Financial Assessment

Methods of assessment company's financial position for the purposes of business valuation can be based on one of three basic approaches. The first approach involves the organization of a differentiated account of all debt on terms of their maturity. In parallel, set the intensity of future cash flows and verify the adequacy of the individual time points. This approach is based on primary information on financial flows. Systematization of this information is very time-consuming and feasible only in companies that are cash flow management. The second approach is based on a special balance sheet liquidity, which allows the company's financial position.

On the balance sheet liquidity all balance sheet items are rearranged according to their rate of turnover. Combining the assets of, implemented by a certain date, with parts of the liabilities, which are the same deadline must be paid (redeemed), set the value of payments surplus or deficit of payments at a certain point. The third approach is based on parameters that are calculated based on a comparison of their individual assets and sources of prevailing at a particular time. These can be indicators of liquidity, financial performance dependence or autonomy, financial soundness, and so on. Practical use of any version of indicators associated with establishing a critical level, allows us to classify the financial position enterprise in terms of solvency. Since the indicators are only indicators and do not allow the right to establish the degree of solvency, this method is not guaranteed to be error-free. However, in most cases, it allows us to obtain a correct diagnosis of the true financial position of enterprises with sufficient accuracy for its inclusion in the follow-up procedure for evaluating the enterprise.