Development of methodological tools assessment of financial stability of enterprise

DOI

10.2991/sicni-18.2019.29How to use a DOI?

Keywords

financial sustainability of the enterprise; methodical approach; evaluation; scorecard.

Abstract

Under modern conditions of economic instability, the risk of bankruptcy of economic entities as the result of their increasing inability to resist negative effect of external and internal factors increased significantly. Even large and successful companies need to form of a new management mechanism, aimed to the growth of shareholders' equity under the condition of the target level of financial stability. In this connection the problem of sustainable functioning of economic entities is extremely relevant today. With respect to the real sector of economy, this problem becomes even more important due to some peculiarities of their functioning. These features include a complex organizational structure; great amount of reserves; long production cycle; high capital intensity; the significant amount of the investments to the renewal of fixed assets and, as a consequence, high level of borrowing. This makes an objective necessity for scientific evaluation of the development issues and the insurance of the financial stability of the enterprises. The subject of this research is the methodological tools for assessing the financial stability of the enterprise. Objective: To assess the improvement of methodological tools of financial stability through the development of the author's methodical approach. The methodological basis of the given research were such methods as categorical, logical and structural analysis and synthesis, detailing and summarizing, grouping and comparison of methods of economic analysis of statistical information. The main results: 1. Modern methodological approaches to the assessment of financial stability were considered. A number of significant disadvantages which restrict their effectiveness and practical use were found; 2. The author methodical approach to the assessment of financial stability using the integral indicator and a numerical score was elaborated; 3. The author testing technique used for the assessment of financial soundness of ten largest companies in Russian iron industry was tested; 4. The main tendencies and factors of changes of the level of financial stability of Russian iron ore companies in the period 2012-2017 were found out. Key findings from the study: 1. The financial stability of the enterprise is considered to be the synthesis of three structural components: financial stability, financial flexibility and financial capacity, which determines the logical-structural and methodological basis of the author's methods of its evaluation. 2. Successful testing methodology proposed by the authors for assessing the financial stability on the example of ten largest iron enterprises of Russia confirms the high efficiency of its practical application.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

TY  - CONF
AU  - Julia Dolgikh
AU  - Julia Slepuhina
PY  - 2019/01
DA  - 2019/01
TI  - Development of methodological tools assessment of financial stability of enterprise
BT  - Proceedings of the 2nd International Scientific conference on New Industrialization: Global, national, regional dimension (SICNI 2018)
PB  - Atlantis Press
SP  - 146
EP  - 150
SN  - 2352-5398
UR  - https://doi.org/10.2991/sicni-18.2019.29
DO  - 10.2991/sicni-18.2019.29
ID  - Dolgikh2019/01
ER  -