Financial stability as factor and indicator of economic safety of an industrial enterprise
Journal Title: Економіка. Фінанси. Право - Year 2019, Vol 7, Issue
Abstract
The article substantiates the main provisions on the assessment and management of financial stability as a factor and indicator of economic security of an industrial enterprise. Ensuring the economic security of the enterprise is a complex multi-purpose system, the content and structure of which depend on the financial and economic condition of enterprises, the level of its financial stability. The financial stability of the enterprise is characterized by a ratio the volume of own and borrowed funds, the degree of provision of inventories and expenditures by borrowing and own sources of their formation, and is also characterized by a system of absolute and relative indicators. Financial stability of the enterprise, as an indicator of the optimal balance of capital structure and potential maneuverability is a fundamental factor in ensuring the economic security of the company in operational management and strategic planning, because it allows you to timely assess the preconditions for bankruptcy, thereby eliminating catastrophic risk for the enterprise. The methodical approach for estimation of financial stability of the enterprise is presented. Depending on the values of the valuation indicators, five levels of financial soundness (or risk) are proposed. The possibility to compare them with five levels of financial security is justified: absolute, normal, unstable, critical and crisis. It is proved that the complex assessment of financial stability allows to classify the financial condition of the enterprise according to the degree of threat, which is important for making management decisions in the sphere of risk management and stabilization of the financial and economic state of the enterprise. Management measures to maintain financial sustainability is one of the key tasks of financial management in an enterprise. In order for enterprises not to be bankrupt, it is important to conduct timely analysis of financial and economic activities, identify weaknesses, eliminate them and carry out strategic planning of work.
Authors and Affiliations
Kateryna Volodymyrivna Kucherenko
Keywords
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