Assessment Of The Financial Condition Of Agro-Industrial Corporations

Abstract

The goal of a corporation’s financial management is to ensure its stable financial condition and solvency. The existing methods of assessing the financial condition involve determining the type of financial condition of corporations by calculating the appraisal by points of key indicators of the balance sheet and a report on financial results. The disadvantage of financial ratios calculated on the basis of profits and assets is their static nature, simultaneity, the possibility of overestimating the level of ratios due to the inclusion in the composition of current assets of illiquid inventory, receivables, finished products, low information content for forecasting money receipts and payments. This leads to a distortion of the current financial stability and solvency of the corporation. This problem is particularly relevant for agribusiness corporations, which are characterized by seasonality of activity and the associated temporary discrepancy between expenses, income, receipts and payments of funds. To eliminate this discrepancy, when calculating financial ratios, the balance sheet items are adjusted, as well as a comparative analysis of financial ratios at the last reporting date and a similar date last year. An analysis of the financial statements of many corporations shows that with the normative values of financial ratios, they did not adequately fulfill obligations to counterparties, i.e. their financial condition was characterized by insolvency.