International Journal of Management and Economics Fundamental
50
https://theusajournals.com/index.php/ijmef
VOLUME
Vol.05 Issue01 2025
PAGE NO.
50-55
10.37547/ijmef/Volume05Issue01-09
Financial analysis of the oilfield service company jsc
makhsusenergogas
Fayziyev Umurkul Shuxratovich
Acting Associate Professor of the Department of Financial Analysis, Tashkent State University of Economics, Uzbekistan
Received:
22 October 2024;
Accepted:
24 December 2024;
Published:
23 January 2025
Abstract:
This article comprehensively examines the financial condition of Makhsusenergogas JSC and provides
an assessment of its activities. The analysis procedures carried out will serve the company in preventing risks and
in confidently expanding its activities. The conducted analysis is distinguished by the fact that the field of activity
of this industry is different from others and has its own characteristics, since the main activity of the oilfield service
company JSC Makhsusenergogas is construction and installation work, laying of gas pipelines, installation and
dismantling of equipment used in the work of oil and energy companies.
Keywords:
Financial condition, balance sheet currency analysis, profitability, liquidity, construction and
installation work.
Introduction:
Currently, in our country, as well as all
over the world, there is a need to conduct a
comprehensive analysis of enterprises in order to
determine their financial condition and assess it. Thus,
Resolution of the Cabinet of Ministers of the Republic
of Uzbekistan, dated July 28, 2015, No. 207 "On the
introduction of criteria for evaluating the effectiveness
of joint-stock companies and other economic entities
with State ownership" and Resolution of the Cabinet of
Ministers of the Republic of Uzbekistan, dated
December 14, 2018, No. 1013 "On measures to
radically improve the system of financial rehabilitation
of enterprises with state participation" serve as a kind
of tools for execution of these actions. Having
determined their financial condition, organizations can
be confident in their future and correct all the
shortcomings of the past. The analysis of the financial
condition of an enterprise plays a critical role in a
comprehensive assessment of its economic stability
and investment attractiveness. The purpose of this
analysis is to identify dynamic trends in the economic
development of an enterprise in the retrospective
period, to diagnose in detail its current financial and
economic situation, to make scientifically sound
forecasts of the vectors of further strategic
development, as well as to quantify and qualitatively
assess the level of financial and operational risks
affecting its functioning in conditions of market
uncertainty.
Determining the financial condition of an enterprise at
a specific reporting date is a comprehensive
assessment of its property and financial situation based
on the principles of a systematic and integrated
approach. This analysis makes it possible to identify the
structure and dynamics of assets and liabilities, the
level of liquidity and solvency, the degree of financial
stability, as well as the effectiveness of the company's
resource management. The research results serve as
the basis for the development of strategic management
decisions aimed at ensuring long-term economic
stability and sustainable development in a changing
macroeconomic environment.:
• how well the company managed its financial
resources during the period preceding this date;
• how it used the property;
• What is the structure of this property;
• how efficiently did the company combine its own and
borrowed sources;
• how effectively did it use its own capital;
• What is the payoff?
The main types of analytical research of financial
reporting data are: analysis based on a single database
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
(vertical analysis), which is a structural study of the
financial performance of an enterprise in order to
determine the proportional ratio of reporting
elements. Within the framework of this approach, the
balance sheet items are transformed into relative
indicators in relation to the total amount of assets,
which makes it possible to identify the specific weight
of each element in the formation of the property
potential of the enterprise. Similarly, the items in the
financial results report are expressed as a percentage
of total income, which provides a comprehensive
assessment of the profit structure and profitability of
business activities. Such an analysis helps to identify
key financial imbalances, form the basis for
comparative analysis and make informed management
decisions.
A REVIEW OF THE LITERATURE ON THE TOPIC
In the context of modern economic realities, business
entities are interested in moderate and sustainable
activities that can be ensured by an effective capital
management system, which will help maximize profits
and increase their own well-being. An integral
component of the continuity of business and the
stability of the functioning of enterprises is the
systematic work on the analysis and assessment of the
financial condition, reflecting their ability to effectively
use resources in a rapidly changing external
environment. The content, the conceptual framework
of the financial condition and the assessment of the
factors affecting it are important theoretical
foundations for the development of a methodology for
analyzing the financial condition of business entities. A
significant contribution to the development of relevant
theoretical provisions was made by domestic and
foreign scientists and practitioners: Khan N.A.,
Ibragimov A., Abduganiev A.A., Khasanov B.A.,
Abdukarimov I.T., Pardaev M.K., O.I. Averina, M.I.
Bakanov, V.I. Barilenko, S.B. Barngolts, L.A. Bernstein,
Y.B. Brigham, L.T. Gilyarovskaya, D.A. Endovitsky, O.V.
Efimova, V.G. Kogdenko, V.V. Kovalev, N.P. Lyubushin,
M.V. Melnik, E.V. Nikiforova, J. Richard, O.V. Rozhnova,
G.V. Savitskaya and others. Many authors reveal
various aspects of the financial condition. However, the
essential characteristics of the financial condition have
not yet been determined; its conceptual framework,
which allows to adequately disclose the content of the
financial condition in relation to the practice of
domestic enterprises, has not yet been formed; and the
idea of the factors determining the level of financial
stability needs to be clarified.
Modern methods of analyzing and evaluating the
effectiveness of oilfield service industry enterprises
cover a wide range of approaches and theoretical
foundations developed by both foreign and domestic
scientists. The classical works of Smith and J.
Schumpeter, which laid the theoretical foundation for
the study of economic processes, play a key role in
shaping the foundations of efficiency analysis. The
concepts of M. Mescon, M. Albert and F. Hedowri in the
field of financial management emphasize the
importance of a strategic approach to the management
of industrial enterprises and their resources.
The contribution of Uzbek scientists such as S.S.
Gulyamov, M.A. Ikramov, T.Z. Teshabaev and others to
the study of the specifics of the development of
national industry and the adaptation of modern
methods of efficiency assessment in the context of the
national economy is important and significant. Their
work contributes to an in-depth understanding of the
processes of economic growth and transformation of
industry structures, as well as the formation of
scientific foundations for optimizing the management
of production and financial resources. Their research
has enriched the theoretical and methodological basis
for the development of effective tools for assessing the
financial and economic stability of enterprises, which
contributes to increasing competitiveness and
innovation activity in the national industry.
Thus, modern scientific literature on the analysis and
evaluation of the effectiveness of oilfield services
industry enterprises demonstrates a multidimensional
approach that integrates theoretical concepts with
practical recommendations, which contributes to a
deeper understanding of the specifics of the
functioning of this sector. The review and
systematization of the works of various authors make it
possible not only to deepen the understanding of the
mechanisms
of
analysis
and
evaluation
of
effectiveness, but also to form a comprehensive toolkit
for their application in a rapidly changing economic
environment. This integrated approach contributes to
the development of more accurate and reasonable
assessment methods, and also allows taking into
account the specific features of the oilfield services
industry, which is a prerequisite for making informed
management decisions and improving the financial
performance of enterprises.
METHODOLOGY
The methodological basis of the research is the works
of domestic and foreign scientists who study in detail
the theoretical and practical aspects of modern
methods for assessing the effectiveness of oilfield
services industry enterprises, as well as the issues of
studying and analyzing their financial condition in a
dynamically changing market environment. In the
course of the analysis, not only legislative acts and
regulatory documents were used, but also materials
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
from scientific and practical conferences devoted to
this topic, which ensured the versatility of the approach
and the relevance of the research. The research was
based on a systematic approach that involves a
comprehensive analysis of interacting elements, and in
order to achieve the goals and obtain objective results,
methods of traditional, economic, mathematical,
logical, comparative and statistical analysis were used,
which allowed for a deeper understanding of the
patterns of functioning of enterprises and the
development of scientifically sound recommendations.
RESULTS
To conduct a comprehensive financial analysis of an
enterprise, the authors of the study decided to use a
condensed analytical balance sheet, which is a
modified form of the balance sheet, providing an
increase in the degree of analytical informativeness. In
the
practice
of
financial
analysis,
various
methodological approaches are used to study the
structure and dynamics of the balance sheet, among
which the following can be distinguished:
A direct analysis of the balance sheet, carried out
without prior transformation and changes in the
structure of balance sheet items, allows you to get a
general idea of the financial position of the enterprise.
The formation of a condensed analytical balance sheet,
which provides for the aggregation of elements of
balance sheet items that are homogeneous in
economic content in order to increase the convenience
and accuracy of interpretation of the data obtained.
Clearing the balance sheet of regulatory items,
including adjusting indicators by eliminating regulatory
values and then aggregating data in the necessary
analytical sections for in-depth research.
Thus, the tables below reflect one of the possible
options for forming a condensed analytical balance
sheet-net, in which individual items are aggregated in
order to ensure greater clarity and consistency in
financial analysis.
Dynamics of the balance sheet currency of Makhsusenergogas JSC, million soums
Diagram 1
During the analyzed period, there has been an increase
in the balance sheet currency of Mahsusenergogas JSC.
At the end of 2023, the balance sheet currency
increased by about 28% relative to the end of 2022, and
amounted to 126,687 million soums.
The company's net revenue for 2023 amounted to
226,737 million soums, and increased by 51,713
thousand soums, or 30 percent, compared to 2022.
In the structure of the total income received from the
implementation of all types of activities of the
Enterprise, the largest share was accounted for by
income from the main type of activity.
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
Net revenue and cost of Mahsusenergogas JSC, million soums
Diagram 2
Financial results for 2023 of Makhsusenergogas JSC, million soums
Diagram 3
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
The value of all assets on the company's balance sheet
by the end of 2023 amounted to 126,686,522 thousand
soums.
The company's long-term assets in the balance sheet
currency at the end of 2023 amounted to 13,548,865
thousand soums (10.6% of total assets). Current assets
amounted to 113,137,657 thousand soums (89.4% of
total assets). Thus, the main part of the property
structure for the entire analyzed period was occupied
by current assets. Fixed assets, including equipment,
are owned by the company.
CONCLUSIONS
An analysis of the current financial condition of
Makhsusenergogas JSC revealed the absence of long-
term debt (over 12 months), which can be interpreted
as a positive trend indicating the stability of the
financial structure of the enterprise. The absence of
long-term debt obligations reduces dependence on
external debt sources and reduces the financial burden
associated with debt servicing. It also indicates a high
degree of financial independence and the company's
ability to independently meet its operational needs,
minimizing the risks associated with possible
fluctuations in market conditions and changes in
lending conditions. Thus, this fact indicates financial
stability and a strategic focus on long-term
independence.
The increase in short-term accounts receivable (from
27,692,952 thousand soums to 58,646,481 thousand
soums) shows a stable structure of liabilities and
satisfactory work carried out by the company with
consumers of its products.
During the reporting year 2023, the company saw a
significant increase in cash (from 42,394,280 thousand
soums to 52,287,441 thousand soums)
–
the company's
funds with absolute liquidity, which indicates the
positive dynamics of the company's financial position.
The growth of funds is a positive trend, and at the same
time, in order to increase the efficiency of the
enterprise, it is necessary to invest temporarily
available funds along with borrowed funds in
expanding production, developing new products, and
advertising the enterprise, which is also pursued by this
project.
At the end of 2023, there was an increase in the balance
sheet currency, which characterizes an increase in the
activity of the enterprise in the market.
The analysis of the balance sheet of Makhsusenergogas
JSC showed a positive trend in its work, which is
confirmed by the data from form No. 2 "Profit and Loss
Statement".
Net revenue for 2023 increased by 51,713,198
thousand soums (from 175,023,826 thousand soums to
226,737,024 thousand soums). There was an increase
in cost by 54,563,759 thousand soums (from
131,569,410 thousand soums to 186,133,169 thousand
soums). The cost of production increases at a faster
pace at the enterprise. Thus, with a 30 percent increase
in net revenue, the cost increased by 41 percent,
therefore, in the future, Makhsusenergogas JSC needs
to pay increased attention to cost reduction measures
(choosing cheaper suppliers, reducing transportation
costs, optimizing forms of remuneration).
Thus, it can be concluded that the company has
significant potential to improve its solvency, increase
the liquidity of assets and strengthen financial stability,
provided that a rational and strategically sound
approach to financial resource management is applied.
Effective asset management, including optimizing
working capital and diversifying financing sources, can
be the basis for increasing operational flexibility and
minimizing financial risks. The implementation of
targeted financial strategies will increase the internal
efficiency of the enterprise and improve its position in
the market, creating a solid foundation for further
growth and long-term development.
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https://www.researchgate.net/publication/23732375
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