Analysis of the financial performance of an enterprise is an effective tool for choosing a partner

Analysis of the financial activity of the enterprise serveseffective tool in the qualified choice of a partner from both the internal and external markets. The main source of data on the financial stability of a potential counterparty is financial statements.

In a market economy today accountingenterprises is based on the compilation of accounting data and the use of information link that connects the enterprise with the counterparties that are the main users of such data.

In the conditions of modern management, anyusers of accounting information set themselves the task of analyzing the financial activities of an enterprise, on the basis of which in the future it is possible to draw certain conclusions about subsequent activities. This analysis has its sources, purpose and methods.

Forms are used as sources.accounting statements with attachments to it. Analysis of the financial activity of the enterprise is responsible for achieving its goal - identifying the possibility of a deep consideration of external and internal relations of a business entity with the establishment of its solvency, financial position and profitability.

The result of this work should be a clearly formed picture of its activities, presented to the management or other persons interested in the financial condition of the enterprise.

For many decades, business valuation methods have been based on data provided by the accounting system. Among those, it is customary to single out the following methods:

- Comparison of market and book prices -assessment of the effectiveness of the existence of the enterprise, consisting in the ratio of the book value of the available resources with their market value. This method is used in the formation of the so-called investment portfolio to maximize the profitability of the enterprise.

- Market value added, reflectingthe market value of the enterprise, taking into account the capital involved in a certain period. This indicator reflects the effectiveness of the enterprise. It is determined by dividing the market value of borrowed and equity capital by the value of investments. Economists have proven that this indicator contributes to embracing the future value of income.

- Comparison of market value and incomeshare, showing the projected profit of the entity, multiplied by the total number of its shares. Thus, there is a privately received value of a share on its potential income.

- Economic value added, which is an estimate of income. This indicator reflects the economic profit that a business entity must have for the market to survive.

Analysis of the financial activities of the enterprise will beincomplete without considering the return on investment, which is used to evaluate the effectiveness of the various assets used to generate income. The use of this indicator requires a clear interpretation of the concept of "investment".