Statistical and dynamic management balances

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Statistical balances are compiled on the basis of instant indicators that are calculated on a specific date. Dynamic balances provide more information, since they display the property composition of the organization and the sources of its formation not only on a specific date, but also in dynamics.

The form of dynamic balance has one paraguay mobile phone numbers database difference from the statistical one, which is the number of columns. The qualitative difference is that:

the dynamic management balance may include transit accounts that are absent from statistical balances;

main and transit accounts are represented not only by balances at the beginning and end of the period, but also by turnovers for the given period.

Dynamic management balance is considered more complex than static balance. For this reason, the most popular is the transitional form between these documents.

Liquidity and accounts receivable in the management balance sheet
A management balance sheet will help to clearly display the situation with asset liquidity on a certain date. The speed with which the company's assets are converted into cash is called liquidity.

The financial specialist of the organization must maintain a balance in management decisions, namely, maintain control over a reasonable ratio between short-term and long-term assets. The purpose of this action is the consistent development of the enterprise and its ability to repay short-term liabilities on time. An increasing financial deficit between groups leads to an increased risk of a situation in which the company will not be able to find funds to pay off its creditors.

Sometimes it is inconvenient to conduct an analysis based on absolute indicators, so relative coefficients are calculated. In some sources, you can find different recommended results of calculated values. For example, the optimal value of the current liquidity ratio is considered to be from 1.5 to 2.5. In some sources, it is recommended to adhere to the ratio of accounts receivable to accounts payable, which is equal to 1.

Liquidity and accounts receivable

Source: shutterstock.com

The financial specialist of the organization, constantly monitoring the liquidity indicators, must take the following measures to improve the situation:

suspend further increase in non-current assets;

find new long-term sources of financing and convert short-term liabilities into long-term ones;

negotiate with creditors to obtain maximum deferments on debt repayment, despite the payment of possible interest.

Signs by which one can judge the deterioration of liquidity:

significant increase in the dynamics of non-current assets;

structural changes in the balance sheet towards a reduction in long-term debt obligations and an increase in short-term ones;

the presence of losses in the balance sheet, i.e. the indicator “Financial result” has a negative value.