Diagnosing the financial condition of the enterprise is a very important step in financial management.To identify the problems of the company is necessary to analyze a number of indicators to assess the current situation.Calculation to be indicators of financial stability and liquidity levels as well as levels of profitability and the rate of turnover of various enterprise resources.
liquidity analysis can be done using only the balance sheets, which means the ease and availability of this type of analysis, even for less experienced financial executives.Draw conclusions about the liquidity balance sheet is possible after the balance sheet liquidity.To evaluate the liquidity of the company as a whole, it is necessary to calculate liquidity ratios.Let us dwell on them in greater detail.
first factor - is a common measure of liquidity.His payment is in respect of the size of the current assets of the company to the value of short-term debt, which are contained in the fifth section of the balance sheet.Total liquidity indicator shows the possibility of the company to repay existing debt by the most urgent areas for the purpose of current assets, which, of course, is much more liquid non-current.In the economic literature, you can find the name of "the current liquidity" or "the total coverage ratio," but they mean the same thing.
for this indicator, there are values that are considered normal.The lower boundary is set to 1, which defines the requirement of liquidity.In other words, current assets have to suffice to cover short-term liabilities.If the total exceeds the liquidity ratio of the value of 2, it means that the company is conducting ineffective management policy of current assets.
The above value range is generally accepted, but may not reflect the needs and characteristics of a particular enterprise.For the correct determination of standards necessary to make the following calculation: divide the norm of reserves and the value of short-term liabilities by the same amount of short-term liabilities.The calculated standard overall liquidity into account the fact that the direction of the current assets to satisfy creditors' claims in the disposal of the company will remain a necessary minimum reserves to continue operations.
Other liquidity ratios are calculated by using only the more liquid assets.For example, when calculating the intermediate target coverage rate of excluded stocks are less liquid assets.This index must also be greater than one, and above it apparently is limited to the total coverage ratio.
The numerator in the formula coefficient of absolute liquidity present only the most liquid assets - short-term investments and money.He estimates the amount of term debt that the company can return by the most liquid assets.In percentage, this value should be in the range of 20 to 25. However, for modern enterprises Russian this level is often elusive.
Among other things, you can calculate the amount of liquidity in the mobilization of resources.So it is concluded, as the company will repay short-term liabilities if sell all their holdings.It is believed that this share should be from one-half to 70%.
If any parameters are outside normal limits, the financial manager is to take certain decisions that will improve the situation.