2. Methods of analysis of financial condition.
The coefficient method is used to identify the quantitative relationship between different items, sections or groups of balance sheet items. Parallel to this, grouping and comparison methods can be used. The coefficients method can be used to calculate the share of a particular item in the total volume of a liability (asset) or the relevant section of the balance sheet. Active (passive) accounts can be compared with both accounts opposite to the liability (asset) accounts and with similar balance sheet accounts of previous periods, i.e. in dynamics. The method of coefficients is required to control capital adequacy, liquidity level, and the amount of risk exposure of commercial banks' operations on the part of the Bank of Russia. It can be used to quantify refinancing operations.
Methods of visual representation of the analysis results, one of which is the tabulation method. When using this method it is very important to determine the types and number of tables that will be drawn up based on the results of the study. The order of execution of the mentioned tables is also of great importance.
To other methods of visualization of the obtained results is a graphical method, which allows to compare the final data of economic analysis in the form of diagrams, distribution curves, etc. At the same time, the graphical method is most often used to forecast prices, determine the time of purchase and sale of securities on the market, to diversify investments with the use of correlation-regression and dispersion analysis, as well as to reduce the risks of capital investments of the bank.
Index method, a rather common method in statistics, in the economic analysis of banking activities, it is used mainly to study the business activity of a commercial bank.
The method of system analysis is the most effective method of information analysis at the present stage. It makes it possible to solve complex management tasks based on the processing of whole data arrays rather than separate information fragments.
The method of elimination allows us to deduce the influence of separate factors on the generalizing index by arranging the influence of other factors. One of the methods of elimination is the method of chain substitution. The condition for its application is the presence of a multiplicative form of communication, in which the factors act as self-originators. The essence of the method is the consistent replacement of the base value of partial indicators by the actual value and the consistent measurement of the impact of each of them. In conclusion, the algebraic sum of the influence of all factors on the result is established.
A variety of methods of chain substitution are methods of absolute and relative sacristans. Their advantage is a more compact form of recording. The absolute treasury method measures the change in the resultant index under the influence of each factor. The value of deviation of the actual value of the factor from the base (business plan) is multiplied by the actual values of all factors preceding the one under consideration, and by the base values of all subsequent factors. The method of relative retailers consists in the fact that the increase in the effective indicator under the influence of a factor determines by multiplying the base value of the result by the indices of business plan execution of all factors preceding the factors considered in the analytical formula, and by the index of business plan execution reduced by one unit for the factor under consideration. It is necessary to remember that the size of the quantitative influence of factors. In this regard, when building the analytical formula of the effective indicator, the first place is given to the quantitative factors and the last place - to the qualitative ones. If there are several quantitative factors, then the first place is given to the quantitative independent factor, and then the factors are built according to the degree of generalization: the higher the degree of generalization, the closer to the beginning of the formula should be the factor.
The considered methods allow to single out the most essentially influencing factors on result, to establish positive and negative moments in bank activity, to reveal reserves of increase of its efficiency.
The analysis of the bank's financial condition includes several procedures. In the most general form, these procedures can be presented as follows: definition of the purpose of the analysis, collection of the information, primary processing of the data, express-analysis, detailed analysis, substantiation of decision-making.
To increase the reliability of the received estimations and substantiation of the taken decisions it is necessary to carry out the most complete and detailed analysis. The execution of specific procedures, the order of their implementation and the accuracy of the obtained results depend on: the goals set, the quality and volume of information, methodological support, qualification of the specialist conducting the analysis.
To be continued the next part.