student: gr fk - 09 d. zenzerova scientific supervisor s.a. kuznetsova,

Diploma work:“Managing the company financial

stability (on the example of the private company “Avtomarket 2000”)”

Student: gr FK - 09D. Zenzerova

Scientific supervisorS.A. Kuznetsova,

Doctor of Economic SciencesFull Professor

Content

Introduction

Chapter 1. Managing the company financial stability

Chapter 2. Financial stability evaluation of the private company “Avtomarket 2000”

Chapter 3. Ways to improve the financial stability management of the private company “Avtomarket 2000”

Chapter 4. Safety Management for the Emergency State for the private company “Avtomarket 2000”

Conclusions2

The purpose of research – to develop an action plan to improve the financial stability management of the enterprise

The object of research – the company financial stability

The subject of research – managing the company financial stability

The research base – Private Company “Avtomarket 2000”

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The financial stability management is the system of decision to raise funds and

distribute financial resources to provide the company stable growth, profitability,

viability and solvency and achieve financial health.

4

Stages of the company financial stability management:

• financial statement stability evaluation, internal and external factor analysis;

• the company financial stability management strategy development and implementation;

• financial stability planning;

• strategic control and financial forecast.

5

Private company “Avtomarket 2000” was established in 2000.

The company manufactures and sells a wide product range for different fields:

• agriculture (spare parts for the sowing and harvesting equipment);• military industry (engines and spare parts);• car industry (car, bus and truck engines and spare parts).

The company background

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Ratio 2009 2010 2011 2012 2013 Normative value

Cover ratio 1,45 1,46 1,36 1,50 1,97 2,0

Quick liqudity ratio0.24 0,23 0,29 0,37 0,70 0,8-1,0

Absolute liqudity ratio

0,12 0,13 0,20 0,27 0,43 >0.2

Liqudity ratio dynamics of the private company “Avtomarket 2000” in 2009 – 2013, th. grn.

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Indicator 2009 2010 2011 2012 2013

Inventories (I) 1540,5 1693,1 1826,0 2099,6 1599,5

Own funds 194,5 245 243 574 860

Short-term loans 1280,6 1367,3 1701,6 1852,5 1258,6

Long-term loans 390,0 380,0 375,0 360,0 360

Own funds + Long-term loans 584,5 625 618 934 1220

Own funds + Long-term loans + Short-term loans 1865,1 1992,3 2319,6 2786,5 2478,6

I < Own funds + Long-term

loans + Short-term loans

I < Own funds + Long-term

loans + Short-term loans

I < Own funds + Long-term

loans + Short-term loans

I < Own funds + Long-term

loans + Short-term loans

I < Own funds + Long-term

loans + Short-term loans

Type of financial stability

unstable unstable unstable unstable unstable

Evaluating the type of financial stability of the private company «Avtomarket 2000» in 2009 – 2013, th. grn.

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The drawbacks of the private company “Avtomarket 2000”

The private company “Avtomarket 2000” cannot be considered absolutely liquid because of the large debt liabilities

Large amount of long-term and short-term liabilities result in the unstable company financial performance

Account receivable increased significantly in 2013

Slow sales of the company products reduce the revenue

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Discount Policy for the private company “Avtomarket 2000”

1. Account Receivable analysis (debt-to assets ratio, debt capital turnover evaluation)

2. Cost-effective discounts calculation for the particular customer.

3. Discount extention for the customer to accelerate payment.

4. Making a discounting agreement.5. Receipts to the accounts, working capital flow

stimulation.

Accounts receivable policy management for the private company “Avtomarket 2000”

1. Accelerate cost recovery system using modern refinancing technologies.

2. Use factoring as an effective way to refinance accounting receivable.

3. Total cost of refinancing of receivables equal to 87,1 th.grn.

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Factoring can transfer accounts receivable into financial resources

Working capital deficit liquidation will achieve cash-flow balance

Company solvency will improve, working capital turnover will accelerate

The private company “Avtomarket 2000” can increase profitability and improve competitive market position

The company performance analysis result

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Reduce the assortment structure and stock provision disbalance of the private company “Avtomarket 2000”

regular inventory product quality control; regular assortment control of the inventory

available; sales stimulation of the stock reserves; effective discount policy and advertising

campaign to increase sales; regular customer demand analysis ; regular inventory control, excess stock transfer

to other retail outlets.

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Stock reserves management policy

Finished product sale for the amount of 429,5 th. grn. will reduce the stock inventory and make 1170 th.grn.

Own funds ratio will increase to 0,74

Working capital turnover ratio will increase to 0,42

Financial stability of the private company “Avtomarket 2000” will improve and correspond to the normative value

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Conclusions

The proposed action plan can:

• reduce the company debt liabilities;• improve the debt-collection system;• optimize the inventory stock level;• improve the company financial

performance and financial stability.

My report is over! Thank you for your attention!

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