Wellness: financial: description of the procedure

The crisis at the enterprise means the emergence of a risk of bankruptcy, which is a specific manifestation against the background of the market space and reflects the restructuring of the economic structure. In the conditions of modern financial instability, problems arise more often, and economic recovery helps to solve them. The financial condition of a firm, bank or enterprise is established by the analysis and diagnosis of a competitive position in the market and economic instability in the situation of redistribution of capital. Such studies reveal the initial periods of bankruptcy and determine the application of the crisis program.

The loss or profitability of an enterprise in practice is characterized by a characteristic feature in the structure of the balance sheet. Symbolic funds are reflected on the cash and settlement accounts, while significant amounts are placed in the accounts receivable and overdue accounts payable. If the indicators of accounts payable exceed receivables, then the enterprise operates at a loss, and vice versa.

The arbitration court makes a decision to start the procedure of observation. After the end, the first meeting of creditors is held, by decision of which the effective procedure for improving the economic situation at the enterprise is determined:

• Financial recovery;
• The organization of management from the outside;
• Production in a competitive environment.

During these stages, full or partial peace agreements may be established between the parties to the judicial review.

The essence of financial recovery

Improvement of the financial sector of the enterprise is to provide an opportunity to adjust the shaky economic stability. But before the full procedure it does not always work. Sometimes a production or other company initiates the process without creating an observer system. To do this, representatives go to court.

If the amount of the enterprise's indebtedness for payments is less than the value of the company's assets, then the bank's guarantee is not needed. An organization that has obligations in excess of the market value of its own property requires bank guarantees only for the difference of funds. And the court does not accept applications in such conditions, therefore, a five-year installment plan is agreed upon, which is agreed with only a quarter of the creditors.

Installment in the settlement of obligations allows unscrupulous debtors to gradually withdraw assets. They still carry out production or economic activities, which creates new debts. Legal restrictions are powerless against a company that does not want to give away property at the request of creditors. Measures of financial recovery are designed to restore the debtor's solvency and pay off obligations in accordance with the approved schedule.

By the decision of the arbitration court on the basis of the conclusions of the meeting of creditors, a recovery procedure is introduced. The following documents are attached to the decision:

• A plan for the recovery procedure;
• Schedule with specific terms of debt repayment;
• Minutes of the meeting;
• List of the debtor's founders who applied to the meeting with a proposal for the introduction of health measures;
• Data on the alleged repayment of debts in accordance with the proposed schedule.

An application for fulfillment of obligations is sometimes submitted by third parties. Payment of debts under the schedule is carried out with a mortgage, bank or state guarantee, a guarantee of a legal entity. The term of financial rehabilitation is appointed for a period not exceeding two years, and the procedure is carried out by an administrative observer.

Administrative supervisor - manager

The official executes a set of measures for the transparent conduct of the health procedure. A list of creditors and claims is mandatory. It is the duty of the observer to organize a meeting of creditors. At an intermediate stage, the administrative manager reviews the debtor's reports on the payment of debts in accordance with the schedule and transfers the data to the interested creditors.

The supervisor controls the recovery, the financial change in the state of solvency and the timeliness of payments. The administrative manager requires the manager to timely repay debts and provide information about these transactions. If the debtor makes an inventory of property, then the observer is mandatory.

Supervises the conduct of transactions by the debtor, provides information on this issue to other creditors. If the head of the debtor does not fulfill his obligations, the administrative administrator applies to the arbitration court with a petition to change the head of the company. The observer shifts from the position taken by the arbitral tribunal after the petition of the organization of arbitration administrators, in which he is composed.

Improvement and rehabilitation of the bank

The bank's financial recovery consists of complex measures to solve the bankruptcy problem. Targeted measures return the institution to normal life. The procedure involves state executive committees, institutions of other banks, various commercial and legal firms.

The refinancing procedure is the issuance of a loan to stabilize a debtor institution against a pledge of bank assets. The loan is granted on a preferential basis. The condition for the use of the received target funds is their use for carrying out the due payments and maintaining economic stability. It is not allowed to use amounts for lending to others.

To restore the functionality of the bank, a full restructuring of arrears is carried out. The Bank works with clients, and the shortage of funds for payments to individuals and legal entities pays off due to the fact that payments on loan commitments are suspended and held with a delay according to the developed schedule. This prevents the outflow of depositors from the bank and the creation of unhealthy excitement.

The scheme of personnel reduction and liquidation of departments in the structure of the organization is used. Reduces the amount of payment for the work of bank employees. Sometimes there is a union of units. Staff dissatisfaction, of course, is taken into account, but forced financial recovery measures significantly reduce the expense item.

Measures to eliminate insolvency of the company

Bringing the enterprise to solvency is carried out by operational measures that are non-standard in terms of the usual situation. The main difference between the management of a crisis enterprise is the lawful admission of any losses and omissions of benefits in the present and future time, if this restores the company's solvency today.

The shortage of money becomes obvious when expenses exceed the flow of funds. At this point, there are problems with the company's current creditors. The financial recovery of the organization is to distribute financial flows to reduce the difference between the amount of expenses and revenues.

Maneuvering consists in using already available money, assets and those funds that will arise in the future, if the company cope with the crisis. The policy of maximizing revenues and minimizing the expense item is being implemented:

• Create a new payment calendar or improve the old schedule;
• Use of low liquid assets of the enterprise for sale in order to obtain funds or repayment of their short-term debts with their alienation;
• Restructuring of short-term liabilities in long-term payments.

Improvement of the company

The procedure for financial recovery is carried out according to the standard scheme approved by the order of the Ministry of Trade and Economy of the Russian Federation. A title page is compiled, an executive summary is attached. The document starts with a table of contents. Then follow his typical points.

General description and description of the company

The section highlights the type of main activity, the name of the form of government. The share distribution of packages between large holders of shares is indicated, state property in percentage is determined. Put the number and name of the structural departments of the enterprise, the number of employees, the payroll.

The composition of production, types of products and volumes of output are indicated. Determines the amount of revenue for the year from the sale of goods in cash and other equivalent terms. The mass of exports is calculated in the total share of output in monetary terms.

Financial recovery in the description procedure implies a census of fixed assets, unfinished construction, the percentage of completed volumes. Social objects on the balance sheet of the firm are entered, annual expenses for maintenance and maintenance are taken into account, expenses for servicing state capacities and mobilization reserves are taken into account.

Data on the state of the business and sales of commercial products

The types of products are prescribed, data on annual production for the past and foreseen periods are given. The share of each type of goods in the total sales volume is indicated, the revenue by types of products is calculated. Financial recovery of the enterprise involves submission of planned indicators for each product, calculation of production capacity utilization, comparative analysis of the load during a crisis and in a year of effective work.

Describes suppliers with data on supplied basic materials, specifies the procedure for settlements with them, compares purchase prices. Separately, lists of consumers, selling prices broken down into domestic and foreign markets, are given, data on payment methods for the goods are given.

Analysis of the company's finances

This section is important for establishing the reasons for bankruptcy. Financial recovery is impossible without an analysis of economic indicators. The document provides a calculation of liquidity, business activity, economic sustainability of the company, the total costs for each product and the financial indicators are indicated .

The data on the share of equity in the working capital are provided, the data of the total mass of circulating assets and borrowed money are given. The structure of the funds and the division into those that are in production and the calculated indicators are determined. It is indicated the possibility to cover current expenses at the expense of circulating assets and averaged terms of settlements with organizations for shipped goods.

Financial recovery will require the company's data on the possibility of payments on all current liabilities, the structural state of the borrowed funds, and in dividing the debts of banks and direct creditors to fiscal services and internal obligations. The calculation is made, and its structure for the cost of production is given, the data are compared in a stable year and during the same period of the crisis.

Key profit parameters are calculated, for this purpose data on profits and losses from sales, taxation, usual activity, emergency situation are given, the indicator of net profit for the past period is calculated.

Marketing research

The marketing component of the document is necessarily included in the financial recovery, as it contains the basic measures for the sale and the speedy sale of the goods. The section consists of a brief description of the branch organizations and the place of the company in the general mass. Advantages and disadvantages of the enterprise are compared with competitors. An objective characteristic of market relations in this area is given, the target consumer masses and the share of the goods in the process of implementation. The dynamics of increasing and decreasing demand for products depending on various factors is described, recommendations for improving sales are given.

An effective marketing strategy is being developed, an action plan is being drawn up to saturate the market with company products, channels for distributing commodity flows, advertising moves and impact on the buyer are described in order to increase demand. On the basis of the data obtained, a new or improved type of product and measures to promote the goods on the external market are proposed for development.

Areas of activity for economic recovery

In the section there are presented specific measures for the financial recovery of the debtor. Specific actions on transformation of activity of the enterprise are resulted. As a result of effective activities, the following results are obtained:

• There is a cash gain of the organization's revenue;
• The costs and expenses of all types in the enterprise are reduced;
• Optimizes and streamlines the management of the company's cash flow;
• Prerequisites for timely settlements on liabilities are created.

Production plan

This section defines the role of production changes in the process of financial transactions of the company. The program of production, combined with the sales plan, the costs of manufacturing goods and selling prices, is covered by points. The need for fixed assets, staff and resources is calculated, and the payroll is specified. Here, the positive or negative influence of external causes on production is indicated, possible risks are specified.

Financing Plan

The section is characterized by the given objective evidence of the effectiveness of the chosen path of financial recovery. The estimated distribution of financial flows and future payments for liabilities is made taking into account the material and technical needs of the enterprise. Mandatory consideration is given to barter transactions, offsets for goods and cash.

The actual forecast of the financial results of the enterprise after the procedure of economic reforms is made, resulting in a projected balance sheet of the company, which clearly shows the improvement of the financial condition and economic indicators.

In conclusion, it should be noted that there are many ways to improve the economic situation in a crisis enterprise, but an immediate analysis of economic activity is conducted to successfully solve them, taking into account all the above-mentioned indicators. If this is not done on time, then the fall in production and aggravated insolvency will have a very detrimental effect on the financial condition of the company and lead it to imminent collapse.