The coefficient of property mobility: the formula. Analysis of financial condition

It's not a secret for anyone that the stability of the financial performance of any enterprise depends primarily on the literacy and appropriateness of investing financial resources in assets. That is why for a qualitative assessment it is necessary to study the structure of the property, as well as the sources of its formation and the reasons for their change. By the way, in more detail, as a rule, we consider the reasons that negatively affect the financial condition of the structure.

The product of the estimate

Initially, according to the balance sheet, it is expedient to determine the total value of the structure's assets at a particular reporting date. At the same stage, it is necessary to identify deviations for each type of property by comparing information at the end and beginning of the reporting period. It should be noted that for detailed study of changes in the structure it is necessary to calculate additionally the specific weight of each type of property in the total currency presented in the balance sheet, as well as to study the causes of structural changes in the property.

Next step

Further it is logical to consider the ratio of the dynamics of current and non-current assets, as well as calculate the coefficient of property mobility. Based on these calculations, it is advisable to draw such conclusions:

• In the case of an increase in working capital and a decrease in non-negotiable assets, a tendency to accelerate the turnover of the property complex can be observed in the structure. In this scenario, the result is usually the release of a specific part of the funds and short-term investments (of course, if the percentage of submitted items has increased).
• In order to correctly characterize the property, it is necessary to calculate the property mobility coefficient. It is represented as the ratio of the value of the basic current assets to the value of the property. ). In practice, it looks like this: Kmi = OA / VB ( property mobility ratio ). The formula, as you can see, is quite simple.

What else?

The final step of the first stage is the calculation of Kmoa. The coefficient of mobility of current assets is represented as the ratio of the maximum mobile component of them (not only funds, but also financial investments) to the total value of OA. It is important to note that the increase in the coefficients presented above is an excellent confirmation of the acceleration of the turnover of the property complex of the structure.

The coefficient of mobility of current assets is as follows: Kmoa = (DS + CFI) / OA.

It should be noted that the low level of OA mobility is not always a negative factor. In the case of a high profitability index of the product, the structure is usually directed to free resources in order to expand and strengthen production.

Analysis of production potential

It's no secret that the financial condition of any structure is due to its production activities. That is why, when analyzing it, it is necessary to evaluate competently the production potential, which should include:

• Fixed assets.
• Unfinished production.
• Property of industrial purpose.
• Future expenses.

Important is the fact that the submitted articles contain in their structure only real assets. It is they who characterize the capacity of the structure in the production plan (the supply of reserves, etc.).

Characteristic of the production potential

In order to correctly represent the production potential, the following indicators are used:

• Movement, as well as the proportion of assets for production purposes in the total value of the property.
• Movement, as well as the specific weight of the OS in the total value of the property of the enterprise.
• Coefficient of wear OS.
• The depreciation rate is averaged.
• The presence, dynamics, as well as the specific gravity of capital investments, their ratio to financial ones.

conclusions

The increase in the share of production assets at the end of the year and the greater proportion of the corresponding assets in the total amount of the structure means usually a significant increase in production opportunities. It is important to note that this indicator should not be lower than 50 percent (for comparison, as a rule, industry indicators are taken as a standard). The specific weight of the value of fixed assets in the total value of the structure's funds is calculated as the ratio of the residual value of the OS to the balance currency. Such a calculation is usually made at the beginning and end of the reporting period. Absolute indicators, which are reflected in the analysis, are compared with standard ones (relevant for all structures of this or that industry).

After calculating the wear coefficient (in other words, depreciation), a qualitative characteristic of its changes is formed. In order to correctly assess the intensity of depreciation of the OS, the indicator of the average depreciation rate is applied (the ratio of the amount of depreciation to the initial cost of the OS).

Analysis of the composition and dynamics of mobile media

Based on the analysis of the structure of mobile assets (see the property mobility ratio above), it is advisable to consider the changes that took place in the composition of the OS in general terms, after which - in the context of specific articles. It is advisable to consider the main causes of changes in working capital:

• Profit (after all taxes are paid).
• Depreciation deductions.
• Increase in the company's own funds.
• Increase in debt on loans or loans.
• Increase in liabilities in respect of accounts payable.

Decrease of working capital

The main reasons for the decrease in working capital are the following items:

• Some of the costs covered by the profits that remain at the disposal of a particular structure.
• Investments of a capital nature.
• Financial investments of a long-term nature.
• Significant reduction in accounts payable.

It should be noted that after the absolute indicators were identified and an overall assessment was made, the values of the effective use of the property should be calculated.

Coefficient of long-term financial independence

As noted above, a number of indicators are used to assess the growth potential. The property mobility ratio, considered above, characterizes the industry specificity of the structure. But in the economy there are a number of coefficients used in the analysis of production. Thus, the ratio of the amount of equity and long-term liabilities to the balance sheet currency reflects the share of own funds in the total amount of financial sources. It is important to note that the recommended value in this case is 0.8-0.9. Coefficient of stability is the scientific name of this relationship. In accordance with the accounting records of the Russian Federation, the indicator is calculated as follows:

(SK + DO) / WB = (page 1300, Form 1 + Page 1400, Form 1) / page 1700, Form 1.

Analysis of the indicator

The stability factor is usually analyzed in dynamics. Thus, an upward trend can characterize the growth of business activity of the structure, expansion of its production capacities, as well as the effectiveness of the management process. It is logical that a decrease in this coefficient reflects a decrease in turnover, respectively, a decrease in the rate of development of the structure. It is important to note that the enterprise can achieve the maximum level of economic growth only if the received profit is reinvested (that is, invested).

Coefficient of forecasting bankruptcy

In case of early detection of deterioration in the financial condition of the structure and prevention of insolvency, it is of course possible to prevent the collapse of business. It is for this case that the forecast coefficient of bankruptcy is applied. This method is usually used by analysts to assess the solvency and general welfare of a company.

What is meant by bankruptcy? In accordance with the notion put forward by the arbitration court, the term is defined as one of the types of financial condition of the borrower, when the borrower does not have the opportunity to satisfy the creditors' claims or can not settle for mandatory payments.

The bankruptcy process fulfills two key tasks: the elimination of debts to creditors and the full recovery, as well as the subsequent strengthening of the company's activities. As a rule, economists are guided by three approaches that can help to identify a possible decrease in the solvency of a legal entity. Among them, the calculation of the creditworthiness factor, the forecasting of solvency ratios, and the application of a system of criteria of an informal character. These methods allow us to identify possible deviations even at early stages, and thus speed up the neutralization of the existing threat. They constitute a specific system of company management in order to prevent a crisis, including:

• Monitoring of the economic state, produced in a continuous manner.
• Analysis of some deviations from the standard course of the company's activities, as well as an assessment of the extent of the deterioration.
• Identification of factors that adversely affect the situation.
• Identify options for restoring the financial work of an enterprise.

It should be noted that one of the primary signs of the economic insolvency of a legal entity is the unwillingness to fulfill creditor claims for a period of three months from the moment of theoretical fulfillment of obligations.

Conclusion

The financial condition of a legal entity can be influenced by factors of both objective and subjective nature. They are important to consider in order to prematurely assess the risk of insolvency. So, to subjective factors it is necessary to attribute an anti-increased turnover in the process of trade, a decrease in the "price-quality" ratio, a low level of profitability, an increase in the expenditure item, and an increase in liabilities. Objective factors include incomplete or inaccurate reports, their delay, an increase in the debt-to-assets ratio, some unevenness in the balance sheet of the asset and liabilities, and an increase in illiquidity (albeit gradually).