Qualitative and structural analysis of the balance sheet. Conducting vertical and horizontal balance analysis. Vertical balance analysis

Hello, Vasily Zhdanov is here, in this article we will look at horizontal and vertical analysis of the balance sheet of an enterprise. Maintaining financial statements is the most important aspect activities of a serious commercial organization. But the ability to analyze the balance sheet is also important, because the data recorded in it can tell an expert about the past and current activities of the company, as well as predict the development of the enterprise in the future. Depending on how much information the analyst needs and what specific goals he pursues, one of many is selected existing methods balance analysis. But the most popular are horizontal and vertical balance sheet analysis, because... both methods allow:

• reduce the risks of creditors when investing in companies;
• develop methods to maintain production stability;
• increase the company's income;
• conduct a competent analysis financial statements.

Important! Horizontal and vertical balance sheet analysis can be used simultaneously, since they complement each other and help conduct a more in-depth study of accounting data, which allows you to see the company’s growth rate and the dynamics of its development.

Brief information about the balance sheet

The balance sheet is a key type of reporting, thanks to which the company’s management has the opportunity to see the dynamics of the enterprise’s development in specific figures, the presence of short-term and long-term debts, the origin Money, as well as the volume of fixed/working assets.

The balance sheet is often called a financial entity, due to the fact that the information contained in the statements clearly demonstrates to company managers and analysts the risks of ruin and development prospects, as well as the rate of growth (decline).

The results of the balance sheet are 2 parts, equal to each other (if the balance sheet is drawn up correctly):

1. ASSETS(money, material assets, machinery, equipment, buildings and structures, inventories, debts of counterparties and consumers, etc.) - everything that a company owns and disposes of for the purpose of carrying out commercial activities and making a profit.
2. LIABILITIES(short-term liabilities to counterparties and clients, borrowed funds, retained earnings, own (share) capital) - information about the sources of the company’s assets.

Horizontal and vertical business analysis can help company management find weaknesses in the company’s activities and options for correcting errors.

Horizontal balance sheet analysis. Example with conclusions

The method of analysis that will be discussed is called horizontal for the reason that information for each item of the balance sheet for several periods is located in a row horizontally. The more periods of activity the data is compared, the more columns there are in the analysis table.

Below is a list of basic information you need to know about horizontal analysis of financial statements:

1. This method is used in cases where it is necessary to study the time dynamics of balance sheet results.
2. Not only the values ​​of absolute indicators (in rubles), but also relative ones (in %) are subject to comparison:

Absolute deviations
Relative deviations
Rates of growth

1. To conduct the analysis, you should select 2-3 quarters or years. Absolute (or relative) values ​​are consistently compared with similar indicators of later periods.
2. Horizontal analysis makes it possible to assess whether production indicators have improved or worsened in comparison with the year before and last year.

When conducting a horizontal analysis, they first look at the balance sheet total for the Asset - if the value increases across the columns (from previous to future periods), this indicates the favorable development of the company and its chances for further growth.

Next, attention is drawn to the dynamics of indicators of foreign and working capital: if their growth is observed from period to period, it means that the company is actively working, and management personnel are accepting right decisions on the way to improving the base.

The next thing to check is the solvency of the company, whether the company has free money in circulation and, importantly, whether it is used for investment in order to extract additional income. arrived. All this can be judged by studying the dynamics of values ​​​​for items directly related to money - “Cash”, “Accounts receivable”, “Financial investments”.

And finally, lines in the Passive are studied. To understand where the company under study gets its free money, you should pay attention to changes in the indicators for the items “Borrowed funds” and “Accounts payable”. Here, before drawing any conclusions, you need to carefully analyze the company’s policy regarding attracting third-party capital. Since a balance sheet analysis may show an increase in debt, however, this can be a positive thing if the money is invested wisely and generates additional income.

Vertical balance sheet analysis (structural). Examples with conclusions

Basic information about vertical analysis of accounting data can be seen in the list below:

1. Structural analysis is to demonstrate the structure of the final accounting information. reporting in the form of relative indicators expressed as percentages. As a result of the study, the expert receives the values ​​of all balance sheet items as a percentage of its total.
2. The advantage of vertical analysis over horizontal analysis is that in absolute terms it is difficult to see whether positive or negative dynamics are observed in the company’s work. Relative values, on the contrary, make it easy to assess whether the best side financial indicators deviated, and to what extent. The resulting output data in relative values ​​will not allow for incorrect comparisons due to the influence of various external factors, such as the inflationary process.
3. This method of analysis differs from horizontal analysis in that vertical analysis is focused on a selected moment and provides an assessment of the company’s position on the day the report is issued. The method is used when necessary:

• see how certain accounting items have changed in comparison with previous periods. balance;
• compare the capital structures of several companies or enterprises in different fields of activity;
• find out the composition of the outside and working capital;
• find out whether the size of the company's borrowed capital has decreased or increased;
• check how the structure of liabilities and assets has changed.

The essence of using structural balance sheet analysis is as follows:

1. The total amount of revenue when analyzing the report financial results firms (form No. 2) is taken equal to 100%. If the balance sheet is examined, the total amount of assets is taken as 100%. Vertical analysis is also suitable for studying the statement of cash flows (form No. 4) and changes in capital (form No. 3).
2. All balance sheet items are individually calculated as a percentage of 100% (i.e., the total amount of assets or revenue). To implement this, the analyst must select the period (year) of activity of the analyzed company, and then divide each individual balance sheet line by the accounting currency. balance, and then multiply the result by one hundred percent (since the value must be relative, in %).

Let's return to point 2 of the algorithm, which was given above the table. Let's find out how the values ​​in the table were obtained using the example of current assets:

Now that we understand how the data in the table was calculated, let's analyze it and draw conclusions:

• The amount of long-term debt of the analyzed company decreased slightly.
• The amount of equity (shareholder) capital is 50% of the total liabilities (this indicates that the company is characterized by an average level of stability).
• Short-term debt makes up a third of the balance sheet and remains virtually unchanged.
• The number of OS objects is reduced because some of them are going out of circulation.
• 63% of assets account for working capital, and the increase in their share was a consequence of the growth of accounts receivable (the company's management should think about the reasons for its growth).

Let's try to conduct a vertical analysis of data for 2 years of operation of the enterprise in absolute and relative values:

In general, the interpretation of a set of balance sheet output data is carried out by professional financial analysts and auditors, since it is necessary to be able to see the big picture and draw conclusions based on comprehensive research. What can be said unambiguously to a non-specialist looking at the table we received is that:

• the analyzed company has no changes in its own funds in the form of authorized capital, but the amount of available equity capital has increased by 8% due to the presence of retained earnings;
• the company has attracted a fairly large amount of borrowed funds, liabilities include >60% of accounts payable, but the positive side is a decrease in the level of loans in dynamics;
• the enterprise is solvent and quite stable financially, since there is a decent level of cash (48.22%);
• the company does not competently select counterparties for cooperation; most likely, the current partners are insolvent, because noted high level accounts receivable;
• the data from the table indicates that the level of receivables and inventories of the company is high, and therefore there are less non-current assets than current assets (the bad thing is that there may be extra costs for inventory storage (logistics), but the good thing is that managers care about investing in uninterrupted production).

Answers to frequently asked questions on the topic “Horizontal and vertical balance sheet analysis”

Question: What are the advantages and disadvantages of using vertical and horizontal analysis of financial statements?

Answer: The positive side of horizontal analysis is the ability to assess the dynamics of financial indicators over the years. A significant drawback is the fact that this type of analysis is of little use for assessing the financial condition and making decisions by managers - it is rather a diagnostic method. As for vertical analysis, it makes it possible to track changes in the structure of A and P of the company, but also does not allow it to be assessed financial condition.

Balance analysis is carried out using one of the following methods:

• ? analysis directly from the balance sheet without first changing the composition of balance sheet items;
• ? by constructing a consolidated comparative balance sheet with the aggregation of some elements of balance sheet items that are homogeneous in composition;
• ? carrying out additional adjustments to the balance sheet for the inflation index with subsequent aggregation of items in the necessary economic sections. A comparative analytical balance can be obtained from the original balance sheet by condensing individual items and supplementing it with indicators of structure, dynamics and structural dynamics.

The analytical balance sheet is useful in that it brings together and systematizes the calculations that an analyst usually makes when reading a balance sheet. The analytical balance sheet usually covers a lot of important indicators that characterize the statics and dynamics of the financial condition of the organization. This balance actually includes indicators of both horizontal and vertical analysis. Directly from the analytical balance sheet you can obtain a number of the most important characteristics of the financial condition of the organization. These include:

the total value of the organization’s property, reflected in the bottom line of the balance sheet;

the cost of immobilized (non-current) assets, equal to the total of section I of the balance sheet;

the cost of mobile (working) funds equal to the total of section II of the balance sheet;

cost of material working capital (inventories);

the amount of the organization’s own funds equal to the total of section III of the balance sheet;

the amount of borrowed funds equal to the sum of the results of sections IV and V of the balance sheet;

the amount of own working capital equal to the difference in the results of sections III and I of the balance sheet;

A separate position in the aggregated balance sheet shows net working capital, defined as the part of current assets (working capital) financed by invested capital. The value of this indicator characterizes the degree of liquidity of the enterprise, which makes this indicator of particular importance.

Typically, net working capital (NWC) is calculated using the formula

CHOC = TA - TP,

where TA are current (current) assets,

TP -- current (short-term) liabilities.

The greater the net working capital, the more financially stable the enterprise.

When analyzing the comparative balance, it is necessary to pay attention to the change specific gravity the amount of own working capital in the value of property, the ratio of the growth rates of equity and borrowed capital, as well as the ratio of the growth rates of receivables and payables.

With stable financial stability, the organization should increase in dynamics the share of its own working capital, the growth rate of equity capital should be higher than the growth rate of borrowed capital, and the growth rate of receivables and payables should balance each other.

Horizontal balance sheet analysis consists in constructing one or more analytical tables in which absolute balance sheet indicators are supplemented with dynamics indicators. The degree of aggregation of indicators is determined by the analyst.

Table 1 - Horizontal analysis of balance sheet assets

Based on the table below. 1. we can conclude the following. The total value of the organization's property increased during the reporting year by 33,538 thousand rubles, or 140.65%.

The most significant increase in absolute terms was the least mobile part of current assets - inventories, and in relative terms - cash. There is a fairly significant increase in accounts receivable (see Appendix 1). This fact reflects the diversion of part of current assets to consumer lending finished products, goods, works and services of the organization, subsidiaries and other debtors, which indicates the actual immobilization of this part of working capital from the production process. On the other hand, accounts receivable indicate the upcoming receipt of funds if the organization has solvent debtors.

Non-current assets during the reporting period increased by 24455 thousand. rub., or 140.68%. The increase in the value of non-current assets occurred due to an increase in the value of fixed assets and the formation of deferred tax assets, as well as under the item “Construction in progress”

Table 2 - Horizontal analysis of balance sheet liabilities

As follows from the calculations presented in table. 2., an increase in the value of liabilities for the reporting period by 33,538 thousand rubles, or 140.65%, is mainly due to an increase in equity capital by 14,176 thousand rubles, or 121.44%. Long-term liabilities over the same period increased by 15,000 thousand rubles, and short-term liabilities by 4,362 thousand rubles. (126.59%).

The growth of equity capital was due to the growth of retained earnings in the amount of 14,176 thousand rubles. The authorized, additional and reserve capital did not change in absolute amounts.

Among borrowed funds, the debt to participants for payment of income increased most significantly - by 2,694 thousand rubles.

The next analytical procedure is vertical analysis -- presentation of financial statements in the form of relative indicators. This representation allows you to see the share of each balance sheet item in its overall total. An obligatory element of the analysis is the dynamic series of these quantities, through which it is possible to track and predict structural changes in the composition of assets and the sources of their coverage. Thus, two main features of vertical analysis can be distinguished:

the transition to relative indicators allows comparative analysis enterprises, taking into account industry specifics and other characteristics;

relative indicators smooth out Negative influence inflation processes that significantly distort the absolute indicators of financial statements and thereby complicate their comparison over time.

It should be noted that the importance of permanent and current assets for manufacturing and trading companies is different. Thus, a significant part of the assets production company, obviously, will be formed at the expense of fixed production assets. At the same time, the assets of a company engaged in trading activities will primarily consist of inventories, goods for resale and other property, which is reflected in the section “Current assets”. Thus, when analyzing the ratio of permanent and current assets, more attention should be paid to the change in structure itself, and, if possible, compare it with the structure of assets of peer companies and find out the reasons for the differences.

Table 3 - Vertical analysis of balance sheet assets

Both at the beginning and at the end of the reporting period, non-current assets occupy a larger share of the property than current assets. During the reporting year, their share increased by 0.02 points, which indicates the formation of a more stable asset structure.

Table 4 - Vertical analysis of balance sheet liabilities

From Table. 4. It is clear that equity capital predominates in the organization’s liabilities. By the end of the year, there was a tendency towards a slight reduction in its share.

In the process of analysis Special attention it is necessary to pay attention to elements that have the highest specific gravity, and to elements whose share has changed abruptly. As a rule, elements with the maximum specific weight or those that change abruptly are indicators of the “problem points” of the organization. To obtain more accurate information, it is necessary to estimate the absolute values ​​of these elements.

Based on the results of the balance sheet analysis as a whole, we can conclude the following. An analysis of structural dynamics indicators revealed the presence of a rather favorable trend: the increase in property was ensured due to the increase in non-current assets. Thus, newly attracted financial resources were invested mainly in liquid assets, which strengthens the financial stability of the organization. The increase in equity capital had the greatest impact on the increase in sources of funds.

Horizontal and vertical analysis complement each other. Therefore, in practice, it is advisable to build analytical tables that characterize both the structure of the reporting accounting form and the dynamics of its individual indicators.

Trend analysis -- part of the forward analysis that is necessary in management financial resources organizations. In the process of trend analysis, a graph of the organization’s possible development is constructed, the average annual growth rate is determined, and the forecast value of each indicator is calculated. This is the simplest way of financial forecasting. The exclusion of random deviations makes it possible to identify stable dynamic series of individual indicators, which can serve as a fairly reliable basis for predicting the development of business entities.

Analysis of the dynamics of the balance sheet currency, the structure of assets and liabilities of the organization allows us to draw a number of important conclusions necessary both for the implementation of current financial and economic activities and for making management decisions for the future.

In general terms, signs of a “good” balance are:

the balance sheet currency at the end of the reporting period increased compared to the beginning;

the growth rate of current assets is higher than the growth rate of non-current assets;

The organization's own capital exceeds its borrowed capital and its growth rate is higher than the growth rate of borrowed capital;

The growth rates of accounts receivable and accounts payable are approximately the same.

There are many techniques for analyzing the balance sheet. The choice of a specific one depends on the task at hand, as well as the available information. The most commonly used methods are vertical and horizontal analysis. They are necessary to analyze financial statements and increase income. The methods are relevant for investors, banking institutions, and lenders.

Vertical balance analysis

Vertical analysis is required to find the structure of the final values ​​of financial indicators. It displays the following options:

• Availability of current and permanent assets, their volume.
• Sources of financing.
• Balance sheet parameters that change quickly.
• Changes in general structure balance.
• Share of reserves.
• The share of receivables in the total structure of assets.
• Share of own funds.
• Placement of borrowed funds.
• Debts to budgetary entities and credit institutions.

Responsibility for conducting vertical analysis rests with employees of the economic department.

Holding

Let's consider the algorithm for performing vertical analysis:

1. The total assets of the company are taken as 100%.
2. Each parameter indicated in the reporting is determined as a percentage of 100%.

When conducting an analysis, you need to follow a number of rules:

• Vertical analysis is a tool for determining the solvency of an organization. For this reason, special attention should be paid to accounts receivable, financial deposits, available funds and their equivalents.
• When comparing percentages, you need to identify discrepancies in speed.

Let's consider the conclusions that can be drawn from the results of vertical analysis:

• Reflection of existing changes in relation to the entire set of property.
• Growth of non-current assets in percentage.
• Fixing the share of the organization’s personal capital at a certain level.
• Presence or absence of losses.
• The presence or absence of long-term loans and obligations to creditors.

ATTENTION! If, based on the results of a vertical analysis, a lack of available funds was discovered, this may negatively affect the level of solvency.

Example

Let's look at an example of a calculation for the line “Cash and cash equivalents”. This figure is 25,000 rubles. The balance currency for the selected period is 550,000 rubles. The calculation is carried out according to the following scheme: 25,000/550,000*100% = 4.5%.

The resulting value indicates the percentage of cash from the balance amount. It can be analyzed. In this example, the company has little available funds. This means that its solvency is low.

Horizontal cash analysis

The main function of horizontal analysis is to compare parameters for the current period, as well as the previous period. As a result, it is possible to determine the dynamics, based on which conclusions can be drawn.

Horizontal analysis is a comparative analysis of financial indicators for periods of interest. When calculating, you need to take the values ​​​​by line, and also track its changes over several periods.

These periods can be completely different intervals. However, typically the analysis is carried out by quarter or year. The number of periods that are analyzed may vary. It all depends on the tasks assigned. If a qualitative analysis is carried out, 3 periods are taken into account when calculating. As a rule, this technique is carried out to analyze the balance sheet, profit and loss statement, and changes in capital. Horizontal analysis can be carried out according to two approaches:

• Change in absolute values ​​(for example, in rubles).
• Change in relative values ​​(for example, percentage).

The approaches complement each other. The most understandable example of horizontal analysis is determining changes in values ​​relative to the previous period. For example, the company’s revenue for the quarter increased by 25%.

ATTENTION! Horizontal and vertical analyzes are essentially opposite. The horizontal method allows you to trace changes over different periods. The vertical method involves tracking changes within the boundaries of one period.

Features of the analysis

When performing horizontal cash analysis, you need to follow a number of rules:

• The main parameters that you should pay attention to are cash deposits, cash, and receivables. These options display available available funds.
• If you want to form a complete picture of changes, you need to analyze the balance sheet of the last 2-3 years.

The work is carried out on the basis of company documentation.

Structure

Let's look at the indicators that are analyzed when using the horizontal method:

• and current fixed assets.
• Accounts receivable.
• Cash and cash equivalents.
• Equity.
• Borrowed capital.

If required, you can use additional parameters.

How is horizontal analysis performed?

The employee needs to determine ways to form the company's own funds. To do this, you need to analyze the liabilities of the balance sheet. When analyzing the flow of funds, you need to focus on a number of items, such as:

• Debts to creditors.
• Borrowed funds.
• Amount of authorized capital.
• Income that will be received in the following periods.
• Retained earnings.

As a rule, available funds are generated from proceeds from the company's clients. A decrease in value indicates either a decrease in advances or a decrease in demand.

ATTENTION! Horizontal analysis provides only approximate indicators. If alarming values ​​are found as a result, you will need to additionally calculate various coefficients.

Example

The following values ​​are analyzed:

A full analysis uses a much larger list of parameters. Comparing the data of two columns allows you to track the changes. Based on them, a conclusion is drawn about the financial condition of the company. To get a complete picture, you need to study all the indicators, as well as determine the reasons for the changes.

Analysis of the obtained values

The balance sheet reflects the state of the company. A “good” balance meets a number of requirements:

• The balance sheet currency at the end of the period under review increases relative to the beginning of the period.
• The rate of currency growth exceeds the rate of inflation, but is less than the rate of revenue growth.
• The rate of increase in current assets is higher than the rate of growth of non-current values ​​and short-term debts.
• The volume of long-term borrowed funds is greater than the values ​​for non-current assets.
• The amount of equity capital is at least 50%.
• All parameters (rate, volume) of receivables and payables are approximately the same.
• There are no uncovered losses or they are extremely small.

IMPORTANT! When analyzing, you need to pay attention to new trends in accounting methods and changes in accounting policies.

One of the main ways to make a business successful is the ability to control how well things are going and respond to negative factors in a timely manner. But to determine the state of affairs, it is necessary to have criteria on the basis of which appropriate conclusions can be drawn. When it comes to evaluating a company's performance, the best indicator is unbiased accounting numbers. It is on the basis of the balance sheet figures that horizontal and vertical analysis is carried out, giving an idea of ​​the state of affairs of the company at the moment and in relation to previous reporting periods.

Balance sheet

This is one of the main types of accounting reporting, which allows you to see a picture of the company’s activities, the availability of fixed and working capital, sources of financing, the presence of debts, etc.

The final balance values ​​are presented in two parts:

1. Assets that a company has to carry out its activities, including real estate, equipment, cash, inventories of materials, customer debts, etc.
2. Liabilities - inform about the sources of existing assets. This includes equity capital, retained earnings, loans and credits, and current liabilities.

When drawing up a balance sheet, Assets and Liabilities must be equal, that is, everything that is used for business must have its specific source.

Why do you need a balance sheet analysis?

The balance sheet is compiled in such a way that the information contained in it helps to determine the state of the enterprise, growth opportunities or, conversely, the threat of bankruptcy. Therefore, the balance sheet is sometimes called the financial entity. Accordingly, by analyzing the above indicators, you can get an idea of ​​how the company operates, its prospects, or decline.

This analysis is used both by the company's management and potential investors, creditor banks, and business partners. For the company's management, the results of the analysis allow them to develop a further development policy, find weaknesses and ways to correct mistakes. Using the analysis allows you to get answers to the following questions about the state of the company:

• , their structure and sources;
• growth rates for each balance sheet item, its impact on business development;
• the company's dependence on borrowed funds and the valuation of its own funds;
• determining the terms for repayment of borrowed funds;
• the amount of debt for contributions to the budget, wages, and debt repayment.

To find answers to these questions and clarify the existing this moment financial position of the company and apply horizontal and vertical analysis.

Horizontal analysis

Such an analysis is called horizontal because of the location of data in a horizontal line for each of the articles for two or more reporting periods. That is, it gives an idea of ​​the changes that occurred during the reporting period compared to the previous ones, and allows you to track the dynamics of indicators. For this purpose, the preparation of the balance sheet provides for the presence of two and sometimes three columns of reporting data.

Data comparisons are made based on both absolute and relative changes:

In horizontal analysis, first of all, attention is paid to changes in items related to cash, as the most liquid part of the asset. These include “Cash”, “Accounts Receivable”. The presence of movement on these items shows that the company not only has free money, but it is used to invest and generate additional income. That is, the company is sufficiently solvent.

The growing final balance sheet figure also shows the stability of the enterprise and its potential for development. Attention is drawn to the growth of working and non-current assets; it shows vigorous activity and a desire to improve the existing base.

But analysis of the Asset cannot fully determine the dynamics of development, so it is important to consider the changes that have occurred with the Liability. To determine the source of free money in the Liability part, changes in the items “Accounts Payable” and “Borrowed Funds” are analyzed. Of course, the growth of debt can be a concern, but it is impossible to say unequivocally that this factor is negative, since these funds can be used to expand production and generate additional profits in the future.

Vertical analysis

Unlike horizontal analysis, vertical analysis focuses on a specific moment and evaluates the financial condition as of the date of the report. And the task of such an analysis is to determine in what shares each of the items is included in the balance sheet amount. This gave the second name to vertical balance - “structural”.

The calculation of the share of each position is carried out in relation to the total balance amount; it can also be called the balance sheet currency. In the calculation, the balance sheet currency is taken as 100%, and each item will make up its own specific percentage. The use of relative values ​​in the calculation allows you to avoid incorrect comparisons that arise under the influence of external factors, such as inflation.

For clarity, let's look at an example of a vertical analysis of the balance sheet given in the table and conclusions based on these data.

Based on the data presented, the following conclusions can be drawn:

1. The level of inventories and receivables is high, which generally affects the excess over non-current. This can have the positive side of providing funds to ensure uninterrupted production. But we must also take into account that this will increase storage costs.
2. Receivables of this level signal that insufficient work is being done with counterparties and partners are selected who do not have sufficient solvency.
3. A positive point is the high level (48.22%) of cash. This allows us to conclude that the company’s financial position is stable and has high solvency.
4. In the Liabilities section, we notice the high share of accounts payable, more than 60%, but if we compare it with the previous period, we can see that it is decreasing.
5. According to this balance sheet, the company has no changes in its own funds in the form of authorized capital, while its own sources increased by 8% due to retained earnings.

This is a small simplified example, but in general, conducting balance sheet analysis is the prerogative of specialists high class, because it is not easy to interpret changes from the given figures. It is not always possible to say unambiguously how bad or good the indicators are. For correct and well-founded conclusions, special tables and an integrated approach are used.

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Analysis of the balance sheet allows you to obtain information about the state of the company. To make a correct “diagnosis” of a business and give an objective assessment of management’s activities, one must rely on facts and analytics. The source of information in this case will be management and accounting reporting. See how to conduct a vertical and horizontal balance sheet analysis using the example of a specific enterprise.

What is this article about?:

Enterprise balance sheet

The asset is divided into two more sections:

1. Fixed assets, that property that is operated for more than one year and transfers its value to products over more than one production (operating) cycle.
2. Current assets, property of an organization that is consumed during the production (operating) cycle and transfers its value to the organization’s products (services).

The liability contains information about the sources of financing of the company's assets.

Sources are divided into three groups and sections correspond to them:

1. Capital and reserves
2. long term duties
3. Short-term liabilities.

Analysis of the balance sheet using the example of an enterprise

As a cross-cutting example, let’s take from open sources the financial statements according to RAS of one of the largest airlines in Russia (Table 1).

Table 1. Reporting for analysis of the organization’s balance sheet (thousand rubles)

More on the topic:

How it will help: Assess a company's ability to pay its short-term obligations.

How it will help: determine the coefficients of absolute, current and intermediate liquidity, indicators of coverage of working capital by own sources of formation, restoration (loss) of solvency.

Horizontal balance sheet analysis (analysis of indicator dynamics)

table 2. Horizontal balance sheet analysis

Horizontal asset analysis

After a horizontal analysis of the balance sheet, we see that intangible assets and R&D results are decreasing from year to year, the company does not create new intangible assets, and those that have already been practically written off.

The jump (in 2015) and then the fall (2016) in the value of fixed assets looks unusual. This is due to the process of restructuring the airline’s business - in 2015, a significant number of aircraft were taken onto the balance sheet in the form of fixed assets, and in 2016 there was a significant disposal. The reason is the transfer of the helicopter fleet to another entity as an element of restructuring.

From year to year, profitable investments in material assets are decreasing, most likely due to the depreciation of equipment, from which they are mainly composed.

In 2015 and 2016, long-term investments in financial assets increased, but the reasons for this growth are different from year to year. In 2015, long-term loans provided by the company increased, and in 2016, financial investments increased due to the appearance of new shares of companies on the company’s balance sheet. possibly a dedicated helicopter unit.

As a result of the horizontal analysis, it became clear that deferred tax assets increased in 2015 and then decreased in 2016; the reasons must be sought in the peculiarities of accounting for fixed assets.

In 2015, other non-current assets decreased and then in 2016 increased significantly - there is no information about the reasons, but financial analysts should pay attention and clarify the reasons for this dynamics.

During 2015–2016, inventories grew mainly due to raw materials and materials, since we are talking about a large airline; perhaps the growth of inventories was determined by purchases of fuel and lubricants.

Throughout the analyzed period, VAT on purchased assets was reduced, perhaps this is due to a decrease in purchase volumes.

In 2015, accounts receivable fell, in 2016 it increased slightly ( ). A deeper analysis of the balance sheet shows that in 2015 the reduction was achieved due to short-term liabilities of debtors, and in 2016, the debt of buyers with maturities of more than a year increased in absolute and relative values, which does not speak in favor of the company.

Short-term financial investments remained relatively stable in 2015, but dropped sharply in 2016 due to a reduction in lending volumes.

Cash and cash equivalents increased in 2015 and decreased significantly in 2016, perhaps the company used funds in the accounts for debt restructuring purposes.

In general, the assets and, accordingly, the size of the company’s business have decreased since 2016 relative to 2015 and 2014.

Read also:

How it will help: make the company’s budget transparent and accurate, plan in detail and control the expenses of departments.

Horizontal analysis of liabilities

In 2015, the company carried out an additional issue of shares for more than 3 billion rubles and sold new shares for 25 billion, hence the corresponding changes in the balance sheet.

In addition, in 2015, 21 million rubles worth of assets repurchased from shareholders disappeared from the balance sheet. shares, the value of the article “Revaluation of non-current assets” decreased.

A positive factor is that in 2016 the value of the item “Uncovered loss” decreased and not due to additional. Issues, but due to the profits received.

Analyzing sections IV and V of the balance sheet, we see that short-term liabilities have decreased significantly, while long-term ones, on the contrary, have increased - this is a consequence of restructuring - short-term sources were replaced by long-term ones, while part of the short-term debt was covered from funds raised through an additional issue.

When analyzing dynamics, it is very good to understand the significance of a particular indicator in the structure of the balance sheet, and here the second common method of analyzing the balance sheet will help us.

The “second form” of financial statements is meaningful in itself. However, a comprehensive analysis of the financial results report will increase the information content significantly. Read the article about how to carry it out and what conclusions to draw. Also, download the Excel file, which will automatically calculate the indicators based on your data. Analysis of the income statement>>

Vertical balance analysis (structure analysis)

It is logical to continue the balance sheet analysis by examining its structure; this method is called vertical balance sheet analysis. We evaluate the share that a particular category of assets/liabilities makes up in the balance sheet currency, study the history of changes in this share and draw conclusions.

The balance sheet currency is the sum of all assets or liabilities.

Table 3. An example of a vertical analysis of an airline's balance sheet

The first thing we see as a result of a vertical analysis of the asset structure is the low share of fixed assets in the composition of assets. It would seem that the basis for the airline’s activities is a large fleet of equipment, but the modern business model of such companies is focused not on the operation of equipment and provision of it for use, but on the provision of services - the movement of passengers and cargo. You don't need to be an owner to make this happen. technical means, you need to be able to use as much of these funds as possible, and leasing helps airlines do this. Equipment leased is reflected in off-balance sheet accounts. The airline's fixed assets are primarily airport infrastructure, equipment and spare parts.

A significant share of the company’s assets is occupied by financial investments, almost 36% (or 41% if short-term financial investments are also taken into account), but this is apparently a consequence of the company’s development history; the presence of financial assets is not a necessary part of the company’s business model.

The largest share in the company is accounts receivable - almost 42% for 2016. When analyzing a company's assets, it is necessary to pay primary attention to financial investments, as well as the structure and dynamics of accounts receivable; other elements of assets have a much lesser impact on the company's business.

To decrease accounts receivable, check whether you are making mistakes in its management. Download instructions that will help you control receivables from the moment the contract is signed, an Excel model for analyzing debtors, and a checklist of primary receipts from the client.

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When considering sources of financing, it is necessary to evaluate the structure of sources - which is the main one: in our case, the company has accumulated a significant amount of uncovered losses, which have not been covered by its own funds for a long time. But if in 2014 most of activities of the company and, including the loss was covered from short-term borrowed sources, then in 2015 the company improved the financing structure and the overwhelming majority of the balance sheet currency was made up of long-term sources, in addition, the company, through emissions and profits in 2016, reduced the accumulated minus in Section III of the balance sheet .