Analytical Balance is commonly used to study the structure and dynamics of changes in financial position of the company.Get it difficult.For this purpose, the original balance, which sealed the individual articles and complemented by indicators of the dynamics and structure.They usually keep the structure of the original reporting forms, especially allocate current and non-current assets, debt and equity results of the equality of assets and liabilities.Analytical Balance is useful because it allows you to organize made calculations to determine what changes have occurred in the property status of the organization, to draw conclusions about what the sources allowed to open a new inflow of funds in which assets are invested obtained finance.
role analytical balance
analysis of comparative analytical balance provides data for the evaluation of the production of a number of points:
- determine the amount of current and non-current assets, changes in their relationship, as well as their sources of funding;
- articles that grow faster pace, and their effects on the balance sheet structure;
- the proportion of assets held by accounts receivable and inventories;
- distribution of borrowing on maturity and other parameters;
- determining the size of the share of equity and how the organization depends on them.
the analytical balance pays special attention to the elements, whose share is the largest, as well as those whose share of changes abruptly.Horizontal and vertical analysis of the dynamics of the structure and composition of the property makes it possible to set the size of the relative and absolute increase or decrease the company's existing assets, as well as some of its species.
diagnosis financial condition of the banking organization
comparative analytical balance is easy to get from the source through its complement indicators dynamics, structure and trends of investment funds of commercial banks for the comparative periods.As required parameters of this analysis are as follows:
- absolute values of all balance sheet items at the start and end of a certain period;
- specific weights of individual items in the balance sheet at the start and end of the reporting period;
- the absolute values of the changes;
- absolute figures in densities;
- percentage change in the beginning of the period;
- indicators of the dynamics of changes in the structure of the balance sheet;
- the cost of one percent growth of each article and the balance sheet.
comparative analytical balance has a certain preset formula that looks like this:
net own funds = own funds gross - immobilized assets.
If we consider the example of an analytical balance, his form includes:
- in graphs 3-8 are indicators of the structure;
- graphs 9-17 contain performance indicators;
- graphs 12-20 - indicators of structural dynamics of balance.
Explanation
Columns 3-5 contain information about the absolute numbers of articles and sections of the outcome of the balance at the beginning and end of the period you want to analyze.In the fields of 6-8 reflected the specific weight and value of the results of the articles at the beginning and end of the periods.Columns 9-11 contain data on the absolute size of the sections and articles for the periods analyzed.12-14 In the fields you can see changes in the specific weights of the quantities of articles for the period you want to analyze.Columns 15-17 contain the changes to the articles of the absolute values of the parameters of the compared periods.In fields 18-20 shows the percentage change in absolute values results in balance.
Comparative analytical balance:
asset structure of this part consists of several types of assets: are not a source of income, income immobilized.
Liabilities bank balance - Custom (gross) and borrowed funds.In a separate line, placed the balance, are own funds - net.
comparative analytical balance is interesting because it allows you to bring together and somehow balance calculations, which are normally produced by the analyst in the initial review.In this table it is usually covered by a myriad of important indicators that characterize the dynamics and statics of the financial position of commercial banks.Analytical balance, the table that contains the necessary data, including figures, which are sufficient for vertical and horizontal analysis.The first allows you to determine the proportion of the net, and the second is to determine the relative and absolute changes in the size of individual entries in a specific period.
possibilities of the method
comparative analytical balance allows you to:
- Distinguish active and passive types of operations, to assess the extent of their importance in the total structure;
- use separate balance sheets for tracing the movement residues;
- identify the degree of change in the scope for certain types of banking operations;
- identify the causes and the extent of influence of dynamic changes in the articles of profitability, stability, liquidity and profitability of banking operations;
- to identify what resources the bank or company are its own, and which involved;
- allocate assets by categories: revenue, immobilized and liquid;
- spread over the urgency of customer funds attracted in the form of a deposit.
In drawing up amendments to the structure of assets and liabilities is quite possible to draw conclusions about the impact of certain sources as key to cash flow, as well as to know the direction of their investments.
How does it work?
external environment in which the activities of credit organizations, are constantly changing.This requires the managers of the bank the appropriate response, as well as a detailed, in-depth analysis of macroeconomic and financial policies, the development of more and more new methods for the formation of the surplus product by providing additional services to customers institution.The aim of the banks is a constant desire to meet new market needs, market readiness for adverse effects to the active competition, especially one that is associated with changes in interest rates.
In modern conditions the complexities of conducting banking business in need of a complete overhaul of the concept of organizational management in lending.Now is a very promising area, as a strategic and financial management in banks.True, he is being finalized and development.These areas already managed to assert themselves in the field of banking, it is only with their help you can provide effective management of relationships that are associated with the strategic goals and objectives for the formation of financial resources and their use.
From what has been said before we can conclude that the financial management in the credit structure is a system of management measures that have been taken appropriate organizational structure to ensure timeliness and continuity of traffic flow of credit, which are aimed at the stability of the banking institutions, the profitability and preservation of the resource baseAll customers and partners.
Methodology of Comparative analytical balance
analysis is usually performed by one of the ways suggested below:
- directly on the balance sheet, without changing the composition of the pre-balance sheet items;
- by constructing the sealing of the comparative balance sheet, which will be aggregated are homogeneous in composition elements of balance sheet items;
- made additional adjustment data on the inflation index with a further aggregation of entries in the required economic sections.Getting the comparative economic balance may be the source of the seals using the procedure of individual articles, as well as add-dynamic and structural characteristics.
convenience of this method lies in the fact that it organizes and consolidates calculations traditionally carried out by analysts during the initial familiarization with the balance.Analysis of the comparative analytical balance can cover a huge number of indicators showing the statics and dynamics of the organization in terms of finance.This includes horizontal and vertical indicators analysis, from which one can directly obtain the data and the characteristics of the current status of the enterprise in terms of finance.These include:
- reflected the total cost of property of the organization, which is in the bottom line;
- immobilized asset value, which is equal to results of the first section;
- the cost of mobile, visible at the end of the second section;
- the value of stocks, that is, material circulating assets;
- amount of own funds of the company presented in the end of the third section of the balance;
- the amount of borrowings, which is visible in the sum of the results of the fourth and fifth sections;
- size of working capital, the apparent difference in the outcome of the first and third sections.
Net working capital is seen as a separate item of the aggregated balance sheet and determined as part of current assets, which are financed through invested capital.This indicator is a characteristic of the degree of liquidity of the company, which gives it special importance.Net working capital is the difference obtained between assets and liabilities at the moment.The greater the value is characterized by the figure, the more stable is the financial position of the organization.
the analytical balance is carried out must draw attention to the change in the proportion of the size of working capital in total assets, the pace of growth of equity and debt and their relationship, as well as accounts receivable and payable.
stable financial stability of the company accompanied by an increase in the share of working capital, as well as great growth of equity compared to debt.This accounts payable and receivable are approximately at the same level.
essence horizontal analysis of the enterprise is to construct the required number of analytical tables, where the absolute balance sheet should be supplemented by indicators of dynamics.Analyst determines the degree of aggregation.This is another important way to determine the financial position of the company and its sustainability.
Using analytical balance
Often for external analysis is totally inadequate standard of the balance sheet.In this case, use may be compacted.Its preparation involves the transformation consisting in the aggregation or disaggregation, as well as thinning of the balance with the strict observance of a number of important rules:
- must bear the real cost of non-current assets;
- the value of current assets (inventories, receivables, available funds) and liabilities (loans and payables) should be adjusted to the amounts that were not included in the balance sheet for one reason or another.
The resulting difference between the value of assets and liabilities can be adjusted with the help of specially designed articles analytical balance, which was called "accumulation of capital".It combines perfectly all types of retained earnings, savings funds and reserves formed from profits, consumption funds, and other balance sheet items.So, if we talk about how to check the balance, it is worth noting that this article is represented everything that the company has managed to make over its lifetime.When it comes to privatized property, from the moment of incorporation.You can examine the balance sheet, an example of which is shown below.
structure can be considered satisfactory if the balance will correspond to a set of defined criteria:
- the total amount of assets or liabilities, ie the balance sheet, is expected to increase at the end of the reporting period, compared with the beginning;
- Assets must be incremented with a faster pace than non-current;
- the equity of the organization should be more than the loan, and the dynamics of its growth to exceed the growth rate of debt capital;
- payables and receivables have incremented roughly the same pace;
- own funds in current assets should be invested more than 10%;
- the balance must not contain any uncovered losses.
Several conclusions
So, if we consider the balance sheet, an example of which is described here, it is necessary to say that through the analysis of the causes and treatment components of the increase or decrease of certain performance parameters is possible to detect vulnerabilities in the financial and economic activities of any company.This requires to pay attention to different parts of the entire set of data.
Considering the balance, an example of which is described here, you can see different moments.Assume that the total reduction over a certain period, which is considered at the moment, is a testament to reduce the economic turnover of the company, which is often a consequence of insolvency.And sometimes it was reduction of the turnover of the company becomes a reason for its insolvency.This fact can only be determined as a result of more in-depth analysis:
- may be present reduction of solvent demand for works, goods and services of the organization;
- the markets are not available the necessary materials, raw materials or semi-finished products, depending on the scope of the company;
- the active economic circulation gradually involved branches, using the "soil", prepared by the "parent" company.
required to determine the comparative analytical balance.Conclusions it can easily make a qualified accountant who will reveal all the important points of the company.In the analysis of the balance sheet total increase for the period is required to take into account the effect of changes in valuation of fixed assets, if the increase in their value does not depend on the development of productive activities.This demonstrates balance, an example of which is seen here.The hardest thing to take into account the impact of inflation, but without it would be difficult to make any definitive conclusions about whether the increase was the result of the balance sheet total increased cost of the finished product under the influence of inflation, or it demonstrates the expansion of financial and economic activities of the organization.
Interpretation
Comparative analysis of the balance, namely the structure of liabilities, allows you to get one of the biggest reasons for the financial stability of the company.For example, the increase in the share of own funds at the expense of any available source enhances financial stability.Retained earnings in this case could be a source of working capital and reducing short-term debt owed to creditors.
If one examines the way changed the structure of assets of the company, you can get quite important.In particular, the increase in the property share of working capital is often an indication of a more mobile asset structure, which can speed up the turnover of the enterprise.Part of current assets may be diverted to the consumer lending products, finished products, services, organization and work of subsidiaries and the remaining receivables, indicating that the actual immobilization of this part of the working capital of the primary production process.You can also talk about the folding production base.
