Assessment of financial parameters and indicators of efficiency of activity of enterprise, among the problems of analysis are key, as they indicate the economic health of the company and indicate problems that can lead to significant complications and even insolvency or bankruptcy.
The Main indicators of efficiency of activity of the enterprise – this is a fairly extensive list of parameters, in varying degrees, reflecting the results and the efficiency of economic activities. One of the important parameters is financial stability.
Generalized indicators of efficiency of activity of the enterprise, as a rule, are based on the understanding that decisions on management of financial stability of the business needs constant awareness, which is the result of the analysis and evaluation of information. The choice of a technology evaluation is determined by the goals and objectives of the study, and in some cases, and the availability of reliable baseline information. In addition to other things, each technique or procedure has strengths and weaknesses and their impact on the performance of the company.
Widely used horizontal, vertical and trend methods can only give a preliminary assessment of the level of resistance, stating only the absolute change of a particular indicator of financial stability, not revealing information about the internal nature of the changes and without, in fact, other indicators of efficiency. In addition, such methodology is very poorly reflect the dynamics of the current changes in the quality of work of the company.
The Comparative method in its content provides more information than the above, but today in some cases to apply it efficiently is impossible, because reliable industry statistics are not available.
Analysis of existing technologies and procedures of evaluation activity, suggests that the most informative have method of estimation for factors and factor, so they became widespread in the practice of evaluating the performance of enterprises in General and financial sustainability in particular.
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However, the coefficient method of evaluation is pretty much its own significant drawbacks. The most significant are:
ratio: the calculations only reveal but not explain the dynamics of change in financial condition. This situation reflects the state of the company only at the beginning and end of the reporting period. Everything that happens between these dates will be ignored.
- the coefficients do not bear economic sense, therefore, it is necessary comparing them with the indicators of the ‘external’ sources that in modern conditions is difficult for technical and material nature.
The Most common of the available analytical methods is factor analysis. A strong feature of the factorial approach is that during the calculations the initial data are standardization and regulation and losing in this dimension. This allows to use the model to analyze different periods without additional correction for inflation. The analysis of methodological tools defined by the fact that the key to the analysis of performance indicators is:
- improving information provision;
- the development of techniques for comprehensive, allowing to analyze the status of the company is on the optimal aggregate production and financial indicators and ratios.
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Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."
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