Development of a method of analysis of the financial condition of the enterprise taking into account the life cycle and features of its functioning

Abstract

© 2019, Dorma Journals. All rights reserved. A disadvantage of the traditional methodology for analyzing the financial condition of an enterprise is the lack of theoretical and methodological developments adapted to Russian business conditions that allow differentiating the subject of research depending on industry and regional affiliation, as well as the stage of the life cycle and the scale of functioning of corporate structures. Ignoring the regional and sectoral affiliation, the stage of the life cycle and the scale of the enterprise’s activity in a comparative analysis of the actual and normative values of the financial condition indicators does not make it possible to formulate the correct conclusion about the degree of financial stability of the enterprise. It is too early to draw any conclusions regarding the financial condition of the enterprise at an early stage of its life cycle, which is explained by the work of the enterprise not at full capacity. The company, at the stage of its birth, is still unstable, since it has a significant share of borrowed capital, risk indicators are high, and solvency ratios do not reach the recommended values, which contradicts the concept of “sustainability”. At the same time, if the idea of implementing the business of this enterprise is successful, then at the next stages the investment will pay off and bring the expected profit. An important factor in the analysis of the financial condition of the enterprise is also its industry and scale. Neglect of these factors leads to a distortion of the assessment of the level of the financial condition of the enterprise.