Usanov A.Yu.,
Department of Economics and Finance Company
Moscow Financial-Industrial University
"Synergy"
The financial condition of the company and the
factors affecting on it
How financially stable or
that the company can say knowing how much it is dependent on borrowed funds, as
it is free to maneuver their own means without risking unnecessary accrual of
interest and penalties or incomplete payment of accounts payable.
This information is
especially important for users outside the enterprise, i.e. its suppliers and
customers as important to them the possibility of uninterrupted performance of
obligations of the organization with which they work (use of services).
The financial condition of
the enterprise is the ultimate indicator of the overall economic entity. It
reflects the financial resources of the enterprise in which it is able to
ensure the smooth process of production and sales of products, works and
services by leveraging the existing own resource including the possibility of
expansion and upgrade production.
In the process of
production and business enterprises formed the level of the financial condition
of the company.
In modern conditions many
businesses inherent reactive form of financial management. The result of
financial decision-making as a reaction to the current issue becomes not only
increase the probability of reduction of financial stability but also the legal
existence of the company. Therefore the actual problem of financial management
becomes the formation of an adequate market conditions based on the financial
analysis, the concept of functioning and development of the company within the
established financial policy.
Thus, deterioration in the
financial condition of the company necessitated the development of measures to
improve it.
Today, sustainable
development of enterprises is the result of a set of decisions that direct the
actions of the company and which have the greatest impact on the company
achieving its strategic and tactical goals[1].
Figure 1 - Factors
affecting the financial condition of the company[2]
Development of a program to
improve the financial condition of the company involves not only the presence
of a specific tool allowing qualitatively and objectively carry out a financial
analysis of the enterprise, but also enabling to produce the results of a
performance assessment practical recommendations for the further sustainable
development of the company in the short and long term.
Financial activities of any
organization are a set of interrelated processes, which depends on many
different factors.
Factors affecting the financial
condition of the company are divided into internal and external (figure 1).
Internal factors are
directly dependent on the existing system of business management, external -
are almost independent of the company so it can not have a significant impact
on them.
Internal factors are
dependent and therefore the company through the influence on them can adjust
its financial solvency.
The result of the impact of
internal factors is the condition of the assets and their turnover, the
composition and the ratio of financial resources, the availability of working
capital, the level of income and profitability.
The most important
factor determining the possibility of increasing the company's own funds and
consequently the possibility of more of their reinvestment in production are:
·
the ratio of profits and proceeds from sales
(return on sales);
·
equity turnover rate - the greater the number of
revolutions commit their own funds the lower the value of their need to
maintain the process of production and sales and consequently less of their
capacity can be achieved profitability of the enterprise;
·
the optimum ratio used debt to equity (leverage).
Too much borrowing for the formation of assets of the enterprise reduces its
financial viability;
·
increasing the share of profit allocated for the
development of production - the large proportion of the profit goes to the
development of the enterprise, the higher interest of the owners of the
enterprise in his fate.
The contradiction
between the internal and external factors lies in the fact that the company
needs to preserve liquidity and solvency of both external factors for the
suppliers and creditors, as well as return - to cover domestic needs (an
increase in equity, dividends)[3].
The role of financial
analysis of the enterprise is not only important in determining the dynamics of
the financial performance, but also in the ability to evaluate the results of their
own work of the enterprise and the ability to choose a partner based on the
critical study of business activity and reliability of enterprise
competitiveness, its potential in business cooperation, return on capital,
minimize financial risks[4].
The value of the financial
analysis of the company reflected in the fact that the results of this analysis
are a kind of indicator of the state of affairs in the company and allow
management on this basis to take appropriate management decisions to improve
the financial condition and increase the efficiency of its business.
References
1.
Селезнева, Н. Н. Финансовый анализ. Управление
финансами: Учеб. пособие для вузов. – 2–е изд., перераб.
и доп. / Н. Н. Селезнева, А. Ф. Ионова. – М.:
ЮНИТИ–ДАНА, 2009. – с. 58
2.
Тихомиров, Е. Ф. Финансовый менеджмент: Управление
финансами предприятий: учебник для студ. вузов / Е. Ф. Тихомиров. – М.:
Издательский центр «Академия», 2010. – с. 98
3.
Усанов А.Ю. Финансовое состояние предприятия и этапы его проведение. Актуальные проблемы
экономики сборник статей международной научно-практической конференции.
Уфа,2015.
4.
Экономический анализ. Ионова
Ю.Г., Косорукова И.В., Кешокова А.А., Панина Е.В.,
Усанов А.Ю. Москва, 2012.