The financial condition of enterprise – is the company’s ability to fund its activities. Financial condition is characterized availability of the financial resources necessary for the normal functioning of the enterprise, financial contact with other legal entities and individuals, solvency and financial stability. This article describes the theoretical basis of the analysis of the financial condition of any company, as well as agricultural businesses. To study ways to improve the financial condition of agricultural organizations, analyzed the financial condition of JSC “Ilyich AC” Vyselkovsky District, is part of one of the largest Russian agro-holdings – UAB “AgroGard”.
At the present time in a market economy to the enterprise is not just “left afloat”, but also continued to grow, occupying new niches in the market, introducing new technology and remain a reliable partner, it is necessary to have a stable financial position, as well as independence from creditors . Defining financial sustainability of the organization is one of the most important challenges, especially in times of crisis, as the lack of financial stability can not only lead to a lack of the enterprises of funds for the normal operation and development, and eventually leading to bankruptcy and, consequently, curtail production and loss of jobs.
According to A.D. Sheremet and E.V. Negasheva , under the financial condition refers to the company’s ability to finance its activities. It is characterized by the provision of financial resources necessary for the normal functioning of the organization, appropriate to their deployment and efficient use of, financial relations with other legal and natural persons, solvency and financial stability.
Financial sustainability of the agricultural enterprise has a number of features, these features are associated primarily with specificity of agriculture in general – it is: the length of the production cycle; the gap between production time and working period; seasonality of production; dependence on natural and climatic conditions; the presence of specific means of production – land.
A significant role in the assessment of financial results of the company plays an analysis of its financial condition according to balance. Its outcome gives an indicative estimate of the amount of funds that can be obtained for the property.
It is obvious that for an effective importance of financial management of enterprises and organizations of the system have their evaluation methods, including methods for assessing financial stability, which define clearly and in detail the financial condition of business entities, taking into account the current legislation, internal and external factors. There is a whole system of indicators characterizing the financial condition of the organization .
Indicators of financial stability: the factor attracted Equity shows how much has to borrowed funds per 1 ruble. own funds; equity ratio (solvency) gives an idea of how the organization is independent of the creditors; Equity ratio agility shows the company’s ability to maintain the level of its own working capital and replenish working capital, if necessary, at the expense of own sources and others.
In general, the method of analysis of the financial condition of the enterprise includes [1, 2]: horizontal analysis (comparison of each position reporting with the previous period); vertical analysis (identifying the proportion of individual articles in the final index, taken as 100%); trend analysis (comparison of each position reporting with a number of previous periods and determining the trend); analysis of financial ratios (calculated correlations between the individual statements, the definition of the relationship indicators); Comparative analysis (on the one hand, an analysis of indicators of the reporting subsidiaries, departments, on the other – a comparative analysis with indicators of competitors, industry averages, etc.); factor analysis (analysis of the impact of individual factors on the resulting indicator).
For a more detailed and visual examination of financial stability of the agricultural organizations analyzed the activity and financial stability of JSC “AF them. Ilyich ” Vyselkovskiy area and on the basis of the data obtained suggest ways to improve it.
JSC “AF them. Ilyich “was established January 19, 1993. Initially the organization focused its activities exclusively on the production of cereals in the future, based on lessons learned and gradually added and others. In 2003, there was an association of three companies, including JSC “AF them. Illich, “but the name remained. Currently, the organization is part of one of the largest Russian agricultural holdings – UAB “AgroGard”.
Closed Joint Stock Company “Agri Ilyich” – Agriculture Organization of the generalist.
The total land area of the organization – 21 300 hectares. Of these, agricultural land – 21,000 hectares. Of these, the largest area of cultivation falls on winter cereals – 9950 hectares. The number of cattle is 4.7 thousand heads, including dairy cattle – 2,2 thousand heads.
The above resource analysis showed that for the period from 2012 to 2014. CJSC “AF them. Ilyich “average number of employees decreased by 10.2%. This happened at the expense of workers employed in agriculture by 9.6%. The calculations showed that such changes have a positive effect. Decreased agricultural area to 1556 hectares. This is due to more efficient use of land.
The average annual value of fixed assets of the Company, as well as the value of current assets increased by 6.5% and 8.0% respectively. The cost of working capital increased due to the increase of investments, while other indicators that are part of current assets, decreased. During the period under review all the indicators of resource efficiency increased, except capital intensity, this figure fell by 0,121, but it is also a positive trend, which indicates an increase in efficiency of fixed assets and the relative presence of savings invested in capital assets. This effect is achieved in the organization due to the growth of sales.
The analysis of the company results showed that sales increased by 16.2% over the whole period considered. According to the report on the financial results, this was due to the reduction in selling and administrative expenses as well as cost of sales, and with the growth of gross profit. For the main types of products is noticeable growth in sales.
Cost management in the enterprise is organized quite effectively – cost recovery ratio increased to 0,057. With every ruble spent by the organization received in 2014 0.342 rubles. arrived. This effect is achieved due to the fact that revenue is growing more rapidly than the total cost.
During the period under review, an increase of property, since the change in 2014 compared to 2012 amounted to 265 480 thousand rub. This is due to an increase in the amount of current assets 184 775 thousand rub., While non-current assets in the three years increased by 80 705 thousand rub.
Analyzing the sources of formation of property, we can conclude that in general, the organization observed indicators of growth, with the exception of long-term commitment to 243658 th. Rubles and thus become their constituents – borrowings and deferred tax liabilities. The main source of assets is equity, which indicates the low dependence of the company from external investors.
The analysis of efficiency of use of circulating assets showed that the ratio of current assets turnover increased by 0,116, while turnover duration has decreased by 16.966 days. This is due to the fact that revenue growth occurs more rapidly than the average amount of working capital. Decreased consolidation ratio of current assets to 0.046. The smaller consolidation ratio, the current funds are being used efficiently. This trend occurred as due to the growth in revenue. However, in comparison with 2013, in 2014 a decrease in some of the indicators, suggesting a slight deterioration in the situation of the enterprise. The analysis of the enterprise inventory turnover also showed a positive trend – inventory turnover ratio increased from 2,360 to 2,521 – to 0.161, while the turnover duration decreased by 9.9 days. Consolidation ratio stocks decreased by 0,027.
The analysis of the profitability of the organization has shown a slight decrease in rates – in the range of 0.5-1% compared to 2012, with the exception of return on equity – is seen values rise by 1.5%, it shows that the increase in the firm’s assets is provided mainly from borrowed sources of financing. However, in 2014 in comparison with the 2013 return on sales decreased by 5.42%, this is due to rising production costs.
According to the analysis of JSC “AF them. Ilyich “is absolutely financially sustainable. Such a conclusion can be made on the basis of these calculations: in 2014 in the organization there is a surplus of working capital, equity and long-term borrowed sources of formation of reserves and the total amount of the main sources of formation of stocks within the 104 157 thousand rubles, 179 922 thousand rubles. and 179 922 thousand rub., respectively.
Thus, we can make on the basis of the analysis concluded that the JSC “AF them. Ilyich “is financially stable. Management should recommend to conduct a detailed analysis of the activities, in order to identify ways of further development and strengthening of the organization, identifying and measuring the reserves to improve the financial condition at all stages of production, development of measures for their implementation in the production and careful control by the management of the implementation of these measures.