What coefficients characterize the capital structure of the enterprise. The most common financial indicators. Asset coverage ratio of own working capital
Bulletin of Chelyabinsk state university. 2009. No. 2 (140). Economy. Issue. 18. S. 144-149.
S. N. Ushaeva
performance indicators of the firm's capital structure
The range of issues related to the optimization of the capital structure of the company, which should provide its minimum price, the optimal level financial leverage and maximizing the value of the firm. As indicators of the effectiveness of the capital structure, the coefficients for evaluating profitability and financial stability are considered. The mechanism of the impact of financial leverage on the level of profitability of equity capital and the level financial risk.
Key words: capital, capital structure, performance indicators of the capital structure, financial leverage, company value, equity and borrowed capital, profitability, financial stability.
On the present stage development of the economic system, economic entities face a number of tasks that require optimal solutions. One of these tasks is to determine an effective capital structure that meets the requirements of both the economic situation as a whole (the dynamism and uncertainty of external influences due to the influence of globalization and the expansion of the range of possible, associated with an increase in risk, options for the application of available resources), and the company's management on a certain stage of its development competitive environment assumes the effective functioning of only economic entities that are able not only to attract resources, but also to determine their ratio, which would be optimal in the given conditions). Such an optimal
the capital structure implies ensuring the financial stability of the company, its current liquidity and solvency, as well as the required return on invested capital.
Ensuring current liquidity and solvency is associated with optimization working capital, which guarantee the continuity of the processes of production and circulation of goods (liquidity). The lower the net working capital, the higher the efficiency (profitability, turnover), but the higher the risk of insolvency.
Ensuring an efficient capital structure depends on the ratio of own and borrowed money, which develops when choosing funding sources (see figure) . Managers' decisions to use loans are related to the action of financial leverage.
Sources of financing the company's activities and directions for their use
(financial leverage); increasing the share of borrowed funds, you can increase the return on equity, but at the same time increase financial risk, i.e., the threat of becoming dependent on creditors in the event of a lack of money to pay off loans. This is the risk of loss of financial stability. The condition under which it is expedient to attract borrowed funds is that the prevailing profitability of the company's assets exceeds the interest rate for the loan.
In this case, the risk is justified by the increase in return on invested equity capital. In this regard, the task of management is to optimize the capital structure through the assessment and comparison of the cost various sources financing taking into account profitability.
The ability of the enterprise to generate the necessary profit in the course of its economic activity determines the overall efficiency of the use of assets and invested capital, characterizes the coefficients for assessing profitability (profitability). The following key indicators are used to carry out such an assessment.
1. The profitability ratio of all assets used, or the economic profitability ratio (P). It characterizes the level of net profit generated by all the assets of the enterprise that are in its use on the balance sheet. The calculation of this indicator is carried out according to the formula
where NPO is the total amount of net profit of the enterprise received from all types of economic activity in the period under review; Ap - the average cost of all used assets of the enterprise in the period under review (calculated as an average chronological).
2. The return on equity ratio, or the financial profitability ratio (Rsk), characterizes the level of profitability of equity capital invested in the enterprise. The following formula is used to calculate this indicator:
Rsk SKsr "1)
where NPO is the total amount of the net profit of the enterprise received from all types of economic
activities during the period under review; SKr - the average amount of equity capital of the enterprise in the period under review (calculated as the average chronological) [Ibid.].
3. The profitability ratio of product sales, or the coefficient of commercial profitability (Рр), characterizes the profitability of the operating (production and commercial) activities of the enterprise. This indicator is calculated according to the following formula:
where NRR is the amount of net profit received from operating activities enterprises in the period under review; OR is the total volume of product sales in the period under review [Ibid. S. 59].
4. The profitability ratio of current costs (Rt) characterizes the level of profit received per unit of costs for the implementation of the operating (production and commercial) activities of the enterprise. To calculate this indicator, the formula is used
where Nprp - the amount of net profit received from the operating (production and commercial) activities of the enterprise in the period under review; And - the sum of the costs of production (circulation) of the enterprise in the period under review [Ibid.].
5. The return on investment ratio (Ri) characterizes the profitability investment activity enterprises. The calculation of this indicator is carried out according to the following formula:
where NPI - the amount of net profit received from the investment activity of the enterprise in the period under review; IR is the sum of investment resources of an enterprise invested in objects of real and financial investment [Ibid.].
Management of current liquidity / payment capacity in general includes making decisions on the liquidity of the company's assets and the priority of debt payments; share these concepts
can be as follows: current liquidity characterizes the potential ability to pay off one's short-term obligations, solvency - the ability to actually realize this potential. A sign of solvency, as you know, is the presence of money in the company's current account and the absence of overdue accounts payable, and liquidity is assessed by comparing the positions of current assets and current liabilities.
On the scheme of financial equilibrium, current liquidity lies on the opposite side of profitability "in the balance" - this illustrates the inevitability of a choice between profitability and risk. The smaller the share of liquid assets in the total amount of working capital, the greater the profit, but the higher the risk. Achievement high profitability due to the direction of resources in any one, the most profitable, area of activity can lead to a loss of liquidity, namely, to interrupt the processes of production and circulation of goods at other stages and lengthen the financial cycle. At the same time, excessive tying of financial resources (for example, in stocks) also lengthens financial cycle and means a relative outflow of funds from a more profitable current activities. It is clear that “thrifty”, cautious management is inferior in terms of profitability to management in those firms where managers mobile and flexibly coordinate the financial cycle and put the principle “time is money” at the forefront.
Structural liquidity and financial soundness serve as a fundamental pillar of governance. AT broad sense financial stability is the company's ability to maintain the target structure of funding sources. The owners of the company (shareholders, depositors, shareholders, etc.) prefer a reasonable increase in the share of borrowed funds. Lenders prefer firms with a high share of equity, with greater financial independence. Managers are called upon to find a reasonable balance between the interests of owners and creditors, observing the developed financing rules, and the instrument of such management decisions serves as an analysis of the structure of the balance sheet.
As you know, in the liabilities of the analytical balance sheet, positions are distinguished: equity,
borrowed capital - long-term and short-term. The requirement for the vertical structure of capital (a condition of financial stability) is that own sources of financing exceed borrowed ones: SC > SC.
Structural liquidity also depends on investment decisions within the framework of asset management: according to the hedged approach to financing, each category of assets must correspond to liabilities of one kind or another. For example, in the process of property formation, one should remember the so-called “golden rule” of financing, which describes the requirement for a horizontal balance sheet structure: the amount of equity must cover the value of non-current assets: SC > VNA. In addition to direct comparison of balance sheet positions, analytical coefficients are used to analyze the implementation of financing rules. These include: autonomy ratio, financing ratio, debt ratio, long-term financial independence ratio, equity capital agility ratio.
To identify the level of financial risk associated with the structure of the sources of formation of the capital of the enterprise, and, accordingly, the degree of its financial stability in the process of future development, the coefficients for assessing the financial stability of the enterprise allow.
1. The coefficient of autonomy (KA) shows to what extent the volume of assets used by the enterprise is formed from its own capital and to what extent it is independent of external sources of financing. The calculation of this indicator is carried out according to the following formulas:
where SC is the amount of equity capital of the enterprise on a certain date; NA - the value of the net assets of the enterprise on a certain date; K - the total amount of capital of the enterprise on a certain date; A - the total value of all assets of the enterprise on a certain date.
2. Funding ratio (CF), which characterizes the amount of borrowed funds per unit of equity capital, i.e. the degree of dependence of the enterprise on external sources of financing.
where ZS - the amount of borrowed capital (average or for a certain date); SC - the amount of equity capital of the enterprise (average or on a certain date) [Ibid.].
3. Debt ratio (KZ). It shows the share of borrowed capital in the total amount used. The calculation is carried out according to the following formula:
where ZK is the amount of borrowed capital attracted by the enterprise (average or as of a certain date); K - the total amount of capital of the enterprise (average or on a certain date) [Ibid. S. 53].
4. Ratio of long-term financial independence (KDN). It shows the extent to which the total volume of assets used is formed at the expense of the company's own and long-term borrowed capital, i.e. characterizes the degree of its independence from short-term borrowed sources of financing. This indicator is calculated by the formula
where SC is the amount of the company's own capital (average or as of a certain date); ZK - the amount of borrowed capital attracted by the enterprise on a long-term basis (for a period of more than one year); A - the total value of all assets of the enterprise (average or for a certain date) [Ibid.].
5. The coefficient of maneuverability of equity capital (KMsk) shows what is the share of equity capital invested in current assets, in the total amount of equity (i.e., what part of equity is in its high-turnover and highly liquid form). The calculation of this indicator is carried out according to the following formula:
where SOA - the amount of own current assets (or own working capital); SC is the total amount of equity capital of the enterprise [Ibid.].
These ratios are interrelated: for example, if the coverage ratio of non-current assets with equity capital is greater than one, then the company has no problems with liquidity and financial stability - short-term debt is less than current assets, and the current liquidity ratio is greater than one.
Not only the current financial condition, but also the investment attractiveness of the company, and the prospects for its development. The optimal capital structure ensures financial stability, maximizes the level of financial profitability, minimizes the level of financial risks, as well as its cost. Violation of the financial balance causes financial difficulties, may lead to insolvency and bankruptcy. To monitor the financial balance, managers should regularly analyze reporting data using the proposed indicators, which helps to answer the questions: what is the current state and whether there are certain “distortions” caused by certain incorrect or risky decisions, and to correct this process in a timely manner.
So, one of the main tasks of capital formation - optimization of its structure, taking into account a given level of its profitability and risk - is solved by different methods. One of the main mechanisms for the implementation of this task is financial leverage.
Financial leverage characterizes the use of borrowed funds by an enterprise, which affects the change in the return on equity ratio. In other words, financial leverage is an objective factor that arises with the advent of borrowed funds in the amount of the enterprise's capital and allows it to receive additional profit on equity.
An indicator that reflects the level of additionally generated return on equity with a different share of the use of borrowed funds is called the effect of financial leverage. It is calculated using the following formula:
EFL _ (1 - SNp) X (KVRa - PC) X SK, (12)
where EFL is the effect of financial leverage, which consists in the increase in the return on equity ratio,%; C - becoming-
ka income tax, expressed as a decimal fraction; КВРа - coefficient of gross profitability of assets (the ratio of gross profit to the average value of assets),%; PC - the average amount of interest on a loan paid by the enterprise for the use of borrowed capital,%; ZK - the average amount of borrowed capital used by the enterprise; SC - the average amount of equity capital of the enterprise.
There are three main components in the formula for calculating the effect of financial leverage:
1) tax corrector of financial leverage (1 - SNP), which shows the extent to which the effect of financial leverage is manifested in connection with different levels of income taxation;
2) financial leverage differential (KVRa - PC), which characterizes the difference between the gross return on assets and the average interest rate for a loan;
3) financial leverage ratio ZK L
I, which characterizes the amount of borrowed
capital used by the enterprise, per unit of equity.
The selection of these components allows you to purposefully manage the effect of financial leverage in the process financial activities enterprises.
The tax corrector of financial leverage practically does not depend on the activity of the enterprise, since the income tax rate is set by law. At the same time, in the process of managing financial leverage, a differentiated tax corrector can be used in the following cases: a) if, according to various types the activities of the enterprise established differentiated rates of taxation of profits; b) if certain types activities, the company uses tax benefits on profits; c) if individual subsidiaries of the enterprise operate in the free economic zones of their country, where there is a preferential regime for profit taxation; d) if individual subsidiaries
enterprises operate in states with a lower level of profit taxation.
In these cases, by influencing the sectoral or regional structure of production (and, accordingly, the composition of profit in terms of its taxation level), it is possible, by reducing the average profit tax rate, to increase the influence of the financial leverage tax corrector on its effect (ceteris paribus).
The main condition for achieving a positive effect of financial leverage is its differential. This effect manifests itself only when the level of gross profit generated by the assets of the enterprise exceeds the average interest rate for the loan used (a value that includes not only its direct rate, but also other unit costs for attracting, insuring and servicing it), i.e. when the financial leverage differential is positive. The greater the positive value of the financial leverage differential, the greater, other things being equal, its effect will be.
Due to the high dynamism of this indicator, it requires constant monitoring in the process of managing the effect of financial leverage. This dynamism is due to a number of factors.
First of all, in a period of deteriorating market conditions financial market(primarily, reducing the supply of free capital), the cost of borrowed funds can rise sharply, exceeding the level of gross profit generated by the assets of the enterprise.
In addition, a decrease in the financial stability of an enterprise in the process of increasing the share of borrowed capital used leads to an increase in the risk of bankruptcy, which forces creditors to increase the interest rate for a loan, taking into account the inclusion of a premium for additional financial risk. At a certain level of this risk (and, accordingly, the overall interest rate for a loan), the financial leverage differential can be reduced to zero (at which the use of borrowed capital will not increase the return on equity) and even acquire a negative value (at which the return on equity will decrease, so how part of the net profit generated by it will go to maintenance
borrowed capital at high interest rates). Finally, in a period of deteriorating market conditions commodity market the volume of sales of products is reduced, and, accordingly, the size of the gross profit of the enterprise from operating activities. Under these conditions, the value of the financial leverage differential may become negative even at unchanged interest rates for a loan due to a decrease in the gross return on assets.
The formation of a negative value of the financial leverage differential for any of the above reasons always leads to a decrease in the return on equity ratio. In this case, the use of borrowed capital by the enterprise has a negative effect.
The financial leverage ratio is the leverage that multiplies (changes in proportion to the multiplier or coefficient) the positive or negative effect obtained due to the corresponding value of its differential. With a positive value of the differential, any increase in the financial leverage ratio will cause an even greater increase in the return on equity ratio, and with a negative value of the differential, an increase in the financial leverage ratio will lead to an even greater rate of decline in the return on equity ratio. In other words, an increase in the financial leverage ratio multiplies an even greater increase in its effect (positive or negative, depending on the positive or negative value of the financial leverage differential). Similarly, a decrease in the financial leverage ratio will backfire, further reducing its positive or negative effect.
Therefore, with a constant differential, the financial leverage ratio can be the main generator of both the increase in the amount and level of return on equity, and the financial risk of losing this profit. Similarly, with a constant financial leverage ratio
the positive or negative dynamics of its differential can generate both an increase in the amount and level of return on equity, and the financial risk of its loss.
Knowledge of the mechanism of the impact of financial leverage on the level of return on equity and the level of financial risk allows you to purposefully manage both the cost and the capital structure of the enterprise.
The mechanism of financial leverage is used most effectively in the process of optimizing the capital structure of an enterprise. The optimal capital structure is such a ratio of the use of own and borrowed funds, which ensures the most effective proportionality between the financial profitability ratio and the financial stability ratio of the enterprise, i.e., its market value is maximized.
Bibliography
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Capital structure indicators are intended to show the degree possible risk bankruptcy of the enterprise in connection with the use of borrowed financial resources. Indeed, if the enterprise does not use borrowed funds at all, then the risk of bankruptcy of the enterprise is zero. With an increase in the share of borrowed capital, the risk of bankruptcy increases, so the volume of obligations of the enterprise increases. This group financial ratios are primarily of interest to existing and potential creditors of the company. The management of the company and the owners evaluate the enterprise as a continuously operating economic object. Lenders take a two-pronged approach. Lenders are interested in financing the activities of a successfully operating enterprise, the development of which will meet expectations. Along with this, they must take into account the possibility of negative developments and the possible consequences of non-payment of debt and liquidation of the company. From successful work creditor companies do not receive any benefits: just timely payment of interest and repayment of the capital amount of the debt. Therefore, they should carefully consider the risks involved in repaying the debt in full, especially if the loan is provided for long term. Part of this analysis is to determine how strong a claim for debt recovery would be if the company were to experience significant hardship.
As a rule, the debt of ordinary creditors is repaid after the payment of taxes, repayment of debt on wages and satisfy creditor claims for secured loans that were made against specific assets, such as building or equipment. An assessment of the liquidity of a company makes it possible to judge how protected an ordinary creditor is. The group of financial ratios considered below helps to determine the company's dependence on borrowed capital (how the company uses financial leverage) and compare the positions of creditors and owners. A separate group is formed financial indicators characterizing the ability of the company to service debt at the expense of funds received by the company from its continuous operations.
In accordance with the previously discussed concept of financial leverage, successful use borrowed funds contributes to an increase in the profits of the owners of the enterprise, since they own the profit received on these funds in excess of the interest paid, which leads to an increase in the equity capital of the company.
From the point of view of the lender, the debt in the form of interest payments and repayment of the principal (capital) amount of the debt must be paid to him even if the profit received is less than the amount of payments due to him. The owners of the company, through its management, must satisfy the claims of creditors, which can have a very negative impact on the company's equity capital.
The positive and negative impact of financial leverage increases in proportion to the amount of borrowed capital used by the enterprise. The risk of the creditor increases together with the growth of the risk of the owners.
The debt-to-asset ratio is the primary and broadest estimate that can be made when seeking to assess a creditor's risk. This indicator is calculated by the formula:
This formula is calculated for a point in time, not for a period. This ratio determines the share of "other people's money" in the total amount of claims against the company's assets. The higher this ratio, the greater the likely risk for the lender.
The calculation results for the SVP company for three points in time are given below:
These data indicate that about 50 percent of the sources of financial resources received by the enterprise from borrowed sources. The question arises: is it good or bad? There is no single answer to this question. It all depends on the preferences of the owners of the company and its management, specifically on their attitude to risk. Managers seeking by all means to avoid the risk of bankruptcy will seek to reduce this indicator and attract additional financial resources by issuing new shares. Managers and owners of the company, having a commitment to risk, will, on the contrary, increase the share of liabilities, striving to increase profits due to positive financial leverage. But here there is a contradiction with potential sources of borrowed funds. Indeed, an increase in the share of borrowed resources in the company's capital structure leads to an increase in risk not only for the company itself, but also for its potential creditors. And if the company does not have the opportunity to demonstrate its respectable "credit history", then it will not be able to count on obtaining additional credit. A situation arises in which the managers of the enterprise would like to receive an additional loan, thereby increasing the indicator under consideration, but who will give them. At the same time, there are very respectable companies that have demonstrated high creditworthiness, and lenders are willing to lend money to these companies, despite the high ratio of debt to total assets. An example of such a company is General Motors Inc., which has a value of this indicator at the level of 90%.
SVP is not a “credit sound” company due to its short lifespan, and therefore a debt-to-total asset ratio of 50 percent can be considered critical for this enterprise in the sense that it is unlikely to be able to count on obtaining a new loan. A slight decrease in this indicator in the XY year was the result of a significant decrease in accounts payable.
However, it cannot be unequivocally stated that this indicator is an absolutely correct assessment of how much a company can repay its debts. The fact is that the book value of assets does not always correspond to the real economic value of these assets or even their liquidation value. In addition, this ratio does not give us any idea of how the amount of profit received by the company may change, which may affect the payment of interest and repayment of the capital amount of the debt.
The ratio of debt to capitalization is an indicator that is formed using the ratio of long-term debt to the amount of capitalization. This ratio gives a more accurate picture of a company's risk when using borrowed funds. By capitalization we mean the total amount of the company's liabilities, excluding its short-term liabilities. This indicator is calculated according to the formula:
By definition, capitalization includes the amount of long-term claims against the company's assets, both from lenders and owners, but does not include current (short-term) liabilities. The total amount corresponds to what we call net assets, if no adjustments have been made, such as an exclusion from the calculation of deferred taxes. If deferred tax is not excluded, then the calculation of this indicator for the company SVP leads to the following results:
If we exclude the amount of deferred taxes, then the values of the coefficient will be respectively equal to: 23.73%, 19.34% and 16.63%. There is a decrease in the ratio of debt to capitalization due to the repayment of a part of a long-term bank loan.
Much attention is paid to this ratio, since many loan agreements for this company, whether it is a closed private company or a public joint-stock company, contain certain conditions governing the maximum share of the company's borrowed capital, expressed as the ratio of long-term debt and capitalization.
A similar characteristic, but expressed as a different ratio, is an indicator of the ratio of borrowed and equity capital. This indicator is directly related to the previous one and can be calculated directly with its help. Indeed, let D be the amount of long-term debt, E the company's equity, and y denote the ratio of debt to capitalization, i.e. y = D / (D+E). If we now use z = D / E to denote the ratio of debt to equity, then it is not difficult to obtain that z = y / (1 - y). Calculate the ratio of debt to equity
This indicator easily interprets the state of the capital structure. A potential creditor clearly sees that, for example, as of 01.01.XZ, the company's long-term debt is about 21 percent of its own capital. Provided that the enterprise has sufficiently high liquidity (ie the ability to repay its short-term debts), additional credit may be granted to it. Note that having only the value of the first of the indicators considered in this group, we would not be able to draw such a conclusion, since there long-term debts were not separated from short-term ones.
The debt-to-equity ratio estimates the share of borrowed financial resources used and is calculated as the ratio of the total amount of debt, including current liabilities and all types of long-term debt, and the total equity of the company. This ratio shows in another way the relative shares of claims of lenders and owners and is also used to characterize the dependence of the company on borrowed capital. For SVP, this indicator has the following meanings:
The existence of different options for structure indicators highlights how carefully the rules are developed. financial analysis and the conditions governing the granting of a particular loan. But ratios provide only a first general idea of the risk-to-reward balance of leverage. The next step is indicators characterizing debt servicing.
The second group of indicators that we analyze in the framework of this methodology are indicators of the capital structure (financial stability ratios), which reflect the ratio of own and borrowed funds in the sources of financing of the organization, i.e. characterize the degree of its financial independence from creditors. To build a methodology for recognizing the latent stage of the crisis, the following indicators were identified (Table 4.4):
1) Share of own capital in working capital, or equity ratio(K 9), calculated as the ratio of own funds in circulation to the entire value of working capital. The indicator characterizes the ratio of own and borrowed working capital and determines the degree of security of the economic activity of the organization with its own working capital necessary for its financial stability.
2) Autonomy coefficient(K 10), or financial independence, calculated as the quotient of equity divided by the amount of the organization's assets, and determining the share of the organization's assets that are covered by equity (provided by own sources).
The remaining share of the assets is covered by borrowed funds. The indicator characterizes the ratio of own and borrowed capital of the organization.
3) The ratio of total liabilities to total assets(K 11) - an indicator reflecting the share of assets that is financed by long-term and short-term loans.
Table 4.3
Solvency indicators
|
№ p/n |
Index |
Conv. designation |
Index calculation formula |
Calculation formula coefficient |
Value interval |
Number value signal |
|
Index of growth (decrease) of the ratio A 2 / P 2 |
K 2 \u003d (p. 230 + p. 240) / p. 690 of form No. 1 | |||||
|
0.8≤I 1<0,9 | ||||||
|
0.7≤I 1<0,8 | ||||||
|
0.5≤I 1<0,7 | ||||||
|
Index of growth (decrease) in the degree of solvency of the general |
K 2 \u003d (DO + KO) / V cf m K 2 \u003d (p. 690 + p. 590 of form No. 1) / V cf m | |||||
|
1,1 | ||||||
|
1,2 | ||||||
|
Growth (decrease) index of debt ratio on bank loans and loans |
K 3 \u003d (DO + Z) / V cf m K 3 \u003d (p. 590 + p. 610 of form No. 1) / V cf m | |||||
|
1,1 | ||||||
|
1,2 | ||||||
|
Index of growth (decrease) in the ratio of debt to other organizations |
K 4 \u003d KZ / V cf m K 4 \u003d (p. 621 + p. 622 + + p. 623 + p. 627 + + p. 628 of form No. 1) / V cf m | |||||
|
1,1 | ||||||
|
1,2 | ||||||
|
Growth (decrease) index of debt ratio to the fiscal system |
K 5 \u003d ZB / V cf m K 5 \u003d (p. 625 + p. 626 of form No. 1) / V cf m | |||||
|
1,1 | ||||||
|
1,2 | ||||||
|
Growth (decrease) index of domestic debt ratio |
K 6 \u003d ZV / V cf m K 6 \u003d (p. 624 + p. 630 + + p. 640 + p. 650 + + p. 660 of form No. 1) / V cf m | |||||
|
1,1 | ||||||
|
1,2 | ||||||
|
Index of growth (decrease) of the degree of solvency on current liabilities |
K 7 \u003d KO / V cf m K 7 \u003d p. 690 of form No. 1 / V cf m | |||||
|
1,1 | ||||||
|
1,2 | ||||||
|
Growth (decrease) index of coverage of current liabilities by current assets |
K 8 \u003d OA / KO K 8 =p. 290/str. 690 form No. 1 | |||||
|
0.8≤I 8<0,9 | ||||||
|
0.7≤I 8<0,8 | ||||||
|
0.5≤I 8<0,7 | ||||||
Table 4.4
Capital structure indicators
|
№ p/n |
Index |
Conv. designation |
Calculation formula index |
Calculation formula coefficient |
Value interval |
Number value signal |
|
Index of growth (decrease) of the equity ratio |
K 9 \u003d SK-VA / OA K 9 \u003d (p. 490-p. 190) / p. 290 of form No. 1) | |||||
|
0.8≤I 9<0,9 | ||||||
|
0.7≤I 9<0,8 | ||||||
|
0.5≤I 9<0,7 | ||||||
|
Index of growth (decrease) of the coefficient of autonomy |
K 10 \u003d SK / (VA + OA) K 10 \u003d p. 490 / (p. 190 + p. 290 of form No. 1) | |||||
|
0.9≤I 10<1 | ||||||
|
0.8≤I 10<0,9 | ||||||
|
0.7≤I 10<0,8 | ||||||
|
0.5≤I 10<0,7 | ||||||
|
Growth (decrease) index of the ratio of total liabilities to total assets |
K 11 \u003d (DO + KO) / (VA + OA) K 11 \u003d (p. 590 + p. 690) / (p. 190 + p. 290 of form No. 1) | |||||
|
1 | ||||||
|
1,1 | ||||||
|
1,2 | ||||||
|
1,5 | ||||||
|
Growth (decrease) index of the ratio of long-term liabilities to assets |
K 12 \u003d DO / (VA + OA) K 12 \u003d p. 590 / (p. 190 + p. 290 of form No. 1) | |||||
|
1 | ||||||
|
1,1 | ||||||
|
1,2 | ||||||
|
1,5 | ||||||
|
Growth (decrease) index of the ratio of total liabilities to equity |
K 13 \u003d (DO + KO) / SK K 13 \u003d (p. 590 + p. 690) / p. 490 of form No. 1 | |||||
|
1 | ||||||
|
1,1 | ||||||
|
1,2 | ||||||
|
1,5 | ||||||
|
Growth (decrease) index of the ratio of long-term liabilities to non-current assets |
K 14 \u003d DO / VA K 14 \u003d p. 590 / p. 190 of form No. 1 | |||||
|
1 | ||||||
|
1,1 | ||||||
|
1,2 | ||||||
|
1,5 | ||||||
Designations for table 4.4: SC - capital and reserves of the organization; VA - non-current assets.
4) The ratio of long-term liabilities to assets(K 12) shows the share of assets financed by long-term loans.
5) The ratio of total liabilities to equity(K 13) - the ratio of credit and own sources of financing.
6) The ratio of long-term liabilities to non-current assets(K 14) shows what proportion of fixed assets is financed by long-term loans.
3. The third group - indicators of the effectiveness of the use of working capital, profitability and financial results, evaluating the velocity of circulation of funds invested in current assets. In this methodology, they are supplemented by coefficients of working capital in production and in calculations, the values of which characterize the structure of current assets (Table 4.5):
1) Working capital ratio (K 15 ) is calculated by dividing the current assets of the organization by the average monthly revenue and characterizes the volume of current assets, expressed in the average monthly income of the organization, as well as their turnover. This indicator estimates the speed of circulation of funds invested in current assets.
2) Working capital ratio in production (TO 16 ) is calculated as the ratio of the cost of working capital in production to the average monthly revenue. Working capital in production is defined as funds in stock, including VAT, minus the cost of goods shipped.
The coefficient characterizes the turnover of the organization's inventory. Its values are determined by the industry specifics of production, characterize the effectiveness of the production and marketing activities of the organization.
3) Working capital ratio in calculations (K 17 ) determines the rate of circulation of current assets of the organization that are not involved in direct production. It characterizes, first of all, the average terms of settlements for shipped, but not yet paid for products, that is, it determines the average terms for which the working capital that is in the calculations is withdrawn from the production process. Also, it can give an idea of how liquid the products manufactured by the organization are, and how effectively its relationships with consumers are organized, characterizes the likelihood of doubtful and bad receivables and their write-off as a result of shortfalls in payments, that is, the degree of commercial risk.
4) Return on working capital (K 18 ) reflects the efficiency of working capital use. The index determines how much profit falls on one ruble invested in current assets.
5) Return on sales (K 19 ) reflects the ratio of profit from the sale of products and income received in the reporting period (Table 4.5).
Table 4.5
Indicators of the efficiency of the use of working capital, profitability and financial results
|
№ p/n |
Index |
Conv. designation |
Calculation formula index |
Formula calculation coefficient |
Value interval |
Number signal value |
|
Growth (decrease) index of working capital ratio |
K 15 \u003d OA / V cf m K 15 \u003d p. 290 of form No. 1 / B cf m | |||||
|
0.9≤I 15<1 | ||||||
|
0.8≤I 15<0,9 | ||||||
|
0.7≤I 15<0,8 | ||||||
|
0.5≤I 15<0,7 | ||||||
|
Growth (decrease) index of working capital ratio in production |
K 16 \u003d OSB / V cf m K 16 \u003d (p. 210 + p. 220-p. 215 of form No. 1) / V cf m | |||||
|
0.9≤I 16<1 | ||||||
|
0.8≤I 16<0,9 | ||||||
|
0.7≤I 16<0,8 | ||||||
|
0.5≤I 16<0,7 | ||||||
|
Growth (decrease) index of working capital ratio in calculations |
K 17 \u003d OSR / V cf m K 17 \u003d (p. 290-p. 210 + p. 215 of form No. 1) / V cf m | |||||
|
0.9≤I 17<1 | ||||||
|
0.8≤I 17<0,9 | ||||||
|
0.7≤I 17<0,8 | ||||||
|
0.5≤I 17<0,7 | ||||||
|
Index of growth (decrease) of profitability of working capital |
K 18 \u003d P / OA K 18 \u003d p. 160 of form No. 2 / p. 290 of form No. 1 | |||||
|
0.9≤I 18<1 | ||||||
|
0.8≤I 18<0,9 | ||||||
|
0.7≤I 18<0,8 | ||||||
|
0.5≤I 18<0,7 | ||||||
|
Index of growth (decrease) of profitability of sales |
K 19 \u003d P pr / V K 19 = p.050 / p.010 form No. 2 | |||||
|
0.9≤I 19<1 | ||||||
|
0.8≤I 19<0,9 | ||||||
|
0.7≤I 19<0,8 | ||||||
|
0.5≤I 19<0,7 | ||||||
|
Growth (decrease) index of average monthly output per employee |
K 20 \u003d V cf m / SHR K 20 \u003d V cf m / p. 760 of form No. 5 | |||||
|
0.9≤I 20<1 | ||||||
|
0.8≤I 20<0,9 | ||||||
|
0.7≤I 20<0,8 | ||||||
|
0.5≤I 20<0,7 | ||||||
Average monthly output per worker ( K 20 ) determines the efficiency of using the organization's labor resources and the level of labor productivity, and also characterizes the financial resources for conducting business activities and fulfilling obligations, reduced to one employee of the analyzed organization (Table 4.5).
Legend for table 4.5:
OSB - working capital in production;
OSR - working capital in settlements;
P - profit after payment of all taxes and deductions;
P pr - profit from sales; B - the organization's revenue;
SHR - the average number of employees of the organization.
4. The last group of indicators included in the methodology is performance indicators for the use of non-working capital and investment activity, characterizing the efficiency of the use of fixed assets of the organization and determining how the total amount of available fixed assets (machinery, equipment, buildings, structures, vehicles) corresponds to the scale of the organization's business.
We used the following indicators (Table 4.6):
1) Efficiency of non-working capital, or capital productivity (TO 21 ), which is determined by the ratio of average monthly revenue to the cost of non-working capital and characterizes the efficiency of the use of fixed assets of the organization.
Less than the industry average, the value of this indicator characterizes the insufficient workload of equipment in the event that the organization in the period under review has not acquired new expensive fixed assets.
While a very high value of this indicator may indicate both a full load of equipment and the absence of reserves, and a significant degree of physical and moral deterioration of outdated production equipment.
2) Investment activity ratio (K 22 ), characterizing investment activity and determining the amount of funds allocated by the organization for the modification and improvement of property, as well as for financial investments in other organizations.
Strong deviations of this indicator in any direction may indicate an incorrect strategy for the development of the organization or insufficient control of management over the activities of management.
3) Profitability ratio of non-current assets (K 23 ), demonstrating the ability of the organization to provide a sufficient amount of profit in relation to fixed assets.
4) Return on investment ratio (K 24 ), showing how many monetary units it took the organization to receive one monetary unit of profit. This indicator is one of the most important indicators of competitiveness.
Legend for table 4.6:
NA - intangible assets;
OS - fixed assets.
Table 4.6
Indicators of the effectiveness of the use of non-working capital and investment activity
|
№ p/n |
Index |
Conv. designation |
Index calculation formula |
The formula for calculating the coefficient |
Value interval |
Number value signal |
|
Index of growth (decrease) of capital productivity |
K 21 \u003d V cf m / VA K 21 \u003d V cf m / p. 190 of form No. 1 | |||||
|
0.9≤I 21<1 | ||||||
|
0.8≤I 21<0,9 | ||||||
|
0.7≤I 21<0,8 | ||||||
|
0.5≤I 21<0,7 | ||||||
|
Growth (decrease) index of investment activity ratio |
K 22 \u003d (VA-ON-OS) / VA K 2 \u003d (p. 130 + p. 135 + P. 140)/ P. 190 Form No. 1 | |||||
|
0.9≤I 22<1 | ||||||
|
0.8≤I 22<0,9 | ||||||
|
0.7≤I 22<0,8 | ||||||
|
0.5≤I 22<0,7 | ||||||
|
Index of growth (decrease) of the profitability ratio of non-current assets |
K 23 \u003d P / VA K 23 \u003d p. 160 of form No. 2 / p. 190 of form No. 1 | |||||
|
0.9≤I 23<1 | ||||||
|
0.8≤I 23<0,9 | ||||||
|
0.7≤I 23<0,8 | ||||||
|
0.5≤I 23<0,7 | ||||||
|
Growth (decrease) index of return on investment ratio |
K 24 \u003d P / (SK + DO) K 24 \u003d p. 160 of form No. 2 / (p. 490 + p. 590 of form No. 1) | |||||
|
0.9≤I 24<1 | ||||||
|
0.8≤I 24<0,9 | ||||||
|
0.7≤I 24<0,8 | ||||||
|
0.5≤I 24<0,7 | ||||||
After assigning a numerical value to each signal about the threat of a latent crisis (s i , i=1..n, where n is the number of indicators selected for analysis), it is proposed to aggregate the obtained data into a table of the following form:
Table 4.7
Numerical values of signals about the threat of a crisis
|
№ p/n |
Signal of the threat of a crisis |
The numerical value of the signal |
Such tables must be built for each group of indicators.
Further, it is proposed to introduce two intermediate indicators (S is the counter of true conditions, and F is the counter of the total strength of signals about the threat of a hidden crisis), the calculation of which is carried out according to the following algorithm:
To calculate the magnitude of the threat of a hidden crisis for each group of indicators or for the organization as a whole, it is proposed to use the following formula:
where M is the scale of signals about the threat of a hidden crisis;
n - the number of analyzed indicators for the group or for the organization as a whole.
The magnitude of signals about the threat of a crisis characterizes the crisis in terms of its breadth of coverage and gives an idea of the number of areas covered by a latent crisis, or in which the development of a crisis is possible in the near future.
The intensity of the crisis threat is proposed to be calculated by the formula:
(4.39)
where I′ is the intensity of signals about the threat of a latent crisis;
r is the dimension of the scale of the numerical values of the signals (here r=5).
The intensity of signals about the threat of a crisis characterizes the crisis in terms of the depth of coverage and gives an idea of the level of threat of a latent crisis.
The scale and intensity of signals about the threat of a crisis are proposed to be assessed according to the following scale (Table 4.8):
Table 4.8
Linguistic assessment of the scale and intensity of signals about the threat of a crisis
|
№ p/n |
Numerical value of the indicator |
Linguistic evaluation of the indicator |
Forecast |
|
|
extremely low |
Potential |
|||
|
Hidden Crisis |
nascent |
|||
|
Developing |
||||
|
extremely high |
Progressive |
|||
Values of indicators above 40% allow us to conclude that there is a hidden crisis in the organization.
With values of indicators less than 40%, the probability of a latent crisis is low, the state is characterized as a potential crisis with the subsequent possible development of a latent crisis.
1) The technique developed and presented by us allows us to recognize the earliest stages of the crisis, including the stage of the latent crisis, which are characterized by the absence of visible symptoms of the development of crisis phenomena and cannot be diagnosed by standard methods;
2) When constructing the methodology, a system of indices was used, which makes it possible to evaluate the performance of the organization in dynamics, which gives a more objective assessment of the development of crisis phenomena in the organization and allows taking into account even minimal deviations in its work;
3) The linguistic scale of assessing signals about the threat of a crisis makes it possible not only to draw a conclusion about the presence or absence of a hidden crisis, but also to calculate the magnitude and intensity of the development of the crisis;
4) The developed methodology allows assessing the crisis both in terms of breadth and depth of coverage, which makes it possible to further develop a set of appropriate measures to localize and overcome the hidden crisis in the organization.
Analysis of capital structure and long-term solvency
Internal analysis of the capital structure is associated with the assessment of alternative options for financing the activities of the enterprise. Funds that ensure the activities of the enterprise are usually divided into own and borrowed.
The equity of an enterprise is the value (monetary value) of the enterprise's property, which is wholly owned by it.
Borrowed capital is capital that is attracted by an enterprise from the outside in the form of loans, financial assistance, amounts received on security, and other external sources for a specific period, under certain conditions, under any guarantees.
The structure of capital used by an enterprise determines many aspects of not only financial, but also operating and investment activities, and has an active impact on the final result of this activity. It affects the return on assets and equity, financial stability and liquidity ratios, forms the ratio of profitability and risk in the process of enterprise development.
The solvency of an enterprise is one of the most important indicators that helps to characterize the financial condition of an enterprise in the modern economy, if an enterprise is insolvent, then no one will want to deal with it. The solvency of the enterprise means the ability to repay them on time and in full of their debt obligations. Depending on what obligations of the enterprise are taken into account, there are short-term and long-term solvency. The long-term solvency ratio (K) characterizes the financial condition of the enterprise for a long period and is necessary for early detection of signs of bankruptcy. It is calculated as the ratio of debt capital (DZ) to equity capital (SK)
Analysis of the capital structure as a basis for assessing long-term financial stability and solvency
The analysis of long-term financial stability is based on the assessment of the effectiveness of the capital structure. Under the capital structure refers to the ratio of own and borrowed sources of capital. Here, special attention should be paid not to the entire mass of liabilities, but to the ratio of long-term borrowed funds to equity, since short-term liabilities are intended primarily to finance current activities.
The assessment of long-term financial stability is most important in terms of business development prospects. At the same time, modern economic realities do not allow Russian organizations to actively attract various long-term financial instruments for business financing, such as mortgages, leasing, long-term bonds, pension obligations, etc. due to the lack of relevant legislation on these issues. Evidence of this situation is the state of the "Long-term liabilities" section of the balance sheet of most Russian organizations and the list of articles in this section. Long-term liabilities in the balance sheet are represented only by loans and, therefore, we can conclude that in this regard, this area of analysis cannot be fully implemented, and, therefore, the possibility of assessing the business prospects of such organizations in the long term is underestimated.
Almost no organization manages its own sources. There are many reasons for this, and, above all, it is obvious that borrowed sources are used to physically increase capital in order to increase income and profits.
It is necessary to compare the advantages and disadvantages of using own and borrowed sources of financing in order to better understand their nature and the features of their impact on the structure and cost of capital. In fact, all sources used in business are involved. Investor resources are attracted as equity capital. Equity capital differs depending on the organizational and legal form of its involvement in business - sole, partnership (stock) and joint-stock. Credits and loans, as well as many financial instruments, are used as borrowed capital.
Organizations incur expenses for servicing their own and borrowed capital. Expenses for servicing equity capital are dividends paid to shareholders, participants. The cost of servicing borrowed capital is interest.
The positive aspects of using equity include:
Stability - equity (Ksob) is characterized by stability, taking into account the principle of a functioning organization;
Optional payment of dividends. The requirement to pay dividends is not always mandatory compared to the requirement to repay loans and interest on them.
The negative aspects of using equity capital are:
Uncertainty in the payment of dividends - the uncertainty factor manifests itself in the process of operational financial planning, since it is difficult to predict the amount of dividends to be distributed before determining the amount of net profit;
Paying dividends out of net income means, firstly, double taxation and, secondly, unprofitable compared to the system of paying interest on loans.
The positive aspects of borrowed capital include:
A method of relative insurance against inflation. Modern society lives in conditions of constant inflation. Under these conditions, from an economic point of view, it is beneficial to use borrowed sources of financing, because, even insuring against inflation, the debtor always gives back cheaper money than he takes. In this property of inflation, one of the key problems of managing receivables and payables;
Stability of payments - the stability of interest payments is convenient from the standpoint of operational financial planning, since it minimizes the uncertainty and risk factor in cash flow planning;
The inclusion of interest expenses in expenses that reduce profit before tax, which allows you to increase tax expenses and reduce income tax.
The negative aspects of using borrowed capital include a general increase in financial, credit and business risk in general, since there is always a threat of inability to pay interest or repay the amount of debt on time, which can lead to partial or complete loss of business.
When analyzing the use of borrowed sources of financing, it is always necessary to consider various aspects of the effectiveness of their use:
It is more profitable to use loans with longer terms - this allows you to save in general on the costs of servicing the loan, as well as on tax payments in each payment period;
If the cost of paying interest on loans is lower than the profit received from investing borrowed funds, it is more profitable to use borrowed sources;
- if the cost of paying interest on loans is higher than the profit received from investing borrowed funds, it is more profitable for the organization to lend its own funds and thus increase the income of the organization.
Financial stability is expressed by a whole system of analytical coefficients that allow a versatile assessment of the capital structure according to balance sheet data. These ratios reflect different aspects of financial stability, and only their cumulative assessment allows us to draw general conclusions. Organizations, taking into account the specifics of their activities, set standard values for financial stability ratios and, in the course of analysis, compare standard values with actual ones. This allows you to build a system in relation to objective evaluation criteria. In this case, the normative values can be both external and internal.
Solvency ratios (capital structure)
Under the solvency of the enterprise is understood as its ability to pay off long-term obligations. This definition is confirmed by the composition of solvency ratios, which are based on the ratio of items of long-term assets to each other and to the total liabilities. Since the items of long-term liabilities represent equity and debt capital, the coefficients of this group may also be called "capital structure coefficients". Unfortunately, in Russian practice, the concept of solvency of enterprises is mistakenly identified with the concept of their liquidity. Solvency indicators characterize the degree of protection of creditors and investors who have long-term investments in enterprises from the risk of non-repayment of invested funds.
The group of solvency ratios (or capital structure) includes the following ratios:
1) coefficient of ownership;
2) the coefficient of borrowed funds;
3) dependence coefficient;
4) interest coverage ratio.
1. Equity ratio:
K \u003d Equity capital / Balance sheet results x 100%
Equity ratio characterizes the share of equity in the sources of financing of the enterprise. It also reflects the balance of interests of investors and creditors. The high proportion of own funds in the structure of long-term liabilities, other things being equal, ensures a stable financial position of the enterprise. Permissible values: in Western financial management, it is considered that the value of this coefficient must be maintained at a level exceeding 50%.
2. Debt ratio:
K \u003d Borrowed capital / Balance sheet results x 100%
The borrowed capital ratio reflects the share of borrowed capital in the sources of financing of the enterprise. This coefficient in its value is the reciprocal of the property coefficient. Permissible values: Western financial management considers that the value of this ratio should be kept below 50%.
3. Dependency ratio:
K \u003d Borrowed capital / Equity capital x 100%
Permissible values: in Western financial management, it is considered that a high value of the coefficient is undesirable. This ratio characterizes the firm's dependence on external loans. The higher the value of the indicator, the more long-term liabilities the given enterprise has, the more risky its position is. A large external debt, including interest payments, means a potential risk of a shortage of funds, which, in turn, can lead to the bankruptcy of an enterprise.
4. Interest coverage ratio:
K = Earnings before interest and taxes / Interest expense (times)
The interest coverage ratio characterizes the degree of protection of creditors from the risk of non-payment of interest on placed loans. The ratio shows how many times during the reporting period the company has earned funds to pay interest on loans. This indicator also reflects the acceptable level of reduction in the share of profits used to pay interest. Valid values: the higher the coefficient value, the better.
Below is a list of financial indicators most commonly used in financial analysis. These indicators are divided into five groups, reflecting various aspects of the financial condition of the enterprise:
- Liquidity ratios
- Capital structure indicators (sustainability ratios)
- Profitability ratios
- Business activity ratios
- Investment Criteria
For some indicators, recommended ranges of values are also given. The values most often mentioned by Russian experts are taken as such ranges. However, it should be remembered that the permissible values of indicators can differ significantly not only for different industries, but also for different enterprises of the same industry, and a complete picture of the company's financial condition can only be obtained by analyzing the entire set of financial indicators, taking into account the characteristics of its activities. Therefore, the given values of the indicators are purely informational in nature and cannot be used as a guide to action. The only thing that can be noticed is that if the values of the indicators differ from the recommended ones, then it is desirable to find out the reason for such deviations. I. Liquidity Ratios - Liquidity ratios
Liquidity indicators characterize the company's ability to satisfy the claims of holders of short-term debt obligations.
1. Absolute liquidity ratio
Shows what proportion of short-term debt obligations can be covered by cash and cash equivalents in the form of marketable securities and deposits, i.е. almost completely liquid assets.
2. Quick ratio (Acid test ratio, Quick ratio)
The ratio of the most liquid part of current assets (cash, receivables, short-term financial investments) to short-term liabilities. It is usually recommended that the value of this indicator be greater than 1. However, the real values for Russian enterprises are rarely more than 0.7 - 0.8, which is considered acceptable.
3. Current ratio (Current Ratio)
It is calculated as the quotient of current assets divided by short-term liabilities and shows whether the company has enough funds that can be used to pay off short-term liabilities. According to international (and Russian) practice, the values of the liquidity ratio should be in the range from one to two (sometimes up to three). The lower limit is due to the fact that working capital must be at least enough to pay off short-term liabilities, otherwise the company will be at risk of bankruptcy. An excess of working capital over short-term liabilities by more than three times is also undesirable, since it may indicate an irrational asset structure.
Calculated according to the formula: 
Recommended values: 1 - 2
4. Net working capital (Net working capital), in monetary units
The difference between a company's current assets and its short-term liabilities. Net working capital is necessary to maintain the financial stability of the enterprise, since the excess of working capital over short-term liabilities means that the enterprise can not only pay off its short-term liabilities, but also has reserves for expanding activities. The optimal amount of net working capital depends on the characteristics of the company's activities, in particular on its scale, sales volumes, inventory turnover rate and receivables. The lack of working capital indicates the inability of the company to repay short-term liabilities in a timely manner. A significant excess of net working capital over the optimal need indicates the irrational use of enterprise resources. For example: issuing shares or obtaining loans in excess of real needs.
Capital structure indicators reflect the ratio of own and borrowed funds in the company's sources of financing, i.е. characterize the degree of financial independence of the company from creditors. This is an important characteristic of enterprise sustainability. The following ratios are used to assess the capital structure:
5. Financial Independence Ratio (Equity to Total Assets)
It characterizes the dependence of the firm on external loans. The lower the value of the coefficient, the more loans the company has, the higher the risk of insolvency. The low value of the coefficient also reflects the potential danger of the enterprise having a shortage of funds. The interpretation of this indicator depends on many factors: the average level of this ratio in other industries, the company's access to additional debt sources of financing, and the specifics of current production activities.
Calculated according to the formula: 
Recommended values: 0.5 - 0.8
6. Total liabilities to total assets (Total debt to total assets)
Another option for presenting the company's capital structure. Shows what proportion of the company's assets is financed by loans.
7. Long-term liabilities to assets (Long-term debt to total assets)
Shows what proportion of the company's assets is financed by long-term loans.
Calculated according to the formula: 
8. Total debt to equity
The ratio of credit and own sources of financing. Also, like TD / TA, is another form of presentation of the financial independence ratio.
9. Long-term liabilities to non-current assets (Long-term debt to fixed assets)
Shows what proportion of fixed assets is financed by long-term loans.
Calculated according to the formula: 
10. Interest coverage ratio (Times interest earned), times
It characterizes the degree of protection of creditors from non-payment of interest on the granted loan and demonstrates: how many times during the reporting period the company earned funds to pay interest on loans. This indicator also allows you to determine the acceptable level of reduction in profits used for interest payments.
The profitability ratios show how profitable the company's activities are.
11. Return on sales ratio, %
Demonstrates the share of net profit in the sales volume of the enterprise.
Calculated according to the formula: 
12. Return on shareholders’ equity ratio, %
Allows you to determine the effectiveness of the use of capital invested by the owners of the enterprise. Usually this indicator is compared with a possible alternative investment in other securities. The return on equity shows how many monetary units of net profit each unit invested by the owners of the company earned.
Calculated according to the formula: 
13. Profitability ratio of current assets (Return on current assets),%
Demonstrates the ability of the enterprise to ensure a sufficient amount of profit in relation to the working capital used by the company. The higher the value of this ratio, the more efficiently working capital is used.
Calculated according to the formula: 
14. Profitability ratio of non-current assets (Return on fixed assets),%
Demonstrates the ability of the enterprise to provide a sufficient amount of profit in relation to the fixed assets of the company. The higher the value of this ratio, the more efficiently fixed assets are used.
Calculated according to the formula: 
15. Return on investment ratio, %
Shows how many monetary units it took the company to receive one monetary unit of profit. This indicator is one of the most important indicators of competitiveness.
Calculated according to the formula:
. Activity ratios - Business activity ratios
Business activity ratios allow you to analyze how efficiently the company uses its funds.
16. Net working capital turnover ratio, times
Shows how effectively the company uses investments in working capital and how this affects sales growth. The higher the value of this ratio, the more efficiently the company uses net working capital.
Calculated according to the formula: 
17. Fixed assets turnover ratio, times
Capital productivity. This coefficient characterizes the effectiveness of the use of fixed assets by the enterprise. The higher the value of the coefficient, the more efficiently the company uses fixed assets. A low rate of return on capital indicates insufficient sales or too high a level of capital investment. However, the values of this coefficient differ greatly from each other in different industries. Also, the value of this ratio strongly depends on the methods of calculating depreciation and the practice of assessing the value of assets. Thus, a situation may arise that the fixed asset turnover rate will be higher in an enterprise that has worn-out fixed assets.
Calculated according to the formula: 
18. Total assets turnover - Asset turnover ratio, times
It characterizes the effectiveness of the company's use of all available resources, regardless of the sources of their attraction. This coefficient shows how many times a year a full cycle of production and circulation is completed, bringing the corresponding effect in the form of profit. This ratio also varies greatly by industry.
Calculated according to the formula: 
19. Stock turnover ratio, times
Reflects the rate at which stocks are sold. To calculate the coefficient in days, you need to divide 365 days by the value of the coefficient. In general, the higher the inventory turnover ratio, the less funds are tied up in this least liquid group of assets. It is especially important to increase turnover and reduce inventory in the presence of significant debt in the company's liabilities.
Calculated according to the formula:
20. Accounts receivable turnover ratio (Average collection period), days.
Shows the average number of days it takes to collect a debt. The smaller this number, the faster the receivables are converted into cash, and therefore the liquidity of the working capital of the enterprise increases. A high value of the coefficient may indicate difficulties in collecting funds from accounts receivable.
Calculated according to the formula: 
V. Investment ratios -
Investment criteria.21. Earnings per share
One of the most important indicators affecting the market value of a company. Shows the share of net profit (in monetary units) attributable to one ordinary share.
Calculated according to the formula:
22. Dividends per ordinary share
Shows the amount of dividends distributed to each ordinary share.
Calculated according to the formula: 
23. Price to earnings ratio, times
This ratio shows how many monetary units shareholders are willing to pay for one monetary unit of the company's net profit. It also shows how quickly an investment in a company's stock can pay off.
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