Financial condition analysis
Assessment of a counterparty's solvency and risks before a contract is signed
Financial condition analysis shows how stable a company is, whether it is able to meet its obligations on time and whether it has the resources to perform the contract.
The analysis is carried out before a contract is signed with a supplier, contractor or customer and when existing counterparties are reviewed. When a business is acquired or an investor takes a stake, due diligence is carried out.
Finappraisal analyses a company's financial condition in key areas
Financial statements
Analysis of the balance sheet and income statement for the last three years based on the State Information Resource of Accounting (Financial) Statements (GIR BO): the structure and dynamics of assets, liabilities and equity, and net asset value
Revenue and profitability
Trends in revenue, profit and profitability, losses in recent years, and a comparison of the tax burden and profitability with the industry averages published by the Federal Tax Service of Russia
Solvency and financial stability
Liquidity, financial stability and business activity (turnover) ratios under the Rules for Financial Analysis by Insolvency Officers (Russian Government Resolution No. 367 dated 25 June 2003), debt burden, receivables and payables
Staff and resources
Average headcount, revenue per employee, and the availability of the production capacity, equipment, qualified staff and experience needed to perform the contract
Tax and debt risks
Tax arrears, outstanding penalties and fines, tax offences, decisions to suspend bank account transactions, enforcement proceedings and bankruptcy notices in the Unified Federal Register of Bankruptcy Information (Fedresurs)
Business reputation
Information in the Unified State Register of Legal Entities (USRLE) on owners, managers and records of unreliable information, mass registration addresses and nominee directors, arbitrazh court disputes, and inclusion in registers of unscrupulous suppliers
The analysis is based on financial statements, information in the Federal Tax Service "Transparent Business" service, data from open registers and arbitrazh court case files and, with the counterparty's consent, its management accounts, account breakdowns and contracts. Finappraisal assesses the company's solvency and financial stability, the risk of non-performance, the availability of resources and its business reputation: the circumstances that a prudent market participant examines when choosing a counterparty (Federal Tax Service Letter No. BV-4-7/3060@ dated 10 March 2021). The result is an analytical report on the company's financial condition and the risks of working with it, which is used when deciding whether to sign the contract and on what terms, and which documents the counterparty due diligence.