Audit and economical analysis

Table 141

Evaluating the Borrower's Activities

Measuring element symbols	Indicators
Customer's commitment to business development :	growth dynamics;
	variability;
	promising.
Changes in demand for products (works, services) :	customer description;
	market size and quality indicators;
	sales volume;
	evaluation order;
	sale plan;
	demand stability;
	commodity turnover;
	risks.
Proposal change :	competitors status;
	correspondence;
	transfers risk;
	price stability;
	reasons dependent to labor force;
	availability of demand for foreign currency.
Quality classification of products :	level of technology;
	product quality;
	capital and labor capacity.
Competitive rate :	competitors;
	intensity of competition;
	barriers to entry into the market;
	market share of competitors.

 

The aim of the credit analysis is to retrospectively analyze the capabilities of enterprises to increase their cash assets by analyzing their financial condition and outcomes in attracting credit, borrowed funds.

In assessing the creditworthiness of enterprises, the following tasks are addressed:

• 
  periodic examinations of creditworthiness of enterprises;
  
• 
  financial stability of enterprises, assessment of assets and capital utilization;
  
• 
  assessment of the condition of funds allocation, their turnover;
  
• 
  assessment of additional indicators, such as the status of past due obligations, changes in the level of financial independence of the enterprises, growth in sales, and the status of liquid assets;
  

The level and quality of creditworthiness analyzes depend on the completeness of information sources and their detailed knowledge. Therefore, structuring and structuring information learned in the analysis is an important issue. Below are the estimates of enterprises' creditworthiness, sources of analysis and their requirements.

Table 142

Internal and external financial analysis of creditworthiness in information sources