Financial risk indicator. Formulas for calculating coefficients of financial stability of an enterprise Financial risk coefficient for construction

Let's consider financial risk, its types (credit, market, operational and liquidity risk), modern methods of its assessment and analysis and calculation formulas.

Financial risk of the enterprise. Definition and economic meaning

Financial risk of the enterprise– represents the probability of an unfavorable outcome in which the enterprise loses or receives less than part of its income/capital. Currently, the economic essence of any enterprise is to create income and increase its market value for shareholders/investors. Financial risks are basic in influencing the results of the financial and economic activities of an enterprise.

And in order for an enterprise to reduce the negative impact of financial risks, methods for assessing and managing its size are being developed. The basic premise put forward by Norton and Kaplan that underlies risk management is that only what can be quantified can be managed. If we cannot measure or quantify any economic process, we will not be able to manage it.

Financial risk of an enterprise: types and classification

The process of any analysis and management consists of identifying and classifying existing risks of an investment project/enterprise/assets, etc. In the article we will place greater emphasis on assessing the financial risks of an enterprise, but many of the risks are also present in other economic entities. Therefore, the initial task for every risk manager is to formulate threats and risks. Let us consider the main types of financial risks that are identified in the practice of financial analysis.

General approaches to assessing financial risks

All approaches to assessing financial risks can be divided into three large groups:

1. Estimation of probability of occurrence. Financial risk as the likelihood of an unfavorable outcome, loss or damage.
2. Assessment of possible losses under one or another scenario for the development of the situation. Financial risk as the absolute size of losses possible adverse event.
3. Combined approach. Financial risk assessment, how the probability of occurrence and the size of losses.

In practice, a combined approach is most often used, because it gives not only the probability of risk occurrence, but also possible damage to the financial and economic activities of the enterprise, expressed in monetary terms.

Algorithm for assessing the financial risks of an enterprise

Let's consider a standard algorithm for assessing financial risks, which consists of three parts. Firstly, analysis of all possible financial risks and selection of the most significant risks that can have a significant impact on the financial and economic activities of the organization. Secondly, a method for calculating a particular financial risk is determined, which allows the threat to be formalized quantitatively/qualitatively. At the last stage, changes in the size of losses/probability are predicted under various enterprise development scenarios, and management decisions are developed to minimize negative consequences.

The influence of financial risks on the investment attractiveness of an enterprise

The investment attractiveness of an enterprise is a combination of all indicators that determine the financial condition of the enterprise. Increasing investment attractiveness allows you to attract additional funds/capital to increase technological, innovative, personnel, and production potential. An integral indicator of investment attractiveness is the criterion of economic added value EVA (EconomicValueAdded), which shows the absolute excess of operating profit over the cost of investment capital. This indicator is one of the key indicators in the strategic management system of the enterprise - in the cost management system (VBM, Value Based Management). The formula for calculating economic added value is as follows:

EVA (Economic Value Added)– indicator of economic added value, reflecting the investment attractiveness of the enterprise;

NOPAT (Net Operating Profit Adjusted Taxes)– profit from operating activities after taxes, but before interest payments;

WACC (Weight Average Cost of Capital)– an indicator of the weighted average cost of capital of an enterprise. And it is calculated as the rate of return that the owner of the enterprise plans to receive on invested own and borrowed capital;

C.E. (Capital Employed)– used capital, which is equal to the sum of permanent assets and working capital involved in the activities of the enterprise (FixedAssets +WorkingCapital).

Since the weighted average cost of capital of an enterprise consists of the cost of borrowed and equity capital, reducing the financial risks of an enterprise makes it possible to reduce the cost of borrowed capital (interest rates on loans), thereby increasing the value of economic value added (EVA) and the investment attractiveness of the enterprise. The figure below shows a diagram of financial risk management and investment attractiveness.

Methods for assessing financial risks

In order to manage risks, they need to be assessed (measured). Let's consider the classification of methods for assessing the financial risks of an enterprise, highlight their advantages and disadvantages, presented in the table below. All methods can be divided into two large groups.

So, let us examine in more detail quantitative methods for assessing the financial risks of an enterprise.

Methods for assessing enterprise credit risks

A component of the financial risk of an enterprise is credit risk. Credit risk is associated with the possibility of an enterprise not paying its obligations/debts on time and in full. This property of an enterprise is also called creditworthiness. The extreme stage of loss of creditworthiness is called bankruptcy risk, when the company is completely unable to repay its obligations. Methods for assessing credit risk include the following econometric risk diagnostic models:

Assessment of credit risks using the E. Altman model

The Altman model allows you to assess the risk of bankruptcy of an enterprise/company or a decrease in its creditworthiness based on the discriminant model presented below:

Z – the final indicator for assessing the credit risk of an enterprise/company;

K 1 – own working capital/amount of assets;

K 2 – net profit/total assets;

K 3 – profit before tax and interest payments/total assets;

K 4 – market value of shares/borrowed capital;

K 5 – revenue/total assets.

To assess a company's credit risk, it is necessary to compare the resulting indicator with the risk levels presented in the table below.

It should be noted that this model can only be applied to enterprises that have ordinary shares on the stock market, which makes it possible to adequately calculate the K4 indicator. A decrease in creditworthiness increases the total financial risk of the company.

Credit risk assessment using R. Taffler’s model

The next model for assessing the credit risks of an enterprise/company is the R. Taffler model, the calculation formula of which is as follows:

Z Taffler – assessment of the credit risk of an enterprise/company;

K 1 – indicator of enterprise profitability (profit before tax/current liabilities;

K 2 – indicator of the state of working capital (current assets/total liabilities);

K 3 – financial risk of the enterprise (long-term liabilities/total assets);

K 4 – liquidity ratio (sales revenue/total assets).

The resulting credit risk value must be compared with the risk level presented in the table below.

Assessment of credit risks using the R. Lees model

In 1972, economist R. Lees proposed a model for assessing credit risks for UK enterprises, the calculation formula of which is as follows:

K 1 – working capital/amount of assets;

K 2 – profit from sales / amount of assets;

K 3 – retained earnings / amount of assets;

K 4 – equity capital / borrowed capital.

In order to determine the level of credit risk, it is necessary to compare the calculated Lis criterion with the level of risk presented in the table below.

Methods for assessing operational risks

One type of financial risk is operational risks. Let's consider a method for assessing operational risks for companies in the banking sector. According to the basic method ( BIA) operational risk assessments ( Operational Risk Capital,ORC) the financial institution calculates the reserve that should be allocated annually to cover this risk. So in the banking sector a risk of 15% is taken, that is, every year banks must reserve 15% of the average annual gross income ( GrossIncome,G.I.) over the past three years. The formula for calculating operational risk for banks will be as follows:

Operational risk= α x (Average gross income);

α – coefficient established by the Basel Committee;

GI is the average gross income for each type of bank activity.

Standardized methodology for assessing operational risksTSA

A complication of the BIA method is the TS method, which calculates deductions for operational risks arising in various functional areas of the bank’s activities. To assess operational risks, it is necessary to highlight the areas where they may arise and the nature of the impact on financial activities they will have. Let's look at an example of assessing a bank's operational risks.

As a result, the amount of the final deduction will be equal to the amount of deductions for each allocated function of the bank.

It should be noted that, as a rule, operational risks are considered for companies in the banking sector, and not in the industrial or manufacturing sector. The fact is that most operational risks arise from human error.

Methodology for assessing liquidity risk

The next type of financial risk is the risk of loss of liquidity, which shows the inability of an enterprise/company to repay its obligations to creditors and borrowers on time. This ability is also called the solvency of the enterprise. In contrast to creditworthiness, solvency takes into account the possibility of repaying debt not only with cash and quickly liquid assets, but also with medium-liquid and low-liquid assets.

To assess liquidity risk, it is necessary to evaluate and compare with the standards the basic liquidity ratios of the enterprise: current liquidity ratio, absolute liquidity ratio and quick liquidity ratio.

Formulas for calculating enterprise liquidity ratios

Analysis of various liquidity ratios shows the ability of an enterprise to repay its debt obligations using various three types of assets: quick-liquid, medium-liquid and low-liquid.

Methodology for assessing market risk – VAR

The next type of financial risk is market risk, which is a negative change in the value of an enterprise/company’s assets as a result of changes in various external factors (industry, macroeconomic and microeconomic). For quantitative assessment of market risks, the following methods can be distinguished:

• VaR method (Value at Risk).
• Shortfall method (Shortfall at Risk).

Risk assessment methodVaR

The VAR method is used to assess market risk (Value at Risk), which allows you to estimate the probability and size of losses in the event of a negative change in the value of the company on the stock market. The calculation formula is as follows:

Where:

V – current value of shares of the company/enterprise;

λ – quantile of the normal distribution of returns on shares of the company/enterprise;

σ – change in the profitability of the company/enterprise shares, reflecting the risk factor.

A decrease in the value of shares leads to a decrease in the company's market capitalization and a decrease in its market value, and consequently, its investment attractiveness. You can learn more about how to calculate the VaR risk measure in Excel in my article: “ “.

Risk assessment methodShortfall

Shortfall market risk assessment method (analogue:Expected Shorfall, Average value at risk, Conditional VaR) more conservative than the VaR method. The risk assessment formula is as follows:

α – selected risk level. For example, these could be values ​​0.99, 0.95.

The Shortfall method better reflects the “heavy tails” in the distribution of stock returns.

Summary

In this article, we examined various methods and approaches to assessing the financial risks of an enterprise/company: credit risk, market risk, operational risk and liquidity risk. In order to manage risk, it is necessary to measure it; this is a basic postulate of risk management. Financial risk is a complex concept, therefore, assessing various types of risk allows us to weigh possible threats and develop a set of measures to eliminate them.

The well-being of an enterprise is not always achieved through its own funds. Effective existence in the market often requires investment. External loans increase the profitability and competitiveness of a business project.

But with uncontrolled involvement of third-party resources, you can end up in a debt trap. To avoid this situation, economists have developed a sustainability indicator called the financial risk ratio. Let's figure out how it is calculated and what it shows.

Financial risk ratio - definition

The ratio determines the ratio of capital attracted from outside to own funds. Characterizes the degree of dependence of an economic entity on borrowed financial injections.

In other words, the indicator allows you to assess the level of freedom in making decisions on raising additional money for the development of the enterprise and distributing income.

Economists in narrow circles call it the coefficient of attraction, leverage, capitalization. In simple terms, it means the extent to which a company is dependent on borrowed funds.

The KDF indicator is quite multifaceted. The result of its calculation additionally indicates the efficiency of using the company's own capital within the framework of its activities.

As a result of the analysis of the leverage ratio, the following conclusion is drawn:

• most of the organization’s assets are borrowed funds - it is financially dependent, the risk indicator is high;
• the main share of financing comes from its own treasury - the enterprise is financially independent, the CFR is correspondingly low.

“The generally accepted normal value is defined as 0.5 or less. The critical number is considered to be 1 or higher. Average boundaries are not always applicable; much depends on the scope of the object’s activity. An individual approach to the situation is important for accurate calculations.”

Oleg Nikiforov, financial analyst

Financial risk ratio formula

The international formula for determining the CFR looks like this:

KFR = ZK / SK, where:

• KFR – financial risk;
• ZK – borrowed capital;
• SK – the amount of own funds.

The balance sheet, according to the legislation of the Russian Federation, is maintained in Form 1. Thus, the formula for domestic reality is as follows:

KFR = page 1400 + page 1500 / page 1300.

In this version, the values ​​reflect:

• line 1400 – line of section 4 of the accounting report Long-term liabilities;
• line 1500 – line of section 5 Short-term liabilities;
• page 1300 – line of section 3 Capital and reserves.

In practice, borrowed funds include investments from individuals and legal entities, all assets borrowed from financial institutions. Equity includes money directly invested by the owner or several founders.

The result of a simple calculation in a schematic diagram indicates the following:

The indicator over time is used to determine the financial stability of a business.

Scheme for calculating the financial risk coefficient

We figured out the formula and the indicators necessary for the calculation. Let's move on to the practical plane and consider how the CFR is determined using a specific example.

As of January 2018, Zorya Open Joint Stock Company has:

• own funds, taking into account the authorized capital, additional funds and margin in the amount of 100 million rubles;
• bank loans related to long-term liabilities for 50 million rubles;
• periodic short-term obligations to suppliers, the tax service, and the pension fund equal to 13 million rubles.

The capitalization ratio of the OJSC is: (50 + 13) / 100 = 0.63. The indicator standards are a little high, but not critical. The company has reserves for increasing activity in the field of borrowed resources.

“The KFR standard for some sectors of the economy is determined within 2-2.5 units. For example, for trading companies an indicator of 3-4 is considered normal. We should not rush to conclusions; sustainability assessments must be comprehensive.”

Nina Belskaya, economist

What does the financial risk ratio show?

KFR is a mutually beneficial indicator for both the owner and the investor. The method of expert assessment of credit risk allows an entrepreneur to:

• assess the need for additional loans;
• select the optimal source of financing for business development;
• determine the line of non-payment of loans, after which interest rates increase significantly;
• identify the risks associated with bankruptcy;
• identify the real state of affairs before launching a new investment project or issuing securities;
• Rate the company by type of activity.

In turn, a potential investor needs to determine:

• stability of the enterprise;
• level of profitability;
• ability to repay debt on a timely basis;
• volumes of future capital investments;
• risks of company ruin;
• prospects regarding profit;
• attractiveness of the object in terms of purchasing shares and bonds;
• efficiency of using own funds for development planning.

The calculation of the KFR helps not only depositors, but also other subjects of the economic process - banking institutions, suppliers, partners, ordinary employees, shareholders, insurance companies.

The financial risk coefficient must be present in periodic reporting and statistics for the enterprise so that the interested party has access to information over time.

Bottom line: what is the financial risk ratio used for?

KFR is an important indicator of any business project, regardless of its scale and focus. Determines the amount of borrowed capital per unit of equity. In practice, it shows the stability of the company in the market and the level of attractiveness for investment.

It is calculated using a simple formula based on accounting documents. Equally useful for both the owner and creditors, partners, and any interested parties.

Page 4

The financial risk ratio (debt ratio, debt-to-equity ratio, leverage) is the ratio of borrowed funds to equity. It shows how much borrowed funds the company raised per ruble of its own.

where Kfr is the financial risk coefficient;

ZS - borrowed funds (line 590+line 690);

SS - own funds (p. 490).

The optimal value of this indicator, developed by Western practice, is 0.5. It is believed that if its value exceeds one, then the financial autonomy and stability of the enterprise being assessed reaches a critical point, but everything depends on the nature of the activity and the specifics of the industry to which the enterprise belongs.

CFR beginning 2009 = = 2

Kfr con 2009 = = 1.8

Analyzing the obtained values ​​of the ratio of equity and borrowed capital, we can conclude that in the period under review there is a downward trend in this indicator. So, if at the beginning of 2009 the ratio of equity and borrowed capital was 2, then by the end of 2009 the ratio of equity and borrowed capital decreased to 1.8.

Financial stability coefficient of Kfu:

The value of this coefficient shows the share of those sources of financing that the enterprise can use in its activities for a long time. The normal value of this coefficient is 0.7-0.8.

Kfu beginning 2009 = = 0.3

Kfu con 2009 = = 1.2

Thus, the analysis indicates the unstable financial position of AVN LLC.

To assess the financial results of an enterprise, assessing the profitability of using the funds at its disposal is of great importance.

We will calculate and analyze the profitability of AVN LLC

Ratios for assessing profitability (profitability) characterize the ability of an enterprise to generate the necessary profit in the process of its business activities, and determine the overall efficiency of using assets and invested capital.

Product profitability (cost recovery ratio) is calculated by the ratio of profit from sales before payment of interest and taxes to the amount of costs for products sold:

Рз = *100%, (7)

where Рз - cost-effectiveness;

Prp - profit from sales before interest and taxes;

Zrp - the amount of costs for sold products.

Product profitability shows how much profit an enterprise makes from each ruble spent on the production and sale of products. It can be calculated for individual types of products and for the enterprise as a whole.

RZ 2008 = *100%= -8%

RZ 2009 = *100%= 15%

Return on sales (turnover) characterizes the efficiency of industrial commercial activities: how much profit does an enterprise have per ruble of sales. This indicator is determined by the following formula:

RT = *100%, (8)

where P is the profit of the enterprise in the period under review;

Tob - the size of the enterprise's turnover in the period under review.

RT 2008 = *100%=6%

RT 2008 = *100%= 11%

The profitability ratio of all assets used or the economic profitability ratio (Pa). It characterizes the level of net profit generated by all assets of the enterprise that are in use on its balance sheet. This indicator is calculated using the formula:

Other materials

The concept of the shadow economy
The shadow economy is today an integral element of any economic system, but has not yet been comprehensively studied. While studying the general laws of the economy, economic theory does not focus on the problems of the shadow economy: it either...

Composition, structure, movement, condition of fixed assets, provision of fixed assets and efficiency of their use
The composition and structure of fixed assets of Nagorsk RAIPO is shown in table 2. Table 2. Composition and structure of fixed assets of Nagorsk RAIPO. Types of funds 2006 2007 2008 thousand roubles. % thousand roubles. % thousand roubles. %...

Level of financial risk(degree of financial risk) is the main indicator used to evaluate individual investments. The level of financial risk is determined by the following formula:

Where
UR- level of corresponding financial risk;
VR- the probability of occurrence of this financial risk;
RP- the amount of possible financial losses if this risk materializes.

The financial activity of a company in all its forms is associated with numerous factors, the degree of influence of which on the results of this activity and the level of financial security is increasing significantly at the present time. The risks that accompany the company's business activities and generate financial threats are combined into a special group of financial risks that play the most significant role in the company's overall “risk portfolio.” The level of financial risk of a company has a significant impact on the results of economic activities. The increased level of financial risk recently is due to the instability of the external environment:

• changes in the economic situation in the country;
• emergence of new innovative ones;
• expansion of the scope of financial relations;
• variability and a number of other factors.

Therefore, identification, assessment and monitoring of the level of financial risks are one of the urgent tasks in the practical activities of financial managers.

The level of financial risk is determined by the essence of financial risk itself, which is one of the most complex categories associated with economic activity, which has the following main characteristics:

• Economic nature. Financial risk manifests itself in the sphere of economic activity of an enterprise, is directly related to the formation of its profit and is characterized by possible economic losses in the process of carrying out financial activities. Taking into account the listed economic forms of its manifestation, financial risk is characterized as an economic category, occupying a certain place in the system of economic categories associated with the implementation of the economic process.
• Objectivity of manifestation. Financial risk is an objective phenomenon in the functioning of any enterprise. Risk accompanies almost all types of financial transactions and all areas of financial activity of an enterprise. Although a number of parameters of financial risk depend on subjective management decisions, the objective nature of its manifestation remains unchanged.
• Probability of implementation. The probability of the financial risk category is manifested in the fact that a risk event may or may not occur in the process of carrying out the financial activities of the enterprise. The degree of this probability is determined by the action of both objective and subjective factors, but the probabilistic nature of financial risk is its constant characteristic.
• Uncertainty of consequences. This characteristic of financial risk is determined by the indeterminacy of its financial results, primarily the level of profitability of ongoing financial transactions. The expected level of performance of financial transactions may vary depending on the type of risk level within a fairly significant range. Financial risk can be accompanied by both significant financial losses for the enterprise and the formation of additional income.
• Expected adverse consequences. The consequences of financial risk can be characterized by both negative and positive indicators of financial performance; this risk in business practice is characterized and measured by the level of possible adverse consequences. This is due to the fact that a number of extremely negative consequences of financial risk determine the loss of not only income, but also what leads to it (i.e., to irreversible negative consequences for its activities).
• Level Variability. The level of financial risk inherent in a particular financial transaction or a certain type of financial activity of an enterprise is not constant. First of all, financial risk varies significantly over time, i.e. depends on the duration of the financial transaction, because the time factor has an independent impact on the level of financial risk (manifested through the level of liquidity of invested financial assets, the uncertainty of the movement of the interest rate on the financial market, etc.). In addition, the indicator of the level of financial risk varies significantly under the influence of numerous objective and subjective factors that are in constant dynamics.
• Subjectivity of assessment. Despite the objective nature of financial risk as an economic phenomenon, its main assessment indicator - the level of financial risk - is subjective. This subjectivity, i.e. the unequal assessment of this objective phenomenon is determined by the different level of completeness and reliability of the information base, the qualifications of financial managers, their experience in the field

A significant increase in the influence of the company’s financial risks on the results of economic activity is caused by the instability of the external environment: the economic situation in the country, the emergence of new innovative financial instruments, the expansion of the scope of financial relations, the variability of financial market conditions and a number of other factors. Therefore, identification, assessment and monitoring of the level of financial risks are one of the urgent tasks in the practical activities of financial managers.

Financial risk assessment is based on certain methods. The main objective of the methodology for determining the degree of risk is to systematize and develop an integrated approach to determining the degree of risk affecting the financial and economic activities of the enterprise.

The financial statements of the enterprise are used as the initial information when assessing financial risks: the balance sheet.

Main financial risks assessed by enterprises:

Risks of loss of solvency;

Risks of loss of financial stability and independence;

Risks of the structure of assets and liabilities.

Analysis of balance sheet liquidity is carried out in connection with the need to assess the creditworthiness of the enterprise. Balance sheet liquidity is defined as the degree to which an enterprise's liabilities are covered by its assets, the period of transformation of which into cash corresponds to the period of repayment of liabilities. Analysis of balance sheet liquidity consists of comparing assets, grouped by the degree of their liquidity and arranged in order of decreasing liquidity, with liabilities, grouped by their maturity and arranged in ascending order.

Depending on the degree of liquidity, the assets of the enterprise are divided into the following groups: /1/

A1 - the most liquid assets, are calculated as follows:

A1 = Cash + Short-term financial investments (1.1)

A2 - quickly realizable assets, calculated as follows:

A2 = Short-term accounts receivable (1.2)

A3 - Slowly selling assets, calculated:

A3 = Inventories + Long-term accounts receivable + VAT + Other current assets (1.3)

A4 - Hard to sell assets, calculated:

A4 = Non-current assets (1.4)

Balance sheet liabilities are grouped according to the degree of urgency of their payment:

P1 - The most urgent obligations, these include accounts payable

P2 - Short-term liabilities, these are short-term borrowed funds, debt to participants for payment of income, other short-term liabilities, are calculated:

P2 = Short-term loans and credits + Debt to participants for payment of income + Other short-term liabilities (1.5)

P3 - Long-term liabilities, these are balance sheet items related to sections 4 and 5, i.e. long-term loans and borrowings, as well as deferred income, reserves for future expenses and payments, are calculated:

P3= Long-term liabilities + Deferred income + Reserves for future expenses and payments (1.6)

P4 - Constant or stable liabilities, these are items in section 3 of the balance sheet “Capital and reserves”, calculated:

P4= Capital and reserves (organization’s own capital)

A1? P1, A2? P2, A3? P3, A4? P4.

A comparison of liquid funds and liabilities allows us to calculate the following indicators:

· Current liquidity, which indicates the solvency (+) or insolvency (-) of the organization for the period of time closest to the moment in question:

TL=(A1+A2) - (P1+P2) (1.7)

· Prospective liquidity is a forecast of solvency based on a comparison of future receipts and payments:

PL=A3-P3 (1.8)

I. Liquidity ratios

Liquidity - the ability of values ​​to turn into money (the most liquid assets); characterized by the amount of money that can be obtained from their sale and the time that is necessary for this.

Liquidity ratios help determine a company's ability to pay its short-term obligations during the reporting period. The most important among them are the following. (Appendix 4)

Net working capital is necessary to maintain financial support for expanding its activities in the future.

II. Solvency ratios (capital structure indicators)

Capital structure indicators characterize the degree of protection of the interests of creditors and investors with long-term investments in the company. They reflect the company's ability to repay long-term debt. The coefficients of this group are also called solvency coefficients. /1/

Table 1.1

Main indicators for assessing solvency and methods of their calculation

The main solvency ratios include the following:

1. The ownership ratio characterizes the share of equity capital in the company’s capital structure, and, consequently, the relationship between the interests of the owners of the enterprise and creditors. In Western practice, it is believed that it is desirable to maintain this ratio at a fairly high level, since in this case it indicates a stable financial structure of funds, which is preferred by creditors. It is expressed in a low proportion of borrowed capital and a higher level of funds secured by own funds.

This is protection against large losses during periods of downturn in business activity and a guarantee of obtaining loans.

The ownership ratio, which characterizes a fairly stable financial position, all other things being equal, in the eyes of investors and creditors, is the ratio of equity to total funds at the level of 60 percent.

The gearing ratio reflects the share of borrowed capital in sources of financing. This ratio is the inverse of the ownership ratio.

The financial independence coefficient characterizes the firm's dependence on external loans. The higher it is, the more loans the company has, and the riskier the situation, which can lead to bankruptcy of the enterprise. A high level of the ratio also reflects the potential danger of a cash shortage for the enterprise.

It is believed that the coefficient of financial independence in a market economy should not exceed one. High dependence on external loans can significantly worsen the position of an enterprise in the event of a slowdown in sales, since the cost of paying interest on borrowed capital is classified as a conditionally fixed expense, that is, such expenses that, other things being equal, the company cannot reduce in proportion to the decrease in sales volume.

III. Business activity ratios

Business activity in the financial aspect is manifested, first of all, in the speed of turnover of funds. Analysis of business activity consists of studying the levels and dynamics of various financial ratios - turnover indicators. They are very important for the organization. Business activity ratios allow you to analyze how efficiently a company uses its funds. (Appendix 5)

1) The size of the annual turnover depends on the speed of funds turnover.

2) The size of the turnover, and, consequently, the turnover rate, is associated with the relative amount of conditionally fixed expenses: the faster the turnover, the less these expenses are for each turnover.

3). Acceleration of turnover at one or another stage of the circulation of funds entails acceleration of turnover at other stages.

Business activity ratios allow you to analyze how efficiently a company uses its funds.

1. Asset turnover ratio - characterizes the efficiency of the company’s use of all available resources, regardless of the sources of their attraction, that is, it shows how many times per year (or other reporting period) the full cycle of production and circulation is completed, bringing a corresponding effect in the form of profit, or how many monetary units of sold products were brought by each monetary unit of assets. This ratio varies depending on the industry, reflecting the characteristics of the production process.

The accounts receivable turnover ratio shows the average number of times accounts receivable (or just customer accounts) are converted into cash during the reporting period.

The accounts payable turnover ratio shows how much turnover a company needs to pay its invoices.

4. The inventory turnover ratio reflects the speed at which these inventories are sold. To calculate the coefficient in days, it is necessary to divide 360 ​​or 365 days by the quotient of dividing the cost of goods sold by the average annual cost of inventories. Then you can find out how many days it takes to sell (without payment) inventories. When analyzing this indicator, it is necessary to take into account the impact of the assessment of inventories, especially when comparing the activities of a given enterprise with its competitors.

IV. Profitability ratios

The effectiveness and economic feasibility of the operation of an enterprise are measured by absolute and relative indicators. There are indicators of economic effect and economic efficiency.

Economic effect is an absolute, volumetric indicator characterizing the result of an activity, which can be summarized in space and time.

Economic efficiency is a relative indicator that compares the effect obtained with the costs or resources used to achieve this effect.

The economic meaning of profitability indicators is to calculate the profit per ruble of revenue from sales, expenses, assets, and capital. Profitability ratios show how profitable the company's activities are.

The growth of profitability is a positive trend in the financial and economic activities of the enterprise. It should be remembered that profitability indicators do not always take into account the specifics of the enterprise’s activities:

· long-term investments may reduce profitability;

· an enterprise can be highly profitable due to the implementation of risky projects, which ultimately can lead to a loss of financial stability;

· the calculation of return on capital is based on accounting rather than market estimates of the value of assets and equity, and does not give an accurate result.

1. Product profitability reflects the amount of profit received by the organization for the analyzed period per each ruble of the cost of products sold.

Return on sales demonstrates the share of net profit in the company's sales volume. The growth of profitability of sales in general is assessed positively even with a decrease in the absolute values ​​of profit, since this fact indicates the presence of a favorable trend in the activity of the enterprise: the growth rate of profit exceeds the growth rate of sales revenue.

Return on total assets demonstrates the ability of an enterprise to provide a sufficient amount of net profit in relation to its total assets. A decrease in the ratio indicates a drop in demand for products and an overaccumulation of assets.

Return on equity allows you to determine the efficiency of using capital invested by the owners of the enterprise in comparison with possible alternative investments in securities. Return on equity shows how many monetary units of net profit earned each unit invested by the owners of the enterprise.