Improvement of liquidity management and solvency of the enterprise

Abstract

Of particular importance in modern conditions is the transition to financial management based on the analysis of the financial state, taking into account the setting of strategic objectives of the enterprise, adequate to market conditions, and searching for ways to achieve them. The maximum validity of the managerial decisions made is provided only by a qualitative analysis of the financial condition of both their enterprise and current and potential business partners. In this case, not only the current financial condition is important, but also the forecast for the near and distant future. Financial situation is the most important characteristic of business activity and reliability of the enterprise. It determines the competitiveness of the enterprise and its potential in business cooperation, is the guarantor of effective economic activity, both the enterprise itself and its partners. The financial condition, determined by the whole set of economic factors, shows the level of balance of assets and liabilities of the enterprise, as well as the effectiveness of their use. The financial condition of an enterprise is manifested in its solvency, optimality of the structure of the sources of capital and the optimality of the structure of the assets of the enterprise, primarily from the ratio of fixed and circulating assets, and also from the balance of assets and liabilities of the enterprise, its financial stability is largely enviable. Consequently, solvency, liquidity, financial stability and, in general, the financial condition of an enterprise characterize its reliability as a business partner in the conditions of renewal and development of a market economy.