Economic science/ Financial Relations

 

Kapanova Sholpan Amanzholovna

senior teacher of "Finance" department of Korkyt Ata Kyzylorda State University

Sadybekova Nurgul

student of group Fin-06-5

 

The Theoretical Base of Diagnosing of the Enterprise activity

 

        An enterprise is the main list at all the stages of economics development. Here the straight connection between the worker and his industrial means is definitely seen. We must consider a businessman as a main person during the market relations. A status of businessman is to be consolidated just after the enterprise’s state registration. The organization of a modern enterprise is a structure that requires complex works.

        A financial state of the enterprise is a financial stability at a definite period of time and its maintenance with financial resources for unbreakable conduction of its economical activity and regular execution of its debt obligations.

          Every author writes differently of financial stability. One of them explains it as a skilful use of finances and finances sufficiency for works unbreakable processes. A financial stability is a relation between own and debt finances. And the others say, that those economical subjects which pay assets at the expense of itself and does not let the unliquidated debtor and creditor debts and execute obligations in time are to be financially stable.

          A financial stability is the enterprise’s definite accounts state which always guarantees solvency.[1.p.25].

          The exceed of incomes from expenses is a financial stability. It describes financial and resources state of an enterprise which finances the necessary expenses for its extension and revival and which supplies an unbreakable process of production and sale of products by freely usage of financial means. A financial stability is a part of enterprise’s general stability. The enterprise’s financial stability is a state of financial resources which indicates its development by keeping solvency and credits ability at a possible risk range. A financial stability is a permanent exceed of incomes from expenses. That is why a financial stability forms during the economical activity and becomes a part of enterprise’s general stability.

          The main directions of diagnosing and analyzing the financial and economical activity of an enterprise are as following:

-         a presentation of analysis conduction of social, commercial, industrial and economical results;

-         usage of main methods for material, working and financial resources state analysis;

-         consolidation of economics leading subjects efficiency raising on the base of technical and economical analysis;

-         evaluation of financial state and bankruptcy diagnostics and of financial risk;

-         evaluation of enterprise work’s industrial results;

-         evaluation of product(works, services) production and sale expenses, evaluation of material resources and reserve resources usage and of industrial reserves usage and state;

-         evaluation of ecological consequences of enterprise activity;

-         evaluation of enterprise’s development results and working resources usage;

-         definition and evaluation of factors serving for enterprise work’s efficiency;

           The functions of enterprise activities financial and economical diagnostics and analysis are as following: Control, calculation, stimulation, organization.

          An economical analysis can be classified by the following signs:

-         objects;

-         subjects;

-         goals;

-         range of comparison;

-         analysis repetition;

-         participation in a plan;

-         questions content;

-         scope range of an object being analyses;

-         analysis automation range.

Table1. Class types of enterprise’s financial and economical activity analysis

 

Classification

Types of analysis

By objects

-         structural

-         functional

Conduction terms

-         systematic

-         episodic

Goals

-         inner

-         comparative

Characteristics

-         dynamic

-         statistic

Range

-         complex(systematic)

-         local(objective)

Content

-         subjective

-         operational treatment

Target of result analysis

-         quantative

-         qualitative

Subject

-         analysis of an economical subject(self-analysis)

-         analysis of outer structure(outer analysis)

methods

-         statistic

-         factoral

-         analytical

Sources: [1.p.34]

 

 

    Market relations formation requires to divide an united complex analysis of enterprise activity into inner {management} and outer {financial analysis}. Every type of analysis has its own information sources.

    There are two types of reports according to the world practice: a financial report printed in financial newspapers and bulletins, special guides for presentation of enterprise’s working state and economical activity result at a report period before shareholders, public, banks, insurance organizations and government establishments. It also declares information of several years giving possibility to describe partner ship activity’s in dynamics and its development direction and to foresee its future state. The second type of a report is a management analysis, it is the type of top, secret report consisting of enterprise products’ prime rate norms and of its extra issue leading to a low range of sales. There are types of important reports describing work results of separate pats as responsibility centres in an inner report.

     Table2. The main methods of diagnosing and analysis of enterprise’s financial and economical activity

                         Items of method

                     Content of methods

                                   1

                                      2

Unformed method

Logical, subjective research

Analytical

Evaluation of state by highly classified experts

Morphological

Systematization of analogous decisions collection and use of effective variants.

Rating

Definition, ranging and systematization by a number of indexes

Factographical

Analysis of materials printed in mass media

Monitoring

Systematic analysis of changes

Logical modeling

Marking analytical table , systematic indices

Fundamental

Definition of dynamics main directions and study of main tendencies

Technical

Indices of expected situations

Formed methods

Strictly formed analytical dependence

Factoral

Evaluation and classification of influencing the separate factors

Conjectural

Stabilization of demand and offer by current situations

Mathematical

Chained structure, arithmetic difference , percentage digits, differential, logarithmic, integral analysis , calculation of simple and complex percents discounting

Statistical

Correlational, regressive, dispersional, clasteric, extrapolational analysis, preparation of index methods by middle and comparative lots methods and by group and dynamics 

Methods of operational researches and marking decisions

Use of Graph theory, games , mass service, resources and achievement of goals and systematic planning

Econometrical

Making matrix, garmonic, industrial balances

Econometrical and mathematical modeling and effective programming

Descriptive, predicative and norms modeling, systematic analysis, linear and non-linear, dynamical programming 

Sources: [1.p.37-39]

 

    

     Definition of economical conduction range, comparison of expenses and results lets to find out who is more industrious and liquidates a problem of salary payment.

     Several methodical bases of diagnosing and analysis of enterprise’s financial and economical activity are viewed. Exact collection methods can be put into diagnosing and analysis of enterprise’s financial and economical activity. The main methods of diagnosing and analysis of enterprise’s financial and economical activity are given table 2. Inner analysis is done on the base of management report and outer analysis is made on the base of financial report. We need new methods in evaluation of enterprise’s financial state during modern market relations.

     We can come to next decisions on the base of researches made by diagnosing and analysis of enterprise’s financial activity.

1.     A general financial stability of an enterprise firstly indicates a movement of current flow which supplies exceed of income from expenses. During market relations it firstly requires a stability of income coming from product sales. It must be left a sufficiency of income for giving a chance the others and for industry development and revival of material and technical base of an enterprise after its accomplishing all the calculations and obligations for the further good development of it.

2.     One of the important factors of financial stability closely connected with enterprise product and its industry technology is an effective content and structure of assets and also a correct choice of the enterprise management strategy. Management of the current assets consists of holding a least sum of finances in enterprise’s account for its current. The more incomes and financial resources the enterprise has the more comfortable it may feel itself.

3.     On of the terms of good financial state is being in good relations with its contragents, that is with banks, contractors, subcontractors, customers, share holders and tax organs. That is why in order to be more attractive than the neighbors’ enterprise’s stability must be better. In such a way a financial stability defines competition ability and a range of it in business relations, evaluates its range of economical interests in financial and other points of view.

4.     Coincidence of financial state with market demands must be directed to achievement of financial stability in order of effective service of enterprise and also to comfortableness of own and debt finances, to account and credit order, to regular entry of financial resources.

    An achievement of financial service is defined by sale indices. Unbreakable production and sale of higts quality product positively influences the financial resources formation of enterprise and it the quality of its product is low then it will interfere with finances entry leading to fall of solvency and growth of enterprise expenses.

     The volume of enterprise expenses is defined by effective conduction of industrial process. The more effectively the industrial process is lead the less expenses are spent. On the contrary, the growth of raw and material expenses, fall of labour productivity, non-industrial expenses and extra expenses of other resources leads to necessity of extra finances labour and material resources are resulted in cost prime and income.

      The stability of enterprise’s financial activity leads to necessary situation for reaching a goal, supplies a financial stability of enterprise.

     All-round and systematic analysis of enterprise activity given the following possibilities:

-         quick, qualitative and professional evaluation of economical activity results of enterprise and its branches;

-         registration and fixation of factors influencing the income got from goods and services;

-         definition of industrial expenses and their changes motion necessary for preparing cost policy;

-         search for ways of correct salvation of enterprise’s income problems in near and far future.

The accountant balance is one of the sources of analysis of enterprise activity and financial state.

      The final information of annual results of enterprise property and financial state are indicated in accountant balance of enterprise.

      Mechanical copying and usage of foreign experience and methods of enterprise’s financial stability analysis is not effective for us. Attention is not much paid to peculiarities of enterprises in this situation. The reason of is that the foreign enterprises’ got development range does not always coincide with our enterprises’ development range.

      The financial state of enterprise is described by solvency, effectiveness of assets’ usage and profitability.

     It is of great importance to analyze a stability of enterprise’s financial state during market relations. It is described by enterprises’ getting independence, by their responsibility before property owners, workers and commercial partners.

    

                                                      Literature

1.     Titov V.I. Analysis and diagnosing of financial and commercial activity of enterprise: Reader – M.: Dashkov Co. Printing and trade corporation, 2005, 352p.

2.     Sherement A.D. Complex analysis of economical activity – M.: INFRA – M, 2006, 415p,

3.     Basovsky L.E .Theory of economical analysis: Reading manual. – M.: INFRA – M, 2006, 222p.

4.     Kanakovskaya A.R. , Tarushkin A.B. Economical analysis : Reading and methodical manual. St – Pb: Herda –Print House -2003, 368p.

5.     Chechevitsyna L.N. Analysis of financial and economical activity: Reading manual for alma maters 2nd edition, added and processed. Rostov – on- Don, Phoenix, 2005, 384p.