Assessment of the financial sustainability of the enterprise: the basics of financial analysis
Consideration of all factors
In the economy, an important role is played by such type of factors as financial stability, which shows how stable the position of an organization is at the moment. The assessment of the financial stability of an enterprise can be considered positive when the following conditions are met:
1) The company’s solvency remains.
2) Financial resources are used with maximum efficiency.
3) At least 50 percent of financial resources, without which the activities of a business enterprise cannot be carried out normally, are covered from its own assets.
On financial stability: additional information
The activity of the enterprise is necessarily carried out within the framework of a particular economic environment. In part, its stability ensures the stability of the financial type as a factor.In addition, the assessment of the financial sustainability of the enterprise, as well as this factor itself, to some extent depends on the effective and active response of the enterprise to changes in external or internal factors, to the results of the enterprise’s activities.
About the characteristic of financial stability
In general, when carrying out such an operation as an assessment of the financial stability of an enterprise, it is possible to determine how the ratio between expenses and revenues is formed at a particular enterprise. If the indicator is positive, then everything goes as it should. This means that management can freely dispose of funds and make any necessary maneuvers. So financial stability is an indicator that plays a major role in the overall stability of an enterprise.
About important characteristics in this direction
One of the most important characteristics in terms of financial stability is often the relationship between the enterprise and the bank, which gives money for certain actions. Therefore, the assessment of the financial sustainability of an enterprise must take into account how exactly and to what extent the funds that were borrowed from banks or other similar organizations are used.
About financial recovery of the company
The material base for achieving the best result can be normalized by non-traditional methods, for example, by leasing. Leasing at the same time has greater economic significance than other financial transactions, so that it quite effectively contributes to such a situation as improving the financial stability of the enterprise.
About additional factors
Improving contractual discipline and contractual work is another factor that also plays an important role for financial sustainability. Here it is important to take into account the peculiarities of the organization of finance and production itself. Actually, indicators of financial stability of an enterprise often take into account such factors. The urgency of this sphere is related to the fact that a situation often arises when payments between firms are not made at all or are made with fairly strong delays. The main thing here is to really label all the features in paper form.