1.2 Characteristics of the organizational management structure

The company has the following registration information:

1.3 Pricing policy of the thermal power station

Due to restrictions to data resources on the enterprise there are given the results of the pricing of the production only for 2001 year.

It is seen that electricity supply was 4725212 thous. kWh; the price for 1 untit was 0,1119; and the overall cost was 566080,4 thous.uaH. The supply of thermal energy was 48500 Gcal, price for 1 unit - 51,05 and the cost - 2475,9 thous.uaH. Other products 996 m3, for the cost - 317,1 thous.uaH. But the cost price actual was differ: for electricity - 0,1201 for 1 unit of UAH; thermal energy - 45,01 for 1 unit of UAH and other products - the cost was less 220 thous.uaH.

It was studied the Form 1-PF Report about labor and analyzed the development and growth of the average wage, the growth of production, number of employees and production.

The results are given in Table 2.1 It shows the connection between the increase rate of productivity and average salary, between the increase of production, amount of workers and productivity, their influence on extra costs on labor remuneration and determines the reasons of that.

Table 2.1 - Dynamics of indicators of the use of labor potential Zuevskaya TPP for 2009-2011 years.

The calculation of increase (reduction) rate indexes is conducted based on evident given data with the use of chain and base methods.

So, we can see that output of the Zuevskaya TPP increased in 2010 compared to 2009, and in 2011 to 2009 by 33,5 %. The average number of employees decreased each analyzed year, but labor productivity increased. The gross wages grew in 2010 and more in 2011 by 28,1% compared to 2009. This changes in labor cost was due to increase in salaries (tariff rates) on the basis of the Law of Ukraine "On setting the subsistence minimum and the minimum wage " from 20.10.2009 № 1646 - VI; - increase in the variable portion of salaries, namely the growth of bonus payments from 15% to 25%; payments for personnel of Zuevskaya TPP compensation for length of service (in accordance with the Collective Agreement of Zuevskaya TPP benefits payments for employees who dismissed for retirement voluntarily (in accordance with the Collective Agreement of Zuevskaya TPP) [1].

The next point is the analysis of the qualitative characteristics of the labor potential of the Zuevskaya TPP.

Table 2.2 - Analysis of the qualitative composition of the labor potential of the Zuevskaya TPP

So, we can see that employees by age 35-50 take the biggest share in all analyzed period. In the group of workers according to work experience almost half of the workers have experience of work more than 10 years. It is natural because many people work on the station all their lives.

Also, it should be noted that the company DTEK (and Zuevskaya TPP) value a lot their staff. Basis for sustainable development of DTEK is highly qualified personnel. Effective human resource management, continuous staff development, motivation and safety are the priority issues of the company. The company invested a lot in the social development, environment protection, and DTEK planned to invest in social development of Zugres 11.4 million UAH in 2013-2015 [4].

­ Form 1 Balance sheet (Appendix A);

­ Form 2 Profit and loss statement (Appendix B);

­ Form 3 Cash flow statement (Appendix C);

The analysis of the industrial and economic activity of the enterprise I began with the analysis of property status of the DTEK Zuevskaya TPP.

Analysis of the property status of the commercial organization of its balance sheet begins with a study of the volume, composition, structure and dynamics of the property in the context of its two main components: current and non-current assets (Table 2.3).

Table 2.3 Characteristics of the property in the context of current and non-current assets of the DTEK Zuevskaya TPP 2009-2011

So, this tendency characterizes to accelerate the turnover of current assets. The result is a conditional release of funds to the most mobile forms (cash and short-term investments). In 2010 year the amount of current assets increased by 24,97 % and possessed 12, 37 % of a total amounts of the assets of the enterprise compared to 2009 it was 9,7 %. In 2011 the amount of assets increased dramatically by 57,6% for non-current assets and for current - 61,12%.

Further analysis of the volume of the composition, structure and dynamics of the real assets of the enterprise was made.

Real assets characterize the productive capacity of the industrial enterprise and include their intangible assets (net book value), fixed assets (net book value), inventories (raw materials, and other similar items), work in progress.

Table 2.4 Analysis of real assets of the DTEK Zuevskaya TPP 2009-2011

So, from the table it is seen that intangible assets decreased in 2010 by 236,05% and 2011 by 155,9 % compared to 2009 due to declining in the amount of the article construction in progress. Increase in total real assets indicates a growing productive capacity of the industrial enterprise and is considered as a positive phenomenon. In analyzed enterprise in the period of 2009 - 2011 the amount of real assets increased by 2,51% in 2010 compared to 2009 and by 46,34% in 2011.

Further it is calculated and analyzed financial ratios describing the financial situation of a company, the main of which are presented in Table 2.5.

Table 2.5 Key financial ratios that characterize the financial situation of the DTEK Zuevskaya TPP 2009-2011

The coefficient of the dynamics of property characterizes the trend of the growth rate of the property of an organization in an accounting estimate. Growth of this indicator is a positive assessment, as evidenced by the expansion of the scope of its business activities. It is seen from the table that the coefficient of the dynamics of the property increased each analyzed year; in 2011 it grow by 57,56% compared to 2009. Share of non-current assets in the property reflects the proportion of non-current assets in the property of a commercial organization. Its increase is a sign of mobility decreases property and therefore deserves a negative assessment. In the analysis this coefficient decreased slightly by 2% avg., but it means that it is grown the mobility of the property and it is a positive trend. The share of current assets in the property shows the proportion of current assets in the property of a commercial organization. Its growth indicates an increase in the mobility of the property and therefore deserves a positive assessment. It increased by 16,67% in 2010 compared to 2009, and by 23,08% in 2011. The share of real assets in the property reflects the share of real estate assets in the industrial enterprise. It decreased by 32,31% in 2011 compared to 2010, and this reduction of this indicator indicating that reducing the productive capacity of the industrial enterprise, so it is a negative trend. The share of fixed assets in non-current assets reflects the proportion of assets in non-current assets of the organization. Its high value, usually characterizes the orientation of the creation of the material conditions of the current expansion of the company. In analyzed case it increased by 10,87% in 2010 to 2009, but fall by 27,78% in 2011 compared to 2010 and by 13,89% to 2009. The share of intangible assets in non-current assets shows the proportion of intangible non-current assets of the commercial organization. Its high value usually indicates the nature of the innovation strategy of the enterprise. The value of this coefficient is not big, and decreased by 200% in 2010 to 2009, and by 500% in 2011 to 2009. The share of construction in progress in non-current assets shows the share of construction in progress in non-current assets of the commercial organization. Growth of this index as a whole deserves a negative assessment as construction in progress, are usually not involved in the ongoing activities of the enterprise. It decreased by 1200% in 2010 to 2009 and by 550% in 2011 compared to 2009.

The next step is an analysis of volume, composition, structure and dynamics of non-current assets of the commercial organization (Table 2.6).

Table 2.6 Analysis of non-current assets of the DTEK Zuevskaya TPP 2009-2011

So, it is seen that fixed assets take the biggest part of non-current assets and they increased each analyzed year in 2010 the accession rate was 14,41% and 111,55% in 2011 compared to 2009, and 84,91% in comparison 2011 and 2010; and it is a positive trend. Special attention should be paid to the analysis of change in the proportion of long-term investments in non-current assets. Since long-term investments involve diversion of funds from circulation for a long time and involve, as a rule, with a significant risk, the increase in their share of non-current assets is considered as a negative phenomenon, indicating deterioration in the quality of non-current assets. It is therefore advisable that the rate of increase of non-current assets (RInc) ahead or at least was equal to the rate of increase of long-term investments (RIlti). This ratio indicates that the proportion of long-term investments in non-current assets is not increased and therefore their quality is not degraded. In the analysis the amount of the long-term investments is constant, so there were no changes. Similarly, a negative estimated increase in the share of construction in progress in non-current assets, since it involves the diversion of funds from the market, giving in this time no economic effect. Because of this, it is desirable that the rate of increase of non-current assets (RInc) ahead or at least was equal to the rate of increase of construction in progress (RIcip). This ratio suggests that the share of construction in progress in non-current assets is not increased and therefore their quality is not degraded. The indicator work in progress was big in 2009 and took 11,17% of total amount of non-current assets but it decreased by 89,70% in 2010 and by 59,94% in 2011. But in 2011 it also increased by 288,98%.

Further analysis of the volume of the composition, structure and dynamics of the current assets of the commercial organization is made. In the analysis, depending on the service sphere reproduction current assets are divided into two groups:

1. Current production assets: Inventories (raw materials, supplies and similar items), work in progress, deferred expenses and VAT on purchases.

2. Circulating assets: Finished products and goods for resale, goods shipped, receivables, short-term investments, cash and other current assets. Analytical calculations are made in the form of Table 2.7.

Table 2.7 Analysis of current assets of the DTEK Zuevskaya TPP 2009-2011

In general, as a rather negative phenomenon should consider the growth of the size and proportion of work in progress, as it is an indirect sign of irregularity production process. In analyzed case the amount of work in progress is constant and equal to 0. Increase in the size and proportion of accounts receivable also can not be evaluated positively, as an increasing diversion of current assets turnover, although temporary, does not contribute to the effectiveness of current activities of the commercial organization. Receivables decreased in 2010 from 9453 thous.uaH to 5675 thous.uaH by 39,97% and in 2011 by 28,74%.

So, the next big step in analyzing of the industrial and economic activity of the enterprise is the analysis of the enterprise expenditures.

Production costs are included in cost of goods (works, services) are grouped according to the following elements: material costs, labor costs, contributions to social activities, depreciation of fixed assets and intangible assets other expenses.

If the excess of expenses over revenue for the company from its operations generated losses that are reflected in the liabilities section of the balance sheet and (in the negative sense).

The amount of loss of balance (and previous reporting years) reduced total and section and currency balance as a whole (reduced bag their own financial resources). Unprofitable activity of the enterprise is incompatible with market conditions.

Table 2.8 Dynamic analysis of costs of the DTEK Zuevskaya TPP for 2009-2011

From the table it is seen that costs are characterized by four indicators, namely administration expenses increased by 6,11% in 2010 compared to 2009 and by 25,55% in 2011. Distribution expenses were constant and equal to 0. Other operating expenses increased in 2010 by 19,22%, and by 4,72% in 2011 compared to 2010. Other expenses decreased in 2010 by 48,67%, but dramatically increased in 2011 by 97,75%.

On the basis of profit and loss statement it is needed to analyze of the enterprise operating costs. The following results are provided in table.2.9.

Table 2.9 Analysis of the operating costs of the DTEK Zuevskaya TPP for 2009-2011

So, the analysis shown that the biggest proportion took other operating expenses for 48,14% for all operating expenses; and for all analyzed period the amount of expenses do not change at all. Material costs increased by 1613 thous.uaH in 2010 and by 385 thous.uaH in 2011. Labor costs were remained almost without changes. Deductions for social events rose by 15,71% in 2011 compared to 2010. Depreciation decreased by 158 thous.uaH in 2010, that is 1,07% and it increased the amount by 2956 thous.uaH in 2011. For the total operating expenses there were rise by 15,07% in 2010 and by 12,04% in 2011.

So, further it should be considered the enterprises income formation. The ability to use income as an indicator of efficiency is facilitated by the features of the company arising from the uniqueness of its products, the specific process and procedure planning costs. The value of income is that it describes the financial performance of business.

Basing on the Form 1, Form 2 it could be defined the changes that took place during this three years in the structure of enterprise incomes. You can see it in Table.2.10.

Table 2.10. Formation of the profit of Zuevskaya TPP on 2009-2011 years

Revenue from sales of products (works, services) include the amount of the realized sales price in the period of production, goods and services, production and sale of which is subject to all the activities of the company in accordance with its constituent documents. It increased in 2010 by 18, 19% and by 33,56% in 2011 compared to 2009, due to the fact that the amount of production increased too. The indicator of value added taxes also increased during compared period, in 2011 by 33,56% to 2009. In general, all indicators increased, but the hugest deviation was in the costs of goods sold, in 2011 they rose by 72,79%.

The Table 2.11 describes the financial performance of enterprise indicators, defines the quantitative factors influence on the net income change of net income.

Table 2.11. Analysis of the formation of net profit of Zuevskaya TPP on 2009-2011 years

The analysis of table will allow investigating a dynamics and structure of income. During research of income dynamics inflation factors of change should be taken into consideration. So, the gross income of the enterprise rose by 163335 thous.uaH, or by 60,33% in 2011 compared by 2009. Financial results from operating activities made profit, and increased in 2011 by 76,24% or by 144107 thous.uaH. Other income increased, but other expenses decreased in 2010 from 16363 thous.uaH to 9678 thous UAH, but in 2011 by 67,25%. So, the net profit made up 122724 thous.uaH in 2011, that is less by 83,76% in 2009.

So, the next step of the analysis is the analysis of the financial results of the enterprise. The main economic results of financial and economic activity of Zuevskaya TPP are the amount of electricity produced and sold, gross income, profit.

The main source of information is the income statement (form № 2), which displays information about the formation of the net income (loss), items of operating expenses.

At this stage of the analysis it should be given an overall assessment of the results that is change of its dynamics for 2009-2011 years. Then it is determined absolute and relative deviation, causes of these variations, determined the impact of these factors on the deviation.

Thus, horizontal analysis of key indicators of the "Income Statement" (Table 2.3) shows that almost all indicators of financial performance: gross, operating profit before tax and after tax have a positive absolute and relative deviation.

Thus, throughout the all analyzed period there was a loss only in indicators of other financial activity of the enterprise, namely other financial income (which consist of revenues from the operating exchange rate difference and percent charged to bank) decreased by 2875 thous.uaH in 2010 y.compared to 2009 y., but increased sharply in 2011 by 6931 thous.uaH. Other income also decreased in 2010 by 6 thous.uaH compared to 2009, and increased by 1362 thous.uaH in 2011 copared to 2010. Other cost (consist of liquidation of fixed assets and construction in progress objects, write-off fixed assets, other expenses) decreased by 55 thous.uaH in 2010 y.compared to 2009, but increased by 7338 thous.uaH in 2011. The growth of other financial income and cost in 2011 to great extent occurred due to the discounting of long-term debt (treaty of debt of Zuevskaya TPP).

By the results of 2011 the company received net profit in the amount of 122724.0 thous.uaH, as compared with a profit of 2010 in the amount of 42569.9 thous.uaH an absolute increase in profit was 80154.1 thous.uaH. Thus, on the enterprise it takes place profitability of the production. The analysis of the results of activities of the enterprise in the range of kinds of services it was found that according to the analysis of the main indicators of activity of Zuevskaya TPP: from basic licensing activities received: 2011 - earnings in the amount 71397.2 thous.uaH, by 2010 - profit in the amount 57474.1 thous.uaH - from licensing activities of other income were as follows: 2011 - in the amount 1098.3 thous.uaH, in 2010 - in the amount of 755.5 thous.uaH.

The next step of the analysis is the effectiveness of the use of the fixed assets of the enterprise.

The first step is the structure of the fixed assets of the enterprise.

Table 2.12. The structure of the fixed assets of the Zuevskaya TPP in 2009-2011

So, it seen from the table that the main part of the fixed assets are buildings, structures which poses approximately 80 % of the total amount of fixed assets.

The evaluation and analysis of the indexes of efficiency of fixed assets usage and reproduction are presented in Table 2.13.

Table 2.13. Efficiency indicators of fixed assets usage and reproduction of Zuevskaya TPP on 2009-2011 years

The most important indicator of the analysis of the efficiency of the use of fixed assets is the capital productivity. This indicator is used to characterize the dynamics of the efficiency of fixed assets of the enterprise, as well as a comparative evaluation of the effectiveness of fixed assets for enterprises in the same industry [2]. Capital productivity is calculated by the formula:

(2.1)

During all period this indicator was increased and it a positive trend; in 2011 it increased by 24,74% compared to 2009; it is due to modernization of the equipment and reconstruction of them.

Capital intensity is an inverse indicator of capital productivity.

Capital equipment of labour shows how and to what extent the company is fitted by labor resources by average value of fixed assets; is calculated by the formula:

(2.2)

It rose by 14,01% in 2011, and by 0.76% in 2010.

Deterioration rate of the fixed assets shows to what extent the fixed assets are amortized, so in which measure their possible future replacement is financed on the measure of wear:

(2.3)

Under profitability of fixed assets it is understand the index of efficiency of the use of fixed assets of enterprise, that settles accounts as a relation of profit from basic productive and unproductive activity of enterprise to the average annual cost of capital productive assets, by a formula:

(2.4)

Renewal rate of fixed assets. It shows what part from present on the end of period covered of the fixed assets is presented by the new fixed assets:

(2.5)

Coefficient of leaving of fixed assets shows size of capital assets, that left from the rotation of money of enterprise to the general amount of capital assets on this enterprise:

(2.6)

Rate of growth of fixed assets shows the degree of increase of the fixed assets in a period covered against a past period.

(2.7)

Thus, according to this part of the analysis we see that there are only positive trends.

The analysis of the financial and economic activity of Zuevskaya TPP needs the identification of the following indexes of the financial conditions of the enterprise, which are given in Table 2.15.

Table 2.14. The dynamic of the financial situation of Zuevskaya TPP on 2009-2011 years

So, ROA increased in 2011 and 2010; ROE also increased by 55,9%. Working fund to total resources ratio was equal to 0,03 and decreased in 2010 and 2011 to 0,02. Mobility assets ratio shows the share of the assets of the enterprise take current assets. The coefficient must be greater than 0.5. On the enterprise it was 0,14. Absolute liquidity ratio is the most stringent criterion of liquidity of the company. The coefficient should be between 0.2 - 0.35. According to company index at the end of 2009, it took the value 0.002 and in 2010 - 0,01. This means that the company had the risk of failure to meet its immediate obligations. But in 2011 it increased to 0,33. The quick ratio is the ratio of current assets to current liabilities of the company and shows the adequacy of resources of the enterprise, which can be used to pay off its current liabilities. For normal operation of the business, this value must be greater than 2. It was 0,46 in 2009 and 0,69 in 2011, but it did not meet the normative value. Current ration means profit attributable to a currency working capital; and it means that in 2009 for 1 money units of working capital led to 0,88 of profit, and in 2011 - 5,18 of profit.

The next step is the analysis of the enterprise financial stability, financial independence, and analysis of business activity.

Analysis of solvency (financial stability) of the company is carried out by calculating the following parameters (coefficients): solvency ratio (autonomy), the coefficient of funding ratios of working capital mobility rate and equity, see. table.2.15.

Table 2.15. Calculation of solvency (financial stability) of the Zuevskaya TPP on 2009-2011 years

So, the coefficient of the solvency or autonomy was in the normative range more that 0,5 and in 2011 increased by 6,14% to 2009. The coefficient of funding should be less than 1, it was in 2009 and 2010, but in 2011 it increased to 1,93. Ratio of own working stocks was negative during all analyzed years. Mobility rate on equity also was negative and it decreased in 2011 to - 0,04. The indicator of financial independence is the reverse to the coefficient of the concentration factor equity. The growth dynamics of this index means an increase in the proportion of borrowed funds to finance the enterprise. If its value is close to unity (or 100%), it means that the owners of fully funding your business, if greater than one - on the contrary. For example, if the value of this ratio in 2009 was 1.87, this means that every 1.87 UAH, invested in assets, 87 kopecks were borrowed somewhere. But in 2010 and 2011 it decreased and it was a positive signal; in 2011 for 1,2 UAH only 20 kopecks were borrowed.

Further it should be analyzed the business activity of the enterprise. Business activity of the company in the financial aspect is manifested primarily in the rate of turnover of its funds. Analysis of business activity is to study the dynamics of various levels and turnover ratio. Analysis of business activity allow us to analyze the efficiency of the core activities of the company, which is characterized by speed of financial resources. Analysis of business activity allows us to analyze the efficiency of the core activities of the company, which is characterized by speed of financial resources. The analysis is carried out using turnover ratio shown in Table 2.17. According to the table will find a number of parameters that characterize the rate of turnover, inventory, accounts receivable, accounts payable, inventory, fixed assets and equity. Based on the obtained parameters calculate maturities of receivables and payable, which will give us an idea of ??the level of financial discipline in the target company.

In the Table 2.16 it is presented indicators which characterize the business activity of the company.

Table 2.16. The analysis of the business activity of the DTEK Zuevskaya TPP 2009-2011

Asset turnover ratio - reflects the turnover rate of the total capital of the company, that shows how many times during the analyzed period is the full cycle of production and circulation, bringing a corresponding effect in the form of profits, or how many currency units of sales brought each unit of assets. In 2011 it decreased by 18,02%. Turnover ratio of current assets describes the ratio of revenue (gross revenue) from sales, excluding value added tax and excise tax to total current assets of the company. The decrease in this ratio indicates a slowing of turnover of working capital. In the enterprise it was decrease in the value of this coefficient, it fall by 39,30% in 2011 compared to 2009. Turnover ratio of receivables shows how many times a year turned the funds invested in the calculations. Typically, the higher the score of this ratio is the better, because the company receives payment for most accounts. On the other hand, the provision of commercial credit to customers is one of the tools of sales promotion, it is important to find the optimal length of the crediting period. Turnover ratio of accounts payable was equal to 0 during all analyzed period. Turnover ratio of inventories reflects the number of turns of inventory the company for the period. In general, the higher the inventory turnover, the less money tied to this least liquid article of current assets, the more liquid current assets structure and also more stable financial situation of the company. It rose each analyzed year and in 2011 it was increased by 60,07% compared to 2009. Turnover ratio of fixed assets shows the efficiency of the fixed assets of the company. It is high at enterprise and each year grow, in 2010 it was 0,89 and in 2011 - 0,97. Turnover ratio of equity is calculated as the ratio of the net proceeds from the sale of goods (works, services) to the average value of equity of the enterprise and describes the efficiency of equity capital of the company. It decreased in 2011 compared to 2009 from 4,46 to 2,61 that is a negative trend.