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Abstract

Content

Introduction

1. Theme urgency


The relevance of the topic of the thesis project is due to the fact that: in modern conditions, it is necessary to rationally evaluate and manage the financial condition of the enterprise. Effective financial management aimed at avoiding bankruptcy and major financial failures, leadership in combating competitors, acceptable growth rates of the company's economic potential, growth in production and sales, maximizing profits, minimizing costs, ensuring cost-effective operation of the enterprise is the main goal of successful operation of the enterprise and achievement of their goal.

2. Goal and tasks of the research

The purpose of this study is to manage the financial condition of the enterprise and develop methodological recommendations for improving the management of the financial condition of an industrial enterprise.

To achieve the goal in the course of the master's work, the following tasks are formulated and solved:

·        an analysis of theoretical provisions on the essence of the financial condition;

·        the theoretical aspects of financial management of the enterprise are analyzed;

·        methods and models of financial management of the enterprise are characterized;

·        developed recommendations for improving the management of the financial condition of industrial enterprises

The object of the research of the thesis is the process of managing the financial condition of the enterprise.

The subject of the study is a set of theoretical, methodological and practical aspects of the financial management system of an industrial enterprise.

Methods of research.

The methodological and theoretical basis of the research is the scientific works of domestic and foreign scientists devoted to the current problems of managing the financial condition of the enterprise. During the research, the following methods were used: the method of analysis and synthesis, deduction and induction, comparison, forecasting, statistical information processing methods, system approach, comparisons.

Practical significance of the results.

The result of the study is recommendations for improving the financial management system of the industrial enterprise.

The main content of the work

The introduction highlights the problem of the relevance of the topic of master's work, reveals the purpose and objectives of the research, shows the object, the subject, the research methods used, and also contains information on the practical value of the study.

3. Review of research and development

3.1 REVIEW OF INTERNATIONAL SOURCES.

The theoretical and methodological basis of this study was the scientific work of foreign and domestic scientists on the assessment and management of the financial condition of the enterprise.

Among foreign authors studying this problem, it is possible to single out works: E.I. Altman, R. Bass, R.H. Berry, R.A. Brili, B. Koil, M. Glance, V. Myuro, K. Pyroka, P. Witman and others [12]

3.2 REVIEW OF NATIONAL SOURCES.

In market conditions, the financial condition is the key to survival and the basis of the company's stable position. It reflects the state of financial resources in which an enterprise, freely maneuvering with cash, is able, through effective use, to ensure an uninterrupted process of production and sale of products, as well as to expand and update it.

The financial condition of an enterprise depends on the results of its production, commercial and financial activities. If the production and financial plans are successfully implemented, this positively affects the financial position of the enterprise, and vice versa, as a result of the underfulfilment of the plan for the production and sale of products, its cost of production increases, the revenue and profit amount decrease, and as a result - the financial condition of the enterprise and its solvency worsens.

Table 1.1 presents the views of economists on the definition of the financial condition of the enterprise

Author

Definition
Markaryan E.Ya. "... is a combination of indicators that reflect the ability of an enterprise to repay its debt obligations" [1]
Saifulin R.S
"... is the composition and placement of funds, the structure of their sources, the speed of capital turnover, the ability of enterprises to repay their obligations on time and in full "[2]
Lyubushin N.P. "... this is the organization's ability to finance its activities" [3]
Sheremet A.D. "... this ratio of the structure of its assets and liabilities, that is, the resources of the enterprise and their sources "[4]
Savitskaya G.V. "... this is an economic category reflecting the state of capital in the process of its circulation and the ability of the business entity to self-development at a fixed point in time" [5]
Kreynina M.N. "... this is the most important characteristic of the economic activity of the enterprise, revealing the competitiveness of the enterprise, its potential in business cooperation, it assesses to what extent the economic interests of the enterprise and its partners in financial and other relations are guaranteed" [6]
Kovalev V.V. "... this is a characteristic of the property and financial regulations of the enterprise, and the results of its economic activities, as well as opportunities for its further development" [7]
Artemenko V.G.,
Belendir M.V. 		"... this is the most important characteristic of the organization, reflecting the availability of financial resources, the appropriateness and effectiveness of their deployment and use, solvency and financial stability [8]
Balabanov I.T. "... this is a characteristic of the financial competitiveness of an enterprise (that is, solvency, creditworthiness), the use of financial resources and capital, the fulfillment of obligations to the state and other economic entities [9]
Gerasimenko G.P. "... this is a set of indicators reflecting the ability of an enterprise to pay off its debt obligations [10]

Analyzing the opinions of economists on the concept of the financial state of the enterprise, we can conclude that the most accurate definition of the financial state was presented by Savitskaya GV, because her opinion on the definition of the financial state most accurately shows the financial condition of the enterprise as a whole.

The concept of financial condition abroad is generally identified with financial position, financial stability. Important indicators at the same time are solvency, cost recovery and repayment of obligations, the ability to create a new product from available resources and receive income at the same time [11]. In the Russian and foreign approaches, the structure of financial analysis is also different. In domestic practice, the components of financial analysis differ depending on the approach of one or another author.

The financial condition is characterized by the provision of financial resources necessary for the normal functioning of the enterprise, the appropriateness of their placement and the effectiveness of use, financial relationships with other legal and physical persons, and the financial stability of the enterprise. The ability of the enterprise to make timely payments, to finance its activities on an extended basis, indicates its good financial condition.

Thus, in order to assess the financial condition of an enterprise, it is necessary to assess:

1) property status, structure of its distribution and efficiency of use;

2) sufficiency of own and borrowed capital for current economic activity, rationality of its use, and also choice of strategy for the further development of the enterprise;

3) the achieved level in the stability of the financial condition of the enterprise, its financial independence, its own working capital, the sufficiency of fixed assets, production stocks and work in progress to ensure the competitiveness and profitability of the products.

4. METHODICAL APPROACHES TO THE ANALYSIS OF THE FINANCIAL STATE OF THE ENTERPRISE BY THE EXAMPLE OF JSC "Red October"

The financial condition of the enterprise is analyzed with the help of a set of methodological approaches that allow to structure and identify the interrelations of the main indicators.


Figure 1. Analysis of the financial condition of the company

The table 4.1 Presents the main methodological approaches to the analysis of the financial condition of the company.

Table 4.1 - Basic methodological approaches to the analysis of the financial condition of the enterprise

Name Content Value

Coefficient analysis (relative indicators)
Calculation of the ratio of individual items of reporting company, the determination of the relationship of indicators
Allows for a comparative analysis of effectiveness:
-to previous years
 - with planned indicators
 
Vertical (structural, percentage) analysis
Calculation of the structure of summarizing reporting items and compilation of dynamic series (percentage analysis)
Allows you to track predict structural changes in the composition of sources of funds and the direction of their use

Horizontal (time) analysis


 
Calculation of the structure of summarizing reporting items and compilation of dynamic series (percentage analysis)
Allows to reveal tendencies of change of separate articles (groups of articles) of the reporting

Matrix Analysis
Based on the use of a model, the elements of which reflect the interconnection of diverse but interdependent economic indicators 		 
The matrix model of analysis makes it possible to evaluate the decisions made in the past, as well as to justify the decisions made on the basis of interrelations and the dependence of various indicators

Analysis of the financial condition based on the solvency ratios of the  Red Oktober enterprise, which gives a quantitative description of the enterprise, is presented in Table 4.2.

Table 4.2 - Coefficients of solvency of the enterprise OJSC Red Oktober


Indicators
At the beginning of the reporting period
At the end of the reporting period
The established criterion
 Current liquidity ratio 1,17 1,95 Ктл=2
 Absolute liquidity ratio 0,01 0,35 Кал=0,2
Coefficient of quick liquidity 0,66 1.12 Кбл=0,8

The matrix approach to the analysis of the financial condition of an enterprise is based on the use of a model, the elements of which reflect the interconnection of diverse but interdependent economic indicators. The values ​​of the named model are determined by the established rules, which are dictated by the form of the balance sheet of the enterprise, capable of sufficiently freely transforming into a matrix where the asset's articles (economic means) are horizontally located, and vertically the articles of liability (sources of funds).

The algorithm for analyzing the financial condition of an enterprise through a matrix method is presented in the following sequence:

1. An abridged form of the balance sheet is compiled.

2. Analytical tables are formed (the matrix balance at the beginning of the year, the matrix balance at the end of the year, the difference (dynamic) matrix balance for the year).

3. Express analysis of analytical tables is carried out in the following directions:

- the state (structure and quality) of enterprise funds at the beginning and end of the period;

- Dynamics of enterprise funds for the period;

- level of solvency and financial stability;

- the level and rank of factors affecting the financial condition of the enterprise;

- conclusions are formed on the results of the analysis.

Let's consider the practical possibility of using the matrix approach to the analysis of the financial state of the enterprise JSC "Moscow Confectionary Factory" Red October ", which produces and sells confectionery products.

The reduced form of the balance sheet for 2014-2015. is presented in Table. 4.3. 

Table 4.3 - The reduced form of the balance sheet of JSC "Moscow Confectionery Factory" Red October "for 2014-2015.

Balance sheet items

 The analyzed period
2014 2015
 
Balance active
 
Fixed assets, intangible assets (at residual value) 		2 519508
  		11 344
Financial investments 4 941381 4 163 864
Deferred tax assets 10 042 141
Other non-current assets 57452  
Total under section 1 7 528 383 6 325 999
Inventories and costs 1 363 292 1 451 951
Accounts receivable 3 066 627 3 702 583
Short-term financial investments 25 000 1 026 500
Cash 19 210 185 191
Other assets 1 993 50 908
Total for section 2 4 476 122 6 755 371
Balance 12 004 505 13081370

Passive balance
Authorized and additional capital 784 784 11 023
Reserve capital 535 535
Undistributed profit 6 478 503 7 067 697
Total under section 3 7 263 822 7 853 016
Long-term loans and borrowings 0 800 000
Deferred tax liabilities 67 479 59 667
Total under section 4 67 479 859 667
Borrowings 800 885  
Accounts payable 3 817 119 3 470 459
Estimated liabilities 55 200  
Total under section 4 673 204 4 368 687
Balance 12 004 505 13081370

The compilation of the matrix model (Tables 4.5 and 4.6) is based on the following requirements:

1. The size of the matrix is ​​chosen, the articles of the asset are reflected horizontally across the matrix, the articles of liability are vertical. The balance line and the matrix graph are filled in exactly according to the balance sheet data.

2. Consistently, starting with the first line of the asset balance, selected sources of funds at the disposal of the enterprise.

3. All balance results on the horizontal and vertical of the matrix are checked. The most important is the stage of drawing up the matrix - selecting sources of funds at the disposal of the enterprise (Table 4.4).

At the same time, one should proceed from the range of financial rights and powers given to the enterprise, the economic nature of its own and borrowed funds, the economic essence of mobile and non-mobile assets.

Table 4.4 Selection of sources of enterprise funds in the formation of the matrix

Means (articles of the asset)

Sources of funds (articles of liability)

Non-productive assets

  

1. Fixed assets and intangible assets.
Statutory and additional capital.
Long-term loans and borrowings Accumulation funds and retained earnings

2. Capital investments.
Long-term loans and borrowings
Statutory and additional capital
Accumulation funds and retained earnings
3. Long-term financial investments. 1.Taxible and additional capital
2. Accumulation funds and retained earnings

Mobile means

  
1. Stocks and costs
Authorized and additional capital (balance)
Reserve capital
Accumulation funds and retained earnings (balance)
Short-term loans and borrowings.
Creditors
Consumption funds and reserves
2. Debtors
Creditors
Short-term loans and borrowings.

3. Short-term financial investments.
Reserve capital
Creditors
Consumption funds and reserves
4. Cash
1. Reserve capital
2. Accumulation and retained earnings
Credits and loans
4. Consumption funds and reserves

Table 4.5 - Matrix Balance for 2014

Active / Passive
Statutory and additional capital
Reserve capital
Retained earnings
Long-term loans
Deferred liabilities
Short-term loans and borrowings
Commitments 		Balance
Property, plant and equipment 5511,5   2503793,5 0 0 0 0 2509305
Intangible assets 5511,5   4691,5 0 0 0 0 10203

Capital investments + financial investments 		772569   3970018 0 0 197602 0 4940189
Profitable investments 1192     0 0 0   1192
Other non-current assets           57452   57452
Deferred tax assets         10042     10042
Inventories and costs       0   499628 863664 1363292

Receivables 		  535   0 57437   3008655 3066627

Short-term financial investments 		      0   25000   25000
Cash and cash equivalents       0   21203   21203
Balance 784784 535 6478503 0 67479 800885 3872319 12004505

Table 4.6 - Matrix Balance for 2015

Active / Passive Statutory and additional capital Reserve capital Retained earnings Long-term loans Deferred liabilities Short-term loans and borrowings Commitments Balance
Fixed assets and intangible assets 11023   2 118 045
  		        2 129 068
 
Capital investments + investments 772 569   2 591 295 800 000
  		      4 163 864
 
Other non-current assets 1 192   31 734   141
  		    33 067
Inventories and costs     1 455 480
  		        1 455 480
 
Accounts receivable   535     59 526
  		 
3 977231
 4 037 292
 
Short-term investments     871 143
  		    67 026 88 331 1 026 500
 
Cash and other assets             236 099
  		236 099
Balance 		784 784 535 7 067 697
  		800 000
  		59 667 67 026 4 301 661 13 081 370
 

Table 4.7 - Dynamic Balance for 2014-15.

Active / Passive Statutory and additional capital Reserve capital Retained earnings Long-term loans Deferred liabilities Short-term loans and borrowings Commitments Balance
Fixed assets and intangible assets 0 0 -390440 0 0 0 0 -390440
Capital investments + financial investments 0 0 -1 378 723 800 000 0 -197 602 0 -776 325
Other non-current assets 0 0 31 734 0 0 -57 452 0 -35 619
Inventories and costs 0 0 1455480 0 0 -499628 -863664 92188
Accounts receivable 0 0 0 0 2089 0 968576 970665
Short-term investments 0 0 871143 0 0 42026 88331 1001500
Cash and other assets 0 0 0 0 0 -21203 236099 214896
Balance 0 0 589 194 800 000 -7 812 -733 859 429 342 1 076 865

On the basis of the above dynamic balance, it follows: as a result of increasing solvency, the risk of bankruptcy of the enterprise decreases, positive profit dynamics are observed, short-term loans are repaid for the period under study, and mobile assets are financed at the expense of the company's own capital. At the same time negative dynamics of financing of non-mobile assets is observed at the expense of own funds, long-term loans are attracted to finance capital investments, the amount of the enterprise's liabilities increases. In general, the dynamic balance is positive and the enterprise is stable

Advantages and disadvantages of methodological approaches to the analysis of the company's financial condition are presented in Table 4.8.

Table 4.8 - Advantages and disadvantages of methodological approaches to the analysis of the financial condition of the enterprise

Name

Benefits

 Disadvantages
Coefficient
  
Simplicity of calculations and elimination of influence of inflation, which is especially important in long-term analysis
Coefficients are static, do not reflect differences in accounting methods and the quality of the constituent indicators.

Matrix
Calculation of additional indicators characterizing the financial stability and creditworthiness of the organization.
Receiving additional information to find out the reasons for changing the financial condition of the organization
 
High labor intensity. Difficulties, connection with the selection of the source of formation of assets

Conclusion

Thus, a financial condition is understood as the ability of an enterprise to finance its activities. It is characterized by the provision of financial resources necessary for the normal functioning of the enterprise, the appropriateness of their deployment and the effectiveness of use, financial relationships with other legal and physical persons, solvency and financial stability. Analysis of the financial condition of the enterprise is one of the key points of its assessment, as it serves as the basis for making managerial decisions.

Matrix balances significantly expand the information base of the financial express analysis necessary for making managerial decisions. In work with the help of the matrix approach, the linking of assets and liabilities of the balance was determined, the structure was calculated and the quality of assets was determined according to the balance sheet of the enterprise and the sufficiency of sources of their financing, and the financial condition of the enterprise was confirmed by OAO "Moscow Confectionery Factory" Red Oktober "for 2014-15.

On the basis of the above analysis, it should be concluded that the enterprise is financially independent and solvent. Financing of mobile assets is carried out at the expense of the company's own capital. However, there is a negative dynamics of financing of non-mobile assets from own funds. Based on the analysis of the Krasny Oktyabr company, it should be concluded that the enterprise is financially independent and solvent. Financing of mobile assets is carried out at the expense of the company's own capital. However, there is a negative dynamics of financing of non-mobile assets at the expense of own funds. Overall, the balance of the enterprise is positive.

When writing this essay, the master's work is not yet complete. Final completion: May 2017. The full text of the work and materials on the topic can be obtained from the author or his supervisor after the specified date.

Reference

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