A- GENERALLY

As a result of very rapid political, economic and technological developments in the world, the disappearance of time and space differences causes the crises experienced by countries and commercial organizations to tend to spread rapidly to large geographies due to intertwined relations. This causes, organizations with unhealthy financial structures, to be eliminated from the market in a very short time.

For this reason, it is vital for companies to strengthen their financial and managerial structures and turn the crisis environment into an opportunity before these negative environments occur.

The main measures in this regard can be collected under the following headings;

1. Creating a transparent and healthy company organization and accounting structure,
2. Establishing the company’s internal and external control mechanisms to ensure that the system maintains itself in a healthy manner,
3. Checking, whether all assets and debts of the company are healthy, establishing a financial structure that will provide future planning purposes in order to maintain its activities and investments in a healthy and efficient manner, and analyzing, controlling and evaluating it in certain periods (such as monthly, 3-6 months and annually),
4. The analyzes and evaluations to be made are prepared in the form of reports by the managers and presented to the partners at periodic meetings, so that the system operates properly and the measures to be taken, if necessary, are effectively put into effect,

It is a great necessity.

5. The most important instrument of the issues listed above is FINANCIAL ANALYSIS METHODS.
6. These methods, company financial values;
   • Vertical and horizontal comparisons,
   • Static and dynamic comparisons,

It is done by interpreting the ratios obtained through .

B-AREAS WHERE FINANCIAL ANALYSIS WILL BE USED

1. For the company continues its activities in a healthy manner,
2. Subsidiaries operate in accordance with the consolidated structure,
3. To guide the Company’s Distributor / Franchise organizations to operate in a healthy manner through periodic analysis and thus to prevent the damage they may cause to the Company.

C-SUCCESS CONDITIONS OF FINANCIAL ANALYSIS

1. The most important condition for success in financial analysis is the existence of an effective and transparent organization.
2. Another important requirement is that the accounting and information system is sufficient to allow financial analysis.
3. Although financial analysis is to present the figures in the form of ratios, like all studies that depend on people’s comments and evaluations, the expert who performs and interprets the analysis:
   • Having knowledge of legislation, financing and analysis techniques,
   • Having sufficient experience,
   • Being creative and guiding, having vision, common sense and foresight,

It is very important in terms of analysis, evaluation and solution generation.

D-CONSEQUENCES OF NOT ESTABLISHING A FINANCIAL ANALYSIS STRUCTURE

Unfortunately, if companies do not install such systems, success will be random.

When companies that go bankrupt and have to withdraw from the market, which are very common in the world, are examined, it is seen that a healthy control system has not been established or that various company bodies disrupt this structure and prevent rationality. It is known that large companies with very large balance sheet profits had to withdraw from the market due to the fact that important statements and monitoring / evaluation studies such as cash flow and fund flow were not carried out effectively.

Financial analyzes are equally effective in ensuring that the investments are made feasible and at the most appropriate costs and in the most appropriate time period (time is also a very important cost), as well as the healthy continuation of activities.

Ahmet BALTA
Certified Public Accountant

Following the latest technological, social and political developments, our world has now become smaller. Producers and consumers can move between countries according to their needs in a very short time and easily, and this has accelerated company takeovers and acquisitions. This has revealed the need for Due Diligence to be carried out very meticulously.

Due Diligence must first be carried out by a competent and experienced team in this regard, otherwise, unreal asset/liability amounts of the merged/acquired company will be invested.

The Due Diligence process is given briefly below.

1. The legal structure of the company, whether the transactions are legal or not, commitments, etc. should be examined in detail.
2. The company’s existence of a transparent and healthy accounting system, authorizations and internal control mechanisms should be evaluated.
3. Whether taxes, public receivables and obligations to personnel have been fulfilled on time, and whether there are any unpaid debts in this regard should be examined.
4. The trend in the market shares of the products over the years should be examined; is there an outdated product group? How are price comparisons with competitor products over time?
5. In the company’s financial statements, receivables, debts, doubtful parts, the status of profit and equity capital and whether there are healthy figures, stock movement ratios, waste and losses should be examined and analyzed.

Carefully carrying out all of the above-mentioned issues and any additional investigations that may arise during the process will ensure that later disputes between the parties can be prevented from the very beginning.

Ahmet Balta
Certified Public Accountant