There are several mechanisms for determining the financial stability of an enterprise or organization. Specialists use these tools and mechanisms in order to give a reliable assessment and an independent view of the current state of affairs and development prospects. The value of net assets, in this case, is one of the most important tools in question.
Speaking about the state of affairs of a company, experts take into account primarily financial stability and sustainability. Without this, no further development can take place, since market participants need to rely on specific data.
To carry out normal activities, the company must be solvent. In other words, it should independently cover at least half of the expenses necessary for the implementation of normal activities. It also includes a favorable credit history, a positive balance, etc. In this case, we can talk about financial stability in a modern market.
Of course, in this issue, the state of the external environment is also taken into account, within the framework of which the activity of one or another enterprise occurs, since changes can both help and harm the company.
The activities of any company should be profitable, and it should consistently exceed costs. Only then can we talk about business development, the profitability of an activity, and the value of net assets will increase. The company's management needs to monitor the establishment of an uninterrupted process of work, starting from the very first stages and ending with the direct sale of products or offered services. Financial stability, which experts so often talk about, is formed at all stages of work and depends on a number of details.
Net assets of the enterprise and their value
The value of net assets fully shows the long-term security of the organization from various financial troubles. An established system gives stable results, and they can even work much longer for the company itself. This also indicates the security of creditors and all participants.
When this or that participant leaves the company’s management, or the creditor wants to get his share, then its size helps determine the value of the company's net assets.
In the legislation of the Russian Federation on joint-stock companies all these points are prescribed in full detail. The term "net assets" is also associated with the rights and obligations that arise with those or other persons related to them.
The value is determined by deducting from the value of the real assets of the enterprise its debt obligations. If the financial situation begins to change, then at the same time a change in the value of the net assets of the enterprise begins to occur. In the event that, when determining the net assets of an enterprise, their value is less than the authorized capital, then the enterprise is considered unprofitable and can be liquidated. However, reserve funds and dividend payments are also taken into account.
The assets of the enterprise represent all cash and non-cash reserves, property of the company and other funds. When calculating, specialists take into account the company's liabilities - these are various obligations of the company and so on.
Since this parameter is very important for determining the success of an enterprise, sometimes the value is estimated using the net asset method. That is, when it is necessary to determine the approximate value of the enterprise, as well as its prospects and possible ways for further development, it simply takes the value of the assets. This gives a fairly accurate, albeit somewhat approximate, picture of the opportunities that the company has.