FINANCIAL STABILITY AS A FINANCIAL SECURITY INDICATOR OF AN ENTERPRISE

Authors

DOI:

https://doi.org/10.18371/fcaptp.v4i39.241312

Abstract

Abstract. The system diagnostics of enterprise financial security developed by the authors are based on taking into account the combined effect of the main elements of the financial stability management process.

On the basis of the justification of the interdependence of the main components of an enterprise’s financial security (on the one hand, the types of financial stability and the liquidity of the balance sheet, on the other hand, their correlative effect on the level of financial security) the authors proposed a model for its evaluation. It has been proposed that the type of financial stability of an enterprise should be determined on the basis of the identification of the financial situation in accordance with the scale developed on the basis of the values of the main financial stability ratios. The type of liquidity on the balance sheet is based on a comparison of liquidity-based items of assets with maturities. The unified impact of types of financial stability and balance sheet liquidity on the level of financial security became the basis for the development a matrix for diagnostics the general position of financial security of the enterprise.

Based on the established relationship between the degrees of financial stability and liquidity of an enterprise on the one hand, and the level of financial security of operating activities on the other, a model has been developed to assess the level of financial security of the enterprise’s operating activities. It has been proposed that the financial stability and liquidity of an enterprise should be determined on the basis of a three-tiered indicator by classifying financial situations within the established indicator scale: depending on the priority of selecting funds to finance the tangible portion of a negotiable asset and the sufficiency and composition of a negotiable asset to meet current liabilities. On this basis, a diagnostic matrix of the financial security position of the enterprise’s operational activities has been developed.

The interconnection of the positions of the financial security of the enterprise and the unification of its level enabled the authors to develop a matrix of zones of the general position of the financial security of an enterprise where, depending on the combination of financial security levels, zones are distinguished from absolute financial security to financial danger.

The testing of each element of the proposed enterprise financial security diagnostic’s system on the materials of a selected group of enterprises of the oil-and-fat industry confirms the practical significance of the developed tools in the process of managing their general financial security.

Keywords: financial security, financial security level, financial security position, financial security of operating activities, financial stability, liquidity, oil-and-fat enterprises.

JEL Classification G30, M20, Q14

Formulas: 14; fig.:5; tabl.: 4; bibl.: 22.

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Published

2021-09-10

How to Cite

Hrynyuk, N. ., Dokiienko, L. ., Nakonechna О. ., & Kreidych І. . (2021). FINANCIAL STABILITY AS A FINANCIAL SECURITY INDICATOR OF AN ENTERPRISE . Financial and Credit Activity: Problems of Theory and Practice, 4(39), 228–240. https://doi.org/10.18371/fcaptp.v4i39.241312

Issue

Section

The models and process technology of the financial information