” already appears here, and the authors note that their size should be sufficient.
A somewhat different point of view is held by E.I. Utkin, who agrees that the assessment of solvency is one of the most important criteria for the financial condition of an enterprise. However, by solvency, he understands the ability of an enterprise to pay off its long-term obligations in a timely manner and in full.
A. D. Sheremet believes that "the solvency of an enterprise is defined as the ability to cover all its obligations (short-term and long-term) with all assets" . This definition, unlike the above, is more accurate, since it takes into account all types of obligations and it indicates how the final result is achieved. However, it cannot be called complete, since the specifics of the reproduction process at the enterprise are not taken into account.
Within the framework of this approach, D.S. Molyakov and E.I. Shokhin argue that solvency is the most important indicator characterizing the financial condition of an enterprise; indicates that the company is able to timely satisfy all payment requirements of suppliers arising from previously concluded contracts, pay off loans and borrowings received, pay wages to employees, and also make payments to budget and extra-budgetary funds.
The shortcomings of all the considered interpretations of solvency are taken into account in the definition of A.M. Subdegree, which characterizes it as the ability of an enterprise to fulfill its obligations in a timely manner and in full, which arise from credit and other monetary transactions, have certain deadlines payment.
Thus, the solvency of Western scientists is determined by the availability of their own working capital and the ability to cover losses. In contrast, Russian economists define solvency as the ability of an enterprise to fulfill its obligations (short-term - V.V. Kovalev, M.M. Kreinina, M.S. Abryutina and A.V. Grachova; long-term - E.I. Utkin; all obligations - A.D. Sheremet, D.S. Molyakov, E.I. Shokhin, A.M. Podderegin).
It should be noted that, considering the content of the concept of "solvency", some scientists and specialists, on the one hand, identify it with liquidity, and on the other hand, point to their differences.
The concept of liquidity characterizes the potential ability of an enterprise to pay for its obligations, and the concept of solvency - a real opportunity to fulfill its obligations.
The deterioration of the solvency and liquidity of the enterprise is an early and first symptom of the onset of a financial crisis, which may result in bankruptcy. For its timely prevention, it is necessary to develop a system for assessing the level of solvency and liquidity, which makes it possible to obtain reliable information about the financial condition of the enterprise, identify the reasons for its deterioration and determine the ways out of the financial crisis.
Therefore, competent liquidity and solvency management just the same implies an integrated approach, taking measures to ensure that the enterprise has a constant, stable solvency.
Similar information.
One of the most important characteristics of the financial condition of the enterprise is its ability to meet its obligations.
The activities of an economic entity can be characterized from different angles, but in the most general case it can be represented as a set of alternating cash inflows and outflows. Part of the cash flows refers to the characteristics of the company's activities from a short-term perspective, the other part characterizes this activity in the long term. The cash flow balance of an enterprise is related to the total financial structure enterprises, the degree of its dependence on creditors and investors.
Maintaining a balanced inflow and outflow of cash is the basis of 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 funding. Choosing their size, composition and structure, the enterprise simultaneously acquires certain opportunities and imposes certain obligations on itself. The possibility of varying the methods of raising funds is predetermined by the following features of the system of market relations.
First, resources (material, financial, intellectual, informational, etc.) are unevenly distributed among the owners.
Second, physical and legal entities who either know how and where it is possible to profitably apply resources of a certain volume and composition, but do not possess them, or, on the contrary, have temporarily free resources at their disposal, but do not know a clear way of their application.
Thirdly, the system for regulating the process of redistribution of resources has two sides: normative (various aspects of doing business are legally regulated, for example, the sequence of satisfying creditors' requirements) and incentive (the provision of a resource for temporary use is encouraged by establishing some remuneration: wages, rent, interest , dividends, etc., and the amount of the incentive is determined by many factors, including the risk factor for the loss of the provided resource).
In the appendix to the 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 point of view, the reasonable attraction of capital is often more economically beneficial than 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 the assumption of a certain risk. Obligatory regular payments must be made for the funds received for temporary use; in addition, the borrowed funds must be returned.
In addition, the company's funds can be used in its internal circulation and beyond (accounts receivable, acquisition of securities, shares, bonds of other enterprises).
Accordingly, the problem arises of determining the sources of financing for its activities, determining their structure, identifying more effective sources of financing, determining the optimal way to allocate the enterprise's 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 available funds, 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 obligations.
Thus, the main signs of solvency are:
a) the availability of sufficient funds in the current account;
b) the absence of overdue accounts payable.
Solvency is the ability of cash resources to repay their short-term payment obligations in a timely manner and an 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, liquidity of the balance sheet and liquidity of the enterprise.
The liquidity of the balance sheet is the ability of a business entity to turn assets into cash and pay off its payment obligations, or rather, it is the degree of coverage of the company's debt obligations by its assets, the period of conversion of which into cash corresponds to the maturity of payment obligations. It depends on the extent to which the amount of available means of payment corresponds to the amount of short-term debt obligations.
The liquidity of the enterprise is a more general concept than the liquidity of the balance sheet. The liquidity of the balance sheet involves finding means of payment only from internal sources (realization 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.
The 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 with violation of payment terms) both at the expense of its own and borrowed funds.
The degree of liquidity of the enterprise depends on its solvency.
Solvency assessment is carried out on the basis of the characteristics of the liquidity of current assets, i.e. the time it takes to turn them into cash. At the same time, liquidity characterizes not only the current state of settlements, but also the prospect, including the short term.
On the contrary, the financial condition in terms of solvency can be very volatile: yesterday the company was solvent, but today the situation has changed dramatically - it's time to pay off the next creditor, and the company has no money in the account, because the payment for the products delivered earlier was not received in a timely manner, t .e. it became insolvent due to the financial indiscipline of its debtors, while the company has a liquid balance sheet and the ability to raise borrowed funds.
If the delay in receipt of payment is of a short-term or random nature, then the situation in terms of solvency may soon change for the better, but other, less favorable options are not ruled out. Such peak situations are especially common in commercial organizations that for some reason do not maintain sufficient insurance stock of funds in their current account.
Liquidity is less dynamic compared to solvency. The fact is that as the production activity of the enterprise stabilizes, it gradually develops a certain structure of assets and sources of funds, sharp changes in which are relatively rare. Therefore, liquidity ratios usually vary within some quite predictable limits, which, by the way, partly gives reason to analytical agencies to calculate and publish average industry and group average values of these indicators for use in inter-farm comparisons and as benchmarks when opening new areas of production activity.
The liquidity of the balance sheet 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, it is easier for it to maintain its liquidity.
Sometimes, instead of the term "solvency", they say, and this is generally correct, about liquidity, that is, the possibility of certain objects that make up the balance sheet asset to be sold. This is the broadest definition of solvency. In a closer, specific sense, solvency is the availability of funds and cash equivalents for the enterprise, sufficient for settlements of accounts payable requiring repayment in the near future.
Solvency and liquidity have a positive impact on the implementation of production plans and the provision of production needs with the necessary resources. Therefore, they are aimed at ensuring the planned receipt and expenditure of financial resources, the implementation of settlement discipline, the achievement of rational proportions of own and borrowed capital and its most efficient 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, in obtaining loans, in choosing suppliers and in selecting qualified personnel. Finally, it does not come into conflict with the state and society, because pays timely taxes to the budget, contributions to social funds, wages - to workers and employees, dividends - to shareholders, and banks guarantee the return of loans and the payment of interest on them.
The higher the solvency of the enterprise, the more it is independent of unexpected changes in market conditions and, therefore, the less the risk of being on the verge of bankruptcy.
In the context of the financial crisis, many firms are in a deplorable state. And often the main reason for this is the lack of funds and other assets.
A sign indicating a deterioration in liquidity is an increase in the immobilization of own working capital, which is manifested in an increase in illiquid assets, overdue receivables and bills received (overdue), etc. Some of these assets and their relative importance can be judged by the presence and dynamics of articles of the same name in the reporting.
Insolvency is evidenced, as a rule, by the presence of other “sick” articles in the reporting: “Losses”, “Credits and loans not repaid on time”, “Overdue accounts payable”, “Promissory notes issued overdue”.
Thus, solvency and liquidity are achieved with the sufficiency of own capital, good quality assets, a sufficient level of profitability, taking into account operational and financial risk, sufficient liquidity of the balance sheet, stable income and wide opportunities for attracting borrowed funds.
To ensure solvency and liquidity, an enterprise must have a flexible capital structure, 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 are not a happy accident, but the result of competent, skillful management of the entire complex of factors that determine the results of the enterprise's economic activity.
The term "liquidity" means the ease of transformation material assets into money. The company's liquidity indicators include several local parameters.
Balance sheet liquidity indicators reflect the current situation at a certain moment in the ratio of liquid assets available to the enterprise and its liabilities. In other words, it is the ability, recorded in the balance sheet, to convert assets into means of payment in a timely manner in order to fulfill its obligations.
Absolute liquidity indicators are a broader concept than the liquidity of the balance sheet, which characterizes the ability to fulfill obligations by partners or other subjects of relationships. It should be noted here that the company is considered liquid, having a liquid balance. But ensuring liquidity cannot be identified only with the fulfillment of this condition. Row external factors can destroy the liquidity of the enterprise, even if it has a balance close to ideal.
Liquidity indicators of an enterprise are a complex, multi-level concept, which is 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 the main condition, non-observance of which calls into question the further existence of any enterprise. In addition, the tight liquidity requirement requires, in the short term, continuous revision of daily cash flow forecasts. Therefore, it is advisable to single out the liquidity management of an enterprise in a separate circle 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 the shortage of funds, generally speaking, requiring certain costs; according to the second criterion, free cash can be invested in order to generate income.
At present, 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 framework of the designated areas of application, liquidity is a kind of relationship created for the correct realization of the value of the exchange (for example, goods and money). At the same time, 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 the 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, financial indicators. It allows you to assess the capabilities of the enterprise in terms of further development in the selected area.
The liquidity management methods of an enterprise include:
· Distribution of funds through various channels;
· Distribution of assets in accordance with the terms of liabilities;
· Scientific management.
Liquidity management of an enterprise involves such an allocation of the company's finances, which will allow, if necessary, to quickly pay off obligations.
The most important aspect of the company's activity is to maintain 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 the analysis of solvency and liquidity, as well as indicators of financial stability, aimed at achieving and maintaining a certain state of the financial resources of the enterprise.
Financial stability management also includes forecasting changes in the movement of financial flows and taking timely measures to prevent the deviation of the state of financial resources from the desired and necessary.
The effective functioning of the company requires economically sound management of its activities, which is based on financial analysis.
The following can be distinguished as the main directions of analysis of the effectiveness of the production and economic activities of the enterprise:
Express analysis of the indicators of the balance sheet and the income statement (until 2012 - income statement);
Analysis of financial stability;
Liquidity analysis;
Analysis of the effectiveness of the use of basic resources;
Analysis of profit and profitability.
The balance sheet and income statement provide a very informative description of the organization's activities for a certain period. Many estimates can be made on these reporting forms as part of a rapid analysis, i.e. without lengthy and cumbersome calculations, which require special knowledge. Below is a set of such estimates:
1. Financial result: positive financial results in the income statement indicates the profitable work of the organization, a negative result means a loss; the higher the profit, the more effective the financial and economic activity of the organization.
2. Capitalization: in the most general form, capitalization is an increase in own capital in the balance sheet; an increase in the third section of the balance sheet, as a rule, is a consequence of the profitable work of the organization and is evaluated positively.
3. Property: an increase in property, as a rule, is evidenced by an increase in the balance sheet; Special attention when assessing trends in property status, it is given to the real part of the property - the means of production (means of labor and objects of labor), which are reflected in the balance sheet in section I and in stocks from section II.
4. Working capital: the organization must be provided with working capital (own working capital, functioning capital, net assets); in this case, the organization, after settlements on short-term debts, has a free balance of liquid funds to continue its financial and economic activities; a sign of the availability of working capital is the inequality:
sec. II - section. V > 0. (1)
5. Liquidity of the balance sheet: the liquidity criterion is the double excess of current assets (section II) of short-term liabilities (section V); An organization is considered liquid if
sec. II / sec. V? 2.(2)
6. Financial stability: an indicator of the financial stability / instability of the organization is the capital structure (structure of liabilities); a formal sign of financial stability is the excess own capital loan capital:
sec. III > sec. IV + sec. V. (3)
7. The rule of "left and right hand" indicates the ability of the 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:
sec. I? sec. III + sec. IV. (4)
From the totality of the above express assessments of financial statements, special attention is paid to the criteria of liquidity and financial stability, as well as the rule of "left and right hand". These directions of evaluation are also criteria for optimality, otherwise it is appropriate to speak of a blunder.
Possession of express analysis tools is an obligatory moment of professional qualification of specialists. It allows you to make significant conclusions about the state and development trends of the organization, based on “dry” at first glance, figures, which, as a rule, are confirmed by the calculation of analytical coefficients. Hotinskaya G.I. Financial management(on the example of the service sector): textbook. allowance. - 2nd ed., revised. and additional - M.: Publishing house "Delo i Service", 2010. - S. 44-45.
To analyze the financial stability of the organization according to the balance sheet, you can use the following methodology (three-factor model):
1. Determine the amount of stocks and costs.
2. Determine the sources of formation of stocks and costs. The main sources of formation 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=SC-VA, (5)
where SOS - own working capital of the enterprise;
SC - equity;
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 S/C is long-term borrowed capital.
3rd group (IS3) - the total value of sources of formation of reserves and costs, including the above groups and short-term loans and borrowings:
IS3=IS2+KKZ, (7)
where KKZ - short-term credits and loans.
Absolute stability of the financial condition is achieved when all reserves and costs (ZiZ) are fully covered by their own working capital:
ZiZ<СОС (ИС1), (8)
where ZiZ - stocks and costs.
In this case, there is an excess 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)
Here, there may be a lack of own working capital, as well as an excess of long-term sources of formation of reserves and costs.
Unstable financial condition - all stocks and costs are covered by all sources of coverage:
IS2<ЗиЗ<ИС3. (10)
In this case, the company has the opportunity to restore solvency at the expense of bank loans for inventory items, taking into account the amounts set off by the bank when lending.
Crisis financial condition - general sources of coverage are not enough to cover stocks and costs:
ZiZ>IS3. (eleven)
In this case, the company is on the verge of bankruptcy. The company needs to reasonably reduce its inventory.
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. - S. 478. (12)
where SC - equity;
VB - balance currency.
The growth of the autonomy coefficient in dynamics is a positive factor. The normal minimum value of the autonomy coefficient is estimated at 0.5.
The coefficient of security with own working capital (Ksos):
Bank V.R., Bank S.V., Taraskina L.V. Financial Analysis: Textbook. - M.: TK Velby, Prospect Publishing House, 2010. - S. 112. (13)
where OA - current assets;
SOS - own working capital, which are calculated by the formula (5).
The normative value of the ratio of own working capital is greater than or equal to 0.1.
Ratio of own and borrowed funds (Kc/z):
The decrease in the level of the ratio of own and borrowed funds in dynamics indicates an increase in the level of financial stability.
The normal limitation of the ratio of own and borrowed funds is greater than 1. Zhulina E.G., Ivanova N.A. Analysis of financial statements: Textbook. - M .: Publishing and Trade 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 for the immediate repayment of creditors' claims, which cannot be rolled over. Grass E.Yu. Analysis of the liquidity of the balance sheet according to the new forms of accounting reporting in 2011 // Economic analysis: theory and practice. - 2012. - No. 27. - S. 54.
The concept of financial stability is closely connected with the concepts of solvency and liquidity. If financial stability is its internal side, reflecting the balance of cash flows, income and expenses, means and sources of their formation, then solvency and liquidity are an 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.
The liquidity analysis of the balance sheet is reduced to checking whether the liabilities in the liabilities side of the balance sheet are covered by assets, the period of transformation of which into cash is equal to the maturity of the liabilities. Grass E.Yu. Analysis of the liquidity of the balance sheet according to the new forms of accounting reporting in 2011 // Economic analysis: theory and practice. - 2012. - No. 27. - P. 60.
To assess the solvency of an organization, three relative liquidity indicators are used, which differ in the set of liquid funds considered as coverage for short-term liabilities:
Current liquidity ratio (Kcurrent liquidity):
where OA - current assets;
TO - short-term liabilities.
With the help of the current liquidity ratio, the potential solvency of the enterprise in a relatively long term is estimated.
Quick liquidity ratio (Current liquidity):
where NLA - the most liquid assets: cash and short-term financial investments;
ABR - marketable assets: accounts receivable, payments on which are expected within 12 months after the reporting date, other current assets.
Quick liquidity ratio shows the possibility of repayment of short-term liabilities of the enterprise at the expense of the most liquid and quickly realizable part of current assets.
Absolute liquidity ratio (Cabs.liq.):
The absolute liquidity ratio characterizes the ability of the enterprise to immediately fulfill financial obligations, showing what part of the existing short-term debt can be repaid at the moment.
The next direction in the analysis of the effectiveness of production and economic activities is the analysis of the efficiency of the use of the main resources of the enterprise.
The main resources of the enterprise are material resources (fixed and current assets), labor resources (personnel), 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 the enterprise, 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.: Volters Kluver, 2009. - P. 178. The 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 during the year and fully transfer their value to the cost of production. The main types of working capital are: stocks, receivables, short-term financial investments and cash.
The following indicators are used to analyze the effectiveness of the organization's material resource management:
1. The efficiency of fixed assets management is characterized by indicators of capital productivity (Fo) and capital intensity (Fe):
where B - sales revenue;
OS - the average annual cost of fixed assets.
Return on assets shows how much revenue falls on 1 ruble. fixed assets of the enterprise.
2. The efficiency of current assets management is characterized by the following indicators:
The turnover ratio of current assets (Ооа) is calculated by the formula:
The turnover ratio of current assets reflects the intensity of the use of working capital. It shows the turnover rate of current (mobile) assets, or how many rubles of revenue fall on the ruble of current assets.
The duration of circulation of current assets (POoa) is calculated by 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 of one employee (the amount of revenue per 1 employee).
Average salary per 1 employee:
where FOT is the wage fund.
In the process of analysis, a correspondence should be established between the growth rate of average wages and labor productivity. It is important that the rate of growth in labor productivity outpaces the rate of growth in wages, otherwise there will be overspending and a decrease in the value of profit. Savitskaya G.V. Analysis of the economic activity of the enterprise: Textbook. - 5th ed., Rev. and additional - M.: INFRA-M, 2010. - S. 175.
One of the important indicators of the efficiency of the production and economic activities of the 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 economic activity of the enterprise in the past period and the possibilities of its further functioning. Profitability indicators are practically not affected by inflation, they can be compared with average industry coefficients, in dynamics, with the performance of competitors. Profitability indicators characterize the effectiveness of the use of financial resources of the enterprise.
The main indicators of profitability 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 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 of working capital:
where OA is the average value of current assets.
Return on equity (RSC) characterizes the share of balance sheet profit in equity:
where BP - balance sheet profit (profit before tax);
SC - average value of own capital;
Return on sales (RP) shows how much profit falls on one ruble of sold products:
where PP - profit from sales;
B is sales revenue. Bank V.R., Bank S.V., Taraskina L.V. Financial Analysis: Textbook. - M.: TK Velby, Prospekt Publishing House, 2010. - S. 131.
Summing up the consideration of the proposed methodology for analyzing the effectiveness of production and economic activities, we can draw the following conclusion.
The 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, the effect and costs - and in general terms, for example, in the amount of working capital, assets or profit. At the same time, all considered indicators should be evaluated in aggregate. As can be seen from the presented coefficients, the main indicator of financial stability is borrowed capital and its ratio to own.
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