You will need
- - the balance sheet of the company for the period;
- - the formula for calculation of the capital ratio:
- KSK=KS/K, where:
- - KS - own capital of the enterprise,ths.
- To the assets of the company, thousand RUB.
Determine the amount of own capital of the enterprise (COP). This can be done by taking the total amount on the line of section III "Capital and reserves" accounting balanceas at end of the reporting period. As can be seen from the structure of the balance sheet to equity of the company is one authorized and additional paid-in capital, reserves and retained earnings.
Determine the amount of assets of the company (K). The value of the assets of the company is the total amount (currency) balance as at the end of the analyzed period. Calculate the coefficient of own capital of KSK specified formula by dividing the amount of own capital of the enterprise (COP) to the value of its assets (K) at the end of the reporting period.
Analyze the results by calculating the coefficients own capital of the enterprise over the same period last year, for the previous accounting periods. Examine the dynamics of changes in the coefficientand make necessary conclusions.If required, calculate other indicators, characterizing the structure of capital and level solvency (the ratio of the ratio of borrowed and own capital, the ratio of the coating, the restoration of solvency, etc.).
The higher the capital ratio, the higher the level of solvency of the company. The high level of this ratio shows the stability of the financial structure of the enterprise, which is a good guarantee of obtaining credits on favorable terms.
Advice 2: How to calculate solvency ratio
The solvency of the company represents its ability to timely pay for the commitments and debts in the current time, both short-term and long-term. In the analysis of the solvency assets are treated as secured debt of the company, i.e. the property, after which it will pay its obligations.
Speaking about the solvency of the organization, meant its liquidity, i.e. the possibility of realization of the company's assets and repayment of debts. It is a broader representation of solvency. In the narrower sense, solvency is whether the company has sufficient funds to repay the current accounts payable in the near future.
In the analysis of solvency of the enterprise calculated for three major factor. The first of them is current ratio solvency allows to evaluate the ability to repay your debts and shows how much current assets account for one ruble of short-term liabilities. The normative value for this ratio is 2. The value of the coefficient is below the set standard indicates the presence of the risk of delayed calculation of the enterprise to repay current liabilities.
The quick ratio solvency is defined as the ratio of the amount of receivables and short-term investments and cash liabilities of the company. Ie when calculating this coefficient from the value of the assets of the company are deductible reserves. And this is quite logical: they not only have less liquidity but in case of rapid implementation, the sale price may be below their cost of production or acquisition. The estimated value for this ratio is 1.
The most stringent criterion of solvency of the enterprise is the ratio of the absolute solvency. It is calculated as the ratio of cash to short-term liabilities of firms and shows what part of the debt can be repaid immediately from available cash. The normative value for this ratio is 0.25.
Advice 3: How to calculate coverage ratio
When analyzing liquidity, which is understood as the ability of an enterprise to timely pay for the assumed short-term obligations at the expense of quick sold assets, counting the number of coefficients. Among them, the current ratio or the ratio of the coating.
Ratio coverage characterizes the ability of companies to repay current liabilities due to the sale of current assets. This is the most common measure of the liquidity of the organization. The higher the value, the more solvent the company.
This ratio shows how many rubles of current assets the company's short-term ruble obligations. In other words, it allows you to determine which part of current liabilities, the company may pay the expense of current assets. Therefore, theoretically, the organization in which the level of current assets exceeds the level of short-term liabilities can be regarded as well functioning.
Calculate the coefficient of coverage is pretty simple. It is defined as the ratio of current assets to current liabilities of the firm. In this case, the asset refers to cash in hand and the company on accounts in banks, receivables with a maturity of less than 12 months, the cost of commodity-material assets, other current assets, for example, short-term investments. But it should be remembered that not all the assets shown in the balance sheet, are current. Some trade balances or overdue receivables have zero liquidity. Under current liabilities refers to a loan with the nearest maturity, liabilities to employees of the organization, budget, extrabudgetary funds, etc.
The coefficient value of the coating, usually in different industries are not the same. Its normative value is 2. The ratio below the established level is considered critical. The increase in this indicator in the dynamics is regarded as a positive aspect and shows that the risk associated with the difficulty in the implementation of the enterprise's assets is reduced.