Financial condition of the enterprise: assessment and analysis

The financial condition of an enterprise is the turnover of cash flows that serve the sale and production of its products. The fact is that between the developing rates of production and the economic state of the organization there is a system of co-dependencies. The growth of industrial volumes will improve the company's condition, but its decline, on the contrary, will worsen. But financial well-being will in turn affect production: it will slow it down or speed it up. Let us consider in more detail this problem, as well as the features of the analysis and evaluation of organizations.

The financial condition of the enterprise will depend on a number of indicators - indicators of working capital, property, settlements and payments. Difficulties in the organization arise due to lack of funds, inaccessibility of loans, reduction in the terms of their provision, incorrect investment, unreasonable use of loans, and so on.

There is a special methodology for analyzing the financial condition of an enterprise. Its content consists in forecasting and evaluating the organization on this issue in accordance with the accounting and reporting data.

The financial condition of the enterprise in this case should be considered from the following positions:

• It is necessary to evaluate the organization from the point of view of its economic content;
• It is recommended to determine how the system of factors (external and internal) affects the main and basic indicators, as well as to identify the available deviations from them;
• There must be a regular prediction of the company's condition;
• It is recommended that a regular justification, development and preparation for the adoption of a system of decisions to improve the situation in the company be recommended.

Analysis and assessment of the financial condition of the enterprise must be carried out in two directions:

• Internal analysis will necessarily be carried out by the employees of this organization in accordance with the approved plan;
• Audit (external analysis) should be determined by the interests of other users and conducted according to official accounting records.

The financial condition of the enterprise will be successful if it is able to exist, develop, and also maintain a balance in its assets and liabilities in a situation of changing external and internal reality.

The matter is that even with high incomes the organization can experience difficulties in the event that it is irrational to use its monetary resources. For example, if it was decided to invest in excess stocks or to allow a large debt on loans.

Among the positive factors of economic stability can be identified the availability of sources and reserves of the formation of monetary reserves, and among the negative - their magnitude.

Therefore, in order to find the main ways out of a crisis or unstable state, a number of conditions will need to be taken into account. Let us consider them in more detail.

First, it is recommended that all sources of industrial reserves be regularly replenished.

Secondly, there should be a gradual increase in the share of own funds from profit.

Thirdly, the most important stage in the analysis of economic sustainability is the determination of the availability, development and dynamics of negotiable own funds, and most importantly, their safety.

Fourth, it is necessary to optimize the structure of own funds, as well as a reasonable reduction in the level of their reserves.

One of the main criteria for assessing the company's status is its solvency, long-term (the company's ability to settle for long-term liabilities) and current (the company's ability to pay short-term obligations).