APPRAISE THE FINANCIAL SITUATION OF ENTERPRISE BEFORE ORGANIZE ANNUAL GENERAL MEETING

The purpose of the general meeting of shareholders is to summarize the business situation of the enterprise, to vote on the strategies and development plans of the business in the future. This is also an opportunity for related parties to jointly solve arising problems or re-elect a new board of directors when the old one has expired. Shareholders meetings are considered an important event, an opportunity for shareholders to directly discuss all business issues with business leaders.

When the enterprise wants to get a bank loan, the enterprise prepares a loan application in which the enterprise always tries to show a healthy financial situation and has good financial capacity to ensure its repayment ability, because A healthy financial position of a business is one of the conditions for banks to consider lending loans to businesses. Therefore, in order to know whether the financial situation of a business is good or bad, it is necessary to conduct an appraisal to evaluate it, it is necessary to focus on appraising the following contents:

Verifying the reliability of financial statements:

The financial statements used are: balance sheet, income statement, cash flow statement and note sheet of financial statement. However, not all firms have the capacity to fully prepare these financial statements. Furthermore, the financial statements required by a bank are to be disclosed to external sources, so they may, when prepared, differ from those prepared internally by a bank, thus providing the reliability level. The financial statements provided by the business are not guaranteed. Although banks are required to provide audited financial statements, in reality the vast majority of financial statements sent to banks by businesses have not been audited. Therefore, verifying the reliability of financial statements is a regular job of credit officers and they usually take the following steps:

• Carefully study the data of the financial statements

• Use financial knowledge and analytical ability to detect suspicious points in financial statements.

• Examine the disclosures to better understand the suspicious points in the financial statements.

• Invite clients to discuss, interview and request explanation of suspicious points discovered.

• Visiting the company to observe and if necessary review original accounting documents.

• Conclusion on the reliability of the financial statements provided by the business.

Analysis of financial statements:

- Analysis of major items on financial statements

Content analysis of changes in important financial data of the business over time (usually data from the last 3, 4 or 5 years). Figures in these financial statements include both absolute and relative (percentage of total assets for the balance sheet or percentage of total revenue for the income statement. import). Relative numbers more clearly reflect absolute numbers of the key financial trends that have been and are taking place for borrowers and allow analysts to compare with other firms or with industry averages. .

- Analysis of major financial parameters:

* Solvency parameters.
* Operation parameters.
* Financial leverage parameters
* Profitability parameters.