Audit and economical analysis

Vertical analysis. Elements of financial statements as a method of filling for horizontal analysis will be used to assess the composition of the subject.   These aspects can be applied to all forms of financial statements.   In the general context, the diagnosis of the financial condition of an enterprise is based on the individuality of the individual and his changes.   Understanding the financial well-being of the company focuses on the correct balance of unity lines in the overall composition.

Table 34

Vertical analysis

Balance sheet asset	Last year			Current year			Difference
	Sum	%	Sum		%	Sum		%
1	2	3	4		5	6(4-2)		7(5-3)
Active
Long-term assets	UM0	UM/A0*100	Um1		Um1/A1*100	Um1- UM0		Um1/ UM0
Current assets	JA0	JA0/A0*100	JA1		JA1/A1*100	JA1- JA0		JA1/ JA0
Total amount	A0	100	A1		100	A1- A0		A1/A0
Passive
Own source of funds	O‘M0	O‘M0/P0*100	O‘M1		O‘M1/P1*100	O‘M1- O‘M0		O‘M1/O‘M0
Obligations	M0	M0/P0*100	M1		M1/P1*100	M1- M0		M1/ M0
Passive total	P0	100	P1		100	P1- P0		P1/ P0

Table 35

Vertical analyzing Financial Results

Financial Results	S	Last year		Cuurent year		Difference		Growth
		Sum	%	Sum	%	Sum	%
1	2	3	4	5	6	7(5-3)	8(6-4)	9(5/3*100-100)
Gross profit from product sales	YAf0	YAf0/ Sn0 *100	YAf1	YAf1/Sn1 *100	X	U	Z	YAf0
Outcome of the main activities	An	An0	An0/Sn0*100	An1	An1/Sn1* 100	X	U	Z
Results of financial activity	Mn	Mn0	Mn0/Sn0* 100	Mn1	Mn1/Sn1* 100	X	U	Z
Emergency Outcome	Fn	Fn0	Fn0/Sn0*1 00	Fn1	Fn1/Sn1*1 00	X	U	Z
The result until tax payment	Sn	Sn0	100	Sn1	100	X	U	Z
Taxes and other taxes on income	Fs	Fs0	Fs0/Sn0*1 00	Fs1	Fs1/Sn1*1 00	X	U	Z
Net profit	Sf	Sf0	Sf0/Sn0*1 00	Sf1	Sf1/Sn1*1 00	X	U	Z

The same applies to structured analysis in the general line of cash flows (cash flow The same applies to the structured analysis of the total cash flow line (cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, cash flow from financing activities, cash flow from cash flow) ( property, plant, construction, transfer equipment, machinery and equipment, tools, etc.) can be used for structured private equity a (equity, additional capital, reserve capital, unallocated profit lines).

Vertical analysis assumes uniformity in horizontal analysis.   That is why they are always divided and divided.   It is impossible to ensure the completeness of the analysis, applying them one by one.

The trend is the most commonly used method for evaluating dynamic changes as a basic analysis.   Using this method, changes in the near and long period are estimated in absolute and relative terms.   Trend analysis is often used to evaluate asset revaluation, estimate profit and growth, and also estimate investment.

Table 36

Tendency analysis of elements of financial statements

Years	Autonomy ratio	Change +, -
		Compared with the previous year			Regarding to the base year
		Thesum	%	Thesum		%
2014	K1	x	x	x		x
2015	K2	K2-K1	K2 / K1	K2-K1		K2 / K1
2016	K3	K3-K2	K3 / K2	K3-K1		K3 / K1
2017	K4	K4-K3	K4 / K3	K4-K1		K4 / K1
2018	K5	K5-K4	K5 / K4	K5-K1		K5 / K1

Table 37

Analysis of changes in financial indicators compared with previous years

Indicators	Profit		Salesrevenue					Volumeofassets
	Compared with the previous year	Regarding the period	Previous year			Base year		Compared with the previous year		Regarding the period
Absolute expression
2014	F0	x		ST0	x		A0		x
2015	F1-F0	F1-F0		ST1 ST0	ST1 ST0		A1-A0		A1-A0
2016	F2-F1	F2-F0		ST2-ST1	ST2-ST0		A2-A1		A2-A0
2017	F2, F3	F3-F0		ST3-ST2	ST3-ST0		A3-A2		A3-A0
2018	F3-F4	F4-F0		ST4 ST3	ST4-ST0		A4, A3		A4-A0
Relative expression
2014	F0	x		ST0	x		A0		x
2015	F1 / F0	F1 / F0		ST1 / ST0	ST1 / ST0		A1 / A0		A1 / A0
2016	F2 / F1	F2 / F0		ST2 / ST1	ST2 / ST0		A2 / A1		A2 / A0
2017	F3 / F2	F3 / F0		ST3 / ST2	ST3 / ST0		A3 / A2		A3 / A0
2018	F4 / F3	F4 / F0		ST4 / ST3	ST4 / ST0		A4 / A3		A4 / A0

 

Based on a trend analysis, the level of indicators is also assessed, and the average level of growth is also assessed.

Ratio analysis method.   Absolute statements in business valuation cannot reveal all aspects of financial condition.   therefore, in most cases, relative expressions are also used.

Relative expression is defined by science as a financial factor, each of which reflects the material aspects of the financial position of the subject.

The following important aspects of financial ratios should be highlighted:

- the coefficients of the coefficients are determined by combining two or more indicators (the coefficients must have their content and classification and give a new indication of their financial position);

- financial ratios are determined only on the basis of official published financial statements (financial ratios are calculated by summing the series of one or more financial statements, as well as their consolidated units);

- financial ratios - represent various aspects of one business (for example, when assessing the company's solvency, its absolute, intermediate and general characteristics);

- it is possible to accumulate certain indicators when determining the coefficient of the coefficient (for example, a set of indicators of the financial condition of the company when evaluating a rating or a combination of indicators of economic uncertainty);

- financial ratios - have the same size;

- financial ratios - allow for a comprehensive assessment of the effectiveness of the enterprise;

- financial ratios - distinguish the content of various aspects of the process (the aggregation and absorption coefficients of fixed assets are different, their unity is one aspect);

- comparison of indicators of all enterprises and organizations, regardless of the absolute value of financial ratios.

Characterized types and coordination of financial ratios.   The coefficients of the coefficients are calculated by multiplying the basis by different indices, and the coefficients of the coefficients are equal to the sum of the units.

Structural factors - the share of long-term and current assets in the ownership structure of the company, the share of liquid assets (stocks, liabilities of receivables, funds) in current assets, the share of own and borrowed funds in total resources, long-term and short-term liabilities in the structure of liabilities and other structural factors.

Ratios include financial independence, sustainability, profitability ratios, and solvency ratios.

The following ratios can be summarized as generalized financial ratios¹¹.

- creditworthiness and liquidity ratio;

- financial stability ratios;

- profitability ratios;

- degradation rates;

Activity rates

Each group of financial ratios includes several indicators.

The absolute value of the coefficients of solvency and liquidity;   (In some sources these numbers are called absolute, fast liquidity and current liquidity)