Analysis of Assets in Balance Sheet of Construction Company

In this paper we focus on the analysis of the volume of assets in the balance sheet of selected construction company in Slovenia, Reflex. Selected company belongs to a construction branch in the activity of the final works. According to the data by the Statistical Office of the Republic of Slovenia, financial and economic crisis has begun in 2008, which was in Slovenia first expressed in the construction sector. The purpose of the research is to examine the volume of assets in the balance sheet of Reflex and in the construction branch in order to determine whether construction activity after a few years of economic crisis is recovered or not. Developments in the branch affect future operations of the company Reflex. It is very difficult to say that a company or activity recovers if the volume of assets is decreasing. Research period covers the years 2008–2012. As studies and statistics data warn, the main problems of construction companies in Slovenia are decline of orders in construction sector, drop in real estate sales, and payment indiscipline. All this affects business volume of the construction company. The volume of business is reflected also in the volume of assets on the balance sheet. Therefore, in this study an accounting analysis of assets volume of the company Reflex and a statistical analysis of the assets in a construction branch in the field of building completion were done. By an accounting analysis, we examined the individual movements in long-term and short-term types of assets of the company Reflex. By statistical analysis we examined whether the volume of assets in companies within the construction branch significantly increased. For the statistical analysis, we used t-test (one-sample statistics) for the analysis of the arithmetic mean of assets. Both analyses were done on a sample construction company engaged in building completion and finishing which, in 2012, employed at least ten workers. Thus, the selected sample contains 56 companies. By an accounting analysis of assets volume, we found that the volume of assets in the company fluctuated and in 2012 reached the lowest value; the volume of total assets in 2012 does not even reach the value of assets in 2008. The value of tangible fixed assets of the company dropped significantly; current assets increased mainly due to an increase in operating receivables. By statistical analysis of the volume of assets of a construction branch, we found that the volume of assets does not increase on such a scale that it would be able to confirm with sufficient accuracy, so we cannot talk about recovery within the analyzed activities. The limitation of research represents the number of construction companies with final construction work in a sample of companies. On the other hand, on partial accounting analysis, we studied only assets in the balance sheet, but not other economic categories in the financial statements. Based on these limits, after a review of assets in the balance sheet of Reflex, we suggest improving the management of funds, in both long-term and short-term types.