coefficient of availability of internal funds disclose whether the enterprise has enough of its resources, which are necessary to its financial stability.The presence of an economic entity capital - is one of the most important conditions for productive enterprise.It belongs to a group of factors that determine the financial stability of the organization.
Equity indicate the level of liquidity and solvency, as well as the extent to which the company is able to close their commitments at the moment, realizing Assets.Its own working capital is very important for the positive functioning of the enterprise.
In absence of these, we can say that all current assets are formed by borrowed capital.This occurs when there is a lack of own sources.
coefficient of availability of internal funds is supposed to be more than one-tenth.A lower value is possible to say that the economic entity is not enough of his own money to finance its current operations.It should be noted that this indicator is very tough, Russian companies is very difficult to achieve it.
coefficient of its own working capital is calculated in the following ways:
skew = SobObSr / OA;
or skew = (SobKap - VneobA) / Both;
or skew = (CR + DSB + RPR - VNA) / Both,
where:
- SobOobSr - is its own funds;
- SobKap - equity;
- VneobA - non-current assets;
- KR - up section of the capital and reserves;
- DSB - revenues in future periods;
- RPR - reserves for future expenses;
- Both - it's current assets.
meaning of the second formula is as follows: the difference in the numerator - is the most illiquid financing (non-current) assets, using the most sustainable sources - their own.In addition, it should remain part of the working capital in order to ensure the financial activities of the company.
production ratio of current assets own funds may also be determined using a balance:
skew = (490 - 190) / 290 (in lines).
This factor does not apply in Western countries.In the Russian practice it introduced for the determination of the bankruptcy (or failure) of an economic entity.
Factors that determine an entity provided nakolko own funds, identified as a result of correlation and regression analysis.The result is that most considered factor related to the following:
- current liquidity;
- return on sales;
- inventory turnover;
- productivity.
ratio of own working capital, in addition to these indicators, helps make the overall financial picture of the organization.And this is the most important characteristic of the company.Thus, determining the competitiveness of the business entity, its potential, and the estimated degree of assurance the economic interests of the company and its partners.If the company is financially stable, among the organizations of the same profile it is able to attract more investment, obtain loans, choose suppliers and select qualified professionals.
