Assessing financial sustainability


The guarantee of survival and the basis of the stability of the organization is its financial stability.Financial stability is a reflection of stable excess of

income over expenditures, provides free maneuvering of funds of the organization, and through their effective use contributes to the uninterrupted

process of production and sales of products. In other words, the financial stability of an organization is such state of its financial resources,

distribution, and use, which provides development of enterprise based on the growth of profit and capital while maintaining solvency and

creditworthiness under conditions of the acceptable risk level. Financial stability is formed in the process of all production and economic activities

and is the main component of the general (financial and economic) stability of the enterprise.Financial stability is affected by a large number of

factors, which can be classified as place of origin – external and internal;by the importance of the result – primary and secondary;by

structure – simple and complex;by the time of action – permanent and temporary.Internal factors affecting the financial stability of the enterprise

include:industry affiliation of the business entity;The structure of output (services), its share in total solvent demand;the amount of paid-up

authorized capital;The number of costs, their dynamics in comparison with cash income;State of property and financial resources, including reserves

and reserves, their composition and structure. The influence of these factors largely depends on the competence and professionalism of managers of

the enterprise, their ability to consider changes in the internal and external environment.External factors include:the influence of economic

conditions of economic management;the techniques and technology prevailing in society;solvent demand and the level of income of consumers.

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