Applying benchmarking tool in assessment financial safety of organization

Abstract

The aim of paper is to assess financial safety of organization using benchmarking method which was initially involved in business practices such companies as Xerox and Hewlett-Packard. Our research addresses using benchmarking relating to assessment of financial state of three Russian oil companies in order to develop a set of suggestions leading to desirable financial state. Proposed technique for assessment financial safety implies next steps: identifying key factors affecting the financial state of company, the choice of financial safety indicators by means of correlation analysis, a calculation of integral indexes of financial safety, development of guidance for decisions making.  The next fundamental indicators of financial safety are examined - financial independence ratio, leverage ratio, accounts receivable turnover ratio, accounts payable turnover ratio, returns on assets, return on borrowed capital. To improve financial ratios the matrix of management decisions was elaborated.