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In the course of the financial analysis of the organization’s activities
must be based on the
financial reporting data (balance sheet and statement of changes in equity) to calculate the
basic indicators of the property situation of the company, an analysis of fiscal sustainability, to
assess the solvency and liquidity of the company.
Analysis of the property allows you to expand the production capacity of the organization,
based on a fraction of their own funds in the total production capacity. Indicators financial
sustainability of the enterprise’s financial position is characterized by dependence on sources
of capital structure, in particular the ratio of debt to equity. The end result of this analysis
is a set of coefficients, which are determined based on the type of financial stability, which
characterizes the level of his ability to operate only on its own or a combination of equity and
debt resources that determines the financial policy.
One of the tasks of financial analysis is the timely identification
and elimination of
shortcomings in financial activities and find the reserves to improve the financial condition
of the company and of its solvency. The deadlines for each company in the normal functioning
of market conditions should perform financial analysis. The subject of financial analysis is
financial resources and their flows.
The main classical methods of financial analysis are:
• Horizontal analysis. In the horizontal analysis determined the absolute and the relative
magnitude of change (deviation) for various balance sheet items for the period.
• Vertical analysis. Task vertical analysis – a calculation of the proportion of individual
articles in the overall result, balance sheet or other statements, i.e. revealing the structure of
the test report by a certain date.
• Trend analysis is a comparison of the studied variables, articles for a number of time periods
to identify trends that dominate the dynamics of the index. The trend (time series).
• ratio analysis is the study of the level and dynamics of relative indicators of financial
condition, which is calculated as the ratio of the balance sheet items
or other absolute values
obtained on the basis of the financial statements.
A preliminary assessment of the financial condition of the non-profit organization can be
made on the basis of horizontal and vertical analysis of the balance of performance estimates
of income and expenditure.
During the analysis of the financial condition of the organization use the data of the
following forms of financial statements: balance sheet, income statement, cash flow statement,
Appendix to the balance sheet.
Development of measures for more efficient use of financial resources and strengthen the
financial condition of the company requires a detailed study of existing resources. The economic
activity of any economic entity it is necessary to allocate resources by type and directions. For
these purposes, the company creates the unit of financial management, in which conducts its
financial strategy. The basis of financial management and financial
strategy of the enterprise
keeps the financial statements analysis
In order to properly evaluate the results obtained during the processing of the financial
statements must also take into account the information that characterizes the industry in which
the company operates. This study provides the main characteristics of the industry, factors of
production, which can help determine the prospects of the enterprise sector.
For small businesses embodied in the life of the financial management purposes difficult to
implement due to lack of funds and, as a consequence of not having frames which give effect
to the financial management. For this reason, management of small businesses are forced to
limit their own. In most cases, the activities of small organizations
the immediate management
function assumes the founder of the organization. This fact, in turn, causes a lack of time to carry
out administrative functions, which can lead to loss of control over the current financial state
of the organization. Management of the enterprise in addition to the conduct of core activities
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should represent the direction of movement of the enterprise development. Hence the need to
rationally allocate their time and opportunities to attract additional material and human resources
for the successful implementation of the monitoring of current economic activity and further
business planning. These provisions are the basis for the successful implementation of financial
management strategies.
As with any business the main part of financial management will be a financial analysis of the
company. But at the same time the organization will face a number of complications.
For small
businesses the situation is complicated by the fact that many of them are made in the simplified
tax system and, therefore, used a simplified version of the accounting [21]. This fact seriously
complicates the possibility of financial analysis for a full analysis of liquidity, solvency, financial
stability and the probability of bankruptcy diagnostics company simplified accounting data is not
enough. But while any economic entity maintains its accounting records and prepares its financial
statements, which in this case will be the basis of financial management. Consequently, the full
financial statements for internal use should be maintained at least for internal company purposes.
From this it can be concluded that the use of the financial
statements for financial
management purposes leader requires a system analysis of available financial statements [11].
Often, however, the leadership of a small enterprise reporting capabilities not available
due to lack of an appropriate analysis of economic education, or lack of time. In this case the
function of the analysis of financial statements may be delegated by the accounting service,
which is engaged in bookkeeping. This process may require additional cost, but the company
executives will receive expert information according to operations of the organization.
Many small businesses in the structure of their liabilities are borrowings. Also, small businesses
often cannot exist without the advances of its products, increasing accounts payable organization.
Due to the instability of the advance payment system increases the risk of delay payments on loans
and, in some cases, failure to pay them. This circumstance gives rise to a debt organization.
As is known, any company whose purpose is to improve the
efficiency of the enterprise, aims
to ultimately increase their profits. Currently proposed are many ways by which the organization
of work efficiency can be greatly increased. The most common methods are to minimize the
current expenses of the enterprise. The company’s management may go here how to purchase
materials at low prices, and to reduce the number of personnel or reducing the payroll. However,
many managers forget that the main objective of the enterprise is not any reduction in costs,
and coordinated and effective work. Heads cut staff to survive today, but forget that they risk
all to be ruined in the future. Of course, organizations need to control costs, but do not try to
save money on the things on which depends the future of the enterprise.
The second way, which will result in improving the efficiency of the enterprise,
is to carry out
modernization. Moreover, modifications can be carried out by any stretch. Typically, this could
be the introduction of modern software industrial – old exchange to a new equipment that
will operate with greater efficiency. Also, modifications can be to create a corporate system of
government, business automation. This also includes the introduction of electronic document
management, the creation of corporate web portals. Of course, this method of modernization
will necessarily lead to a significant increase in the efficiency of the enterprise.
Recently, another good way to improve the efficiency of the enterprise is the introduction of
the management system. Moreover, such systems are not developed on its experience and are
adopted by those organizations that practice this method for a long time.
The most common
today: the theory of constraints systems and quality management system. Such changes and are
even some problems, but in the end they are most effective.
In addition to the above ways to increase the efficiency of the organization is widely spread
and the method of brainstorming. As a rule, are involved in this process, the head and his
deputies. The results obtained in the course of the assault on offer is also very useful to improve
the efficiency of the organization of small businesses.