The balance sheet, in fact, is a way of grouping the property of an economic entity. It presents the balance of property values owned by the enterprise in two aspects: a description of the location and composition (asset) and a description of the sources of origin and purpose (liability).
The main source of information about the economic activity and financial condition of the enterprise is precisely the balance sheet (form 1). Balance analysis is the first stage of a comprehensive study of the financial condition of a commercial organization.
During the analysis, special attention is paid to the following points.
1. Analysis of changes in articles
It should begin with a description of the amount of all property of the enterprise in dynamics for the period under review. As a result, sources of increase (reduction) of assets are identified taking into account the articles on which they occurred.
2. Analysis of the balance sheet structure
When studying the structure of the balance sheet, its currency and the results of each section are taken as 100%. The share of each section is calculated as part of the total amount of funds (all sources of the enterprise), after which the specific gravity of each element is determined.
Analysis of the structure is carried out in blocks: first, the proportion of permanent and temporary assets in the currency in which the document was kept is determined, then their structure is examined (analysis of the balance sheet asset). Liabilities are investigated in a similar way (analysis of the liability of the balance sheet). The study reflects the dynamics of changes in the structure throughout the period under review. It is also necessary to identify the causes of these changes.
Particular attention is paid to the elements that have the greatest weight, and those whose proportion changes stepwise. Often they are the problem points of the enterprise.
3. Analysis of the balance of net working capital (PSC)
PSC helps determine the value of current assets, which are financed by invested capital. It shows what part (share) of current assets was financed in a certain period from the equity of the enterprise.
The value of the CHOK characterizes how liquid the enterprise is. The PSC indicator is the first indicator of its financial stability. That is why its calculation is especially important. The FER is defined as the difference between current assets and liabilities. It can also be calculated as the difference between the invested funds and fixed assets. Using the latter method, one can analyze the reasons why liquidity changes occur.
When calculating the structure, the level of PSCs in assets is also determined, which reflects the ratio of PSCs to the total assets of the enterprise. The growth of PSCs in this case indicates an increase in the financial independence of the enterprise.
The optimal indicator value is determined taking into account the liquidity of the property and the conditions under which settlements with suppliers are carried out. To determine the sufficiency (insufficiency) of a PSC, it is necessary to compare its actual value with the optimal calculated value. If he exceeds the optimal calculated value, the actual decrease in its level does not mean a weakening of financial stability.
The balance analysis ends with a preliminary conclusion on the presence of certain negative factors in the state of the enterprise (deterioration of funds, problems with sales, availability of debts, etc.). At the same time, the reasons that led to their occurrence are indicated (insufficiently effective work of the marketing department, inconsistent work of services, etc.). On the other hand, positive trends are also determined (repayment of previous debts, capital growth, improvement in the structure of assets, etc.).
The most important positive characteristics that can be identified by the balance sheet analysis are the following: growth of accumulated capital; lack of serviced loans; satisfactory credit history; the absence of salary arrears exceeding the standards, to the budget, etc .; lack of overstocking warehouses.