Financial analysis and audit

Source forms in Uzbekistan

• the balance sheet — Appendix 1 to Regulation No. 3567, the statement of changes in equity — Appendix 3, the statement of cash flows — Appendix 4;
• for micro-firms and small enterprises — the balance sheet and the statement of financial results (clause 10);
• annual financial statements — no later than 1 March (clause 7).

Basic ratios

• current ratio = current assets / current liabilities;
• equity ratio = equity / total assets;
• net profit margin = net profit / revenue;
• receivables turnover = revenue / average accounts receivable.

What financial analysis provides

• An assessment of the structure of assets and liabilities
• Liquidity indicators and the ability to service obligations
• Profitability by line of business and its trends
• Inventory and receivables turnover
• Reliance on borrowed funds and the stability of the funding structure

Why the audit comes first

Ratios are calculated from financial statement data. If the balance sheet carries bad debts or illiquid inventory at full value, the ratios will look healthy while real problems exist — and a decision made on their basis will be wrong.

When you need both

Before a transaction, before raising finance and when preparing strategic decisions. In these cases it matters both that the data are reliable and what picture they add up to.