Audit and economical analysis

FLE = (ROA - AIR)(1-TB)•EC/PE

Here:

FLE-financial leverage effectiveness;

ROA - profitability of assets;

AIR - average interest rate;

TB-tax burden;

EC-equity capital;

PE - private equity.

ROA = Net Profit / Assets

ROA (last year) = 507693607/13198104658 = 3.85%

ROA (reporting year) = 974038284/24276893065 = 4.01%

Table 233

Analysis of financial leverage effectiveness

Indicators	Last year	Report year	Change	Rate
1. Assets, A	13198104658	24276893065	11078788407	183.94
2. Net Profit, SF	507693607	974038284	466344677	191.86
3. Return on assets, ROA (2/1)	3.85	4.01	0,16	104.16
4. Private equity, thous. UZS	7745794466	10124233076	2378438610	130.71
5. Debt capital, thousand UZS.	5452310192	14152659989	8700349797	259.57
6. Profit tax rate,%	10	10	0	100
7. Credit, interest rate,%	9	14	5	155.56
8. Inflation rate,%	5.6	11.6	6	207.14
9. Effect of financial leverage,% (3-7)(1-6) * 5/4	-3.26	-12.57	-9.31	385.58

MLs (last year) = (3.85-9) * (1-10 / 100) * 5452310192/7745794466 = -3.26%

 

MLs (reporting year) = (4.01-14) * (1-10 / 100) * 14152659989/10124233076 = -12.57%

In this case borrowing capital (-12.57%) is ineffective. To evaluate the effectiveness of the financial leveraged factors, it is recommended to use the following links:

MLs1 = (4.01-9) * (1-10 / 100) * 5452310192/7745794466 = -3.16%

MLs2 = (4.01-14) * (1-10 / 100) * 5452310192/7745794466 = -6.33%

MLs3 = (4.01-14) * (1-10 / 100) * 5452310192/7745794466 = -6.33%

The total change in the effectiveness of the financial leveraged was 9.31% (-12.57 - (-3.26)). (-6.33 + 6.33) = - 3.17% (-6.33 + 3.16) = -3.17% (-6.33 + 6.33) due to changes in interest rate (- (3.16 + 3.26) = 0.1% due to change in investment profitability ) = 0% due to private equity change (-12.57 + 6.33) = - 6.24% Total effect: 0.1-3.17 + 0-6.24 = -9.31% In case of strong inflation if the interest rates are not re-indexed, financial leverage and private equity profitability will increase, in which case the cost-effectiveness will be calculated using the following formula:

MLS=[ROA-Fo‘s/(1+I)]*(1-Ss)*QK/XK + I*QK/XK*100%

Here:

MLs (last year) = (3.85-9 / (1 + 5.6 / 100)) * (110/100) * 5452310192/7745794466 + 5.6 * 5452310192/7745794466 = 0.98

 

MLs (calculation year) = (4.01-14 / (1 + 11.6 / 100)) * (110/100) * 14152659989/10124233076 + 11.6 * 14152659989/10124233076 = 5.48% you can: MLs1 = (4.01-9 / (1 + 5.6 / 100)) * (110/100) * 5452310192/7745794466 + 5.6 * 5452310192/7745794466 = 1.08%

MLs2 = (4.01-14 / (1 + 5.6 / 100%) * (110/100) * 5452310192/7745794466 + 5.6 * 5452310192/7745794466 = -1.92%

MLs3 = (4.01-14 / (1 + 11.6 / 100)) * (110/100) * 5452310192/7745794466 + 11.6

Total exchange rate change of financial leverage 4.5% (5.48 - 0.98), including: due to the change in investment capital: (1.08-0.98) = 0.1% due to change in interest rate (-1.92-1.08) = - 3% - change in inflation rate (2.76 + 1.92) = 4.67% (2.76-2.76) = 0% - due to private equity change (5.48-2.76) = 2 .72% Influence of total factor: (0.1-3 + 4.67 + 0 + 2.72) = 4.5%.