Financial analysis of the organization - Finance

Table Of Contents

Introduction 2

1 Calculation of financial ratios 4

1.1 Liquidity ratios 4

1.2 Profitability ratios of 5

1.3 Business Activity 7

1.4 The financial sustainability of 9

1.5 The status of 11

2 Assessment of the dynamics of financial ratios 13

3 Analysis of possible sources of funding 22

3.1 Cost sources 23

3.2 Assessment of the complexity of 27

3.3 Timing of funding 28

3.4 Assessment of risk 29

3.5 Evaluation of the length of time of receipt of funds 30

Conclusion 39

Literature 40

Appendix A 41

Introduction

In today's self-financed enterprises significantly increases the role of financial management. The company's revenue, expenses, profits and overall financial and economic situation depends on how well the company manages its finances. Financial analysis is the initial step in the management of finances. It precedes management decisions.

The main source of information about the financial performance of the business partner is the accounting statements. Statements of an entity in a market economy is based on a generalization of the financial records and an information link between the company and society, and business partners - users of information about the activities of the enterprise.

A test case, both directly and indirectly interested in the enterprise users of information. The first group of users are the owners of the enterprise, lenders (banks, etc.), The tax authorities, the staff and the management of the enterprise. Each subject of analysis examines the information based on their interests. So owners need to determine the increase or decrease in the proportion of equity capital and evaluate the effectiveness of the use of resources management of the enterprise; creditors and suppliers - whether to extend credit, lending conditions, guarantees repayment of the loan; potential owners and creditors - advantageous location in the company of their capital, etc.

The second group of users of the accounting and financial reporting - a subject of analysis, which, although not directly interested in the enterprise, but the contract must protect the interests of the first group of users of financial statements. This accounting firms, consultants, exchanges, lawyers, the media, associations, trade unions.

The main source of information for the analysis of the financial condition of the company is the balance sheet (Form 1). Its value is so great that the analysis of financial condition often referred to as the analysis of the balance sheet.

The data source for the analysis of financial results is the report on the financial results and their use (form 2). Source of additional information for each of the blocks of the financial analysis is the application of the balance sheet (Form 5).

The purpose of the financial analysis in the course of this work is the analysis of the financial condition of the company, interpreting financial ratios and indicators, assessment of the causes of their change management and development of recommendations for improvement, analysis of possible sources of financing, changes in financial condition assessment of the company in making the recommended management solutions.

1 Calculation of financial ratios

In the first section, a calculation of the key financial indicators, and Interpretation of the dynamics of changes carried out in the second section.

1.1 Liquidity ratios

Table 1.1 - Calculation of liquidity

Liquidity ratio values ??under the thousand. Rub. Calculation of the recommended value

at the beginning of 2001 to the end of 2001 at the end of 2002

? The current (total) 2.30 1.48 1.43 Liquidity

Ratio of current assets to current liabilities.

Recommended value:> 2.0

Coefficient fast (en) 1.68 0.99 1.07 Liquidity

The ratio of liquid assets to current liabilities.

Recommended value:> 1.0

Coefficient of absolute liquidity 0.02 0.03 0.01

The ratio of liquid assets to short-term liabilities.

Recommended value:> 0.2

Equity ratio 0.1231 0.0438 - 0.0145

The difference between the value of current assets and short-term zodolzhnosti.

The standard value of not less than 0.1

Table 1.2 - Calculation of the share of the assets

at the beginning of 2001 to the end of 2001 at the beginning of 2002 to the end of 2002

The share of working capital in assets 0.54 0.48 0.48 0.4

The share of stocks in current assets 0.24 0.30 0.30 0.22

None of the three liquidity ratios does not correspond to the normal value, which indicates the critical financial situation from the perspective of liquidity. The organization does not have the funds to pay short-term obligations.

Even when you receive money for accounts receivable organization will be unable to pay its creditors on short-term liabilities.

The beginning of 2001, there has been good indicators of liquidity, which in turn is associated with a low level of liabilities compared with the same period of 2002, which greatly influenced the odds on liquidity.

At the same time there is an absolute decrease in liquidity at the end of 2002, which was a consequence of the reduction now in cash and cash equivalents.

1.2 Profitability ratios

Table 1.3 - Calculation of profitability

At beginning of 2001 at the end of 2001. At the end of 2002

1. The total value of assets of the enterprise, ths. Rub. 721 704 962 146 1 507 340

2. Sources of own funds, ths. Rub. 240 016 208 735 169 378

3. Short-term liabilities, ths. Rub. 169 311 318 767 424 082

4. The value of current assets, ths. Rub. 389 872 470 352 604 717

5. The value of total assets, ths. Rub. 721 704 962 146 1 507 340

6. Revenue from product sales, ths. Rub. 518 451 884 523 764 510

7. Profit before tax, ths. Rub. 974 -20,830 -9,199

8. Net Profit, ths. Rub. 311 -21,134 -9,199

9. Return on current assets,% (p.8 / item 4) -4.493 0.080 -1.521

10. Return on total assets% (p.8 / item 5) 0.043 -2.197 -0.610

11. Return on investment,% (p.8 / claim 1, item 3) -3.285 0.056 -0.849

12. Return on equity,% (p.8 / item 2) 0.130 -10.125 -5.431

13. Return on sales% (p.8 / item 6) -2.389 0.060 -1.203

14. Assets turnover, times (p.6 / p.4) 1,330 1,881 1,264

15. Profitability,% (claim 13 * paragraph 14) 0.080 -4.493 -1.521

16. Profitability of production 1.06 1.03 1.03

Table 1.4 - Calculation of profitability

Profitability index The index value is in thousands. Rub. 2001 Significance thousand. rub. 2002 The indicator

Profitability of productive assets 0.01 0.01 Ratio of profit from sales of the average annual cost of operating and inventories

Return on Assets -0.03 -0.01 ratio of net income to average annual value of assets

Return on equity -0.09 -0.05 ratio of net income to average annual value of equity

Net income:

For 2001: -21,134 thousand. Rub.

During 2002 - 9199 thousand. Rub.

The situation for these two periods did not change in the semantic aspect, and not only has changed significantly in the number, because during these periods was to profit from the sales, profitability, calculated from its use, have a positive value. At the same time, indicators of net profit margin have a negative value due to the fact that the whole of the financial and economic activities was a loss.

Only difference is the amount at the beginning of 2001, which in turn is due to lesser participation at the time of the organization of non-sales activities, ie organization has less non-operating expenses, which covers more profit from sales.

Also seen significant changes for the better, the profitability of assets of the enterprise, on the basis of which we can conclude that in 2002 were the most effective use funds raised, which affected uvelechenie property of an enterprise.

Return on equity, as well as many other indicators of profitability as well have changed, which in turn explains the reduction of the loss in 2002.

1.3 Business activity

Table 1.5 - Calculation of turnover

Parameter in the formula for 2001 For 2002

Receivables turnover, times

Revenue from product sales average value of receivables February 3

Maturity of receivables days

The duration of the period of turnover of receivables 120 179

Turnover of inventory, time (F.1: str.211,212,213, 216, 217)

Cost of sales The average value of inventory on September 11

Term of inventory turnover, days

The duration of the period of turnover of inventories 33 39

Accounts payable turnover, times

Revenue from product sales average value payable on May 4

Maturities of payables days

The duration of the period of turnover of accounts payable 69 95

Asset turnover ratio of revenues to average annual value of assets 1.1 0.6

Term asset turnover, days

The duration of the period of turnover of assets 343 581

Equity turnover

The ratio of revenues to average annual value of equity 3.94 4.05

Term equity turnover, days

The duration of the period of turnover equity 91 89

Revenue, ths. Rub. - 884523 764510

Net profit, ths. Rub. - -21,134 -9,199

Proceeds from sale of capital productivity average annual cost of running 5.15 4.29

Accounts receivable turnover is quite low as in 2001, so in 2002. Low turnover of receivables suggests that the company too "loves" their customers, establishing long duration loans or demanding fulfillment of contractual conditions for repayment of debt. This proves that in 2002, when the turnover period increased significantly.

Just seen a significant change in the increase of the turnover of assets, which resulted from increasing the average value of assets in 2002.

During the reporting period were obtained losses, but in 2002, this loss has been reduced by almost half by reducing non-operating expenses, obtaining extraordinary dohov and increase profits from sales of 1.5 times more than in the previous year.

1.4 Factors of financial stability

Table 1.6 - Analysis of the financial stability of the organization

Indicator value of the indicator and its standard value

the beginning of 2001 to the end of 2001 to the end of 2002

Coefficient of autonomy 0.33 0.22 0.11

The ratio of equity to the balance sheet.

Recommended value:> 0.5 (typically 0.6-0.7)

? The ratio of borrowed and equity 2.01 3.61 7.90

The ratio of debt to equity.

The optimum value of 1.

Coefficient cover investments 0.77 0.67 0.71

The ratio of equity and long-term liabilities to total capital.

The normal value in the world: approx. 0.9. Critical: <0.75

Coefficient maneuverability equity 0.40 0.24 0.17 Ratio of current assets to its own sources and long-term borrowings.

? The mobility of working capital 0.54 0.49 0.40 Ratio of current assets to the value of the assets.

? The provision of inventories 2.32 1.09 1.35

The ratio of working capital to the value of inventories.

The standard value of not less than 0.5

? The security of current assets 0.57 0.32 0.30

Ratio of current assets to current assets.

The standard value of not less than 0.1

Coefficient of short-term debt 0.35 0.42 0.32 Short-term debt to total debt.

The coefficient of -0.236 -0.602 -1.213 mobility

Working capital Working capital

Financial stability ratio 0.765 0.669 0.719

Sources of equity + long-term liabilities. Balance value

The standard value of not less than 0.5

Coefficient of financial dependence 3 4.6 8.8 Balance sheet total Equity

? The concentration of debt capital 0.66 0.78 0.88 Loan capital Balance sheet total

Coefficient of autonomy organization says about the extremely high dependence on borrowed capital organization, which every year tends to increase. This is most likely due to the rapid development of the market and the expansion of production, which in turn requires the borrowed funds that will provide the most short-term implementation.

The coefficient of borrowings (2) shows the ratio of debt and equity, in the economic sense is fully consistent with autonomy ratio (1), and shows that in this case the value of equity is less than the debt.

Factor maneuverability equity (4) shows how much of its own funds the organization is in a mobile form, allowing relatively free to maneuver these funds. It is believed that a good financial stability of the organization is characterized by a value of 0.5-0.6. In this case, the value of the index is 0.24, and in 2002 dropped to 0.17.

Judging by the ratio of working capital mobility (5) the share of working capital throughout the property company delivers 49%, and in 2002 already 40%.

Short-term debt in total liabilities of the organization is at the end of 2002 32%, which is 10% less than the end of 2001. Ie the organization has the ability to use more long-term funds, which give them more opportunities to invest in long-term projects.

The coefficient of financial stability shows that the organization stands firmly on his feet and every year trying to improve this situation by raising long-term funds in total liabilities.

Coefficient of financial dependence shows that every year the share of own funds in the total amount of capital decreases at what the data show that koeffitsianta in 2002, the share of equity decreased by almost half, resulting in significant dependence of the enterprise from other borrowed funds.

? The concentration of debt capital also proves the above said statement showing an increase in 2002, the share of debt capital in total capital. This increase is likely due to the active investment activity of the enterprise and financial investments.

1.5 Property Status

Table 1.7 - Structure of the organization's assets and sources of its formation

At the beginning of 2001 at the end of 2001. At the end of 2002

thous. rub. in% thousand. rub. in% thousand. rub. in%

ACTIVE

Property all:

721704

100

962146

100

1507340

100

1.1. Immobilization assets 331 832 46.0 491 794 51.1 902 623 59.9

1.2. Current assets 389 872 54.0 470 352 48.9 604 717 40.1

1.2.1. Inventories 104 826 14.5 153 645 16.0 151 542 10.1

1.2.2. Accounts receivable 280 884 38.9 307 658 32.0 450 570 29.9

1.2.3. Cash 4162 0.6 9049 0.9 2605 0.2

LIABILITIES

All sources of property:

721704

100

962146

100

1506467

100

1.1. Shareholders' equity 240 016 33.3 208 735 21.7 169 378 11.2

1.2. Loan capital 481 688 66.7 753 411 78.3 1 337 089 88.7

1.2.1. Long-term liabilities 312 377 43.3 434 644 45.2 913 007 60.6

1.2.2. Short-term liabilities 30 709 4.3 116 340 12.1 221 239 14.7

1.2.3. Trade and other payables 138 602 19.2 202 427 21.0 202 843 13.5

Table 1.8 - Calculation of the share of the assets

Indicator Calculation formula for the year 2001 for the year 2002

The share in the assets of the OS

The cost of fixed assets

Balance value

0.19 0.12

The share of the active part of the OS in assets

The cost of active fixed assets

Balance sheet total 0.19 0.12

So, on the basis of the obtained data shows that in two years the common property of the organization has increased almost 2-fold since 721,704 thousand. Rub. up to 1,507,340 thousand. rub. Basically it affected immobilization assets, current assets and receivables, which doubled.

If we analyze the sources of the organization, it is also possible to allocate a significant increase in loan capital, which is almost 2.5 times as compared with the beginning of 2001.

The emergence of new sources of funding and longer-term allowed the company to make significant investments to improve and expand production.

Having considered the performance of the active share in the assets of the OS it is clear that all available operating organization involved in the production, and their reduction is associated with an increase in the balance sheet total at the end of 2002.

2 Assessment of the dynamics of financial ratios

Table 2.1 - Dynamics of financial ratios

1 Evaluation property formula for calculating the beginning of 2001 to the end of 2001, the absolute change in the growth rate of the end of 2002 the absolute change in the growth rate

1 The amount of economic resources available to the organization balance total net 721,704.000 962,146.000 240,442.000 1,507,340.000 545,194.000 1,333 1,567

2 The share of fixed assets depreciation value of fixed assets / balance total net 0.235 0.179 -0.057 0.759 0.124 -0.061 0.670

2 Assessment of Liquidity

3 The value of his own. current assets (functioning capital) Property. equity + long-term liabilities - non-current assets 220,561.000 151,585.000 180,635.000 35,312.000 -68,976.000 0,687 1,243

4 Maneuverability sobstv.oborotnyh means cash / functioning capital 0.015 0.053 0.038 3.472 0.001 -0.054 0.026

5 Current liquidity ratio current assets / current liabilities 2.303 1.476 -0.827 0.641 1.426 -0.030 0.979

6 Quick ratio (current assets - inventories) / current liabilities 1.684 0.994 -0.690 0.590 1.069 0.075 1.076

7 The absolute liquidity ratio cash / short-term liabilities 0.020 0.025 0.005 1.268 0.001 -0.025 0.024

8 The share of current assets in the Assets Current assets / total hoz.sredstv (net) 0.540 0.489 -0.051 0.905 0.401 -0.081 0.832

9 Share sobstv.oborotnyh funds in assets sobstv.oborotnye funds / Assets 0.566 0.322 -0.243 0.570 0.299 -0.014 0.954

2 Assessment of Liquidity The formula for calculating the beginning of 2001 to the end of 2001, the absolute change in the growth rate of the end of 2002 the absolute change in the growth rate

10 The share of stocks in current assets stocks / current assets 0.269 0.327 0.058 1.215 0.251 -0.067 0.789

11 Share of Property. current assets to cover reserves sobstv.oborotnye funds / stocks 2.104 0.987 -1.117 0.469 1.192 0.206 1.209

12 Ratio of reserves "normal" sources of coverage / reserves 2.716 2.095 -0.621 0.771 3.038 0.896 1.419

3 Estimation of financial stability

13 concentration ratio of equity equity / total households. assets (net) 0.333 0.217 -0.116 0.652 0.112 -0.104 0.520

14 The financial dependence of all hoz.sredstv (net) / Equity 3.007 4.609 1.603 1.533 8.899 4.270 1.922

15 The maneuverability of equity sobstv.oborotnye funds / Equity 0.919 0.726 -0.193 0.790 1.066 0.367 1.525

16 Concentration ratio of borrowed capital borrowed capital / total hoz.sredstv (net) 0.667 0.783 0.116 1.173 0.888 0.104 1.132

17 The ratio of debt and equity debt capital / equity 2.007 3.609 1.603 1.799 7.899 4.270 2.176

4 Assessment of business activity

18 Proceeds from sales (turnover) 518,451.000 884,523.000 366,072.000 764,510.000 1.706 0.864 -120,013.000

19 Net profit 311.000 -21134.000 -21445.000 -67.955 -9199.000 11935.000 0.435

4 Economic activity estimation formula for calculating the beginning of 2001 to the end of 2001, the absolute change in the growth rate of the end of 2002 the absolute change in the growth rate

20 The turnover of funds in debtors sr.debitorskaya debt * 270 days / turnover for the period - 119.768 - - 178.521 58.753 1.491

21 The turnover of funds in stocks average stocks * 270 days / turnover for the period - 52.599 - - 70.380 17.781 1.338

22 The duration of the operating cycle indicator 20+ indicator 21 - 172.367 - - 248.901 76.534 1.444

23 Turnover equity proceeds from the sale / sr.velichina sobstv.kapitala - 3,942 - - 4,054 0,112 1,028

24 The turnover of the total capital of the proceeds from sales / average balance sheet total of the net 0.718 0.919 0.201 1.280 0.507 -0.412 0.552

5 Evaluation of profitability

25 Return on profits from the sale of products / Revenue 0.039 0.002 -0.037 0.053 0.00497 0.003 2.436

26 Return on operating activities Profit from sales / mfr costs of production and distribution 0.040 0.002 -0.038 0.051 0.003 2.444 0.00500

27 Return on total capital Net income / average balance sheet total of the net - -0.025 - - -0.007 1.004 -0.0001

28 Return on equity Net income / sr.velichina sobstv.kapitala - -0.094 - - -0.049 1.002 -0.0002

Interpretation of the calculation results suggest starting with a review of the structure of assets and liabilities balance.

At the end of the year non-current assets amounted to 60%, as shown in Figure 1.

The main share belongs to non-current assets, which is explained by the fact that along with the retail sale of its products, the organization is engaged and productive activities, and the company involved in the production, it is important to have a significant amount of non-current assets.

In the structure of non-current assets the biggest share of long-term investments that sostalyayut 80%. Since we are not insiders of the company, it can be assumed that engaged in the construction or acquisition of new fixed assets that are required for production. But on the other hand, long-term investments is a significant part of long-term loans to other organizations, ie organization is engaged in diversified capital by transferring funds in other areas, to speed up the process of developing a new type of activity.

In the structure of current assets (Figure 2) belongs to the largest share of receivables (75%) is due to the fact that the high level of business activity - the more sales, the more usual amount of accounts receivable.

The next largest share of current assets - Reserves (22%), which ensures continuity of production and reduces the risk of loss of profits. But detailed examination of the structure of reserves allows us to conclude that the major share of raw materials and work in process, with zero percent of finished goods, which in turn reflects the effective marketing policy of the organization.

Let us now consider the structure of liabilities.

As can be seen from the balance sheet, the largest share in the liability structure is necessary for long-term liabilities, it sostalyaet 60% of the balance sheet. The organization attracts long-term debt, which in turn gives you more opportunities to carry out active investments, compared with short-term funds.

Short-term liabilities (28%) mainly presented in the form of bank loans, the explanation of which is the reason for the lack of long-term resources from credit institutions. In general, short-term loans data are used as sources for working capital.

Now let us consider the dynamics of the balance sheet items and key financial ratios.

So, on the basis of the obtained data show that the financial situation of the organization for two years, has grown significantly since 721,704 thousand. Rub. up to 1,507,340 thousand. rub., and compared with the previous year increased by 1.5 times. The reason for this is the emergence of new sources of funding, with it long-term, it allowed the company to make significant investments to improve and expand production.

Having considered the performance of the active share in the assets of the OS it is clear that all available operating organization involved in the production, and their reduction is associated with an increase in the balance sheet total at the end of 2002.

Dynamics of liquidity has not changed significantly, but if we compare the values ??at the beginning of 2001 and the end of 2002, the visible changes for the worse.

The value of working capital increased, and the growth rate of this value was 1.24. Such a change should be considered positive in terms of increasing the liquidity and solvency of the organization. Observing similar dynamics, potential lender imbued confidence in relation to the organization as possible to the borrower of funds. At the same time, the organization has good dynamics of short-term debt, with those payable has a stable value, it indicates a stable relationship with suppliers that do not require a "real" money on the delivery and provide a delay in payment of funds.

The current liquidity ratio is below 2 (stable at 1.4), it may indicate a sufficient operational work management. This shows the active use of cash and rational credit policy, which leads to a uniform lending.

Dynamics of indicators confirms the increase in the liquidity of the enterprise. At the same time, a sharp decrease in absolute liquidity at the end of 2002, which was a consequence of the reduction now in cash and cash equivalents.

Given the specificity of the industry, increase of current assets to increase liquidity - this is a very irrational step. Considered indicators essentially good only for strict assessment in the event of a disaster. From the point of view of the company better to analyze the expected future cash flows overall. Correlation of current assets and current liabilities generally cover only a small fraction of the total potential receipts.

Assessment of the dynamics of financial stability shows that the organization every year increases the proportion of debt capital. The reason for this dynamic development can indicate either an active financial and investment activities, or hold investments in other sectors, in order to spread risks.

Short-term debt in total liabilities of the organization is at the end of 2002 32%, which is 10% less than the end of 2001. Ie the organization has the ability to use more long-term funds, which give them more opportunities to invest in long-term projects.

Coefficient of financial dependence shows that every year the share of own funds in the total amount of capital decreases at what the data show that koeffitsianta in 2002, the share of equity decreased by almost half, resulting in significant dependence of the enterprise from other borrowed funds. This is due to the increase in loan capital, whose rate of growth outstrips growth rate of equity.

Increased financial dependence leads to lower liquidity and possible reduction in the company's investment attractiveness.

To solve this problem, you must gradually reduce the level of accounts payable, but it is advisable to do only after the use of data and investment credit funds for the purposes for which they were taken.

Assessment of the dynamics of business activity:

Accounts receivable turnover is quite low as in 2001, so in 2002. Low turnover of receivables suggests that the company too "loves" their customers, establishing long duration loans or demanding fulfillment of contractual conditions for repayment of debt. This approach, of course, is attractive to consumers company, which undoubtedly affects the maintenance of unchanged or even increase sales. At the same time, low turnover of receivables "flushes" cash in the company, forcing finansovgo manager to seek new sources of funding for increasing receivables. Well, if it can be provided by the supplier companies that also lend to the company, as the company itself lends to its customers. But not always lenders will also "like" the company, as it "loves" their customers. And so to solve this problem usually have to resort to expensive bank loans to supplement their working capital.

Data analysis of inventory turnover allows to conclude that the whole enterprise is not very good indicators of inventory turnover, indicating inefficient internal inventory system with suppliers and customers regarding the shipment of direct materials and finished products. The consequence may be the increase in costs (mainly storage costs) and reduced profitability. It is therefore necessary to develop a system of uniform supply using logistic procurement methods, to as little as possible reserves lie around in warehouses.

Duration of financial cycle has become more positive. This was due to a significant increase in accounts receivable (from 307,658 to 450,570) and a fixed value of accounts payable. This, of course, led to the "washout" of money from the company - the company has become conscious of the need to attract additional funds to finance working capital. How nepriskorbno, but the solution to this problem may be bank loans, which are not that cheap and affordable.

Assessment of profitability:

The situation for these two periods did not change in the semantic aspect, and not only has changed significantly in the number, because during these periods was to profit from the sales, profitability, calculated from its use, have a positive value. At the same time, indicators of net profit margin have a negative value due to the fact that the whole of the financial and economic activities was a loss.

Only difference is the amount at the beginning of 2001, which in turn is due to lesser participation at the time of the organization of non-sales activities, ie organization has less operating and non-operating expenses, which covers more profit from sales.

Dynamics of parameters indicates an increase in return on assets, which occurred due to the increased sales and improved profitability value asset turnover.

Thus, to improve the situation of the enterprise, it may be advisable to carry out a replacement product mix, increasing the share of more profitable products, try to reduce operating expenses and non-operating expenses, or at least try to reduce the balance of these transactions to zero.

For the production of cost-effective products necessary staff training, introduction of innovative technologies, changes in the method of accounting of costs, reduction (if possible) reserves, the search for alternative suppliers, consolidation of orders.

To reduce the operating costs may be advisable to carry out tax planning, a plan of interest payments on kreditatm and other interest payments, revise Article administrative costs.

3 Analysis of possible funding sources

Recommended investment decision, this decision is aimed at reducing costs, in this case, improving the organization of management and labor, staff training. This investment should lead to improved profitability, the value of which depends on the profits of the enterprise.

After estimating the need for investment was determined amount of 5 million. Rub., Which is the most appropriate for this type of investment, and not so much to have an impact on the overall increase in the debts of the enterprise. According to experts, this financial investment will reduce the costs of 2% and, consequently, to a decrease in the cost of production.

When choosing a source of financing is taken into account a number of factors:

Structure of the firm's assets;

The growth rate of turnover of the company and its stability;

The tax burden (the higher taxes on income, the greater the tendency to debt financing, as in this case an active role performs the tax shield on interest);

The state of the capital market;

Acceptable level of risk;

A strategic target setting financial firms.

Only in-depth analysis and consideration of the effect of all factors allows you to select the best source of funding, a set of funding sources. In the course of the source selection is treated as a financial risk, and the risk of loss of control over the enterprise. Using a combined method of financing allows you to adjust these risks and reduce them to a possible minimum.

We estimate the above-mentioned sources of funding for the following:

- The cost of source

- Complexity

- The level of risk

- Duration

- The delivery period.

3.1 Cost sources

The cost of bank loans expressed interest on the loan. Conducting a survey on interest rates of banks, we can conclude that the rate for the ruble loan vary in the range of 16% to 24% and offer rates on foreign currency loans are equal to 12%.

The required amount of 5 mln. Rubles. Take credit for a period of 10 months.

Ruble loan

Assume the loan is taken June 1, 2004. Calculate your monthly payment by the borrower to the creditor and the amount that would be obtained by summing all payments. Since the organization is a permanent and well-secured client is always responsible for its obligations and has a positive credit history, the bank, which is served by the organization, it establishes an interest rate of 18% per annum.

Table 3.1 - Calculation of payments for the ruble loan

thous. rub.

Date Accrued interest per month, rub. Monthly debt repayment of the remaining debt at the beginning of the month Total monthly payments

1 July 5000 75 500 575

1 August 4500 567.5 67.5 500

1 September 4000 60 500 560

1 October 3500 552.5 52.5 500

1 November 3000 45 500 545

1 December 2500 537.5 37.5 500

1 January 2000 30 500 530

1 February 1500 522.5 22.5 500

March 1 1000 15 500 515

April 1 7.5 500 500 507.5

Total: 412.5 5000 - 5412.5

With a monthly repayment of the debt total payment for the loan amount to 412.5 thousand. Rub., At maturity at the end of the period - 750 thousand. Rub.

Currency credit

Assume the loan is taken June 1, 2004. Calculate your monthly payment by the borrower to the creditor and the amount that would be obtained by summing all payments. Take a loan in US dollars, and the dollar against the ruble will take 1 to 30. The required amount equal to: 5000 (thous. Rub.) / 30 = $ 166.67 thousand. The interest rate - 12% per annum. Moreover, foreign currency credit issued under the following conditions: monthly repayment for the month of accrued interest and payment of the loan amount at maturity.

Table 3.2 - Calculation of payments for foreign currency credit

U.S

Month Accrued interest per month. Monthly debt repayment of the remaining debt at the beginning of the month Total monthly payments

1 July 1666.6 166.66 1833.26 16666

August 1 149.994 1666.6 14999.4 1816.594

September 1 133.328 1666.6 13332.8 1799.928

October 1 116.662 1666.6 11666.2 1783.262

1 November 1666.6 9999.6 99.996 1766.596

1 December 8333 83.33 1666.6 1749.93

1 January 1666.6 6666.4 66.664 1733.264

February 1 49.998 1666.6 4999.8 1716.598

March 1 33.332 1666.6 3333.2 1699.932

1 April 16.666 1666.6 1666.6 1683.266

Total: 16666 916.63 - 17,582.63

Total fees for the loan amount to $ 916.63 (27498.9 rubles. - At constant exchange rates) and at maturity at the end of the period - $ 1,666.6 (49998 rubles. - At constant exchange rates).

Emission of Bills

The fee for a signature loan is as follows:

where P - payment for a signature loan, N - the amount of the bill, t - the period prior to the payment of a bill in days (in our case - 270 days), d - the annual discount rate.

The discount rate is 12%, as such percentage yield the most reliable borrowers and should be less than 24%, as at a rate above our advantage to take out a bank loan. Therefore, we take an annual interest rate of 18%. For the sum of 5,000 thousand. Rub. and the period of 270 days payment for a signature loan amount to 675 thousand. rub. Given the economic instability, uncertainty and lack of practice borrower debt issue, it is necessary to secure a bank guarantee, which increase the chances of implementing the bill. Services for availing cost us about another 5%, which makes it impractical issuance of promissory notes.

Issue of shares

With the issuance of shares, we need to attract 5,000 thousand. Rubles. Hypothetically decide to issue shares at par value of 100 rubles. Thus, it is necessary to issue 50,000 shares. But this amount also includes the cost of emissions: the payment of commissions for placing the issue of shares, payment of lawyers, accountants, printing, engraving, etc. Share issuance costs assumed to be 13%, so to obtain the desired amount necessary to issue shares in the amount of 650 thousand. Rubles (the price of borrowed capital). Ie raise capital to increase this amount and vypustm shares worth 5,650 thousand. rub., so the number of issued shares will be 56500 pcs.

The disadvantage of the share issue is that the reduced weight of the stake of existing owners. And, taking into account the fact that the owner is almost one person, it can be assumed that the share issue will be denied.

Bond issue

Cost of issuing bonds similar costs on issue of shares - 13%. We take into account the amount of costs and issued bonds in the amount of 5,650 thousand. Rubles. Coupon rate on bonds 18% (by analogy with the bills). Bonds with par value of 1,000 rubles will release in the amount of 5650 pieces, 1 year maturity with interest payable at maturity. Thus, we will need to pay the interest on the bonds in the amount of 10,170 thousand. Rubles. Total cost of issuing bonds in 1017 will amount to + 734.5 = 1751.5 thousand. Rubles. In addition, the likelihood is high that we can not realize the complexity of obligatsiy.3.2 Evaluation

Currency and ruble loan

Collection of documents now for delivery to the bank to obtain a loan. Carried out the order of 5 days or 40 man-hours.

A study of bank documents. The process of analyzing the documents takes about 7 days or 56 hours of labor.

Thus, the complexity of obtaining a bank loan equal to 96 man-hours.

A signature loan

Implementation of the subscription to the bill. According to expert estimates probably about 7 days or 56 man-hours.

Checking a bank or other counterparty bills in terms of legal certainty (Verification of all details, as well as powers of the persons whose signatures are on the instrument, and the authenticity of the signatures). Carried out for 3 days or 24 man-hours.

Thus, the complexity of attracting promissory note loan of 80 man-hours.

Issue of shares and issue bonds

Registration of the securities issue. Takes 7 days or 56 man-hours.

Consideration of the registration documents by the registering authority for compliance with applicable laws. Takes 7 days or 56 man-hours.

Sale of securities. Is one month or 240 man-hours.

Registration results of the issue. Labor input - 14 days or 98 man-hours.

Thus, the complexity of raising capital through the issuance of stocks and bonds is 450 man-terms funding chasov.3.3

Currency credit

To date, banks issue currency credit for a period of not more than 1 year.

Ruble loan

Today you can take a ruble loan from banks only short-term - up to 1 year, as suschestvet lack of long-term resources.

Emission of Bills

The promissory note is issued for a period not exceeding 360 days.

Issue of shares

Shares are issued without a specified term to maturity. As a rule, are a source of long-term resources.

Bond issue

Bonds are issued for a fixed term. Can be a source of long-term financing.

3.4 Assessment of risk

Methodology for assessing the level of risk is quite complex. Confine ourselves to assess the risk on a 5-point scale, with 5 points - is the most negative consequences for the company, and 1 point - the smallest.

Credit risk (severity of consequences of non-compliance with obligations);

Currency risk (risk of losses arising due to exchange rate fluctuations);

Risk of non-placement (losses due to non-placement or incomplete placement of the issue)

Table 3.3 - Risk financing sources

Source of funding Type of risk

credit risk is the risk of non-deployment of foreign exchange risk

Currency credit 5 5 1

Ruble loan 5 1 1

Issue of notes 4 1 2

Issue of shares 1 1 5

Bond issue 1 1 5

Taking into account the strong financial position of the company and the means at its disposal, to determine the importance of each type of risk to the organization.

Table 3.4 - Importance for the company considers the risk of

Type of risk

credit risk is the risk of non-deployment of foreign exchange risk

The importance (weight) 3 2 5

Most important for the company is at risk of non-placement, as organizations must obtain such funds in the near future in order to reduce production costs. Credit risk is less important for us, because the company can guarantee its return of their property and there is a possibility of taking a loan guaranteed by the third party.

Stabilization of the economy and the policy of the Central Bank, which provides retention of the exchange rate within a certain range, as well as prevailing in the world oil market situation is favorable for Russia, all this testifies to the stabilization of the ruble, and therefore losses related to foreign exchange risks are least harmful to our company, but still exist.

Based on the tables 3.3 and 3.4, we calculate the average risk for each source of investment.

Table 3.5 - Risk assessment

Source of funding Type of Risk Medium Risk

credit risk is the risk of non-deployment of foreign exchange risk

Currency credit 5 5 1 3.0

Ruble loan 5 1 1 2.2

Issue of notes 4 1 2 2.4

Issue of shares 1 1 5 3.0

Bond issue 1 1 5 3.0

As can be seen from the table is the least risky ruble kredit.3.5 rank duration of cash flows

Currency credit

If there is agreement with the bank money goes to the account within a week.

Ruble loan

Similarly, foreign currency loans

Emission of Bills

Accommodation bills takes about three months.

Bond issue

Placement of the bonds will take approximately three months.

Issue of shares

To obtain the necessary amount of money required 180 days

On the basis of these considerations, draw up a summary table and calculate multidimensional average.

Table 3.6 - Summary table of assessment of funding sources

The complexity of the source of funding (human costs) cost of capital (thous. Rub.) The duration of the delivery period (days) Level of risk financing term multidimensional average

Currency credit 27499 96 0.41 0.04 7 0.09 3.0 1.1 to 1 year 0.41

Ruble loan 96 412 500 0.41 0.59 0.09 2.2 0.8 7 Up to 1 year 0.47

Issue of promissory notes 80 675 000 0.34 (no aval) 90 0.96 1.20 2.4 0.9 0.85 360 day

Bond issue 1,751,500 2.49 1.92 450 90 1.20 3.0 1.1 fixed with the release of 1.68

Issue of shares 450 1.92 650 000 0.92 180 2.41 3.0 1.1 without a set maturity of 1.59

X average. 234 1 1 703,299.8 74.8 1 2.7 1 - 1

On the basis of a multidimensional value was rated funding sources (Figure 3.1).

On the basis of the calculation of multidimensional medium and taking into account the previously mentioned arguments about the possibility of adoption of a source of investment, we get:

1) shares - reduces the weight of shares of existing owners, the need for state registration;

2) bonds - high risk of non-deployment and, consequently, higher costs, the need for an authorized capital, the need for state registration;

3) The instrument - a high risk of non-placement, short-term treatment;

4) foreign currency credit - the risk of losses related to changes in exchange rates, the need to generate revenue in foreign currency.

So, we can conclude that the appropriate source of funding is the ruble loan to the same rating it occupies the second place. It is also associated with low-risk, fast credit, a small payment, and with the function of the tax shield, which is carried out interest on the loan.

Thus, the final decision will be taking a ruble loan to improve the skills of workers and management personnel, the introduction of new management systems, ie funds will be used to reduce the costs associated with production.

This ceteris paribus should lead to increased profits.

Assess the potential profit growth:

1. Calculate the profitability index of current assets:

Return on working capital = Net income / Current assets =

= (-) 9199/604717 = (-) 0.015.

2. Taking into account the growth of current assets will appreciate the new value of profits:

Net profit = Profitability of working capital = Current assets *

= (-) 0.015 * (604 717 + 5000) = 9146.

It can be seen that the loss has decreased by 53 thousand. Rubles.

Profit value is not changed significantly since was taken into account only the amount taken loan from a bank, which has led to a slight increase in current assets.

Because staff training and the introduction of new management systems takes time, it is impossible to determine the effect of moment of financing the activities of the enterprise. Therefore, for a more detailed influence resort to expert estimates, on the basis of which the cost of production should be reduced by 2%.

Now, based on the changed data and, ceteris paribus, sprognoziruem final balance, which will have the form shown in Table 3.7.1, balance sheet after taking out a loan and Table 3.7.2, balance sheet after training and with visible changes after financing, as well as to reflect changes in the profit and loss table 3.8.

Table 3.7.1 - forecast balance for the next reporting period

thous. rub.

ASSETS

Intangible assets

Fixed assets

Construction in progress

Profitable investments in the mat. values

Long-term investments

Other non-current assets

Total for section I

Resources

Value added tax on acquired assets

Accounts receivable (payments are expected in over 12 months after the reporting date)

Accounts receivable (payments are expected within 12 months after the reporting date)

Short-term investments

Cash

Other current assets

Total for section II

BALANCE

Authorized capital

Additional capital

Reserve capital

Social fund

Targeted funding and income

Retained earnings from previous years

Retained profit for the year

Total for section III

Loans and credits

Other long-term liabilities

TOTAL Section IV

Loans and credits

Accounts payable

Debt to participants (founders) for income payments

Deferred revenues

Provisions for liabilities

Other current liabilities

TOTAL Section V

BALANCE

Since the loan will result in minor changes to the financial performance and the goal is not reflected in the balance sheet, the balance sheet sprognoziruem after training and with a visible reduction in the cost of production. Let us calculate the changed parameters.

Table 3.7.2 - forecast balance for the next year after training

thous. rub.

ASSETS

Intangible assets

Fixed assets

Construction in progress

Profitable investments in the mat. values

Long-term investments

Other non-current assets

Total for section I

Resources

Value added tax on acquired assets

Accounts receivable (payments are expected in over 12 months after the reporting date)

Accounts receivable (payments are expected within 12 months after the reporting date)

Short-term investments

Cash

Other current assets

Total for section II

BALANCE

Authorized capital

Additional capital

Reserve capital

Social fund

Targeted funding and income

Retained earnings from previous years

Retained profit for the year

Total for section III

Loans and credits

Other long-term liabilities

TOTAL Section IV

Loans and credits

Accounts payable

Debt to participants (founders) for income payments

Deferred revenues

Provisions for liabilities

Other current liabilities

TOTAL Section V

BALANCE

Table 3.8 - Expected income statement

thous. rub.

Form 2

Revenue from the sale of goods, works and services (less VAT, excise duties and similar payments) 010

Cost of sales of goods, works and services 020

Selling expenses 030

Administrative expenses 040

Gains (losses from sales (lines (010-020-030-040)) 050

Interest income 060

Interest payable 070

Income from participation in other organizations 080

Other operating income 090

Other operating expenses 100

Profit (loss) from financial - economic activity (lines (050 + 060-070 + 080 + 090-100)) 110

Other non-operating income 120

Other non-operating expenses 130

Profit (loss) for the reporting period (lines 110 + 120-130) 140

Income tax expense 150

Diversion of funds 160

Retained earnings (loss) for the period (line (140-150-160)) 170

To assess the effectiveness of investment decision recalculate liquidity ratios, profitability and financial stability after the funding. The value of other parameters will not change significantly.

Table 3.9 - Calculation of

Indicator Calculation Formula Before After Absolute change in growth rate

Assessment of Liquidity

The value of his own. current assets (functioning capital) Property. equity + long-term liabilities - non-current assets 180,635.000 193,764.000 13,129.000 1.073

Maneuverability of working capital funds / functioning capital 0.001 0.069 0.068 48.742

Current liquidity ratio current assets / current liabilities 1,426 1,457 0,031 1,022

Quick ratio (current assets - inventories) / current liabilities 1,069 1,100 0,031 1,029

Cash ratio cash / short-term liabilities 0,001 0,032 0,031 52.285

Assessment of profitability

Product profitability profits from the sale / Revenue 0,005 0,024 0,019 4.887

Return on operating activities Profit from sales / cost of mfr and sales 0.005 0.025 0.020 4.984

Return on total capital Net income / average balance sheet total of the net -0.007 0.003 0.010 -0.370

Return on equity Net income / sr.velichina sobstv.kapitala -0.049 0.022 0.071 -0.456

Assessment of financial stability

Concentration factor of equity equity / total households. assets (net) 0.112 0.120 0.008 1.068

Leverage ratio of all hoz.sredstv (net) / Equity 8.899 8.331 -0.568 0.936

The ratio of debt and equity debt capital / equity 7.899 7.331 -0.568 0.928

Analysis of financial performance suggests that CFOs state enterprises remains prakticheksi unchanged, except for a few factors, such as cash ratio, which rose by 50 times. The reason for this is the large amount of cash on the company's account. This is due to a profit in the forecast year, and that has not been sent or any production needs.

By reducing the cost of production has improved cost effectiveness of products is almost 5 times and a 5-fold increase Profitability core activities.

But most importantly, managed to get the retained earnings in the reporting year planned, due to what the profitability of the total capital and equity capital have a positive value.

Also significantly decreased by 6% depending on the financial companies on borrowed funds, the cause of which is a positive financial result for the forecast year.

Thus, the recommended decision in the field of investment has a positive effect, because achieved the planned objectives: cost reduced poluchina retained earnings, which in turn has led to changes in some of the coefficients for the better. Conclusion

As part of this course project we had done the following:

1) acquired practical skills in calculating financial ratios:

- Liquidity

- Financial stability

- Business activity

- Profitability

- Property

2) acquired analytical skills interpretation of the data

3) acquired practical skills in the balance sheet and income statement

4) carried out the development of recommendations to improve the financial condition of the company

5) The hypothetical example evaluated sources of funding and concluded which source is more expedient to draw.

Literature

1 Kovalev VV "Financial analysis: techniques and procedures" - M .:

Finance and Statistics, 2001. - 560 p.

2 Financing and lending companies: Guidelines for the implementation of a course project for specialty 0604 / Compiled by TA Kuznetsova -Izd. SUSU, 2001. - 35 p.

3 "Expert-Ural" - M .: ZAO "Expert Magazine", 2002

Materials Site www.expert.ru


  












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