In the conditions of market relations, the role of analyzing the financial condition of an enterprise is extremely important. This is due to the fact that the enterprise acquires independence and bears full responsibility for the results of its production and economic activities to the members of the enterprise, employees, banks and creditors.

Financial statements are a set of data characterizing the results of the financial and economic activities of the enterprise for the reporting period. It is a means of enterprise management and at the same time a method of summarizing and presenting information about economic activity. In turn, reporting serves as the initial basis for subsequent planning.

The financial condition of an enterprise or balance sheet (form No. 1) is a set of indicators that reflect its ability to pay off its debt obligations. The most complete analysis of the financial activity of the enterprise can be carried out using financial ratios. For this analysis, the balance sheet is used. The balance reflects the financial condition of the enterprise. In order to establish what impact the external and internal conditions of the enterprise's activity had on the current situation, it is necessary to analyze the asset and liability of the balance sheet.

Vertical and horizontal balance sheet analysis is presented in tables 1 and 2.

As can be seen from Table 1, the value of the property of the enterprise (assets) in 2012. compared to 2011 increased by 772,151 thousand rubles. or by 6.32%., and compared with 2010. the increase occurred by 1235135 thousand rubles. or 10.50%. The increase in the value of property is associated with internal changes in the asset balance. With a decrease in the value of non-current assets by 12.81% or 584340 thousand rubles, there was an increase in current assets by 17.70% or 1356491 thousand rubles.

The decrease in the value of non-current assets is associated with a decrease in all key indicators, of which is a decrease in fixed assets by 1,431,475 thousand rubles. or 90.74% compared to 2011, and by 1,610,450 thousand rubles. or by 91.69% compared to 2010. A strong decrease is also observed in other non-current assets compared to 2011. the decrease amounted to 4422039 thousand rubles. or by 96.95%, and compared to 2010. 3375181 thousand rubles go to 96.05%. Financial investments decreased by 454615 thousand rubles. rub. or by 19.05% compared to 2011, and compared to 2010 there was an increase of 839989 thousand rubles. rub. or 76.97%. Since these assets are not involved in the production turnover, therefore, a decrease in their amount will have a positive effect on the performance of the financial activity of the enterprise.

Intangible assets decreased by 66 thousand rubles. or 0.60%, although compared with 2010 there is a significant increase of 9925 thousand rubles. or 991.39%. The decrease in intangible assets indicates the influence of the market, as well as an increase in current assets.

Deferred tax assets also decreased by 148,890 thousand rubles. or by 25.50% compared to 2011, and compared to 2010 by 226,176 thousand rubles. or 34.21%.

With a decrease in the cost of non-current assets, the main financing was directed to replenish working capital. The increase in current assets indicates the expansion of the enterprise.

There was an increase in stocks compared to 2011 by 991827 thous. rub. or by 21.54% compared to 2010 by 1,297,769 thousand rubles. or by 30.20%., this indicates an increase in production potential, protection of monetary assets from inflation.

The value added tax on acquired valuables increased by 51115 or 938.06%, this is due to the purchase of materials and stocks, and is a positive factor.

There was a decrease in accounts receivable in 2012 compared to 2011 by 6,227,324 thousand rubles. or by 42.02%, and compared to 2010, the decrease amounted to 665,189 thousand rubles. or by 43.45%. This indicates a positive trend in the organization, as the demand for products that were sent on credit increased, as well as the debt of buyers and customers decreased. This has a positive effect on the solvency of the organization and increases its financial stability.

Financial investments in 2012 compared to 2011 increased by 460,797 thousand rubles. or by 46.12%, although in comparison with 2010 there was a decrease of 385,931 thousand rubles. thousand roubles. This indicator indicates the financial activity of the enterprise, and indicates its financial activities and investment contributions.

An increase in 2012 compared to 2011 is also observed in cash and cash equivalents by 379,760 thousand rubles. or by 69.95%, compared with 2010 by 439430 or by 90.93%. This indicates a positive position of the organization and an increase in the liquidity of capital.

Based on the assessment of balance sheet assets, an increase in the production potential of the enterprise was revealed, despite the decrease in non-current assets, there is an increase in working capital, which is a positive trend.

The balance sheet liability increased by 772,151 thousand rubles. or by 6.32% compared to 2011, compared to 2010, the increase amounted to 1,235,135 thousand rubles. or 10.50%. This increase is due to an increase in capital and reserves by 216457 thousand. rub. or by 6.85% in the reporting year and an increase in long-term liabilities by 1,500,023 thousand rubles. or by 63.82%.

The increase in capital and reserves is associated with a decrease in the uncovered loss item by 4.77% or by 216,457 thousand rubles. , but compared to 2010, there is an increase in losses in the amount of 859,093 thousand rubles. This indicates a decrease in its capital of the organization.

The authorized capital in 2010 was 158 thousand rubles. in 2011 there was an increase in the authorized capital due to the revaluation of fixed assets and amounted to 296 thousand rubles. In 2012, the authorized capital did not change.

Additional capital compared to 2011 remained unchanged, compared to 2010 it increased by 503,097 thousand rubles. or by 188.56% and amounted to 7698185 thousand rubles.

The reserve capital has not changed for three years and amounts to 8 thousand rubles.

The increase in long-term liabilities is mainly due to an increase in borrowings. In 2012, compared to 2011, an increase occurred by 1,500,000 or 63.83%, and compared to 2010, there is a decrease in borrowed funds by 1,418,419 thousand rubles. or by 26.92%. This indicates a lack of own working capital and, as a result, the financial dependence of the enterprise on external sources, but since it is used to cover costs and these funds can be equated to equity, this does not worsen the financial condition and stability of the organization. A decrease in long-term liabilities along with an increase in short-term liabilities can lead to a deterioration in the financial stability of an enterprise, but the enterprise is experiencing a decrease in short-term liabilities.

Short-term liabilities decreased by 944329 thousand rubles. or by 14.06%, but this caused a decrease in the balance sheet liability and did not affect the overall growth trend.

The decrease in short-term liabilities was associated with a decrease in borrowed funds by 1,226,248 thousand rubles. or by 92.63% compared to 2011, compared to 2010, the decrease amounted to 2342462 thousand rubles. or 96.00%. This refers to the repayment of short-term loans.

An increase in the section of short-term liabilities is observed in terms of accounts payable and estimated liabilities.

Accounts payable increased by 258351 thousand rubles. or 4.88% compared to 2011. Compared to 2010, the increase in accounts payable increased by 705,241 thousand rubles. or by 14.55%. it all speaks of debt to suppliers, contractors, personnel and other creditors. The presence of accounts payable is not a favorable factor for the organization and reduces the indicators of the financial condition of the enterprise, solvency and liquidity.

Based on the analysis of balance sheet liabilities, an increase in capital and reserves due to retained earnings was revealed, which is a positive moment in the work of the enterprise. Also a positive point is the reduction of short-term liabilities, this is due to the repayment of short-term loans. However, there is also an increase in accounts payable, this is a negative moment in the work of the enterprise. Also, there is an increase in long-term liabilities at the expense of borrowed funds, this may be due to the taking of long-term loans, these funds, based on the analysis of the balance sheet asset, could be spent on increasing the fixed assets of the enterprise.

Thus, the analysis of the company's balance sheet showed that OJSC "Children's World Center" tends to develop, at the expense of free cash and borrowed funds, to expand the scope of activities and increase profits.

Table 1

Horizontal analysis of JSC "Children's World-Center" for 2012-2010

Name of indicator				Absolute deviation of 2012 from 2011, thousand rubles	Absolute deviation of 2012 from 2010 in thousand rubles	Growth rate 2012 to 2011 in %	Growth rate 2012 to 2010 in %
ASSETS
I. Non-current assets
Intangible assets
fixed assets
Financial investments
Deferred tax assets
Other noncurrent assets
Total for Section I
II. current assets
Receivables
Other current assets
Total for Section II
BALANCE	12997701	12225550	11762566
Passive
III. Capital and reserves
Reserve capital
Total for Section III
IV. Long term commitment
Borrowed funds
Total for section IV
V. Short-term liabilities
Borrowed funds
Accounts payable
Estimated liabilities
Section V total
BALANCE	12997701		11762566

table 2

Vertical analysis of the balance sheet of OAO Detsky Mir-Center for 2012-2010

Name of indicator							Deviation, in percentage points 2012 by 2011	Deviation, in percentage points 2012 by 2010
	thousand roubles.	in % of the total balance	thousand roubles.	in % of the total balance	thousand roubles.	in % of the total balance
ASSETS
I. Non-current assets
Intangible assets
fixed assets
Financial investments
Deferred tax assets
Other noncurrent assets
Total for Section I
II. current assets
Value added tax on acquired valuables
Receivables
Financial investments (excluding cash equivalents)
Cash and cash equivalents
Other current assets
Total for Section II
BALANCE	12997701		12225550		11762566
LIABILITY
III. Capital and reserves
Authorized capital (share capital, authorized fund, contributions of comrades)
Revaluation of non-current assets
Additional capital (without revaluation)
Reserve capital
Retained earnings (uncovered loss)
Total for Section III
IV. long term duties
Borrowed funds
Deferred tax liabilities
Total for section IV
V. Current liabilities
Borrowed funds
Accounts payable
Estimated liabilities
Section V total
BALANCE	12997701		12225550		11762566

According to Table 2, we can say that the largest change in the share occurred in terms of net profit by 6.59 percentage points, this increase was due to an increase in profit before tax by 6.88 percentage points. and a decrease in other expenses by 7.95 percentage points. The increase in profit before tax is due to a decrease in interest payable by 1.57 percentage points. and an increase in income from participation in other organizations by 0.11 percentage points. An increase in other income by 0.64 percentage points. had no significant impact on profit growth. The increase in profit before tax was influenced by a decrease in the share of other expenses by 7.95 p.p. The decrease in the share of profit from sales was due to an increase in commercial expenses by 0.38 percentage points, while management expenses, on the contrary, contributed to an increase in the share by 0.31 percentage points. respectively. The decline in gross profit by 3.28 percentage points also contributed to the share of profit from sales. The share of gross profit decreased due to an increase in the share of cost of sales by 3.28 percentage points.

Based on the foregoing, we can conclude that the share of net profit is associated with an increase in the share of almost all the company's income, profit before tax and a decrease in some of the company's expenses and interest payable.

To analyze the main performance indicators of the enterprise, we use the data of the income statement (form No. 2). The report is a form of financial statements, the main purpose of which is to characterize the financial results of the organization's activities for the reporting period.

To analyze the composition of profit and its dynamics, we will carry out a horizontal and vertical analysis of the profit and loss statement of the organization OJSC Detsky Mir-Center. The analyzes are presented in tables 2 and 3. The purpose of the horizontal and vertical analysis is to provide a visual representation of the changes that have occurred in the main line items of the income statement.

Table 3

Horizontal Analysis of the Profit and Loss Statement

OJSC "Children's World-Center"

Name of indicator		For January - December 2011, thousand rubles	Absolute deviation, thousand rubles	Growth rate, %	Growth rate, %
Revenue
Cost of sales
Gross profit
Selling expenses
Management expenses
Profit (loss) from sales
Interest receivable
Percentage to be paid
Other income
Other expenses
Net income (loss)

Analysis of table 3 showed that net profit increased by 1,333,890 thousand rubles. or by 118.2% compared to 2011, in which significant losses were observed. This increase is due to an increase in profit before tax by RUB 1,416,848 thousand. or by 137.4%. The increase in income tax and other similar payments by 82,958 thousand rubles negatively affects net profit. or 85.6% compared to the previous year.

Profit before tax increased due to the growth of income from participation in other organizations by 28,840 thousand rubles. by 158.5% compared to 2011, in which there were losses, and interest receivable by 15,796 thousand rubles. or 9.1%. Also, this increase is associated with a decrease in other expenses by 1,419,198 thousand rubles. rub. or by 55.6% compared to the previous year and with a decrease in interest payable by 271,631 thousand rubles. rub. or by 48.4%.

Increase in other income by 335,509 thousand rubles. or by 28.6% served as an increase in profit before tax by 1,416,848 thousand rubles. or 137.4%.

Gross profit compared to 2011 increased by 474,612 thousand rubles. or by 6.2%, despite this, administrative expenses also increased by 105,347 thousand rubles. or by 9.5%, this was due to an increase in the cost of maintenance and rent for premises for general purposes, and commercial expenses by 1,023,391 thous. rub. or 17.5%, this was due to an increase in the cost of shipping and selling products, which led to a drop in sales profit. As a result, sales profit decreased by 90.9% compared to 2011 and amounted to 654,126 thousand rubles.

The increase in gross profit is associated with an increase in revenue by 3,177,957 thousand rubles. or 16%. Increase in cost of sales by 2,703,345 thous. rub. or 22.3% resulted in an increase in gross profit.

At the end of the year, net profit was received in the amount of 205,642 thousand rubles, and compared to 2011, losses were observed in the amount of 1,128,248.

After analyzing table 3, we can conclude that JSC Detsky Mir-Center has a tendency to develop, because there is an increase in net profit, which is associated with an increase in most indicators of the company's income and a decrease in some indicators of the company's expenses.

The main result of 2012 was an increase in efficiency and financial stability, the development of the network was fully financed from the organization's own funds, operating cash flow reached a historic high, and net debt decreased significantly compared to the previous year.

The growth in indicators is due to an increase in sales volumes associated with the introduction of new distribution channels for products and the introduction of online trading.

According to the profit and loss statement, it is also possible to conduct a vertical analysis, i.e. consider the profit structure, the elements of which are defined as a percentage of sales revenue. Vertical analysis is presented in Table 4.

Table 4

Vertical analysis of the income statement

OAO Detsky Mir-Center

Name of indicator	For January - December 2012, thousand rubles	Share of 2012, %	For January - December 2011, thousand rubles	Share of 2011, %	Change, %
Revenue
Cost of sales
Gross profit
Selling expenses
Management expenses
Profit (loss) from sales
Income from participation in other organizations
Interest receivable
Percentage to be paid
Other income
Other expenses
Profit (loss) before tax
Income tax and other similar payments
Net income (loss)

According to Table 4, we can say that the largest change in the share occurred in terms of net profit by 6.59 percentage points, this increase was due to an increase in profit before tax by 6.88 percentage points. and a decrease in other expenses by 7.95 percentage points. The increase in profit before tax is due to a decrease in interest payable by 1.57 percentage points. and an increase in income from participation in other organizations by 0.11 percentage points. An increase in other income by 0.64 percentage points. had no significant impact on profit growth. The increase in profit before tax was influenced by a decrease in the share of other expenses by 7.95 p.p. The decrease in the share of profit from sales was due to an increase in commercial expenses by 0.38 percentage points, while management expenses, on the contrary, contributed to an increase in the share by 0.31 percentage points. respectively. Also, the decline in gross profit by 3.28 p.p. contributed to the share of profit from sales. The share of gross profit decreased due to the increase in the share of cost of sales by 3.28 percentage points.

Based on the foregoing, we can conclude that the share of net profit is associated with an increase in the share of almost all the company's income, profit before tax and a decrease in some of the company's expenses and interest payable.

The analysis of short-term debt, being the most important component of the activities of the accounting department and the entire financial management system of the organization, allows its management to:

determine how the amount of debt obligations has changed compared to the beginning of the year or other analyzed period;

assess whether the ratio of receivables and payables is optimal, and if not, how to achieve its optimality, what needs to be done for this;

identify and assess the risk of short-term debt, its impact on the financial condition of the organization, establish acceptable limits for this risk, measures to reduce it;

find a rational relationship between the amount of short-term debt and sales volume, evaluate the feasibility of increasing the release of products, goods and services on credit, determine the limits of price discounts to speed up the payment of invoices;

predict the state of the organization's debt obligations within the current year, which will improve the financial results of its activities.

Information for the analysis of the actual amount of short-term debt is contained in the balance sheet, in the annex to it, in the explanatory note and registers of synthetic and analytical accounting. Short-term accounts payable in the balance sheet are presented in total amount and in the context of settlement accounts with a credit balance.

Information on the amount and structure of debt obligations in the balance sheet is interconnected with the indicators of the items in section 2 "Accounts receivable and accounts payable" of Form No. 5, which reflects data on changes in accounts receivable and short-term accounts payable for the reporting year. This allows you to analyze the debt obligations of enterprises in terms of their origin or receipt, types of receivables and short-term debts, the degree of compliance with payment terms and other grounds.

According to the balance sheet, appendices to it and the explanatory note, one can judge the degree of security for obligations and payments received and issued, the dynamics of the movement of bills, the change in the debt obligations of buyers for the goods (services) supplied to them at their actual cost. Analysis of the structure of short-term debt in the context of legal entities and individuals is done on the basis of analytical accounting data.

Debt analysis is an integral part of assessing the liquidity of an enterprise, its ability to repay its obligations. To do this, it is necessary to study and compare the volumes and distribution in time of cash flows, analyze trends in the ratio of short-term debt and the total amount of debt obligations, the ratio of short-term debt and income received. The growth trend of these indicators indicates the possibility of problems with the solvency and liquidity of the enterprise. Indirectly, this conclusion is confirmed by the increase in the terms of settlements with creditors.

Analysis of short-term debt according to the financial statements of the enterprise includes:

analysis of the dynamics and structure of short-term liabilities;

analysis of the turnover of short-term debt;

analysis of the impact of debt obligations on the solvency, liquidity and financial stability of the enterprise.

When analyzing indicators that characterize debt claims and obligations, first of all, they study their dynamics, the causes and prescription of occurrence, and compliance with the statute of limitations.

A significant share in the composition of the sources of funds of the enterprise is occupied by loans, including accounts payable. The relative increase in short-term debt has a twofold effect. On the one hand, this phenomenon is favorable, since the enterprise has an additional source of financing. On the other hand, an excessive increase in short-term debt is extremely dangerous, since it increases the risk of possible bankruptcy.

The stages of express analysis of short-term accounts payable coincide with the stages of express analysis of receivables. At the first stage of the analysis, the change in the share of short-term debt in the total amount of funding sources and in the value of all liabilities is characterized based on the balance sheet data.

Table 3

Analysis of the share of short-term liabilities in the liabilities of the enterprise JSC "URALSVYAZINFORM" for 2009-2010.

In 2010, short-term liabilities at JSC "URALSVYAZINFORM" decreased by 830.3 thousand rubles. The share of short-term accounts payable in the total value of the company's financing sources decreased from 11.77% to 9.13%. From the point of view of current solvency and liquidity, such dynamics is favorable for the analyzed enterprise, since it indicates that it had enough own funds to make current payments.

At the next stage of the analysis of short-term debt, its composition and structure are studied according to the data of the II section of the asset of the Balance Sheet.

Table 4

Analysis of the structure of short-term debt of OAO "URALSVYAZINFORM" for 2009-2010.

Settlements with debtors (composition of accounts receivable)			Change for 2010
amount, thousand rubles		Amount, thousand rubles		Amounts, thousand rubles	Oud. weight, %
1. Short-term financial liabilities
1.1 Other current financial liabilities
2. Short-term trading obligations
2.1 Trading account liabilities
2.2 Advances received
3. Short-term accrued liabilities
3.1 Pay obligations
3.2 Obligations to staff for other operations
3.3 Insurance liabilities
3.4 Accounting obligations
3.5 Obligations to founders and other participants
3.6 Other current liabilities
4. Total current liabilities

As can be seen from Table 3, in the analyzed enterprise JSC "URALSVYAZINFORM" during 2010 there is a decrease in the value of short-term accounts payable of 830.3 thousand rubles. This decrease was mainly caused by the repayment of liabilities on trading accounts in the reporting period, as a result of which their share decreased by 15.32%, and the performance indicator eventually decreased by 1,170.3 thousand rubles. The decrease in the cost of liabilities for settlements with the budget also had a significant impact, the share of which decreased by 16.08%, which led to a decrease in short-term liabilities by 913.7 thousand rubles. In the reporting period, there is an increase in wage obligations. The share of this indicator increased in the reporting period by 14.57%, causing an increase in short-term liabilities by 488.5 thousand rubles. The share of financial debts in the total amount of short-term short-term debt decreased by 0.01%, the share of trade liabilities decreased by 6.29%. At the same time, the share of accrued liabilities increased by 6.3%.

Thus, we can conclude that the analyzed company during the reporting period as the main source of financing assets short-term accrued liabilities. Accrued but unpaid wages, other short-term liabilities can be temporarily used as sources of financing, and free of charge, since, unlike bank loans, no interest must be paid for their use. However, it should be borne in mind that the company cannot fully control such accruals, since the timing of their payments is regulated by external factors, including the current legislation, the change of which does not depend on the plans and capabilities of the enterprise.

At the third stage of the analysis of short-term accounts payable, a characteristic of its turnover is given. To do this, the number of turnovers and the average settlement period of accounts payable (turnover of short-term debt in days) for the reporting year are calculated, which are then compared with similar indicators for the previous year. There are several ways to determine the turnover of short-term debt, which differ in the basis used for calculations. In particular, turnover can be calculated as the ratio of sales revenue or cost of sales to the average short-term debt. The calculation of these indicators by two methods, carried out on the basis of the data of the Balance Sheet and the Statement of Financial Results, is presented in Table 5.

Table 5

Analysis of the turnover of short-term debt in OAO "URALSVYAZINFORM" for 2009-2010.

Indicators			Change
1. Income from sales, thousand rubles.
2. Cost of sales, thousand rubles.
3. Average value of short-term liabilities, thousand rubles.
3. Number of turnovers of short-term debt
3.1 Based on sales revenue
3.2 Based on cost of sales
4. Period of repayment of accounts payable, days
4.1 Based on sales revenue
4.2 Based on cost of sales

As can be seen from the calculations presented in Table 4, the ratio of sales income and the average cost of short-term liabilities indicates a positive trend: if in the previous year each of the short-term debts accounted for 8.14 rubles. income from sales, then in the reporting year - 9.79 rubles, that is, more by approximately 20% (8.14: 9.79100-100).

The number of turnovers of short-term debt calculated on the basis of cost of sales is much less than that calculated on the basis of sales revenue. The dynamics of this indicator confirms the acceleration of the turnover of short-term liabilities. Thus, the number of turnovers increased from 5.24 to 6.34 times, and the average duration of one turnover decreased by 11.92 days compared to the previous year and amounted to 56.78 days. This trend indicates that the company is able to timely regulate accounts payable and other short-term liabilities.

At the final stage of the analysis of short-term liabilities, their structure is characterized by the nature of repayment. For this purpose, on the basis of data from the appendix to the balance sheet, the share of current liabilities (which are not due) and the share of overdue liabilities in the context of each type of short-term debt are calculated.

Table 6

The structure of short-term accounts payable by the nature of repayment in JSC "URALSVYAZINFORM"

Type of debt	Total at the end of 2010	Including
The due date for which has not yet arrived	Overdue
Up to 3 months	From 3 months to 1 year	Over 1 year
1. Other short-term financial liabilities, thousand roubles. %
2. Short-term liabilities on trading accounts, thousand rubles. %
3. Advances received, thousand rubles. %
4. Liabilities to personnel, thousand rubles %
5. Liabilities to personnel for other operations, thousand rubles %
6. Liabilities for insurance, thousand rubles. %
7. Liabilities for settlements with the budget, thousand rubles. %
8. Liabilities to founders and other participants, thousand rubles %
9. Other short-term liabilities, thousand leva %
Total, thousand rubles %

As can be seen from Table 5, 55.25% of all short-term accounts payable are debts that are not due. Therefore, special attention should be paid to arrears. Other short-term financial liabilities are overdue for more than a year in full, in the amount of 14.5 thousand rubles. Of the total amount of short-term liabilities on trading accounts, 1484.3 thousand rubles. or 84.11% are overdue for more than one year. The obligations to the founders and other participants are overdue in full, 39.5 thousand rubles. or 31.98% of the value of this indicator are overdue for more than one year. The cost of advances received, overdue from 3 months to the bottom year, amounted to 478 thousand rubles. or 94.02% of the total value of advances received.

1538.3 thousand rubles or 31.84% of the value of short-term accounts payable is overdue for more than one year. This is a negative moment in the activity of the analyzed enterprise OAO "URALSVYAZINFORM". Untimely repayment (late) of their debts is fraught with the fact that suppliers of raw materials and materials will require prepayment.

The main increase in the value of short-term liabilities for the analyzed period occurred due to an increase in accounts payable by 90.6 billion rubles, which is 54.9%. This is a favorable trend and indicates the emergence of new obligations to the enterprise.

It should be noted that the decrease in the item "Suppliers and contractors" had the greatest impact. The change amounted to 41.8 billion rubles. or 1.2% in the balance structure. This fact should be considered as a negative moment in the activity of the enterprise.

Analysis of the financial stability of the enterprise

Determining the type of financial stability

For enterprises with a significant share of inventories in assets, a methodology is used to assess the sufficiency of funding sources for the formation of reserves and costs. Inventories can be formed at the expense of own working capital and attracted sources.

The most generalizing absolute indicator of financial stability is the surplus or lack of sources of funds for the formation of reserves and costs, i.e. the difference between the value of sources of funds and the value of stocks and costs. This refers to the provision of sources of own and borrowed funds, with the exception of accounts payable and other liabilities.

Depending on the ratio of the values ​​of indicators of inventories, own working capital and other sources of formation of reserves, the following types of financial stability can be distinguished with a certain degree of conventionality:

Absolute financial stability;

Normal financial stability;

Unstable financial condition;

Crisis financial condition.

Three indicators of the availability of sources of formation of reserves and costs correspond to three indicators of the availability of reserves and costs with sources of their formation:

1. Surplus (+) or shortage (-) of own working capital (FS), defined as the difference between the presence of own working capital and the amount of reserves and costs:

FS \u003d SOS - Z

2. Excess (+) or shortage (-) of own and long-term borrowed sources of reserves and costs (FD), defined as the difference between the presence of own and long-term borrowed sources and the amount of reserves:

PD \u003d (SOS + DP) - Z

3. Surplus (+) or shortage (-) of the total value of the main sources for the formation of reserves and costs (FO), defined as the difference between the total value of the main sources and the value of reserves:

FO \u003d (SOS + DP + s. 610) - Z

Using these indicators, you can determine a three-component indicator of the type of financial situation. There are four types of financial situations:

1. Absolute financial stability meets the following conditions:

PS > 0; PD > 0; FD > 0.

The three-component indicator is: S=(1; 1; 1).

2. Normal financial stability guarantees the solvency of the enterprise:

FS< 0; ФД >0; FD > 0.

The three-component indicator is: S=(0; 1; 1).

3. Unstable financial condition, associated with a violation of the solvency of the enterprise. With this type of financial situation, it remains possible to restore balance by replenishing sources of own funds:

FS< 0; ФД< 0; ФО > 0.

The three-component indicator is: S=(0; 0; 1).

4. Crisis financial condition, in which the company is completely dependent on borrowed sources of financing. Own capital, long-term and short-term loans and borrowings are not enough to finance inventories. Replenishment of stocks is carried out at the expense of funds generated as a result of repayment of accounts payable:

FS< 0; ФД< 0; ФО < 0.

Let's determine the type of financial stability for OAO AN Rosneft.

Table 1 Determining the type of financial stability, billion rubles

No. p / p	Balance indicators	Meaning	Change
At the beginning of 2011	At the end of 2011
	Equity	1036,9	1381,4	344,5
	Fixed assets	1355,2	1674,2	319,0
	Own working capital	-318,3	-292,8	25,5
	Long-term borrowings	744,3	756,1	11,8
	Short-term borrowings	149,6	140,6	-9,0
	The total value of sources of reserves formation	575,6	603,9	28,3
	Stocks and VAT	192,2	263,8	71,6
	Excess/shortage of own working capital of the FS	-510,5	-556,6	-46,1

End of table 1

As a result, the three-component indicator of the type of financial situation for the beginning of 2011:

FS< 0; ФД>0; FD > 0.

510,5< 0; 199,5> 0; 383,4 > 0.

We can say that the company is in a normal financial independence, in which the company is solvent.

Three-component indicator of the type of financial situation at the end of 2011:

FS< 0; ФД >0; FD > 0.

The type of financial situation has not changed over the analyzed period, that is, the company is still in a normal financial independence, which ensures normal solvency and efficient production activities.

Analysis of financial stability ratios

The general level of financial stability of the enterprise of OAO NK Rosneft is characterized by the indicators presented in Table 2.

Table 2 Analysis of the financial stability of OAO NK Rosneft

As Table 2 shows, the autonomy coefficient increased in the reporting year, its value shows that the enterprise's property was formed by 52.87% at its own expense.

The debt capital ratio shows that the share of borrowed funds (44.91%) is less than that of own funds (55.09%), but not by much, they are approximately at the same level. Also visible is the positive dynamics of the reduction of this coefficient.

The capitalization ratio shows how much borrowed funds the organization has attracted for 1 ruble of its own funds invested in assets. In this case, one can see a decrease by the end of the year of attracted borrowed funds by 1 ruble of own funds invested in assets.

Analyzing the coefficient of financial independence, we can conclude that the company is financially stable (the higher the value of the coefficient, the more the company is financially stable and the less dependent on third-party loans), the share of ownership of the company's owners in the total assets is quite large and amounts to about half, also from the point of view of investors and creditors, the higher the value of the coefficient, the lower the risk of losing investments invested in the enterprise and loans granted to it, in this case the risk is low.

The funding ratio shows the ratio of own and external funding sources. Shows what part of the activity is financed by own funds, and what part is financed by borrowed funds. The optimal value of this indicator is 1.5, that is, the analyzed enterprise tends to improve the indicator.

In general, we can conclude that the company has a fairly stable financial condition, in which, nevertheless, the possibility of its improvement remains, which happens if we consider the indicators in dynamics.

Solvency assessment

Balance liquidity assessment

The solvency of an enterprise is an external sign of its financial stability. The overall solvency of an enterprise is the ability to fully cover long-term and short-term liabilities with existing current assets.

The liquidity of an enterprise is the sufficiency of cash and other funds to pay debts at the current moment. The level of liquidity depends on the field of activity, the ratio of current and non-current assets, the size and urgency of paying obligations.

Analysis of the liquidity of the balance sheet consists in comparing the funds of the asset, grouped by the degree of their liquidity and arranged in descending order of liquidity, with the liabilities of the liability, grouped by their maturity and arranged in ascending order of terms.

Let's analyze the liquidity of the balance sheet of OAO NK Rosneft.

Table 3 Analysis of the liquidity of the company's balance sheet, billion rubles.

ASSETS	At the beginning of the period	At the end of the period	LIABILITY	At the beginning of the period	At the end of the period	Payment surplus or deficiency, (+;-)
						7=2-5	8=3-6
Most liquid assets (A1)	341,8	337,5	Most urgent liabilities (P1)	165,0	255,6	176,8	81,9
Marketable assets (A2)	246,4	312,8	Short-term liabilities (P2)	150,3	141,2	96,1	171,6
Slow selling assets (A3)	439,2	577,0	Long-term liabilities (LT)	686,0	737,6	-246,8	-160,6
Hard-to-sell assets (A4)	1355,2	1674,2	Permanent liabilities (P4)	1036,9	1381,4	318,3	292,8

The data in table 3 indicate that in the reporting period the company did not have absolute liquidity.

The inequality A1 > P1 is satisfied, which indicates the solvency of the organization at the time of the balance sheet. The company has enough cash to cover accounts payable.

The inequality A2 > P2 is also satisfied, i.e. the liquidated assets of an organization are greater than short-term liabilities. The enterprise will be able to become solvent when settling with creditors and receiving funds from the sale of products.

Inequality A3 > P3 is not fulfilled, this indicates the incomplete liquidity of the balance sheet.

There is an excess of hard-to-sell assets over permanent liabilities at the beginning of the period and at the end of the period.

More detailed is the analysis of solvency using financial ratios.

Professor's article M.L. Pyatov(St. Petersburg State University) is devoted to a discussion of methods for assessing the financial position of a company based on the liabilities of its balance sheet. Options for assessing the change in the structure of liabilities as sources of financing the company's activities are proposed. The possibilities of influencing the structure of liabilities of accounting and contractual policies, various options for real business operations are considered. The ways of refining the balance sheet data using the indicators of the "Report on financial results" are shown.

In previous articles* devoted to the analysis of the dynamics of liabilities, we considered situations in which their (liabilities) ratio changes over a number of reporting periods.

Note:
* With all articles by Professor M.L. Pyatov on this topic can be found on the website under the tag "financial analysis".

The balance sheet represents the structure and valuation of recognized financial sources for the company's operations. The change in the structure of liabilities, thus, shows how their (sources) composition and volumes change. We have considered options 1 to 21 in the table below and have seen that the balance sheet situation of the dynamics of the sources of financing of companies can be a consequence of decisions in their contractual and/or accounting policies. However, in most cases, changes in the structure of the balance sheet and the assessment of its elements really reflect the dynamics of the real economic life of the company. It is very important to understand what the balance sheet can “tell” us in this way, because managing the sources of financing for activities is one of the key issues in enterprise administration.

We have examined in a certain sequence the situations in which changes occur in all three sections of the liability. We have discussed what an increase or decrease in the estimates of Capital and Reserves, Current Liabilities and Long-Term Liabilities can indicate from period to period. We analyzed situations where the assessment of individual sections of a liability remains unchanged over time (of course, adjusted for the dynamics of the purchasing power of the monetary unit) while the assessments of its other articles decrease. We also talked about cases in which maintaining the volume of one or two elements of a company's sources of financing can be combined with an increase in the valuation of the rest of them.

In this article, we will consider situations in which the preservation of relatively unchanged estimates of the elements of one of the sections of the balance sheet liability is accompanied by a change in the estimates of other elements, both upward and downward.

Possible options for the dynamics of the structure of the liability of the balance sheet are presented in table 1.

Table 1

Possible options for changing the structure of sources
financing of the company, reflected in the liabilities side of the balance sheet

Elements liabilities balance Options	Capital and reserves	Long term obligations	Short term obligations

The following are used as symbols:

"+" - increase in the total of the corresponding section of the balance sheet liability for a number of reporting periods;

"-" - decrease in the total of the corresponding section of the balance sheet liability for a number of reporting periods;

"c" - preservation (insignificant changes) of the result of the corresponding section of the liability during the number of reporting periods under consideration.

So let's continue.

Option 22. The company's equity capital grows while reducing the size of its long-term liabilities and maintaining the volume of short-term debts

The first associations that this picture evokes are, of course, positive. The growth of own sources of funds is traditionally viewed as a favorable trend. This is stability, this is stability, this is reliability. If the changes under discussion are characterized by the preservation of the overall scale of the company's activities (the balance sheet is stable), we can talk about the transition to the financing of long-term projects by the company (or at least non-current assets) from not long-term loans, but from its own sources of funds. At the same time, maintaining a relatively stable volume of short-term loans may indicate that the company is maintaining the volume of its current operations.

We can try to understand to what extent such impressions from what we saw are true by looking at what specific positions of the liability section “Capital and reserves” have increased its volumes so much. If such growth is provided by an increase in the Retained Earnings position, our optimistic impressions are most likely correct. And here it remains only to evaluate rationality rejection of long-term lending in favor of financing activities from its own sources of funds.

But if we see that the growth of the company's own capital, demonstrated by the balance sheet, is provided by an increase in its additional capital due to the revaluation of non-current assets, then our case may not be so favorable. The reduction in long-term funding may not be caused by our refusal of such loans, but by the refusal of us as recipients of such loans. Maintaining the volume of short-term lending may mean that the upcoming changes in the state of affairs of our company have not yet had time to affect relations with counterparties, or it may indicate that the company has a growing volume of outstanding debts while falling income. And here the data of the “Report on financial results” of the company can help us understand the actual state of affairs.

The considered picture of the state of affairs can also be evidence of the immutability of the real financial condition of the company with adjustments in its contractual policy. If we have a company's balance sheet prepared according to Russian standards, such a change in the structure of liabilities may be associated with the attraction of a significant amount of leased fixed assets, when both these objects and the long-term obligations of the company related to them will be reflected in the balance sheet.

Option 23. Growth of equity capital, reduction of short-term liabilities and relative preservation of long-term lending

This picture, unlike the previous one, already at first glance makes a disturbing impression. The growth of equity capital with a decrease in short-term loans in the context of maintaining the overall scale of the company's activities may indicate, at a minimum, the irrationality of the management of its liabilities. Financing current assets at the expense of own funds looks strange, but even so it is impossible to define this situation, since the company retains the volumes of long-term loans present in the balance sheet. If part of the working capital is financed by long-term liabilities, this is also a very alarming indicator both from the standpoint of dependence on attracted sources of funds and from the perspective of the firm's long-term solvency.

The reduction in short-term liabilities, accompanied by a reduction in the current assets used by the firm, is evidence of a decrease in the volume of its operations. This is a very alarming signal, especially if such conclusions are also confirmed in the Financial Results Report data. At the same time, the growth of capital and reserves may mean either fears that the payment of dividends in the previous volumes will not allow the company to pay off its obligations, or the desire, through the revaluation of non-current assets, to somehow cover up a really sad picture of the state of affairs. In the first case, most likely, it will be possible to see that the growth of equity capital is provided by increasing the “Retained Earnings” position, in the second, it will most likely be additional capital formed due to revaluation.

At the same time, everything can be completely and not so deplorable. The picture under consideration may reflect changes in the contractual policy of the company, when, for example, a trading company switches to selling significant volumes of goods under commission contracts, or a manufacturing company begins to produce products from raw materials to be supplied. Reflection off the balance sheet of the relevant current assets (goods or materials) will accordingly reduce the amount of short-term liabilities reflected in the statements. This situation may be evidenced either by the presence of off-balance sheet items in the reporting, or by the data of the company's “Report on Financial Results”, showing the preservation or growth of the income received by the company from its core activities.

Also, the considered content of the company's balance sheets may indicate an impending significant change in the types of its activities. In this case, the reduction in the scale of operations previously characteristic of the company will be reflected by a decrease in short-term debts, the restructuring of long-term liabilities may not significantly affect their total volume, and the growth of capital and reserves may indicate precisely the formation of reserves (in the literal sense) to finance the planned changes. in activities at the expense of own sources of funds.

Option 24. Equity decreases, long-term liabilities increase, the volume of short-term debt remains stable

Information about the decrease in equity, first of all, alarms us and looks like a signal of negative trends in the life of the company. This impression is strengthened by data on the growth of long-term debt, traditionally viewed as creating risks of the company's excessive dependence on attracted sources of financing.

However, the situation under consideration cannot be assessed so unambiguously. The information obtained requires clarification, taking into account data both on the dynamics of the structure of the company's assets and its "Report on financial results".

The decrease in the company's equity capital in our case may be due, for example:

• with the withdrawal of funds from it by the owners;
• with rising costs of servicing growing volumes of long-term loans;
• with a change in accounting policy.

The first two situations reflect the actual changes in the economic life of the company, the third - only its presentation in the reporting through accounting methodology.

The withdrawal of funds from the company, observed as a steady dynamics of its financing volumes, is, in general, not the best trend. Even in the absence of other negative "signals", this circumstance seriously reduces the credibility of the company as a strategic partner. At the same time, if this information is accompanied by data on the growth of income and profits of the company, we can only observe the successful implementation of decisions on the more intensive use of long-term loans as a source of financing for the activities of this company. So the owners get the opportunity to use the funds earned by the company to finance their other projects.

If the decrease in the company's equity capital occurs not only against the background of an increase in long-term liabilities, but also a decrease in income and profits, we have an extremely unfavorable picture of the state of affairs.

In the event that the decrease in equity capital is associated solely with an increase in the costs of servicing attracted long-term sources of financing, one can only hope that their attraction in the future will have an effect that, with such interest costs, will bring additional profits to the company. For example, in the situation under consideration, we can also observe a significant increase in the volume of non-current assets, which is evidence of the commissioning and development of new equipment and / or new production premises by the company.

Through accounting policy, a company can demonstrate a decrease in equity by refusing to revalue assets or revalue them downward.

The possibility of demonstrating the situation under consideration by the most diverse scenarios of the development of events is confirmed by the stability of the volumes of short-term liabilities. This may indirectly indicate the preservation of the scale of the company's operations within the framework of its core business.

Option 25. Equity is declining, long-term liabilities are stable, short-term debt is growing

As in the previous case, we observe a disturbing situation - a decrease in the volume of the company's own sources of funds. At the same time, the company's short-term liabilities are growing, most often interpreted as the most unstable and risky source of financing activities.

At the same time, here, just as in option 24, additional analysis of the data from the Statement of Financial Results can help us bring the conclusions about the state of affairs under consideration closer to reality.

If the "Report on financial results" in this situation shows an increase in income and profits, even such an alarming picture of the dynamics of the company's liabilities can have a positive interpretation. The growth in the volume of short-term debt, reflected in the increase in current assets, may indicate an increase in the scale of operations for the company's core business. The stability of long-term liabilities may indicate that banks continue to view the company as a reliable creditor. A decrease in own sources of funds may demonstrate the use of the possibility of directing the company's profits to finance other projects of its owners.

A decrease in income and profits or a statement of financial results showing that the company has received losses will only confirm the fears inspired by the dynamics of the structure of the company's sources of funds presented by this option. At the same time, the growth of short-term liabilities may indicate the growing problems of the company with their timely repayment.

It should be noted that, in the case of a positive scenario of development of events, and in the case of an unfavorable state of affairs, an increase in short-term liabilities may reflect changes in the contractual policy of the firm, suggesting a shift to the use of more current assets owned by the organization.

Option 26. Equity is relatively unchanged, long-term liabilities increase, short-term debt decreases

The invariability of the volumes of the company's own sources of funds reflected in the balance sheet with multidirectional changes in the values ​​of long-term and short-term accounts payable is a situation that can reflect a variety of options for the actual development of events.

The growth of long-term liabilities may be associated with the acquisition of new non-current assets by the company. The stability of the volume of own sources of funds at the same time may show that the company is coping with a corresponding increase in debt service costs. As for the reduction in the volume of short-term liabilities, it may be the result of optimization of inventory management and settlements with the company's creditors. In the event that the data of the “Report on financial results” at the same time show us an increase in the income and profits of the enterprise, then, most likely, everything is really so.

With a less favorable picture shown by the Statement of Financial Results, the stability of equity capital can be ensured by an unjustified revaluation of assets implemented through the accounting policy of the company, while a decrease in short-term debts, as we noted above, can also occur due to a change in the company's contractual policy. The transition to the use of significant volumes of current assets that do not belong to the organization on the basis of ownership (commission agreements, commissions, contracts for the processing of raw materials, etc.) can affect the structure of its balance sheet in this way.

At the same time, the growth of long-term liabilities is evidence of creditors' confidence in the company. This is a positive characteristic of the company. Indeed, even the so-called "on-lending", if it is not the result of the implementation of sham transactions, indicates the plans of new lenders to return the funds provided to the company and receive income. An exception may be situations when the owners of the organization themselves act as such creditors, trying in this way to “save” it in an unfavorable situation.

Here it would be a mistake to assume that the growth of long-term liabilities may be the result of simply their untimely repayment. Indeed, initially long-term liabilities after less than 12 months remain until their maturity date from the date on which the reporting is prepared, should be reflected in the balance sheet as short-term. If the company's accounting department leaves their amounts as long-term, it violates the requirements of the current standards.

Option 27. Equity is relatively unchanged, long-term liabilities decrease, short-term debts increase

Since in this case the estimates of the company's equity reflected in liabilities remain relatively unchanged, it cannot be said that the decrease in the volume of long-term liabilities shows us the implementation of management decisions to finance a larger amount of the company's funds from its own capital. An exception to this rule may be the situation when the decrease in the liability section of the balance sheet "Capital and reserves" is a consequence of the revaluation of non-current assets, reflecting a significant decrease in their value.

An increase in short-term debt coupled with a decrease in long-term loans can also be an alarming symptom. If a certain amount of the company's funds, previously financed by long-term liabilities, is now secured by increased short-term debt, the structure of funding sources has destabilized and taken on a more risky character.

However, if a company's Financial Statement shows us an increase in the firm's earnings and profits, our warning signs can turn into signs of recovery. A decrease in long-term liabilities may only indicate the completion of projects for which the corresponding loans were required. At the same time, the current situation does not require the attraction of new serious borrowings. Suppose a company paid off a large loan related to the acquisition of industrial premises. The growth of short-term loans may indicate an increase in the scale of the company's operations within its core business. This ensures the income and profit growth reflected in the Statement of Financial Results.

It is also possible that the considered dynamics of the company's liabilities is associated with significant changes in its contractual policy. The company can switch to the use of significant volumes of leased non-current assets and at the same time carry out more transactions with working capital that is its property (sell its own goods, use its own raw materials and materials), refusing commission agreements, work contracts, etc.

Concluding the article, it should be noted that our analysis of the ways of interpreting the balance sheet liabilities data shows that the analysis of financial statements cannot be considered as obvious and unambiguous evidence of a particular state of affairs of the company. Economic practice is much more complicated than the data of any, even the most reliable and up-to-date, financial statements. Reading the reported data is only an acquaintance with the symptoms, indicating only a possible state of affairs that may actually take place. However, without the availability of reporting data, the structure of which highlights such symptoms in the most optimal way that exists today, it is extremely difficult to understand what information needs to be assessed to make an adequate management decision.

We will continue to discuss with our readers the methods of analysis of modern financial statements of companies. Next in line is a cash flow statement and methods for evaluating the information contained in it.