Under the coefficient of autonomy (or financial independence) it is customary to understand the indicator that characterizes the share of the organization's assets, which are provided with own funds. The higher the indicator, the more stable the enterprise, more financially stable and practically independent of creditors. Therefore, the autonomy coefficient shows the success of the entire organization as a whole.
In order to correctly calculate the autonomy coefficient, it is required first of all to draw up an aggregated balance sheet based on an already existing balance sheet. It is important to note that such transformations within the balance sheet do not violate the existing structure of assets and liabilities, moreover, they allow you to combine items according to the economic content.
Of course, the autonomy coefficient can be calculated without compiling an enlarged balance sheet. On the other hand, in this case, it will be necessary to increase the item "Capital and reserves" by the adjacent amount of "Deferred expenses".
Using the available data, the autonomy ratio is calculated by dividing the value of own funds by the existing totalassets of a particular organization.
In this case, own funds are understood as all the currently existing financial resources of the organization, which, in turn, usually consist of the funds of the founders, as well as directly from the financial activities of the organization. It is important to note that on the balance sheet they are usually reflected in the section called "Capital and reserves".
The concept of "total assets" includes all property of the organization, including tangible and intangible assets. Total assets are the balance sheet total.
The autonomy coefficient is measured exclusively in shares. In this case, the normative critical value is 0.5-0.7 (and in world practice up to 0.3). According to experts, it is quite reasonable to consider this indicator in dynamics. Thus, the constant growth of the coefficient in dynamics indicates the stability of the organization, the gradual increase in its independence in relation to external creditors.
The autonomy factor primarily plays an important role for potential investors and lenders. The higher this indicator, the lower the risks of possible losses from investors.
The greater the share of so-called non-current assets of a particular organization, the more long-term sources are required for subsequent financing, therefore, the share of equity should be larger,respectively, and higher coefficient of financial autonomy.
It is important to note that there are other ratios and indicators (equity capital flexibility ratio, capital concentration ratio, long-term financial borrowing ratio, etc.) that can also be used to judge the financial stability and independence of any businesses.
