Company analysis

A company analysis lets review various changes in detail that may influence enterprise’s strategy factors. For efficient work of an enterprise it is necessary to start with environment and consumers analysis of this company. Consumers may be presented both by private persons and high-demand companies, which have a possibility to get its goods for personal advantage, and for resale to corporate competitors as well.

Company financial analysis

A company financial analysis is the process of analyzing and understanding of principal figures and ratios that let get an impartial and detailed estimation of company’s financial standing, and company’s total stock value as well.

The main objective of financial analysis is characteristics of company’s financial matter. As a result of analysis there is a possibility to make calculations, detailed estimation and description. In addition, an important factor of financial analysis is the opportunity to depict an accurate possibility of company’s bankruptcy. Very often the company’s financial analysis may be useful not only for small business, but also for respectable and famous banks that make a final decision on credit arrangements. Accountants and experts use company’s financial analysis for preparing more detailed and accurate annual reports.

Recently an important step in business development is a detailed general financial analysis of company’s financial solvency. It presents a unique possibility of an economic entity, which is able to pay off a loan at a set time and date. It is the company’s financial solvency that indicates a positive financial standing of the main enterprise.

More important factors of enterprise’s financial solvency are as follows:

  • Necessary amount of cash sufficient for paying off all the loans and other liabilities to company’s financial matter.

  • A possibility to realize company’s assets if necessary and get a sufficient amount for paying off all the financial debts.

When analyzing company’s financial solvency special financial ratios (current, quick and absolute liquidity ratio) are taken into consideration. These three ratios must be calculated by company’s general balance. Every enterprise and company whose liquidity ratios meet necessary and statutory requirements refers to a financial solvent one.

A detailed analysis of corporate financing activity takes into account a careful dynamics analyzing and financial implications projecting, gives an opportunity to determine a reason influencing the development of profit amount, rarely – loss.

A detailed analysis of financial enterprise liquidity is implemented according to general data of balance account and makes it possible to determine if this enterprise is able to hold payments on its required liabilities.

Why is financial analysis of company’s financial standing wanted?

The main objective for financial analysis of company’s financial standing is to get general data that may specify company’s financial standing precisely. It may include both profit and any losses of the enterprise and all important documentation on loan disbursement as well.

A lot of active companies need financial analysis. With the help of financial analysis it is possible to get qualitative and reliable result on enterprise’s stability. Not exactly constant financial stability of the enterprise may be caused by its insolvency, what may result in small capital turnover and even a risk of its bankruptcy. But surplus financial stability of the enterprise leads to slower development what afterwards reduces its general profit-earning capacity.

Financial analysis of the enterprise frequently deals with total information processing that characterizes interesting moments and criteria of company’s full operation. In most cases all important data is oriented to financial reporting documents and company’s general balance. It follows that documents and information analysis of enterprise’s financial standing is intended for accounting records of general accounting office. Exactly this data let make conclusions on company’s financial standing, but for more careful analysis some more specific modifications are required.

The most important financial analysis of the enterprise is a general estimation of its standing, its assets, balance, product turnover rate and consumed funds income. Total financial analysis of the enterprise lets detect the direction of formation and development, gives a full activity assessment.

A fundamental direction of internal financial analysis is a detailed analysis of full capital productivity, turnover and profit, personal funds quantity. On the basis of this information peculiarities and intricacies in enterprise’s activity are investigated and checked.

Financial analysis of the enterprise:

  1. Includes early detection of factors that have the main influence on enterprise’s financial standing. Helps to determine reasons and circumstances of their appearance.

  2. Exposes vital changes and variations of all financial standing ratios, also helps to define reasons for achieved result.

  3. Gives an opportunity to get full estimation of all vital changes in funded status (quantity and quality changes).

  4. Lets evaluate enterprise’s financial state when needed.

  5. Determines all important trends in enterprise’s financial standing changes.

  6. Detects and mobilizes savings and funds not only of modernization, but updating of the whole enterprise’s financial standing.

  7. Has a unique possibility to detect all necessary ways for qualitative increase in enterprise’s operating benefits.

The main intention of financial analysis is a possibility to get more informative indices, that may provide with a more distinct, clear and accurate view of enterprise’s general financial standing. All profits and losses and also settlements on enterprise’s general credit financing are shown in detail, clearly and intelligibly. In addition, it is possible to learn not only the enterprise’s data for the time being, but make a forecast for company’s financial standing in the nearest future.

Corporate financial evaluation

With the help of service it is possible to have a detailed evaluation of company’s financial standing. Current state may be characterized by degree of its profit-making capacity, capital turnover, financing stability and capability of credit financing liabilities settlements.

For qualitative and detailed evaluation of company’s financial standing there is a corresponding database, reports and balance with accurate financial results.

The most important objectives of company’s financial standing evaluation are as follows:

  • Accurate evaluation of company’s current and future financial standing.

  • Evaluation of enterprise’s possible and prospective funded state.

  • Detection of readily available cash funds, and also capabilities assessment and challenge timeliness.

Nowadays the correct and precise evaluation of enterprise’s financial standing is very important not only for heads of enterprises, but also for investors, creditors and government bodies.

Other articles
Are you still hesitating? Simply get a free trial access.

Связаться с нами в WhatsApp Identify
your INN