The balance sheet is the main form of accounting reporting, which informs users about the financial position of the organization as of the reporting date (clause 18 of PBU 4/99). Information in this reporting form is presented in two parts: assets and liabilities of the balance sheet.

We talked about assets on the balance sheet in. Accordingly, liabilities are the sources of formation of these assets. Let's present the grouping of assets and liabilities of the balance sheet in the table.

Balance sheet: assets and liabilities of the balance sheet (table)

Enlarged, the structure of the balance sheet can be presented as follows (Order of the Ministry of Finance dated July 2, 2010 No. 66n):

What is included in the assets and liabilities of the balance sheet

Let us recall that the assets of the balance sheet group the types of property, funds and rights of the organization.

A balance sheet liability is a grouping of the organization’s capital, its reserves and liabilities in order of increasing urgency of their repayment.

Let's present the composition of the assets and liabilities of the balance sheet in the form of a table.

Table of assets and liabilities

Section I “Non-current assets”
1110	Intangible assets
1120	Research and development results
1130	Intangible search assets
1140	Material prospecting assets
1150	Fixed assets
1160	Profitable investments in material assets
1170	Financial investments
1180	Deferred tax assets
1190	Other noncurrent assets
Section II "Current assets"
1210	Reserves
1220	Value added tax on purchased assets
1230	Accounts receivable
1240	Financial investments (excluding cash equivalents)
1250	Cash and cash equivalents
1260	Other current assets
Section III "Capital and reserves"
1310	Authorized capital (share capital, authorized capital, contributions of partners)
1320	Own shares purchased from shareholders
1340	Revaluation of non-current assets
1350	Additional capital (without revaluation)
1360	Reserve capital
1370	Retained earnings (uncovered loss)
Section IV “Long-term liabilities”
1410	Borrowed funds
1420	Deferred tax liabilities
1430	Estimated liabilities
1450	Other obligations
Section V “Short-term liabilities”
1510	Borrowed funds
1520	Accounts payable
1530	revenue of the future periods
1540	Estimated liabilities
1550	Other obligations

Financial condition of the organization represents the provision of its financial resources, the feasibility of their placement and the efficiency of use, i.e. the organization's ability to finance its activities.

The financial condition of the organization is influenced by the results of production, commercial and financial activities. In this regard, the implementation of the production program in these areas determines the degree of sustainability of the organization's financial condition. Thus, the main purpose of the analysis is to identify shortcomings in financial activities and search for reserves for improving the financial condition to ensure the solvency of the organization.

The main objectives of the analysis the financial condition of the organization are:

1) assessment of the implementation of the production program based on the receipt of financial resources and their use;

2) forecasting possible financial results and developing models of the financial condition of the organization;

3) development of measures aimed at more complete formation and efficient use of financial resources, and improvement of the financial condition of the organization;

Information about the financial condition of an organization is of interest to both managers and owners of the organization, as well as potential investors, suppliers, tax inspectors, etc. In accordance with this, the analysis of the financial condition of the organization is usually divided into:

– internal, which is carried out by the economic services of the organization to develop current and strategic financial policies aimed at ensuring the normal functioning of the organization and preventing bankruptcy;

– external, carried out by regulatory authorities, investors and other interested organizations in order to determine the profitability of investing, ensuring profit maximization and risk reduction.

Analysis of the financial condition of the organization is carried out on the basis of information sources of accounting and management accounting.

Analysis of the financial condition of an organization begins with an analysis of the balance sheet, which is a system of interrelated indicators that reflect in monetary terms the state of the organization’s funds, both in terms of their composition and sources, intended purpose and repayment terms. The balance sheet consists of two parts: an asset and a liability, and the asset reflects the funds of the organization, and the liability reflects the sources of formation of these funds.

Analysis of the organization's assets begins with an analysis of the composition and dynamics of assets, the ratio of fixed and working capital, as well as an analysis of individual items of assets.

The composition of a balance sheet asset can be represented by the following diagram (Table 2.2.29):

Composition of balance sheet asset items						Table 2.2.29
Fixed assets	Intangible assets
	Fixed assets
	Construction in progress
						Immobilized
	Long-term financial investments
						bathroom assets
Negotiable
	Accounts receivable
	Short-term financial investments
	Cash

The main criteria for grouping balance sheet asset items is the degree of their liquidity, expressed by the speed and minimization of losses in the process of conversion into cash; as a result, all balance sheet assets are divided into long-term (non-current) and current (current).

In the process of analyzing assets, organizations, first of all, study the changes that have occurred in the composition and structure of assets (Table 2.2.30).

Table 2.2.30

Analysis of the organization's assets

		For the beginning of the year		At the end of the year		Deviations, +/-
	Indicators
I. Non-current assets, total:
	Intangible assets
	Fixed assets
	Construction in progress
	Profitable investments in mothers
al values
	Long-term financial investments
II. Current assets, total:
	Accounts receivable
	Short-term financial investments
	Cash
Total assets

The table shows that during the analyzed year, the organization’s total assets increased by 8,478 thousand rubles, including non-current assets by 6,662 thousand rubles, current assets by 1,816 thousand rubles. As a result of this, the structure of assets changed, the share of fixed and cash assets increased, while at the same time, in other items there was a decrease in the share of both non-current and current assets.

The main share in non-current assets is made up of fixed assets, therefore, when studying the composition of fixed assets, the ratio of their assets is determined.

active and passive parts, power and working machines, analyze the physical and moral wear and tear of assets, as well as the efficiency of their use.

Inventory analysis is carried out with the aim of optimizing it to ensure a normal production process. The accumulation of large inventories characterizes a slowdown in business activity, which leads to a deterioration in the financial condition of the organization. At the same time, a lack of inventory leads to idle capacity, reduced production and reduced profits. Providing the organization with the necessary quantities of inventory is carried out through their rationing, i.e. calculating the minimum amount of inventory in monetary terms to ensure operational efficiency.

The analysis of accounts receivable is carried out from the perspective of changes in production volumes, i.e. as the scale of sales increases, the volume of receivables invariably increases, but it is important to establish the parameters of the relationship between these indicators, as well as to identify overdue receivables. The presence of the latter creates financial difficulties and worsens the financial condition of the organization.

The presence of funds indicates the solvency of the organization, however, the presence of large balances of money in accounts for a long time may be the result of inefficient use of working capital.

Analysis of the organization's liabilities involves determining the changes that have occurred in the structure of equity and debt capital, as well as the volume of funds raised on a short-term and long-term basis. According to the degree of ownership, the capital used is divided into equity and borrowed capital, and according to the duration of use, long-term (permanent) and short-term capital are distinguished (Fig. 2.2.16).

				Organizational means
Equity							Borrowed capital
						Long-term				Short term
	and reserves					obligations				obligations

Rice. 2.2.16. Classification of organization funds

The financial condition of an organization is largely determined by the ratio in the structure of the use of financial sources. Own capital is necessary to ensure the principle of self-financing and is the basis for the financial independence of the organization. At the same time, carrying out production and commercial activities only at the expense of one’s own funds is not always profitable, therefore most organizations use borrowed funds, which, under certain conditions, provide a higher return on equity capital (Table 2.2.31).

The table data shows that with an increase in sources of funds by 8478 thousand rubles. there was a reduction in the share of long-term liabilities and short-term loans and credits.

Then the dynamics and structure of equity and debt capital are analyzed for individual items.

Table 2.2.31

Analysis of the organization's sources of funds

			To the beginning				Deviations, +/-
		Indicators
	Capital and reserves, total:
	Authorized capital
	Own shares, repurchased
shareholders
	Extra capital
	Reserve capital
	Retained earnings (non-
covered loss)
II. Long term duties,
	Loans and credits
	Deferred tax liabilities
government
	Other obligations
III. Short-term liabilities,
		Loans and credits
		Accounts payable
		Other obligations
Total sources of funds

10.4. Financial stability assessment

The assets and liabilities of the balance sheet are interrelated, i.e. Each asset section of the balance sheet has its own sources of financing. Thus, non-current assets are financed mainly from equity capital and long-term borrowed funds, and current assets are formed from short-term borrowed funds and the organization’s own funds. Moreover, the constant part of the working capital is financed from the organization’s funds, and the variable part is financed from short-term borrowed capital (Table 2.2.32).

				Table 2.2.32
The ratio of assets and sources of their financing
	Non-negotiable		Own main
			Long-term debt	Permanent
Negotiable		Permanent part	Own
			working capital
		Variable part	Short-term borrowed capital

Since equity capital is reflected in the balance sheet as a total amount, in order to find the part from which the constant part of working capital is financed, it is necessary to subtract the amount of non-current assets from the total amount of equity capital (the total of the third liability of the balance sheet minus the first section of the asset of the balance sheet).

The amount of own working capital can also be determined by the difference between the amount of current assets and the amount of short-term and long-term financial liabilities (the total of section II of the assets of the balance sheet minus sections IV and V of the liabilities of the balance sheet) (Table 2.2.33).

Table 2.2.33

Calculation of the amount of equity capital of the organization

Options		Indicators	To the beginning
	1. Non-current assets, thousand rubles.
		Capital and reserves, thousand rubles.
		Own working capital, thousand rubles.
	4. Current assets, thousand rubles.
		Short-term liabilities, thousand rubles.
		Long-term liabilities, thousand rubles.
		Own working capital

After calculating the amount of own working capital, the structure of distribution of own capital and the provision of material working capital with own sources of financing are calculated, which is established by comparing the amount of own working capital with the total amount of material working capital.

Excess or lack of sources of funds for the formation of reserves and costs is one of the criteria for assessing the financial stability of an organization.

The following are distinguished: types of financial stability:

a) absolute stability of financial condition , when stocks and for-

spending less than the amount of own working capital and bank loans for inventory items;

b) normal stability, in which the solvency of the organization is guaranteed, and the amount of inventories and costs is equal to the amount of its own working capital and bank loans;

V) unstable financial condition when the amount of inventories and costs is equal to the total amount of own working capital, bank loans and temporarily free sources of funds (reserve fund, consumption and accumulation funds and others);

G) financial crisis, in which the amount of inventories and costs is higher than the amount of own working capital, loans and temporarily free sources of funds; in this case, balance is achieved through overdue payments to the budget, suppliers, employees, etc.

As a result of the analysis, the possibility of restoring a stable financial condition by accelerating the turnover of working capital is explored; reasonable reduction of inventories and costs; replenishment of own working capital and other activities.

The organization's capital is constantly in motion, moving from one stage to another. At the first stage, the organization uses advanced funds to purchase fixed production assets, raw materials and materials. At the second stage, inventories enter production, part of the funds goes to pay for labor and other expenses, and as a result, finished products are produced. At the third stage, products are sold and debt from buyers to suppliers is formed. On fourth stage Debt collection occurs and funds are credited to the organization’s accounts. The faster the advanced capital goes through all stages of the circulation, the more products the organization sells with the same amount of capital, and vice versa, a slowdown in turnover requires the attraction of additional resources and worsens the financial condition of the organization.

At the same time, one of the important points is to increase the efficiency of use of material resources by reducing losses and avoiding overexpenditures.

The efficiency of capital use is characterized by its profitability (return), calculated by the ratio of profit to the average annual cost of fixed and working capital, and the intensity of use - by the turnover ratio, as the ratio of proceeds from the sale of the average annual cost of capital. The relationship between these indicators can be expressed as follows:

			revenue from				revenue from
ER =			implementation				implementation	RP ×K
	capital amount		revenue from		revenue from		capital amount
	(annual average)		implementation		implementation		(annual average)

where ER is economic profitability; RP – return on sales; TO OB – turnover ratio.

Since capital turnover is an important indicator characterizing the business activity of an organization, for analysis purposes the following indicators are calculated:

1. Asset turnover ratio:

= revenues from sales

K about average annual cost of capital

2. Duration of one revolution:

In this case, the average capital balances are calculated according to the chronological average, and the number of days is: for the year - 360, quarter - 90, month - 30 days.

The rate of capital turnover is determined by its organic structure, i.e. ratio of fixed and working capital. The higher the share of working capital, the higher the turnover and, conversely, with an increase in the share of fixed capital, the turnover of the total amount of capital slows down.

As a result of the acceleration of turnover, part of the funds is released from circulation, the amount of which can be calculated as follows:

where P OB is the change in the duration of the turnover.

The efficiency of capital use is determined by calculating the following indicators:

1. Total return on invested capital , determined from-

bearing the amount of profit (profit before taxes and interest on loans) to the amount of invested capital:

ER = SKVP + ZK,

where ER is economic profitability; VP – profit before taxes and interest (gross profit);

SK, ZK – own and borrowed capital, respectively.

2. Rate of return on debt capital , calculated in relation to

We add the amount of funds paid on loans and borrowings to the average annual cost of loans, borrowings and debts of the organization:

R ZK = amount of debt obligations of the organization (average annual) = ZKR.

3. Return on equity, determined by the ratio of net profit to the average annual cost of equity capital:

R SK = PE SK,

where PE is the organization’s net profit, which can be expressed as follows:

PP = VP – N – PR,

where N is the amount of taxes paid; P R – amount of interest paid.

However, VP = ER × (SC + ZK); the taxation coefficient can be expressed

using the formula:

K N =

N = KN × VP = KN × ER (SK + ZK);

PR = RZK × ZK,

R SK =

ER(SK+ ZK) − KN × ER(SK + ZK) − RZK × ZK

ER(SK+ ZK)(1− KN ) − RZK × ZK

ER× SC(1− KN ) +

ER× ZK (1− KN ) − RZK × ZK

ER× SC(1− KN)

ZK [ ER(1− KN ) − RZK ]

ER(1− K

) + [ ER(1− K

) − P

Meanwhile, the difference between return on equity and return on invested capital after taxes forms the effect of financial leverage, i.e.:

EGF = ER(1− K

) + [ ER(1− K

) − P

VP− N

SK + ZK

ER(1− KN. ) + [ ER(1− K

N ) − R ZK ] ×

ER(SK + ZK) − KN × ER(SK + ZK)

SK + ZK

ER(1− K

) + [ ER(1− K

) − P

− ER(1− K

) = [ER(1− K

) − P

Financial leverage effect shows by what percentage the return on equity capital increases due to the use of borrowed funds in the organization’s turnover. Moreover, it arises if the economic profitability is higher than the interest on the loan.

The effect of financial leverage is realized taking into account two factors:

a) the difference between the return on invested capital after payment of tax and the interest rate for the loan, i.e. [ ER (1 − K N ) − R ZK ] ;

b) financial leverage, i.e. ratio of debt and equity

capital of ZK.

SK

Thus, if we have the following relationship:

ER (1− ​​K N ) − R ZK 0 ,

then a positive effect of financial leverage arises, i.e. under these conditions, it is profitable to attract borrowed capital to increase the return on equity.

If there is the following relationship:

ER(1− KN ) − RZK< 0 ,

then a negative effect of financial leverage is created, i.e. equity capital is consumed, which worsens the financial condition of the organization and can lead to bankruptcy.

In the case when interest costs are taken into account when calculating taxes, i.e. due to tax savings, the real interest rate for loans decreases; it can be expressed by the formula: R ZK (1 − K N), then the effect of financial

The total leverage is calculated as follows:

EDF = [ ER(1 − KN ) − RZK (1 − KN ) ] × S ZK K = [ (ER− RZK )(1 − KN ) ] × SK ZK .

Let us consider the essence of the effect of financial leverage in two options, without taking into account interest on a loan when calculating taxes and taking them into account (Table 2.2.34).

									Table 2.2.34
	Calculation of the effect of an organization's financial leverage
			Excluding				Including interest
		percent at
	Indicators						when taxing
		taxation
		organizations						organizations
	1. Own capital
	2. Borrowed capital

capital, %

Continuation of table 2.2.34

Excluding

Including interest

percent at

Indicators

when taxing

taxation

organizations

organizations

Interest rate for loan

Loan interest amount

Income tax rate

Taxable income

Amount of income tax

10. Net profit

11. Return on equity, %

12. Effect of financial leverage

In the first version the second organization received a financial leverage effect of 6.8%, i.e.

EGF 2 = [30(1− 0.24) − 16] × 250 250 = 6.8%, and the third organization: EGF 3 = [30(1− 0.24) − 16] × 125,375 = 20.4%

In the second option the effect of financial leverage depends on three factors: a) the difference between the total return on invested capital

after taxes and interest rate:

ER (1− ​​K N) − R ZK = 30(1− 0.24) − 16 = + 6.8%;

b) interest rate reduction due to tax savings:

R ZK − R ZK (1− K N) = 16 − 16(1− 0.24) = + 3.84%;

c) level of financial leverage for the second organization:

With ZK K = 250 250 = 1, then EGF = (6.8 + 3.84) × 1 = 10.64%.

For the third organization, the financial leverage is:

With ZK K = 125,375 = 3, then EGF = (6.8 + 3.84) × 3 = 31.92%.

The process of optimizing the structure of an organization's assets and liabilities to increase profits is called leverage, and a distinction is made between production, financial and production-financial leverage.

Production leverage represents the impact on the dynamics of profit by changing the structure due to fixed and variable costs of production costs and the volume of its output and is calculated by the ratio of the growth rate of gross profit (before interest and taxes) to the growth rate of sales in physical terms:

Organizations

Indicators

Unit price, rub.

Variable costs per unit. products, rub.

Amount of fixed costs, thousand rubles.

Break-even sales volume, pcs.

Production volume, pcs.

First option

Second option

Production increase, %

Sales revenue, thousand rubles.

First option

Second option

Amount of costs, thousand rubles.

First option

Second option

Amount of profit, thousand rubles.

First option

Second option

Gross profit growth, %

Production leverage ratio

Based on the above data, each percent increase in product sales will ensure an increase in gross profit for the first organization by

2.17%, the second – 2.64%, the third – 3.24%.

Financial leverage shows the relationship between the ratio of equity and borrowed capital and the amount of profit, determined by the ratio of the growth rate of net profit to the growth rate of gross profit, i.e.

K FL = PE %.

OP%

This ratio shows how many times the growth rate of net profit exceeds the growth rate of gross profit, which is ensured by the effect of financial leverage.

The general indicator is production and financial leverage , determined by the product of the production and financial leverage ratios. So, if the increase in sales volume is 20%, gross profit is 64.8% (for enterprise B), and net profit is 70%, then:

	To submarine				K FL =		1,08 ;	K PFL = 3 × 1.08 = 3.24.

A1. The most liquid assets - these include all items of the enterprise’s funds and short-term financial investments (securities). This group is calculated as follows:

A1 = page 1250 + page 1240

A2. Quickly realizable assets – accounts receivable:

A2 = page 1230

A3. Slowly realizable assets - items in section II of the balance sheet asset, including inventories, VAT and other current assets:

A3 = page 1210 + page 1220 + page 1260

A4. Hard-to-sell assets – items in section I of the balance sheet asset – non-current assets:

A4 = page 1100

Balance sheet liabilities are grouped according to the degree of urgency of their payment.

P1. The most urgent obligations - these include accounts payable:

P1 = page 1520

P2. Short-term liabilities are short-term borrowed funds, debt to participants for payment of income, and other short-term liabilities:

P2 = line 1510+1540+1550

P3. Long-term liabilities are balance sheet items related to sections IV and V, i.e. long-term loans and borrowings, as well as deferred income:

P3 = page 1400+1530

P4. Permanent liabilities or stable are the items in Section III of the balance sheet “Capital and Reserves”:

P4 = page 1300

The balance is considered absolutely liquid if the following relationships exist: A1≥P1, A2≥P2, A3≥P3, A4≤P4

Systematization of data on the grouping of assets and liabilities of the enterprise’s balance sheet is carried out in the following table.

Grouping of assets and liabilities of an enterprise's balance sheet

For the reporting year

(thousand roubles.)

Appendix 19

Financial solvency ratios of an enterprise

L 1 1 - 2. Absolute liquidity ratio L 2 = L 2 0.1-0.7 (depending on the industry of the organization) shows what part of the current short-term debt the organization can repay in the near future using cash and equivalent financial investments 3. “Critical assessment” coefficient L 3 = acceptable 0.7-0.8; preferably L 3 1 shows what part of the organization’s short-term obligations can be immediately repaid using cash, funds in short-term securities, as well as settlement proceeds

Continuation of the table. 19

4. Current ratio	L 4 =		required value 1.5; optimal L 4 =2.0-3.5	shows what part of current obligations on loans and settlements there can be repaid by mobilizing all working capital
5. Coefficient of maneuverability of operating capital	L 5 =		a decrease in the indicator over time is a positive factor	shows what part of the functioning capital is immobilized in inventories and long-term receivables
6. Share of working capital in assets	L 6 =	L 6 =	L 6 0.5	depends on the industry of the organization
7. Coefficient of provision with own funds	L 7 =	L 7 =	L 7 0.1 (the more the better)	characterizes the presence of the organization’s own working capital necessary for its current activities

Appendix 20

Enterprise business activity ratios

No.	Indicators	Calculation method	Explanations
A. General turnover indicators
1.	Total capital turnover ratio	d 1 =	d 1 =	shows the efficiency of use of property. Reflects the turnover rate (the number of turnovers during the period of the entire capital of the organization)
2.	Turnover ratio of working (mobile) assets	d 2 =	d 2 =	shows the turnover rate of all working capital of the organization (both material and monetary)
3.	Return ratio of intangible assets	d 3 =	d 3 =	shows the efficiency of using intangible assets
4.	Capital productivity	d 4 =	d 4 =	shows the efficiency of using only the organization's fixed assets
5.	Return on equity capital ratio	d 5 =	d 5 =	shows the rate of turnover of equity capital. How many thousand rubles? revenue accounts for 1 thousand rubles. invested equity capital

Continuation of the table. 20

During the study period, the book value of fixed assets decreased by 13 times (from 40,092.00 thousand rubles to 2,920.00 thousand rubles). The largest amount of fixed assets was on the Company's balance sheet in the period from the third quarter of 2011 to the second quarter of 2012 - 3267.00 thousand rubles, the smallest amount of fixed assets was on the Company's balance sheet in the period from the third quarter of 2010 to the second quarter 2011 - 522.0 thousand rubles.

The change in the value of fixed assets is due to the write-off of depreciation charges. Depreciation was calculated using a linear method, the useful life of fixed assets was established on the basis of the Classifier of fixed assets included in depreciation groups, while the Debtor's accounting policy provides for the selection of the minimum possible useful life of fixed assets.

The Company's current assets, according to the balance sheet for the first quarter of 2014, amount to 758,172.00 thousand rubles. and consist of: accounts receivable - 166625.00 thousand rubles. (21.9%), reserves - 590,157.00 thousand rubles. (77.84%), cash - 823 (0.12%) and other - 564 (0.074%).

The largest share in the structure of the Company's current assets is occupied by inventories - 77.84%.

According to the data presented in the table, throughout the analyzed period, the value of the Company’s receivables was of significant importance and occupied a significant place in the structure of current assets, which cannot be considered as a positive trend, since such an indicator of the value of receivables in the Company’s current assets indicates trends in non-payments on the part of counterparties and ineffective marketing and management policies of the debtor's management. Moreover, the prospect of collecting receivables in full is unknown.

The maximum value of accounts receivable was in the third quarter of 2013 (821,879.00 thousand rubles), the minimum - in the first quarter of 2012 - in the amount of 107,411.00 thousand rubles.

According to the balance sheet for the first quarter of 2014, the Company's debt amounts to 578,304.00 thousand rubles, of which 578,034.00 thousand rubles. - are short-term accounts payable.

As of the first quarter of 2014, the Company received a loss in the amount of 182,776.00 thousand rubles.

Analysis of the structure of balance sheet items allows us to draw the following conclusions:

The largest share in the structure of the enterprise's assets as of the first quarter of 2014 belongs to current assets (99.6%), respectively, non-current assets account for 0.38%.

In the share of current assets, the largest share is occupied by inventories - 77.84% and accounts receivable - 21.9%, the prospect of collection of which in full is unknown.

The debtor did not provide any reasonable information determining the liquidity of the assets.

The law does not provide for market valuation in the surveillance procedure

Based on the results of the analysis of the enterprise’s balance sheets, the following conclusions can be drawn:

1. In relation to assets, an unfavorable factor is:

Insufficient amount of the Company's most liquid assets.

2. In relation to liabilities, unfavorable factors are:

Significant amount of accounts payable,

Increase in uncovered losses.

5. Analysis of the possibility of break-even activity

Cost Analysis

Table 14 - Dynamics of the cost of goods sold, products, works, services

Name

Calculation periods

I quarter 2011

II quarter 2011

III quarter 2011

IV quarter 2011

I quarter 2012

II quarter 2012

III quarter 2012

IV quarter 2012

I quarter 2013

II quarter 2013

III quarter 2013

IV quarter 2013

I quarter 2014

Cost, thousand rubles.

Increase (reduction) in cost for the period

Sales proceeds, thousand rubles.

Net profit (loss), thousand rubles.

Break-even analysis

Break-even analysis is carried out to determine the required volume of production (sales) at which the enterprise could, without outside help, cover all its expenses without making a profit.

The break-even point is determined based on data on product sales volumes and production costs. A prerequisite for calculations is the division of costs into variable and fixed.

The break-even point is calculated using the formula:

S*=Z/ (1-k), k=W/S, where:

S* - break even

Z- fixed costs

W- variable costs

S- total sales volume for all products

Due to the fact that the enterprise does not keep track of costs in the context of fixed and variable, it is not possible to conduct a break-even analysis.

Conclusions on the possibility of break-even activity of the Company

As a result of the study of the Company's activities, it was revealed that as of the second quarter of 2012, the main production activities of the Company were unprofitable. The occurrence of losses is due to the low profitability of the Company's activities and the need to incur significant expenses on production and economic activities against the backdrop of insufficiency of the most liquid assets. In addition, the Company has a significant amount of accounts payable.

The company has low property, personnel and technological potential, and therefore, the implementation of measures to optimize resource potential and reduce costs will not allow the company to conduct profitable activities and restore solvency.