The indicator of financial dependence is an indicator of financial stability, which also indicates the ability of a company to carry out predicted activities in the long term. The indicator is inverse to the indicator of financial autonomy. It is calculated as the ratio of liabilities to equity. The value of the indicator indicates how much financial resources the company uses for each ruble of equity capital.

Standard value:

The standard value of the indicator is in the range of 1.67-2.5. It is desirable to compare the indicator with the values ​​of other market participants in which the company operates.

According to the Rosselkhozbank methodology, the following value is desirable for creditors:

Table 1. Desirable value from the point of view of creditors

Source: Vasina N.V. Modeling the financial condition of agricultural organizations in assessing their creditworthiness: Monograph. Omsk: Publishing house of NOU VPO OmGA, 2012. p. 49.

Too high dependence suggests that the level of financial risks is significant. Too low dependence may indicate an incomplete use of opportunities by the company.

Directions for solving the problem of finding the indicator outside the regulatory limits

To increase the value, it is obviously necessary to attract additional borrowed funds from credit institutions, banks, other enterprises, etc. This will make it possible to intensify production and marketing activities, which will lead to an increase in the financial result of the company's work or will allow it to achieve other goals.

To reduce dependence, it is necessary to work towards increasing the volume of equity capital. To do this, you can carry out an additional issue of shares, invest the resulting profit in the work of the company, use other available measures.

Calculation formula:

Financial dependence = Total liabilities / Equity

Average value in the economy

Rice. Dynamics of financial dependence of organizations (excluding small businesses) by Russian Federation(according to accounting statements)

DEFINITION

Dependency ratio reflects the level of dependence of enterprises on external sources of borrowing. This coefficient is the opposite of the coefficient of independence.

The formula for the ratio of financial dependence on the balance sheet shows what share of all financial resources of the enterprise will fall on 1 ruble. equity capital. Each investor is interested in information whether the company will be able to fully pay off creditors in the event of the sale of all its assets.

The financial dependence ratio is included in the number of indicators that reflect the degree of financial stability of the analyzed enterprises. This indicator is determined mainly for the long term, assessing the dependence on external funds. The danger of this dependence is expressed in the fact that if an enterprise has a large number of external liabilities (debts), then there is a risk of a decrease (loss) in solvency and subsequent bankruptcy.

The formula for the ratio of financial dependence on the balance

The general formula for calculating the ratio of financial dependence looks like this:

КФЗ = ЗК / ВБ,

Here WB is the balance sheet currency;

ЗК - the cost of the company's borrowed capital.

The formula for the ratio of financial dependence on the balance sheet looks like this:

This ratio is calculated using accounting data.

Dependency ratio analysis

In the case when in the analyzed period the indicator of the financial dependence ratio tends to decrease, this is considered a positive dynamics of the enterprise's development from the perspective of investors and potential borrowers.

Thus, the desire of the enterprise to increase the volume of its own funds in order to ensure the stability of its activities will be favorable.

A positive trend is the general growth of financial resources by attracting additional, cheap in service, sources of borrowed funds. However, to get more complete information, it is necessary to calculate the coverage indicators. The more funds a company borrows from external sources, the greater the risk of insolvency and prospective insolvency.

Normative value

If there is an excess of the indicator, then we can say that the company is dependent on external monetary obligations.

In this case, the organization (enterprise) can draw conclusions about its activities and reconsider the attitude to the size of external sources. Excessive accumulation of liabilities in the near future can lead the company to loss of solvency and insolvency.

The optimal value is 0.5. At the same time, an excessively low financial dependence ratio may show that the company loses the opportunity to receive additional income.

Examples of problem solving

EXAMPLE 1

Let's consider. This indicator is widely used by economists in the West. In Russian practice financial analysis more often they use the autonomy coefficient (I wrote about it in detail in this article). The financial dependence ratio is equal to the ratio of the company's debts to its assets and in foreign literature it is called - Debt Ratio (literal translation "debt ratio"). This ratio is included in the group of indicators "Financial stability" of the enterprise.

Dependency ratio (Debt Ratio). Economic meaning

Dependency ratio- an indicator for assessing the financial stability of an enterprise in the long term. The financial dependence ratio assesses how the company is dependent on external funds. The danger is that if the company has a lot of external liabilities (debts), then the risk of loss of solvency increases and, as a consequence, the possibility of bankruptcy.

Dependency ratio... Calculation formula

The formula for calculating the financial dependence ratio is as follows:

Financial dependence ratio (Debtratio) = Liabilities / Assets

In fact, using the coefficient, we determine the share of borrowed funds (debts) in the structure of the company's assets.

According to the Order of the Ministry of Regional Development of the Russian Federation dated April 17, 2010 No. 173 (clause 8.2.1.2), the financial dependence ratio had the following calculation formula according to the old RAS (until 2011):

Financial dependence ratio = (line 590 + line 690 - line 630 - line 640 - line 650) / (line 700).

According to the new form of the balance sheet, the formula takes the following form (according to RAS after 2011):

Dependency ratio = (line 1400 + line 1500 - line 1530 - line 1540) / line 1700

Public accounting reports, which are presented on the Internet, are enough to calculate this ratio.

Two other indicators similar in meaning to the coefficient of financial dependence

The ratio of financial dependence is often calculated with two other, "similar" ratios: the ratio of autonomy (financial independence) and the ratio of financial leverage (leverage). Taken together, the calculation of these three ratios gives a more complete assessment of the financial stability of the enterprise.

Formulas for these two coefficients:

Autonomy (financial independence) ratio = Equity / Assets

Leverage Ratio = Liabilities / Equity

As we can see, to calculate these three coefficients three balance lines are used: Equity, Assets and Liabilities.

The autonomy ratio is discussed in more detail in the article:. So, let's calculate the financial dependence ratio for the OJSC “Magnit” enterprise.

Dependency ratio... Calculation on the example of OJSC "Magnit"

For the calculation, we need public reporting. Let's take it from the website of the aggregator of financial statements of joint stock companies - InvestFunds. The figure below shows the final view of the received financial statements of the enterprise for 4 quarters.

Calculation of the financial dependence ratio for OJSC "Magnit"

Ratio calculations for 4 quarters:

Dependency ratio 2013-4 = (20486818 + 10347697-10479) / 81717075 = 0.37
Dependency ratio 2014-1 = (20009922 + 5749461-13123) / 77050351 = 0.33
Dependency ratio 2014-2 = (20010145 + 524604-1862) / 70383864 = 0.29
Dependency ratio 2014-3 = (15010019 + 5104068-6544) / 86465293 = 0.23

As we can see, the coefficient has a positive trend (the standard<0,7-0,8). Можно сделать вывод, что за год финансовая устойчивость ОАО «Магнит» улучшилась и динамика положительная.

Dependency ratio... Standard

Recommended value for the coefficient of financial dependence <0,7 (indicated in the domestic literature). Nevertheless, according to the Order of the Ministry of Regional Development of the Russian Federation dated April 17, 2010 No. 173 (clause 8.2.1.2), the financial dependence ratio according to the standard should be less <0.8 ... If it is exceeded, it can be concluded that the enterprise depends on external funds (liabilities). The company needs to draw conclusions about its borrowed funds and, perhaps, not yet take on more debt. Excessive accumulation of liabilities will soon lead the company to the loss of solvency and bankruptcy. The optimal value for the coefficient is 0.5. However, a too low financial dependence ratio indicates that the company is missing out on the opportunity to earn additional income. As you probably remember the main rule in the coefficient of analysis: the higher the liquidity of the enterprise, the lower its profitability (efficiency).

Summary

Let me summarize the analysis of the financial dependence ratio. This indicator is used to assess the financial stability of an enterprise. It is used, as a rule, by financial analysts and arbitration managers. Shows the dependence of the company on creditors (external borrowed funds) and determines the share of borrowed funds in the assets of the company. For example, the value of the coefficient equal to 0.8 indicates that the company has 80% of borrowed funds. When the coefficient is 0.5, then the company has 50% of borrowed funds and 50% of its own.

The financial dependence ratio is one of the signs of a company's financial stability. Financial stability shows the ability of a company to work and improve, while maintaining a balance between assets and liabilities. A company can be called financially stable if its cash flows are optimal and balanced, there are financial resources both for conducting current activities and for covering received loans. This company will be called attractive for investment and have an acceptable degree of risk for the owners.

Definition

The leverage ratio describes the level of dependence of a company on third-party loans. This indicator is inverse to the indicator of concentration of own funds. The increase in the ratio demonstrates an increase in the level of external loans in the financing of the company. A decrease in the indicator to one indicates that the company is fully funded by its owners. The analysis of the coefficient is clear and simple: if it comes out 1.25, this means that in 1.25 rubles invested in the company's assets, 0.25 rubles. are borrowed.

The indicator under consideration is also called the autonomy coefficient. It is often used in practice, as it is convenient when used in deterministic factor analysis.

The financial dependence ratio shows the level of the company's ability to cover all its debts when selling assets.

What affects financial stability

The financial dependence ratio is one of the indicators of the financial well-being of the company.

Financial stability demonstrates the company's ability to work and improve, while maintaining a balance between assets and liabilities. A company can be called financially stable if its cash flows are optimal and balanced, there are financial resources both for conducting current activities and for covering received loans. This company will be called attractive for investment and have an acceptable degree of risk for the owners. The financial position of the company depends on the following factors:

• the amount of equity capital;
• asset quality level;
• the amount of proceeds and the stability of its receipt;
• profitability indicator, taking into account financial and operational risk;
• liquidity ratio;
• the ability to quickly attract external loans.

Along with this, the last two coefficients depend on financial stability.

With an increase in the level of third-party loans for financing an enterprise, the company's solvency decreases. This means a low level of financial independence of the company. The financial dependence ratio shows and influences the quality of relations with banking institutions and partners.

Along with this, the impressive size of its own funds in the company's assets also does not demonstrate the success of its development. The profitability of the activity increases when using not only own, but also borrowed resources. Therefore, it is important to choose the best ratio of the share of loans and the company's own resources.

How to calculate the leverage ratio

The formula for the calculation looks like this:

Total assets (balance sheet liabilities) / Equity

KZ = ZK / SK

where SK is equity capital;

ЗК - borrowed capital.

Methods for calculating the indicator

Three main methods are used to calculate the indicator:

• Study of the liquidity of the company's property (assets).
• The study of the mobility of financial statements (distribution of reporting items according to their ease of sale and the study of the relationship between assets and liabilities).

Studying the company, its ability to pay on loans. Here they also form a comparative (analytical) balance, assess the coefficients of business activity, and so on.

These methods will allow you to optimally and comprehensively study the ratio of financial dependence.

The standard value of the indicator should be within the range of up to 0.7. If it exceeds, it means that the company becomes more dependent on third-party borrowed resources.

Interpretation of the Leverage Ratio

The financial dependence ratio under consideration demonstrates the company's dependence on third-party funding sources.

Strong dependence on external sources threatens to have an extremely negative impact on the company's position with a decrease in sales volume, since the cost of paying interest on loans is a fixed cost that the company cannot reduce in proportion to the decrease in sales volume.

In addition, a high dependency ratio will soon make it difficult for the company to attract new loans at the market average interest rate, especially during troubled times.

Foreign practice

As for the level of attracting foreign loans, there are different opinions in the practice of foreign companies. The most popular is that the level of equity capital in the entire amount of sources of long-term loans should be quite significant, while the lower bar is within 60% (0.6). If the bar is lower, the return on personal capital will no longer meet the optimal values.

Increasing the value of the indicator

It is important to understand that all actions aimed at reducing the indicator "The ratio of financial dependence of equity capital" are studied in economic analysis as positive. In other words, any enterprise will strive to increase the share of its own resources in order to increase the stability of its activities. It should be noted that the increase in the volume of financial resources due to the attraction of inexpensive loans is seen as a positive and competent decision. To obtain them, you need a coefficient of financial dependence, the formula of which makes it easy to carry out competent calculations and draw conclusions.

As a result, the indicator under consideration demonstrates a financial value that describes the company's dependence on borrowed resources. The financial dependence ratio, the normative value of which should be within 0.5-0.7 pp, is calculated as the ratio of the volumes of equity and borrowed capital.

According to the calculated coefficients, one can draw conclusions: the coefficient of financial independence for both 2006 - 0.04, and for 2007 - 0.12, and for 2008 - 0.09 below the standard value (0.5). This means that the amount of the organization's own funds is 4% for 2006, 12% for 2007, 9% for 2008, which is significantly lower than the optimal value (50%), reflects the organization's dependence on borrowed sources and indicates a high probability of financial difficulties for the organization in the future.

The financial stability ratio can be used for the calculation as a supplement to the financial independence ratio, by adding long-term lending funds (long-term liabilities) to the equity capital. These long-term liabilities ensured an increase in the financial independence ratio to 0.6632 in 2007 and to 0.7329 in 2008, which is higher than the optimal value.

The financial dependence ratio for 2006 was 0.96, and by 2008 this figure dropped to 0.91, which is higher than the standard value, which means that the company is dependent on borrowed funds.

The financing ratio is defined as the ratio of equity to borrowed capital and is 0.0423 for 2006, 0.1377 for 2007 and 0.098 for 2008, which is lower than the standard value (1), i.e. most of the organization's property is formed at the expense of borrowed funds. This situation indicates the danger of the organization's insolvency and makes it extremely difficult to obtain credit resources.

The financial leverage ratio shows the financial activity of the organization, represents the ratio of the organization's borrowed and own funds and is equal to 23.6187 for 2006 and 10.2043 for 2008 with a standard of 1, which is higher than the standard value, which indicates a high degree of dependence of the organization on borrowed sources ... It should be noted that the value of this coefficient in 2008 decreased in comparison with 2006 by 56.8%, and this, in turn, means that the financial dependence of LLC Fruit and Vegetable Economy - Monastyrskoe Podvorie on external investors has decreased.

The investment ratio characterizes the share of equity capital involved in the formation of non-current assets and is 0.2476 for 2006, 0.3057 for 2007 and 0.1888 for 2008, which is below the standard value. By 2008, this indicator has decreased, which indicates a very small share of equity capital, only 18% for the formation of non-current assets.

The constant asset ratio characterizes the share of equity capital directed to financing non-current assets and amounts to 3.2707 in 2007 and its increase to 5.2973 in 2008, which is higher than the standard value (1.5).

The coefficient of maneuverability of equity capital shows what part of the company's own circulating assets is in mobile form, which allows relatively free maneuvering of these funds. This ratio for both 2006, 2007 and 2008 (-4.2973) is lower than the standard value and means that the organization has no room for financial maneuver, which indicates the unstable financial condition of the organization.

The coefficient of provision of the organization with its own circulating assets for the entire study period does not correspond to the optimal value (0.1). Consequently, the organization does not have its own circulating assets to cover the entire need for circulating assets and widely uses accounts payable and long-term liabilities for this purpose. This had a negative impact on the quantitative value of the indicator, which by 2008 was at the level of -0.7275.

The ratio of supply of stocks and costs with own working capital shows the degree of supply of inventories with own sources and is -0.8072 for 2007 and -1.5899 for 2008, below the optimal value. Thus, the amount of material stocks is significantly higher than the justified need for them, which indicates a lack of own funds to cover material stocks and the need to attract borrowed funds.