The ratio of own and borrowed funds statistics. Financial soundness ratios

Refers to the coefficients of financial stability of the enterprise.

Debt to equity ratio - what shows

Debt to equity ratio- shows how much borrowed funds fall on 1 ruble. own funds.

Debt to equity ratio - formula

General formula for calculating the coefficient:

Calculation formula according to the old balance sheet

Debt to equity ratio - value

The economic meaning of the ratio of borrowed and own funds consists in determining how many units of borrowed financial resources are per unit of sources of own funds.

The level of this coefficient above 1 indicates the potential danger of a shortage of own Money, which may cause difficulties in obtaining new loans.

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Also found about the ratio of borrowed and own funds

1. Financial soundness standards of Russian enterprises: sectoral features The first coefficient taken for the analysis was the ratio of own and borrowed funds Kszs And in this case there is also no consensus
2. Methodological approach to the analysis of solvency Therefore, for the convenience of analysis, we will consider the inverse indicator - the ratio of equity and borrowed funds Ksootn - the ratio of equity and borrowed funds of the IC
3. Analysis of the capital structure and profitability of the leading Russian oil and gas enterprises Autonomy ratio n 1 n 2 0.67 0.66 -0.01 6 Ratio of equity and borrowed funds n 3 n 1 0.5 0.52 0.02 7. Coefficient
4. Assessment of the market and financial stability of the enterprise While maintaining the minimum financial stability of the organization, the ratio of borrowed and own funds should be limited from above by the value of the ratio of the cost of mobile funds
5. Features of financial analysis at agricultural enterprises Sosnovka -0.16 2.02 0.20 0.06 -0.004
6. Topical issues and modern experience in analyzing the financial condition of organizations - part 4 Also in the studied organization, there is an excess of borrowed funds over its own, as evidenced by the ratio of own and borrowed funds The financial independence ratio confirms the previous conclusion that the organization
7. Working capital and financial condition of enterprises Minimum value of the coefficient 0.5 Coefficient of the ratio of borrowed and own funds Кз с П4 П5 П3, 6 where П3, П4,
8. How to assess the financial stability of an enterprise? Financial soundness standards for enterprises in the construction industry and agriculture For the construction industry, the greatest classifying ability is the debt-to-equity ratio of 77.1% and the maneuverability ratio of its own working capital of 75.8% 4.
9. On the standard values ​​of the coefficients in the formation of the rating assessment of the financial and economic condition of the enterprise Indicators of financial stability & bullet the ratio of borrowed and own funds Kszss P1 P2 P3 P4 0.04 0.04 0.17 0.75
10. The financial stability of the organization and the criteria for the structure of liabilities A negative point should be considered a decrease in the value of the coefficient of flexibility at the end of the period by 31.8%.
11. Financial analysis of the enterprise - part 5 The autonomy ratio in 2005 increased compared to 2004 and exceeds the permissible rate of 0.5, which means that the enterprise no longer needs borrowed funds.
12. Selection of risk factors for bankruptcy of an enterprise based on the principal component method Long-term borrowing ratio 0.881 -0.150 -0.181 -0.145 0.075 Debt to equity ratio -0.580 0.687 0.057 0.152 0.234 Net profit -0,551 0,195
13. Classification of organizations by the level of their financial condition The autonomy coefficient 0.5 for a decrease in the indicator by 0.05 is removed by 1 point The coefficient of the ratio of own and borrowed funds is less than 0 7 for a decrease in the indicator by 0.07 is removed
14. Topical issues and modern experience of analyzing the financial condition of organizations - part 8 II The ratio of own and borrowed funds K4 Is one of the characteristics of the financial stability of the enterprise and
15. Financial analysis of the enterprise - part 4 The autonomy ratio in 2003 decreased compared to 2002 and in 2004 increased slightly compared to 2003, but still did not reach the permissible norm of 0.5, which means that the company needs borrowed funds According to the results of the obtained ratio coefficients borrowed and own funds 2002 2004
16. Assessment of the borrower's creditworthiness (SberBank of Russia methodology) K4 Equity to borrowed funds ratio 0.445 0.625 0.18 1 1 0.2 K5 Product profitability
17. Analysis of the financial condition of agricultural enterprises in the Altai Territory and the ways of their financial recovery
18. Formation of the statement of financial results as a function of production resources management Coefficient of the ratio of borrowed and own funds of the organization 1.601 1.218 1.035 -0.566 -0.183 Coefficient of long-term borrowing
19. Comparative analysis of Russian and foreign approaches to the analysis of the financial condition of the organization
20. Assessment of the efficiency of using the company's own and borrowed capital Ratio of accounts payable and other liabilities 0.049 0.073 0.064 5 Ratio of borrowed and own funds 2.002 1.794 1.855 6 Ratio of mobile and immobilized

Financial stability reflects the financial condition of the organization, in which it is capable of through rational management of material, labor and financial resources create such an excess of income over expenses, at which a stable cash flow is achieved, allowing the company to ensure its current and long-term solvency, as well as to meet the investment expectations of the owners.

The most important issue in the analysis of financial stability is assessment of the rationality of the ratio of equity and debt capital.

Financing a business with equity capital can be carried out, firstly, by reinvesting profits and, secondly, by increasing the capital of the enterprise (issuing new securities). The conditions restricting the use of these sources to finance the activities of the enterprise are the policy of distribution of net profit, which determines the amount of reinvestment, as well as the possibility of an additional issue of shares.

Financing from borrowed sources presupposes compliance with a number of conditions that ensure a certain financial reliability of the enterprise. In particular, when deciding on the advisability of attracting borrowed funds, it is necessary to assess the existing structure of liabilities at the enterprise. A high share of debt in it can make it unreasonable (dangerous) to attract new borrowed funds, since the risk of insolvency in such conditions is excessively high.

By attracting borrowed funds, the company receives a number of advantages that, under certain circumstances, can turn into its reverse side and lead to a deterioration in the financial condition of the company, bringing it closer to bankruptcy.

Financing assets from borrowed sources can be attractive insofar as the lender does not make direct claims regarding the future income of the enterprise. Regardless of the results, the creditor has the right to claim, as a rule, for the agreed amount of the principal and interest on it. For borrowed funds received in the form of a merchandise credit of suppliers, the latter component can be both explicit and implicit.

The availability of borrowed funds does not change the structure of equity capital from the point of view that debt obligations do not lead to "dilution" of the owners' share (unless there is a case of debt refinancing and its repayment with the company's shares).

In most cases, the amount of obligations and the timing of their repayment are known in advance (exceptions are, in particular, cases warranty obligations), which facilitates financial planning of cash flows.

At the same time, the presence of costs associated with the payment for the use of borrowed funds, shifts the break-even point of the enterprise. In other words, in order to achieve break-even operation, the company has to provide more sales. Thus, an enterprise with a large share of borrowed capital has little room for maneuver in the event of unforeseen circumstances, such as a drop in demand for products, a significant change in interest rates, an increase in costs, and seasonal fluctuations.

In conditions of an unstable financial situation, this can become one of the reasons for the loss of solvency: the company is unable to provide a greater inflow of funds necessary to cover the increased costs.

The presence of specific obligations may be accompanied by certain conditions that restrict the freedom of the enterprise in the disposal and management of assets. The most common example of such limiting conditions is pledges. A high proportion of existing debt may result in the lender's refusal to provide a new loan.

All these points must be taken into account in the analysis of the financial stability of the organization.

The main indicators characterizing the capital structure include the coefficient of independence, the coefficient of financial stability, the coefficient of dependence on long-term debt capital, the coefficient of financing, and some others. The main purpose of these ratios is to characterize the level of financial risks of an enterprise.

Here are the formulas for calculating the listed coefficients:

Independence coefficient = Equity / Balance currency * 100%

This coefficient is important for both investors and creditors of the enterprise, since it characterizes the share of funds invested by the owners in the total value of the property of the enterprise. It indicates to what extent an enterprise can reduce the valuation of its assets (reduce the value of assets) without harming the interests of creditors. Theoretically, it is believed that if this ratio is greater than or equal to 50%, then the risk of creditors is minimal: having sold half of the property formed at its own expense, the company will be able to pay off its debt obligations. It should be emphasized that this provision cannot be used as general rule... It needs to be clarified, taking into account the specifics of the enterprise and, above all, its industry affiliation.

Financial stability ratio = (Equity + Long-term liabilities) / Balance currency * 100%

The coefficient value shows specific gravity those sources of financing that the company can use in its activities for a long time.

The coefficient of dependence on long-term debt capital = Long-term liabilities / (Equity + Long-term liabilities) * 100%

When analyzing long-term capital, it may be advisable to assess the extent to which long-term borrowed capital is used in its composition. For this purpose, the coefficient of dependence on long-term sources of financing is calculated. This ratio excludes current liabilities from consideration and focuses on stable sources of capital and their ratio. The main purpose of the indicator is to characterize the extent to which an enterprise depends on long-term loans and borrowings.

In some cases, this indicator can be calculated as the reciprocal, i.e. as the ratio of debt and equity. The indicator calculated in this form is called the leverage ratio.

Financing ratio = Equity / Equity * 100%

The coefficient shows what part of the enterprise's activities is financed from its own funds, and what part - from borrowed funds. A situation in which the value of the financing ratio is less than 1 (most of the property of the enterprise is formed at the expense of borrowed funds) may indicate the danger of insolvency and often complicates the possibility of obtaining a loan.

Immediately, you should be warned against literal understanding of the recommended values ​​for the indicators considered. In some cases, the share of equity capital in their total volume may be less than half, and, nevertheless, such enterprises will maintain a sufficiently high financial stability. This primarily concerns enterprises whose activities are characterized by a high turnover of assets, stable demand for products sold, well-established supply and sales channels, low level fixed costs(for example, trade and intermediary organizations).

In capital-intensive enterprises with a long period of turnover of funds, having a significant proportion of targeted assets (for example, enterprises of the machine-building complex), the share of borrowed funds of 40-50% can be dangerous for financial stability.

The coefficients characterizing the capital structure are usually considered as characteristics of the enterprise's risk. The larger the share of debt, the higher the need for funds required to service it. In the event of a possible deterioration in the financial situation, such an enterprise has a higher risk of insolvency.

Proceeding from this, the given coefficients can be considered as tools for searching for "problem points" in the enterprise. The lower the share of debt, the less the need for an in-depth analysis of the risk of capital structure. A high proportion of debt makes it necessary to consider the main issues related to the analysis: the structure of equity capital, the composition and structure of debt capital (taking into account that the balance sheet data may represent only a part of the company's liabilities); the ability of the enterprise to generate the cash required to meet existing liabilities; profitability of activities and other factors essential for the analysis.

When assessing the structure of sources of property of an enterprise, special attention should be paid to the method of their placement in the asset. This reveals the inextricable connection between the analysis of the passive and active parts of the balance.

Example 1. The structure of the balance sheet of enterprise A is characterized by the following data (%):

Enterprise A

At first glance, the assessment of the structure of sources in our example indicates a fairly stable position of enterprise A: a larger volume of its activities (55%) is financed from its own capital, a smaller one - from borrowed capital (45%). However, the results of the analysis of the placement of funds in the asset raise serious concerns about its financial stability. More than half (60%) of the property is characterized by a long term of use, which means a long payback period. The share of current assets is only 40%. As you can see, for such an enterprise the amount of current liabilities exceeds the amount of current assets. This allows us to conclude that part of the long-term assets was formed at the expense of the organization's short-term liabilities (and, therefore, one can expect that their maturity will come before these investments pay off). Thus, undertaking A has chosen a dangerous, albeit very common, method of allocating funds, which may result in problems of loss of solvency.

So, the general rule of ensuring financial stability: long-term assets should be formed from long-term sources, own and borrowed... If the company does not have borrowed funds, attracted on a long-term basis, fixed assets and other non-current assets must be formed at the expense of equity capital.

Example 2. Enterprise B has the following structure of economic assets and sources of their formation (%):

Enterprise B

As you can see, the share of equity capital prevails in the liabilities of enterprise B. At the same time, the amount of borrowed funds attracted on a short-term basis is 2 times less than the amount of current assets (35% and 70% (30 + 5 + 14 + 20 + 1) of the balance sheet, respectively). However, like enterprise A, more than 60% of assets are difficult to sell (provided that finished products in the warehouse can be fully sold, if necessary, and all buyers-debtors will pay off their obligations). Consequently, with the existing structure of placing funds in an asset, even such a significant excess of equity capital over borrowed capital may turn out to be dangerous. Perhaps, in order to ensure the financial stability of such an enterprise, the share of borrowed funds should be reduced.

Thus, enterprises whose volume of hard-to-sell assets in the composition of working capital is significant should have a large share of equity capital..

Another factor affecting the ratio of equity and borrowed funds is the structure of the company's costs. Enterprises for which the share of fixed costs in the total amount of costs is significant should have a larger amount of equity capital.

When analyzing financial stability, it is necessary to take into account the rate of turnover of funds. An enterprise with a higher turnover rate can have a large share of borrowed sources in total liabilities without a threat to its own solvency and without increasing the risk for creditors (it is easier for an enterprise with a high capital turnover to ensure cash flow and, therefore, pay off its obligations). Therefore, such enterprises are more attractive to lenders and lenders.

In addition, the rationality of liability management and, consequently, financial stability, is directly affected by the ratio of the cost of raising borrowed funds (Cd) and the return on investment in the organization's assets (ROI). The relationship of the considered indicators from the standpoint of their influence on the return on equity is expressed in the known ratio used to determine the influence of the effect of financial leverage:

ROE = ROI + D / E (ROI - Cd)

where ROE is the return on equity; E - equity capital, D - borrowed capital, ROI - return on investment, Сd - cost of attracting borrowed capital.

The meaning of this ratio is, in particular, that as long as the return on investment in an enterprise is higher than the price of borrowed funds, the return on equity will grow the faster the higher the ratio of borrowed and own funds. However, as the share of borrowed funds grows, the profit remaining at the disposal of the enterprise begins to decline (an increasing part of the profit is used to pay interest). As a result, the return on investment falls, becoming less than the cost of raising borrowed funds. This, in turn, leads to a drop in the return on equity.

Thus, by managing the ratio of equity and debt capital, a company can influence the most important financial ratio - return on equity.

Options for the ratio of assets and liabilities

Option number 1

The presented scheme of the ratio of assets and liabilities allows us to talk about a safe ratio of equity and debt capital. Two main conditions are met: equity capital exceeds non-current assets; current assets are higher than short-term liabilities.

Option 2

The presented scheme of the ratio of assets and liabilities, despite the relatively low share of equity capital, also does not cause concern, since the share of long-term assets of this organization is not high and equity capital fully covers their value.

Option number 3

The ratio of assets to liabilities also demonstrates the excess of long-term sources over long-term assets.

Option number 4

At first glance, this variant of the balance sheet structure indicates a lack of equity capital. At the same time, the presence of long-term liabilities makes it possible to fully form long-term assets at the expense of long-term sources of funds.

Option number 5

This structure option could raise serious concerns about the financial soundness of the organization. Indeed, it can be seen that the organization in question does not have enough long-term sources for the formation of non-current assets. As a result, it is forced to use short-term borrowed funds to form long-term assets. Thus, it can be seen that short-term liabilities have become the main source of the formation of both current assets and, in part, non-current assets, which is associated with increased financial risks of the activities of such an organization.

At the same time, it should be emphasized that the final conclusions regarding the rationality of the structure of the liabilities of the analyzed organization can be made on the basis of integrated analysis factors that take into account industry specifics, the rate of turnover of funds, profitability and a number of others.

The guarantee of survival and the basis for the stable position of an enterprise is its financial stability, i.e. the organization's ability to timely from its own funds cover the costs invested in fixed and working capital, intangible assets, and pay off its obligations. The nature of its relationship with business partners - suppliers, buyers, commercial banks, potential investors, shareholders - depends on the financial stability of an organization. Financial stability reflects the financial condition of the enterprise, in which it is able, due to the rational management of material, labor and financial resources, to create such an excess of income over expenses, at which a stable inflow of funds is achieved, allowing the enterprise to ensure its current and long-term solvency, as well as to meet investment expectations owners.

Financial stability can be quantitatively assessed in two ways:

· From the standpoint of the structure of sources of funds;

· From the standpoint of costs associated with servicing external sources.

Accordingly, two groups of indicators are distinguished, conventionally called capitalization ratios and service ratios for external sources of financing (coverage).

In the group of capitalization ratios, first of all, the ratio of borrowed and own funds is distinguished. However, this indicator gives only overall assessment financial stability.

Debt to equity ratio is equal to the ratio of the sum of long-term and short-term liabilities to the equity capital of the organization. It shows how much borrowed money falls on each ruble of own funds invested in the assets of the enterprise. The growth of this indicator indicates an increase in the dependence of the enterprise on borrowed capital, i.e. a slight decrease in financial stability. The recommended value of the indicator is less than 0.3.

Long-term + Short-term

obligations obligations

Ksoot.ZiSK = –––––––––––––––––––––––––––––– (1)

Equity

Autonomy ratio(financial independence or concentration of equity capital) is equal to the share of own sources of financing as a result of the balance sheet of the enterprise and shows the share of own funds in the total amount of sources of financing. An increase in the ratio means an increase in financial independence. The value of this indicator is more than 0.5.

Equity

Ka = –––––––––––––––––––– (2)

Equity in working capital calculated as the difference between the organization's own capital and its non-current assets.

The presence of equity capital in circulation (own circulating assets) is one of the important indicators of the financial stability of an organization. The lack of equity in the organization's turnover indicates that all the organization's circulating assets, as well as, possibly, some of the non-current assets (in the case of a negative indicator value) were formed at the expense of borrowed funds (sources).

SKOS = Own - Non-circulating (3)

capital assets

Equity ratio calculated as the ratio of own funds in circulation to the total amount of working capital.

The indicator characterizes the ratio of own and borrowed working capital and determines the degree of security economic activity organization with its own circulating assets necessary for its financial stability. The recommended value is more than 0.1.

Own - Non-circulating

capital assets

Coss = –––––––––––––––––––––––– (4)

Working capital

Equity capital flexibility ratio is defined as the ratio of equity in working capital to the amount of equity. The ratio shows how much of it is used for financing current activities, i.e. invested in working capital, and what part is capitalized. The value of this indicator can vary significantly depending on the industry sector of the enterprise.

Own - Non-circulating

capital assets

Kman = ––––––––––––––––––––––––––– (5)

Equity

Long-term borrowing ratio characterizes the share of long-term loans and borrowings attracted to finance the activities of the enterprise, along with its own funds, in the total capital of the organization, which is understood as the total value of long-term sources of funds. The growth of this indicator over time is, in a sense, a negative trend, meaning that enterprises are increasingly dependent on external investors.

long term duties

Kdpzs = –––––––––––––––––––––––––– (6)

Own + Long Term

capital liability

As a rule, the owners of the enterprise (shareholders, investors and other persons who have made a contribution to the authorized capital) prefer a reasonable growth in the dynamics of the share of borrowed funds. On the contrary, lenders (suppliers of raw materials and supplies, banks providing short-term loans, and other counterparties) prefer commercial organizations with a high share of equity capital, with greater financial autonomy.

Financial stability ratio is determined by formula (7) and shows what part of the asset is financed from sustainable sources. The value of this indicator is considered normal if it exceeds 0.6.

Own + Long Term

capital liability

Kfu = ––––––––––––––––––––––––––– (7)

Capitalization ratios that characterize the structure of long-term liabilities are logically supplemented by indicators of the second group, called the ratios of servicing external sources of financing, and which make it possible to assess whether the organization is able to maintain the existing structure of sources of funds. Raising borrowed funds is associated with the burden of constant financial expenses, which should at least be covered by current income. Fixed finance costs in terms of interest on loans and borrowings should be weighed against profit before interest and taxes. The corresponding indicator is called the interest rate ratio. Obviously, it must be more than one, otherwise the enterprise cannot fully settle with external investors for its current obligations.

If, in the denominator, finance lease costs are added to the interest expense, then the corresponding indicator is called the coefficient of coverage of fixed financial costs.

Currently, these indicators can be calculated only within the framework of internal analysis, since according to regulatory documents the main part of the interest on the loan is written off to the cost price and is included in the item "Cost of sales of goods, products, works, services" in form No. 2 "Profit and loss statement".

1.3 Indicators of the company's solvency and liquidity

DEFINITION

The ratio of the ratio of own and borrowed funds of the enterprise can characterize its financial stability, showing the amount of borrowed funds attributable to each unit of equity capital.

The formula for the ratio of debt and equity funds shows the structure of capital, giving its general characteristics, including financial condition.

The formula for the ratio of borrowed and own funds is the ratio of borrowed (attracted) capital and equity. The indicator of the ratio of borrowed and own funds is calculated according to data from Form No. 1 (balance sheet).

The formula for the ratio of debt to equity

The formula for the ratio of debt and equity is quite simple. It can be calculated by the ratio of the total debt on borrowed funds, regardless of the timing of their repayment, to the amount of equity.

The formula for the ratio of debt and equity in general view as follows:

K = ZK / SK

Here K is the coefficient of the ratio of borrowed and own funds,

ЗК - the amount of borrowed capital,

SK is the amount of equity capital.

The second version of the formula:

K = (DZ + KZ) / SK

Here DZ is the amount of long-term debt,

KZ - the amount of short-term debt.

The formula for the ratio of debt and equity on the balance sheet

To calculate the ratio between equity and borrowed funds, balance sheet data is required, and the formula takes the following form:

Here K is the ratio of equity and borrowed funds,

Line 1410 - the amount of long-term financial liabilities (taken from the balance sheet),

Line 1510 - the amount of short-term financial liabilities (balance sheet),

Line 1300 is the amount of equity.

What the formula shows

The formula for the ratio of debt and equity capital should show the optimal ratio of debt and equity. There are several values ​​of the coefficient:

• The coefficient is greater than one, which indicates that the borrowed capital is greater than the equity capital (there is a risk of bankruptcy in some cases);
• The coefficient in the range of 0.7 - 1 shows an unstable digging position, in which signs of its insolvency appear;
• A coefficient in the range from 0.5 to 0.7 is considered optimal, an enterprise with such a coefficient is financially stable and operates in a normal mode;
• A coefficient of less than 0.5 reflects the steady state of the company, however, speaking about its ineffective work.

The ratio of borrowed and own funds alone cannot give a complete picture of the economic activity of an enterprise. For a more accurate assessment, an analysis of other coefficients of the company's performance is required.

The value of the ratio of equity and borrowed funds

The calculation of the ratio of debt and equity capital is carried out in cases where it is necessary to quickly obtain approximate data on the financial situation at the enterprise. This indicator can give a general idea of ​​the proportions that make up debt and equity.

If own funds prevail, then this reflects a good financial position, and an increase in leveraged funds may indicate a likely financial instability.

The use of this coefficient is important for those people who invest their own funds in the company:

• Investors,
• Lenders,
• Banks,
• Suppliers, etc.

Examples of problem solving

EXAMPLE 1

EXAMPLE 2

Equity to debt capital ratio Is the ratio of the organization's own funds to the amount of borrowed funds. This ratio is also called financial leverage (leverage), which is an important indicator in assessing the performance of an enterprise. The size of the ratio characterizes the degree of risk, profitability, stability.

Impact on the profitability of the enterprise

Financial leverage arises in those enterprises that do not have enough funds to conduct their current activities, or to increase production. Borrowed funds allow you to meet current needs and bring. However, the stability of the organization depends on the size of the ratio, since with a significant excess of the amount of borrowed funds over its own, bankruptcy is possible. At the same time, risky policies are also the most profitable.

The following variants of the results of using leverage are possible:

• Positive. In this case, the income from borrowed funds exceeds the payment for their use, makes a profit.
• Neutral. Income from borrowed funds is equal to the cost of their maintenance.
• Negative. Here the company suffers losses, the use of the loan does not pay off.

Capital Ratio

He indicates the amount of own funds, which falls on one borrowed. It is calculated by simply dividing the volume of all borrowed funds by the amount of funds belonging to the enterprise.

The standards for this indicator directly depend on the specifics of the organization's activities. If the calculated coefficient is below 1, then the company operates using available resources; if it is higher than 1, then preference is given to borrowed funds. It should be noted that in developed countries prevails, the coefficient is about 1.5 units.

Risks of using leverage

A large amount of borrowed funds indicates the presence of financial risk. The enterprise always has the possibility of a decrease in profitability, which is associated with the inability to pay the debt. You can also highlight the following situations that can increase the level of risk:

• Deterioration of the financial condition of the company,
• The dependence of the activities of a particular organization on fluctuations in exchange rates,
• High rates of inflation,
• The possibility of introducing new tax payments,
• The presence of credit and deposit risks.

That is why it is necessary to assess the feasibility of using borrowed funds in general and the level of possible income.

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