Corporate Financial Analysis and Balance Sheet Optimization
Corporate Accounting Data
The following data represents the company's financial position:
Important Concepts
- Banks and credit institutions: 1,350
- Long-term debts to credit institutions: 14,000
- Safety products: 250
- Finished goods: 5,600
- Suppliers: 5,000
- Creditors: 4,080
- Clients: 2,000
- Profit for the year: 11,200
- Other fixed assets: 10,000
- Plant: 10,000
- Raw materials: 2,220
- Investments in long-term bookings: 1,000
- Capital: 9,000
- Current liabilities to credit institutions: 7,920
- Building (productive activity): 25,780
- Administrative concessions, industrial property, and transfer fee: 2,000
- Debtors: 3,000
Tasks
- a) Organize the balance sheet assets by mass.
- b) Perform a financial analysis by calculating the six main financial ratios and discuss the situation.
- c) The company plans to purchase a new machine for €18,000. It will use half of its current available funds and seek external financing for the remainder. Calculate the required debt and identify at least two suitable financial instruments.
Balance Sheet
A) Assets
- Non-Current Assets: €43,780
- Intangible assets: €2,000 (Concessions, industrial property, and transfer)
- Tangible assets: €40,780 (Land and buildings: €25,780; Technical installations and other fixed assets: €15,000)
- Long-term investments: €1,000
- Current Assets: €14,420
- Stocks: €7,820 (Raw materials: €2,220; Finished goods: €5,600)
- Realizable: €5,000 (Clients: €2,000; Debtors: €3,000)
- Available: €1,600 (Banks: €1,350; Safety: €250)
- Total Assets: €58,200
Equity and Liabilities
- Equity: €27,200 (Capital: €9,000; Reserves: €7,000; Profit: €11,200)
- Non-Current Liabilities: €14,000 (Long-term debts to credit institutions)
- Current Liabilities: €17,000 (Suppliers: €5,000; Creditors: €4,080; Current liabilities to credit institutions: €7,920)
- Total Equity and Liabilities: €58,200
Financial Ratios
- Availability Ratio: Available / Current Liabilities = 1,600 / 17,000 = 0.094
- Treasury (Acid Test): (Realizable + Available) / Current Liabilities = (1,600 + 5,000) / 17,000 = 0.388
- Liquidity: Current Assets / Current Liabilities = 14,420 / 17,000 = 0.848
- Solvency (Guarantee): Assets / (Non-Current Liabilities + Current Liabilities) = 58,200 / 31,000 = 1.877
- Debt Ratio: (Non-Current Liabilities + Current Liabilities) / Total Equity and Liabilities = 31,000 / 58,200 = 0.533
- Debt Structure: Current Liabilities / (Non-Current Liabilities + Current Liabilities) = 17,000 / 31,000 = 0.548