The purpose of any analysis of the reporting at the enterprise is assessment of general characteristics of its fixed assets and factors affecting overall performance of the company and its positioning in the market of rather last periods.
It is required to you
- - balance sheet;
- - calculator or computer.
Instruction
1. Combination of various methods of analyses of balance is important for assessment of enterprise performance. It allows to receive fuller picture of a financial condition of the company. The horizontal analysis of balance consists in studying absolute measures in the reporting of the enterprise, their change as in terms of money, and in percentage.
2. The horizontal analysis assumes creation of analytical tables in which sizes of absolute measures are specified for various periods. Such evident representation allows to estimate growth rates or decrease in these indicators and also to reveal the factors influencing these changes.
3. Make the table as follows: specify assets which dynamics you are going to analyze in the first column. For example, current assets: money, short-term investments, advance payments to suppliers and so forth. Non-current assets: long-term investments, fixed assets, intangible assets, etc.
4. Entitle the second and third column time periods which data you will compare among themselves, for example, January, 2008 and January, 2009. The fourth column call "an absolute deviation", and in the fifth you can give the same deviation, but already in percentage expression.
5. Fill the second and third columns of the table with data from the relevant articles of the balance sheet of your company. Calculate changes, subtracting the second value from the first, and write down the turned-out number in the fourth column. Growth of an asset in this case will be size positive, and decrease – negative.
6. Calculate data for the fifth column for what divide value of an absolute deviation into the corresponding size of an asset of the first period. Then increase the turned-out number by 100%. You receive percentage increase or decrease in an indicator.
7. Add to the table one more line after all calculations which entitle "Assets of all" or "Result". Summarize all values on each column and write down the sums the last line.
8. Significant increase in an absolute or percentage measure says that the company vigorously increases the economic potential, successfully financially develops. Change of some assets can appear for the worse, on the basis of it it is possible to draw a conclusion that the company is not in financial difficulties.
9. In the same way analyze liabilities of the enterprise, including the credits and loans, equity, short-term and long-term obligations, the saved-up profit, etc. Changes of these indicators show a trend of growth or decrease in the sums of debt to creditors, the budget, investors.