conducted qualitative analysis of the financial and economic aspects of functioning of an enterprise helps to make assessment of the work done and correctly predict the changes to get the most profit. For this procedure, as the analysis of the financial condition of the company involved in financial management of the enterprise or,more objectively, is hired by a qualified specialist in the relevant company. In order to analyze the financial condition of the company underwent a financial Manager need to use all accounting and statistical reporting of the enterprise in the current and prior periods.
In the analysis it is important to consider the absolute profit, relative profit performance, financial stability and liquidity of the balance sheet, the efficiency of use of capital raised (if any). Deep analysis of financial and economic activity of the enterprise takes place in several stages. First made reading available reports, and then conducted a deeper professional types analytical work, they include vertical method analysis method of analysis of the trend and, finally, the calculate the so-called financial ratio dimension. During the reading of the statements we study the performance of the enterprise, is the analysis of the financial condition of the company, financial status, use of long-term and short-term investments, sources of capital of the company, communication with customers and suppliers, financial and credit enterprises is the assessment of income and profits of the current year. Horizontal analysis of the financial condition of the enterprise reflects the trend of changes article part reporting compared to the previous quarter, a half, a month. The vertical analysis is the evaluation of specific weight of separate articles of the indicators, for example, receivables in the total activity. Conduct trend analysis allows you to identify the main ways of development of the enterprise in terms of reporting. More accurate financial analysis is obtained by comparing figures for several years.
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Special value for the financial Manager are financial ratios, which are the basis for the analysis of activity of the enterprise. Financial ratios show the proportions and rely on a certain data base: common standards, the average performance in a particular industry, the performance of enterprises in previous years, data on the activities of other businesses, other performance indicators of the company. The calculations for the coefficients is not straightforward, but give the opportunity to make more accurate conclusions and make more workable and optimally the likely prognosis, identify the weak points in the enterprise. Conducted by qualified managers analysis of financial and economic activity of the enterprise – is not only a document for the head, which is based on the results to evaluate the performance of the company and to outline measures for its improvement. Such a document could be drawn up for external users – banks, on the basis of his performance make a decision on issuance of credit, stock market participants, determining the value of the shares or investors making the decision on expediency of investments.
the Manager conducting the analysis must have skills and experience in this kind of activity, as it is responsible to the head of the company for the proposed recommendations for improvement, the accuracy of the data that constitute the “financial image” enterprise.
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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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