Analysis of the financial condition


Analyzing the financial stabilityOne of the traits that define the stability of the firm is the stability of its finances. The financial stability of the business

is considered stable if it has the company’s own money at less than 50% of funds required for business operations efficiently uses the financial

resources, adheres to the financial, credit and payment discipline, that is it is financially stable. The financial position of a company is assessed using

the evaluation of solvency and liquidity, and also an assessment of the stability of its finances.Financial stability is determined by the stability of the

conditions, in which the the company’s activities are carried out as well as by the results of its operations, its effective and prompt response to the

changes in external and internal variables.Financial stability is a sign that is characterized by a constant increase in income over expenses as well as

the freedom to move company funds and their efficient use uninterrupted manufacturing and selling of goods. Financial stability is a result of the

production process and economic activities , and is the most important element in general stability an business.Analyzing the stability of the financial

position at a particular date will allow you to determine the efficiency of the management of the company’s financial resources in the period prior to

the date. It is crucial that the financial state resources meet the needs that the marketplace has and meet the requirements of development for

enterprises Insufficient financial stability could lead to financial ruin and insufficient funds for development of production and excessive funds can

hinder developmentof the business, burdening the cost of the business with excess reserves and stocks. So, the fundamentals to financial security is

determined by the effective development, distribution, and utilization of financial resources.One of the most significant aspects of the financial health

of an enterprise is its stability in its activities over the long run.

It’s related to how the finances of an business and the extent of its dependence on investors and creditors. A lot of business owners from Russia

choose to put only a small portion of their own funds in the company,

and finance it mostly with borrowed money. Financial stability indicators define the degree of dependence an organization on external sources of

funding. If the structure of equity-borrowed funds is heavily influenced by debt, a business could easily be bankrupt when creditors are requesting

their money back at the exact simultaneously.Financial stability of an organisation is among the most significant characteristics of its financial

activities. Financial sustainability refers to the stability of an enterprise’s operations over the long run.It is advised to examine whether the stability of

financials of the firm by using the coefficient method as well as the study of the “net assets” indicator.

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