Igibaev B.G.

RSPE "Academician E.A.Buketov Karaganda State University", Kazakhstan

Importance of financial analysis in today's economy

Peculiarities of market relations are relentless competition, computerization of data processing, technological changes, improvements in legislation, inflation. In these circumstances, the priority tactical task for enterprise is to avoid bankruptcy. Of particular importance, therefore, becomes the formation of an effective control mechanism, based on an analysis of financial and economic conditions, and there is a problem of rational organization of financial activity to further its prosperity, improving financial management, sustainable financial position. To solve these problems need careful application of financial analysis, which enables the best use of available resources of the enterprise.

Analysis of financial condition is a deep and scientifically based study of financial relationships and movements of financial resources in a single production and trade process, and it is a part of a broader concept of financial analysis, which includes more analysis of the formation and distribution of profits, costs of production, realization.

The purpose of this analysis is not only to identify and assess the financial condition of the enterprise, but also to constantly work towards its improvement. Analysis of the financial condition of the company shows to what areas need to conduct this work provides an opportunity to identify the most important aspects and the weakest position in the financial condition of the enterprise.

Financial reporting is the main source of information on financial activity, containing the information needed to develop an investment policy of the enterprise, policy lending, estimates of future cash flows, estimates of resources and liabilities of enterprises and activities of its governing bodies.

But in the course of the analysis information used by analysts should look beyond these purely accounting and reporting, since it reduces the scope of analysis. Therefore, information should include indicators of market resources condition, which used in production; characteristics of major competitors in the industry, where develops or intends to develop in the future entity; status and development of political, economic and tax environment in the whole country and the region; credit policy of the state in the near future, etc.

Based on the developments of world practice can distinguish the following two-tiered system of indicators.

The first group of criteria and indicators, poor values, or the overlapping dynamics of the show possible in the foreseeable future significant financial difficulties, including bankruptcy. These include:

- significant recurring losses in primary production activities;

- exceeding a certain critical level of overdue accounts receivable;

- excessive use of short-term borrowings as a source of funding long-term investments,

- sustainable low values of liquidity ratios,

- the chronic shortage of working capital,

- steadily increasing to dangerous levels leverage ratio funds in the total sources of funds,

- improper reinvestment policy,

- a high proportion of receivables,

- the presence of excess and obsolete products and production stocks,

- deterioration of relations with the institutions of the banking system.

The second group consists of criteria and indicators, adverse values do not give grounds to consider the current financial condition as critical, however, they indicate that under certain conditions, circumstances or non-acceptance of existing measures the situation could rapidly deteriorate. These include:

- loss of key employees of the government;

- forced shutdown, and rhythm disturbances of technological process,

- an excessive reliance on the success and profitability of the new project,

- an over-reliance of the organization from any one particular project, the type of equipment, type of asset,

- participation in litigation organization with an unpredictable outcome,

- loss of key counterparties;

- underestimation of the need to constantly upgrade technology and organization.

The advantages of these system of indicators include a systematic, comprehensive approach to understanding the financial condition of the organization in terms of a possible bankruptcy, the use by any organization of any industry without significant adjustments.

Financial condition of the company, its sustainability and stability depend on the results of its manufacturing, commercial and financial activities. If the production and financial plans successfully executed, it has a positive effect on the financial position of the enterprise. Conversely, as a result of underperformance plan for the production and sale of products is increasing its production cost, reducing the amount of revenues and profits and generally deteriorating financial condition of the company and its solvency. Consequently, stable financial condition is the result of competent, skillful management of the whole complex of factors that determine the business results.

Practical application of financial analysis is possible because the methods of financial analysis, which is understood as a way to approach the study of financial activities. Among the characteristic features of the method include: the use of scorecards, identify and change the relationship between them. In the process of financial analysis applied a number of specific methods and techniques. Methods of financial analysis can be divided into two groups: traditional and math. The first group includes:

- the use of absolute, relative and average values,

- receiving comparisons,

- summaries group,

- the reception chain of substitutions.

By mathematical methods include: correlation analysis, regression analysis, and others, entered the circle of analytical development much later, because of their negligible use in practice, although the use of mathematical methods of financial analysis makes it possible to more accurately assess the financial and economic activities of enterprises and provides an opportunity tracking of any trends in key financial indicators.

Currently mainly used the following methods of analysis of financial statements:

- the horizontal analysis,

- vertical analysis,

- trending,

- the method of financial ratios,

- comparative analysis,

- factor analiz.

Also need and formalized methods of peer reviews, scenarios, psychological, morphological, etc. they are based on the description of analytical procedures at the logical level.

Thus, financial analysis plays a huge role in making management decisions, deciding at the same time the main purpose of assessing the current state of the enterprise and monitoring the dynamics of structural changes in financial condition of the company, and it also contributes to a more correct and precise formulation of financial policy of the enterprise.

list of reference links:

1. Savitskaya G.V. Business Analysis. - Moscow: INFRA-M, 2009. – 288

2. Dyusembayev K.H. Analysis of financial reporting. - Almaty: Economics, 2009. - 366.