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Trend Analysis:
Trend analysis is affirmed by comparing the balance sheet items in the business trend. Trend
analysis is not profitable investments.
Percent Trends According to Preparation:
Operation balance sheet and profit and loss account. Percentage is calculated based on
development over specific years. For a year, the current period should be the normal value. In
addition, it is considered to be a 100 pin base year. The formula is as follows:
N = t * 100 / T
N: Number of trends
T: the amount of the year of reporting
T: Quantity of reference y
The ratio of debts to equity shows that what percentage of equity is liability
Short Term Liability
Long Term Liability 100
The ratio of debs to equity =
If raitos are 100 percent or under 100 percent, Equity is adequate to absorb total debts and
credits are in safe. I ratios are over 100 percent creditors are more arbiter than shareholders
equity. So credits are not safe and creditors want assurance such as hypothec warrant and
pledge. Also this causes increasing loan costs and interest expenses.
B. Ratio of Short-term Liabilities to Equity
The ratio of short-term liabilities to equity shows that what percentage of equity is short-term
loan.
Short Term Liability
Equity 100
The ratio of short-term liabilities to equity =
Ideal ratio is 35 percent for manufacturing companies. If the raito is low company has strong
financial position but if the ratio is high than 35 pecentage the company generally uses short
term liabilities equities are not adequate.
C. Ratio of Real Assets to Equity
The ratio of real assets to equity shows that what pecentage of equity is real assets.
Real Assets
Equity 100
Ratio of real assets to equity =
If the ratio is under 100 percent, equtity is adequate but ratio over 100 percent quity is not
adequate and company has to use liability but if the liability is long term it is suitable.
D. Fill Rate of Financial Costs
Fill rate of financial costs shows that how many times of companys financing expenses is
income of the period.
Income of the Period Financial Cost
Financial Cost
Fill Rate of Financial Costs =
Operating Ratios
Operating ratios measures using assets whether fertile. So relationships are made between
total assets and sales.
- Ratio of avarage collection period
- Ratio of receviables turnover
- Ratio of stock turnover
- Ratio of cash turnover
- Ratio of current assets turnover
- Ratio of propertys turnover
- Ratio of assets turnover
Ratio of avarage collection period arises from relationship between accounts receivable and
sales.
Ratio of stock turnover gives the ratio of net sales to inventory turnover rate of stock of a
period.
Net Sales
Avarage Stocks
Ratio of Stock Turnover =
Ratio of stock turnover indicates that sales of stocks subject to a number of times in the
period. is high, if ratio of stock turnover is high the company's cost of inventory on hold
immediately sold, which means that many expect in the stock of goods is low.
C. Ratio of Cash Turnover
Cash turnover ratio measures turnover of redeemable securities of business and monetary
Net Sales
Avarage Liquid Assets
in a period. Ratio of Cash Turnover =
This ratio determines the amount of cash needed to keep the business, but there is no specific
standard on this issue. For this reason, comments compared with businesses in the same
industry and the past year and tried to come to conclusions.
D. Ratio of Current Assets Turnover
Ratio of current assets turnover indicates that due to the extent the sale of assets. Ratio of
Net Sales
Avarage Current Assets
Current Assets Turnover =
High out of ratio, as derived from net sales of assets, in the case of low-rise is interpreted as
derived from income other than net sales of assets. Current assets are expected outside the
capital for a business is to get clear of the net sales. Thus arises the continuation of the
positive business activities.
E. Ratio of Propertys Turnover
Ratio of asset turnover measures the efficiency in the use of assets of the business.
Net Sales
Avarage Assets
Ratio of Asset Turnover =
This ratio is considered appropriate to be in the manufacturing business from 2 to 4. Rate in
commercial operation is expected to be higher.
According to the standard to be lower this ratio shows that the idle capacity in the business. In
other words, businesses or investments made redundant or are receiving the necessary
efficiency of investments.
Profitability Ratios
Profitability ratios, operating activities resulted in a profit proportionate and sufficient to
measure whether the benefits achieved. Uncovered profitability ratios with relationship
between profit and resources; and profit and sales are that :
-profitability ratios of resources
-profitability ratios of sales
The rate of depreciation of the equity of the acquired company's net profit shows the ratio of
shareholders' equity. Here is handling foreign sources of business.
Net Profit for the Period
Equity
Amartization of Capital Ratio = 100
Amartization of equity ratio, generally indicates the profitability of the capital invested by
business owners or business partners. In this sense, the rate grows business owners or partners
have made a good investment to set up such a business is called. The small ratio indicates that
the investment is not profitable. The size of the rate varies from sector to sector. While some
sectors need very large equity is sufficient in some small equity.
2. Amartization of Capital Ratio
Amartization of capital ratio, revealed how resources affect the overall long-term costs of
these resources with the equity and profit. Although capital ratios move it name from the
capital, equity not indicate a process for the total resources of the business.
Net Profit of the Period Long Term Borrowing Costs
Equity Long Term Liability
Amartization of Capital Ratio =
The size of the ratio indicates that the company's long-term resources are used effectively and
efficiently, it can be said that even the company has achieved most yields of long-term
resources. The proportion of low-rise business can not benefit from this type of long-term
resources efficiently, such as interest on these resources will not negatively affect the
financing costs vary greatly with the of profit.
C. Profitability Ratios of Sales
Located net sales operating profit rate by dividing the operating profit of the business, as
opposed to the gross profit ratio is a ratio of operating expenses, including businesses.
Operation Profit
Net Sales
Operation Profit Ratio = 100
Operating profit after the company's operating expenses are met by the assessed rate reaches
profitability. Therefore, the company's operating profit will be less than the gross profit, but
will grow in proportion. The higher the ratio of operating expenses to operating as an effective
way to control and profit of at least shows that maximizing operating expenses.
3. Net Profit Ratio
Net Profit for the Period
Net Sales
Current Ratio = 100
Net Profit Rate is important to show the profitability of the company's results. Because the
business at this rate financing and other expenses are taken into account. This rate being
higher than the net profit of the business, while the low-rise shows that to be profitable.
3.5. Credit Analysis
Credit is generally considered as the process of ensuring a fund. The parties to this process
funding requests and organizations that are providing funds. Fund requesting organizations,
labor issues, size and modal structures are businesses which are very different. These two
sectors are extremely important function in the overall economic structure, making the loan
request and evaluating the various objectives while finalizing these demands take into
consideration. Eliminating the lack of funds for the borrowers to provide continuity of
business operations, lenders are willing to in the first term of the loan and return with a certain
interest. In this case, based loan processing must basically be based on a certain confidence
and assurance. They unus providing confidence to a business; goodwill of transmission
managers and owners in the demand for loans, in the abstract, such as performance
management-level job in ielt's source and use of concrete structures such as the value for
vehicles.
Credit transactions, particularly in terms of organization that can be said to carry a big risk
loans. limiting risk relevant for that you need to be in approach. The supply of this is about
taking the necessary guarantees from the company requesting credit greatly. Largely because
of the emerging credit needs can not describe as standard. However, some businesses in the
equity of the issue and thus can be said to occur in the form of net working capital deficiency.
The credit needs of the business is closely related to the economic conjuncture motion.
- profitability decreased
- stock turnover rate is falling
- to extend the collection period and
- Illiquidity
In particular, short-term loans of enterprises and credit institutions is one of their most
requested types of loans they want to give the most. Therefore, we will focus on short-term
loans in particular.
Short-term evaluation of the qualitative factor in the demand for credit and take the necessary
decisions on the subject too, moving from quantitative factors
There is a necessity. As is known, in making decisions about short-term liquidity credit
analysis it is the main focus. In other words, short-term credit analysis is based on the
liquidity preference. This is the choice of the most effective evaluation and decision analysis
techniques in the transfer function of the ratio analysis. Odds of a business,
Situated in the various financial tables showing the characteristics of the relationship between
the presence and relative abundance are associated with source structure. Therefore, regarding
the analysis of financial statements
The rates used during the study, each carrying a meaning in terms of business management
shows proportional link between values. When considered in this approach, the ratios of open
and analysis of business studies quickly
It is said that the switches that allow.
Rates through in the analysis work is usually performed comparisons capable of directing the
business management in various fields. This comparison process is completed and be
transformed in three successive stages;
In the first of these, for the same business, and compared to historical rates for the future. the
financial position of the company over time The purpose of this transaction, the liquidity,
profitability and needed information about performance is produced.
In the second stage, the comparison process is carried out with typical rates or standard rates
of similar businesses or the sector in which the company continues to work. However, in
order to make this process must be taken into industry-standard rates.
In the final stage, the proportion of enterprises that are the subject of analysis are kept
depends on the interpretation process compared with the generally accepted value. However,
these comments should be adopted as the primary approach to work-related analysis. Because
the differences in various areas between enterprises, are obstacles in the interpretation of
results a solid understanding of the rate.