Analysis of the solvency and liquidity of the organization is one of the most important aspects of the study of its financial condition. This analysis is carried out using certain long-developed methods that allow you to quickly carry out calculations and draw certain conclusions.
As a rule, at the first stage, the assessment of the liquidity and solvency of an enterprise is carried out by calculating the ratios. All these coefficients are calculated in the same way as the ratio of a certain part of the property of the company to the value of its short-term liabilities. Indicators of liquidity and solvency of the enterprise include the ratios of total and intermediate coverage, as well as the absolute liquidity ratio. When calculating the first indicator in the numerator, the total value of the company's current assets is used. They should total the amount of short-term debts, but not more than twice. In determining the interim coverage, stocks are excluded from the calculation. Thus, the sufficiency of liquid assets is determined when collecting the entire amount of receivables. It is generally accepted that this coefficient in the norm should also exceed one. When determining absolute liquidity, the numerator includes, as the name implies, only absolutely liquid assets. It is considered acceptable if the company can immediately return about a quarter of its most urgent debts. Assessment of the liquidity and solvency of the enterprise should also be carried out when raising funds, which is done with the help of the same index. This ratio is determined by the ratio of formed reserves to the sum of term liabilities. Obviously, fundraising in this case refers to the sale of stocks. However, it should be borne in mind that according to statistics, when selling stocks, it is usually possible to gain only about 40% of their value.
Assessment of the liquidity and solvency of the company can also be made by evaluating and studying the liquidity of the balance sheet of the company. Most often, the method of constructing and studying the liquidity balance is used for these purposes. This balance - in a certain way grouped assets and liabilities of the company. Traditionally, on each side of the balance sheet, 4 groups are formed, which are ranked by degree of liquidity or urgency. The organization’s assets are grouped into the following groups: absolutely liquid, fast, slow, and hard-to-sell property. As for liabilities, the result of the grouping will be the following: the most urgent, short- and long-term liabilities, as well as liabilities called constant. Next, you need to compare the resulting groups with each other by subtracting from the group of assets of the corresponding group of liabilities. If this difference is positive, then there is a payment surplus, and otherwise - a payment deficiency. It is believed that the condition of absolute liquidity is the presence of a surplus in the first three pairs of property and liabilities and a shortage in the fourth. Inequality in the latter group is regulatory and plays an extremely significant role. It characterizes the presence in the organization of its own working capital. The above method is more applicable to enterprises in the real economy, since studying the balance of banks and other financial and credit organizations requires more detail.
The methods described above are the most popular, it is with their help that they usually evaluate the liquidity and solvency of an enterprise. However, this analysis is not sufficient for financial diagnostics, it is necessary to study other facets of the firm.