The degree to which the company's liabilities are covered by its assets, the term of their conversion into money corresponds to the maturity of the obligations. Balance sheet liquidity is achieved by establishing equality between the company's liabilities and its assets.
The liquidity of the enterprise reflect the financial ratios:
absolute liquidity (liquidity of the 1st degree) is calculated as the ratio of the amount of cash and short-term financial investments to short-term debt obligations; shows what part of the current debt can be repaid in the nearest time by the time the balance sheet is drawn up;
liquidity (liquidity of the 2nd degree) is defined as the ratio of cash, short-term financial investments and receivables to short-term debt obligations;
coverage, or current liquidity (liquidity of the 3rd degree), is calculated as the ratio of all current assets (minus deferred expenses) to the amount of term liabilities (the amount of accounts payable and short-term loans); shows the extent to which current assets cover short-term liabilities.
The analysis of the main performance indicators and investment processes at the enterprise will be incomplete if you do not calculate the payback period of investments (t) directed to the development of the enterprise or crisis prevention.
The calculation is carried out according to the formula
t \u003d A Z / A P,
where A Z - additional costs (investments) for the implementation of a management decision or business plan; A P - additional profit received as a result of investment.
In the conditions of market relations, it is considered effective to additionally invest funds for the implementation of business plans (investment projects) and other activities for a period not exceeding three years. This is due to the dynamism of processes in the world market, due to the impact of scientific and technological progress, increasing competition and other factors.

More on balance sheet liquidity:

1. What ratios characterize the liquidity of the balance sheet?
2. The concept of liquidity and factors determining its level

The results of a firm's liquidity analysis are primarily of interest to commercial creditors. Since commercial loans are short-term, liquidity analysis is the best way to assess the firm's ability to pay these obligations.

A general indicator of liquidity is the sufficiency (surplus or shortage) of sources of funds for the formation of reserves. The meaning of the analysis using absolute indicators is to check which sources of funds and to what extent are used to cover reserves.

The need for balance sheet liquidity analysis arises in market conditions due to increased financial constraints and the need to assess the creditworthiness of an enterprise. The liquidity of the balance sheet is defined as the degree of coverage of the obligations of the enterprise by its assets, the period of transformation of which into cash corresponds to the maturity of the obligations. The liquidity of assets is the reciprocal of the liquidity of the balance sheet by the time the assets are converted into cash. The less time it takes for this type of asset to acquire a monetary form, the higher its liquidity. Analysis of the liquidity of the balance sheet consists in comparing the funds of the asset, grouped by the degree of their liquidity and arranged in descending order of liquidity, with the liabilities of the liability, grouped by their maturity and arranged in ascending order of terms. The following groupings are carried out in relation to the balance.

Depending on the degree of liquidity, i.e., the rate of conversion into cash, the assets of the enterprise are divided into the following groups:

The most liquid assets (A1) are funds that have a maturity of less than three months to convert into cash. These include cash (line 260 of the balance sheet) and short-term financial investments (line 250).

Marketable assets (A2) are funds that have a maturity of three to six months to become cash. These include accounts receivable, payments on which are expected within 12 months after the reporting date (line 240 of the balance sheet).

Slowly realizable assets (A3) are funds that take between six months and a year to turn into cash. These include inventories and costs (p. 210 + 220), accounts receivable due more than twelve months after the reporting date (p. 230) and other current assets (p. 270).

Hard-to-sell assets (A4) are funds that take more than a year to turn into cash. These include non-current assets (line 190 of the balance sheet).

Accordingly, the articles of the passive part of the balance sheet are grouped according to the maturity of obligations.

The most urgent obligations (P1) are obligations with a maturity of up to three months. These include accounts payable (line 620 of the balance sheet).

Term liabilities (P2) are liabilities with maturities of three to six months. These include loans and credits (line 610 of the balance sheet) and other short-term liabilities (line 660).

Long-term liabilities (L3) are liabilities with maturities ranging from six months to a year. These include long-term liabilities (p. 590 of the balance sheet), debts to participants (founders) for the payment of income (p. 630), deferred income (p. 640) and reserves for future expenses (p. 650).

Stable (permanent) liabilities (P4). These include capital and reserves (line 490 of the balance sheet).

A firm is said to be liquid if its current assets exceed its short-term liabilities, the firm may be liquid to a greater or lesser extent. A firm whose working capital consists primarily of cash and short-term receivables is generally considered to be more liquid than a firm whose working capital consists primarily of inventories. To check the real degree of liquidity of the company, it is necessary to analyze the liquidity of the balance sheet.

BALANCE LIQUIDITY

To determine the liquidity of the balance sheet, one should compare the results of the above groups for assets and liabilities. The balance is considered absolutely liquid if the following ratios take place:

A 1 > P 1,; A 2 > P 2; A 3 > P 3; A 4< П 4 .

The fulfillment of the first three inequalities necessarily entails the fulfillment of the fourth inequality, so it is practically essential to compare the results of the first three groups by asset and liability. The fourth inequality is of a "balancing" nature, and at the same time it has a deep economic meaning: its fulfillment indicates that the minimum condition for financial stability is met - the enterprise has its own working capital.

In the case when one or more inequalities have a sign opposite to that fixed in the optimal variant, the liquidity of the balance to a greater or lesser extent differs from the absolute one. At the same time, the lack of funds in one group of assets is compensated by their excess in another group, although compensation takes place only in terms of value, since in a real payment situation, less liquid assets cannot replace more liquid ones.

Comparison of the most liquid funds and quickly realizable assets with the most urgent obligations and short-term liabilities allows us to find out the current liquidity. Comparison of slow-moving assets with long-term and medium-term liabilities reflects prospective liquidity. Current liquidity testifies to the solvency (or insolvency) of the enterprise for the nearest period of time to the considered moment.

Prospective liquidity is a solvency forecast based on a comparison of future receipts and payments (of which, of course, only a part is represented in the respective asset and liability groups, so the forecast is quite approximate).

The analysis of the liquidity of the balance sheet, carried out according to the above scheme, is approximate also for the reason that the correspondence between the degree of liquidity of assets and the maturity of obligations in liabilities is tentatively planned. This is due to the limited information available to an analyst who conducts an external analysis based on financial statements. Therefore, to refine the results of the analysis, special methods are required that correct the indicators of the presented methodology. In the 1920s, the method of discount rates was used in analytical practice. Through the norms of discounts, the values ​​of balance sheet items were redistributed between the groups of assets and liabilities in accordance with the average estimates of the liquidity of assets and the maturity of liabilities.

Comparison of the results of the first group of assets and liabilities, i.e. A 1 and P 1; (terms up to 3 months), reflects the ratio of current payments and receipts.

Comparison of the results of the second group of assets and liabilities, i.e. A 2 and P 2 (terms from 3 to 6 months), shows a trend of increasing or decreasing current liquidity in the near future. Comparison of the totals for assets and liabilities for the third and fourth groups reflects the ratio of payments and receipts in a relatively distant future. The analysis carried out according to this scheme quite fully represents the financial condition in terms of the possibility of timely settlements. The form of the aggregated analytical liquidity balance is presented in the table

The form of the aggregated analytical balance of liquidity is presented in the table "Aggregated analytical balance"

Aggregated analytical balance
Assets	For the beginning of the year	At the end of the year	Passive	For the beginning of the year	At the end of the year	Surplus (lack)
						for the beginning of the year	at the end of the year
Most liquid assets (A1)			Most urgent liabilities (P1)
Marketable assets (A2)			Term liabilities (P2)
Slow selling assets (A3)			Long-term liabilities (P3)
Total current liquid assets	108 492	100 825	Total payments	198 974	322 869
Hard-to-sell assets (A4)			Sustainable liabilities (P4)
Balance	697 245	892 493	Balance		892 493

A 1< П 1 , А 2 >P 2, A 3< П 3 , А 4 >P 4.

Based on the data given in the Aggregate Analytical Balance table, we can conclude:

the organization is insolvent for the most urgent (current) payments, the maturity of which is up to three months;

solvent in the short term from three to six months, as it will be able to repay its short-term obligations;

insolvent in the distant future from six months to a year.

The last inequality indicates that the organization is financially unsustainable. In other words, own sources of formation of stocks of inventory items in critical situations may not be enough and the organization will be forced to use borrowed funds.

In order to assess the level of the organization's solvency in this case, it is necessary to check whether the most liquid, fast-selling and slow-moving assets are enough to pay off the most urgent and short-term liabilities.

Analysis of the Aggregated Analytical Balance table shows that the analyzed RUES does not have enough assets to cover payments (A1 + A2 + A3 > P1 + P2): 108,492< 198 974 на начало года; 100 825 < 322 869 на конец года. Кроме того, существенно не хватает и средств для покрытия наиболее срочных платежей.

Comparison of liquid funds and liabilities allows you to calculate the following indicators.

1 Total liquidity ratio (L To ). Gives an overall comprehensive assessment of the liquidity of the balance sheet and the solvency of the organization. Shows what part of all term liabilities, half of short-term liabilities and one-third of long-term liabilities the organization can repay at the expense of all the most liquid assets, half of fast-selling assets and one-third of slow-moving assets. Calculated according to the formula

The value of this indicator at the absolute level of solvency should be greater than or equal to one (L to ≥ 1).

2 Absolute liquidity ratio (L A ). Shows what part of the most urgent and short-term debt the organization can repay in the near future at the expense of cash. Characterizes the solvency of the organization at the date of the balance sheet. It is defined as the ratio of cash and short-term securities to the most urgent and short-term liabilities.

Permissible value is from 0.2 to 0.7 (L a = 0.2 ÷ 0.7).

This indicator is widely used by suppliers of material resources to assess the solvency of an organization.

3 Quick liquidity ratio or the so-called critical assessment, or intermediate liquidity (L to). Shows what part of the organization's short-term liabilities can be repaid at the expense of funds in various accounts, in short-term securities, as well as proceeds from settlements with consumers and customers. It characterizes the expected payment capabilities of the organization for a period equal to the average duration of one turnover of short-term receivables, subject to timely settlements with debtors. It is calculated as the ratio of cash and short-term securities, as well as the amount of funds raised in settlements with debtors to the most urgent and short-term obligations.

The normatively admissible value is equal to one and higher (L to ≥ 1). Low values ​​indicate the need for constant work with debtors in order to ensure the possibility of converting the most liquid part of working capital into cash for settlements with their suppliers.

This indicator is widely used by shareholders to assess the solvency of an organization

4 Current ratio or total coverage ratio (L t). Shows what part of current liabilities on loans and settlements can be repaid by mobilizing all working capital. It characterizes the sufficiency of the working capital of the organization, which can be used by it to pay off its most urgent and short-term obligations. In general, this ratio shows the payment capabilities of the organization, assessed subject to not only timely settlements with debtors and favorable sales of finished products, but also the sale, if necessary, of other elements of tangible assets. It is defined as the ratio of current assets (current assets) to current liabilities (short-term liabilities).

The normative value of the current liquidity ratio is equal to two (Ltl = 2). The lower limit of the current liquidity ratio is equal to one. The lower limit is due to the fact that working capital should be enough to cover their short-term obligations. An excess of working capital over short-term liabilities by more than two times is also considered undesirable, since it indicates an organization's irrational investment of its funds and their inefficient use.

The current liquidity ratio is the main indicator of solvency, which is used not only by external, but also mainly by internal users of economic analysis. It determines the expected solvency of the organization for a period equal to the average duration of one turnover of all current assets.

5 Liquidity ratio when raising funds, that is, the mobile liquidity ratio (L ml). It shows what part of the most urgent and short-term obligations the organization can repay by selling inventory items. It characterizes the degree of dependence of the organization's paying capacity on inventories and costs in terms of the need to mobilize funds to pay off its most urgent and short-term obligations. It is determined by the ratio of inventories and costs, as well as to long-term receivables to the sum of the most urgent and short-term liabilities.

The normative value of the mobile liquidity ratio is in the range from 0.5 to 0.7 (K ml = 0.5 ÷ 0.7).

The mobile liquidity ratio characterizes the organization's long-term solvency.

6 Operating capital maneuverability ratio (L m ). Shows how much of the functioning capital is immobilized in inventories and long-term receivables. It is determined by the ratio of inventories and costs, as well as long-term receivables to the difference between current assets and the most urgent and short-term liabilities.

A decrease in the value of this indicator in dynamics indicates an increase in the maneuverability of functioning capital and is a positive fact.

7 Share of working capital in assets (d that ). Shows the share of current assets in the total assets. It is determined by the ratio of current assets in the property of the organization.

, (8.11) where VB is the balance sheet currency, thousand rubles.

The absolute value of this indicator depends on the sectoral affiliation of the organization. It is advisable to study this indicator in comparison with the indicator characterizing the share of short-term liabilities in the total volume of capital. A decrease in the level of this indicator in dynamics with an increase in the share of short-term liabilities indicates a deterioration in the organization's solvency.

The calculation of these coefficients is necessary not only for a versatile characterization of the organization's solvency, but also for various external users of analytical information. So, for suppliers of raw materials and materials, the current liquidity ratio is most interesting. The bank lending to this organization pays great attention to the critical liquidity ratio. Buyers and holders of shares and bonds of the enterprise to a greater extent assess the solvency of the organization by the current liquidity ratio. Organizations that provide long-term loans are more interested in liquidity ratios that characterize prospective solvency. Organizations that provide short-term loans and loans for replenishment of stocks are more interested in liquidity ratios that characterize current or term solvency.

These ratios reflect a certain aspect of the organization's solvency and are only indicative indicators of the organization's financial position. However, with their help, it is possible to identify the main factors affecting the paying capacity of the organization, and determine the main directions for its improvement.

The calculated coefficients are summarized in the analytical table of the form the table "Enterprise liquidity ratios"

In the course of research, first of all, the absolute level of these indicators at the beginning and at the end of the year is estimated. To do this, the actual values ​​of the coefficients are compared with the standard values ​​and with each other. The positive aspects and disadvantages of various elements of the organization's paying capacity are revealed.

Enterprise liquidity ratios

in fractions of a unit

The name of indicators	Standard value	For the beginning of the year	At the end of the year	Change, ±
1 General liquidity ratio
2 Absolute liquidity ratio	0.2 ÷ 0.7
3 Interim liquidity ratio
4 Current ratio
5 Mobile liquidity ratio	0.5 ÷0.7
6 Operating capital maneuverability ratio
7 Share of working capital in assets
8 Share of short-term liabilities in equity

The data in the table "Enterprise liquidity ratios" show that, in general, the organization's solvency is unsatisfactory. The overall liquidity ratio is below the normative level and decreased to 0.45 by the end of the year (against the normative level of more than 1).

The absolute liquidity ratio is within the normal range. This means that at the time of reporting, the organization can pay off its short-term liabilities.

Indicators on mutual settlements with suppliers and contractors are deteriorating - this is evidenced by the decrease in the interim liquidity ratio. This means that in the short term the organization will reduce its solvency.

The current liquidity ratio by the end of the year decreased by 0.32 and is 4.22. This means that in the long term, the organization's solvency is preserved.

The share of short-term liabilities in capital is 36%, or only 0.36 rubles per ruble of short-term liabilities. inventories that, after sale, can be used to pay current liabilities. General conclusion: the solvency of the enterprise is low, the enterprise is close to the state of insolvency.

Calculate by division current assets for short-term liabilities(current liabilities). The initial data for the calculation contains the balance sheet of the company.

It is calculated in the FinEkAnalysis program in the solvency analysis block.

Liability coverage ratio - what does it show

Shows the company's ability to repay current (short-term) liabilities at the expense of current assets only. The higher the value of the coefficient, the better the solvency of the enterprise. This indicator takes into account that not all assets can be sold urgently.

Liquidity ratios are of interest both to the management of the enterprise and to external subjects of analysis:

• absolute liquidity ratio - for suppliers of raw materials and supplies;
• liability coverage ratio- for investors;
• quick liquidity ratio - for banks.

Liability coverage ratio - formula

The general formula for calculating the coefficient:

K by =	A1 + A2 + A3
	P1 + P2

Liability coverage ratio - scheme

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Balance liquidity- this is the degree of coverage of the company's obligations by assets, the period of transformation of which into cash corresponds to the maturity of the obligations. The degree of liquidity of the balance depends solvency enterprises. The main sign of liquidity is the formal excess of the value of current assets over short-term liabilities. And the greater this excess, the more favorable the financial condition of the company in terms of liquidity.

The relevance of determining the liquidity of the balance sheet is of particular importance in conditions of economic instability, as well as in the liquidation of an enterprise due to its bankruptcy. Here the question arises: does the enterprise have enough funds to cover its debts. The same problem arises when it is necessary to determine whether the enterprise has enough funds to settle accounts with creditors, i.e. the ability to liquidate (repay) the debt with available funds. In this case, speaking of liquidity, it means that the enterprise has working capital in an amount that is theoretically sufficient to repay short-term obligations.

To analyze the liquidity of an enterprise's balance sheet, asset items are grouped according to the degree of liquidity - from the most quickly converted into money to the least. Liabilities are grouped according to the urgency of paying obligations. A typical grouping is shown in the table below:

Table. Grouping assets and liabilities of the balance sheet for liquidity analysis

Assets				Liabilities
Group name	Designation	Compound		Group name	Designation	Compound
		Balance until 2011	Balance since 2011			Balance until 2011	Balance since 2011
Most liquid assets	A1	pp. 260 + 250	pp. 1250 + 1240	Most urgent obligations	P1	pp. 620 + 630	page 1520
Quick Selling Assets	A2	pp. 240 + 270	page 1230	Short-term liabilities	P2	pp. 610 + 650 + 660	pp. 1510 + 1540 + 1550
Slow selling assets	A3	pp. 210 + 220 - 216	lines 1210 + 1220 + 1260 - 12605	Long-term liabilities	P3	page 590	page 1400
Difficult-to-sell assets	A4	pp. 190 + 230	page 1100	Permanent liabilities	P4	pp. 490 + 640 - 216	lines 1300 + 1530 - 12605
Total assets	VA			Total liabilities	VR

HELL. Sheremet points out the need to: deduct expenses not covered by funds and special-purpose financing, and the amount of settlements with employees on loans received by them. Expenses not covered by funds and targeted financing, as well as the excess of settlements with employees on loans received by them over the amount of bank loans, due to the issuance of loans to employees at the expense of special funds of the organization, is reduced when immobilization is subtracted from the value of sources of own funds. If, during the internal analysis, immobilization of other debtors and other assets is found, the total of fast-moving assets is also reduced by its amount.(A.D. Sheremet. A comprehensive analysis of economic activity - M .: "Infra - M", 2009).

To assess the liquidity of the balance sheet, taking into account the time factor, it is necessary to compare each asset group with the corresponding liability group.

1) If the inequality A1 > P1 is feasible, then this indicates the solvency of the organization at the time of the balance sheet. The organization has enough to cover the most urgent obligations absolutely and the most liquid assets.

2) If the inequality A2 > P2 is feasible, then quickly realizable assets exceed short-term liabilities and the organization can be solvent in the near future, taking into account timely settlements with creditors, receiving funds from the sale of products on credit.

3) If the inequality A3 > P3 is feasible, then in the future, with the timely receipt of cash from sales and payments, the organization can be solvent for a period equal to the average duration of one turnover of working capital after the balance sheet date.

The fulfillment of the first three conditions leads automatically to the fulfillment of the condition: A4<=П4

The fulfillment of this condition testifies to the observance of the minimum condition for the financial stability of the organization, the availability of its own working capital.

Based on the comparison of groups of assets with the corresponding groups of liabilities, a judgment is made about liquidity of the company's balance sheet

Comparison of liquid funds and liabilities allows you to calculate the following indicators:

• current liquidity, which indicates the solvency (+) or insolvency (-) of the organization for the nearest time period to the moment in question: A1+A2=>P1+P2; A4<=П4
• prospective liquidity is a forecast of solvency based on a comparison of future receipts and payments: A3>=P3; A4<=П4
• insufficient level of prospective liquidity: A4<=П4
• the balance is not liquid: A4=>P4

However, it should be noted that the analysis of balance sheet liquidity carried out according to the above scheme is approximate, the analysis of solvency using financial ratios is more detailed.

1. Current liquidity ratio shows whether the enterprise has enough funds that can be used by it to pay off its short-term obligations during the year. This is the main indicator of the company's solvency. The current liquidity ratio is determined by the formula:

K \u003d (A1 + A2 + A3) / (P1 + P2)

In world practice, the value of this coefficient should be in the range of 1-2. Naturally, there are circumstances under which the value of this indicator may be higher, however, if the current liquidity ratio is more than 2-3, this, as a rule, indicates an irrational use of the enterprise's funds. The value of the current liquidity ratio below one indicates the insolvency of the enterprise.

2. Quick liquidity ratio, or the coefficient of "critical assessment", shows how liquid assets of the enterprise cover its short-term debt. Quick liquidity ratio is determined by the formula:

K \u003d (A1 + A2) / (P1 + P2)

The liquid assets of the enterprise include all current assets of the enterprise, with the exception of inventories. This indicator determines what share of accounts payable can be repaid at the expense of the most liquid assets, that is, it shows what part of the company's short-term liabilities can be immediately repaid at the expense of funds in various accounts, in short-term securities, as well as settlement income. The recommended value of this indicator is from 0.7-0.8 to 1.5.

3. Absolute liquidity ratio shows what part of accounts payable the company can repay immediately. The absolute liquidity ratio is calculated by the formula:

K \u003d A1 / (P1 + P2)

Shows what part of short-term liabilities can be immediately repaid at the expense of funds in various accounts, in short-term securities, as well as proceeds from settlements with debtors. The value of this indicator should not fall below 0.2.

4. For a comprehensive assessment of the liquidity of the balance sheet as a whole, it is recommended to use general indicator of liquidity of the company's balance sheet, which shows the ratio of the sum of all liquid funds of the enterprise to the sum of all payment obligations (short-term, long-term, medium-term), provided that various groups of liquid funds and payment obligations are included in the indicated amounts with certain weight coefficients that take into account their significance in terms of the timing of receipt of funds and repayment of obligations. The overall liquidity ratio of the balance sheet is determined by the formula:

K \u003d (A1 + 0.5 * A2 + 0.3 * A3) / (P1 + 0.5 * P2 + 0.3 * P3)

Assesses changes in the financial situation in the company in terms of liquidity. This indicator is used when choosing a reliable partner from a variety of potential partners based on financial statements. The value of this coefficient must be greater than or equal to 1.

5. Equity ratio shows how much own working capital of the enterprise is necessary for its financial stability. It is defined:

K = (P4 - A4) / (A1 + A2 + A3)

The value of this coefficient must be greater than or equal to 0.1.

6. Functional capital mobility ratio shows how much of the functioning capital is contained in stocks. If this indicator decreases, then this is a positive fact. It is determined from the ratio:

K \u003d A3 / [(A1 + A2 + A3) - (P1 + P2)]

In the course of the balance sheet liquidity analysis, each of the considered liquidity ratios is calculated at the beginning and end of the reporting period. If the actual value of the coefficient does not correspond to the normal limit, then it can be estimated by the dynamics (increase or decrease in value). It should be noted that in most cases the achievement of high liquidity is contrary to the provision of higher profitability. The most rational policy is to ensure the optimal combination of liquidity and profitability of the enterprise.

Along with the above indicators, to assess the state of liquidity, you can use indicators based on cash flows: net cash flow (NCF - Net Cash Flow); cash flow from operations (CFO - Cash Flow from Operations); cash flow from operating activities, adjusted for changes in working capital (OCF - Operating Cash Flow); cash flow from operating activities, adjusted for changes in working capital and satisfaction of investment needs (OCFI - Operating Cash Flow after Investments); free cash flow (FCF - Free Cash Flow).

At the same time, regardless of the stage of the life cycle at which the enterprise is located, management is forced to solve the problem of determining the optimal level of liquidity, since, on the one hand, insufficient liquidity of assets can lead to both insolvency and possible bankruptcy, and on the other hand, excess liquidity may lead to lower profitability. Because of this, modern practice requires the emergence of more and more advanced procedures for analyzing and diagnosing the state of liquidity.