Balance rapid test for assessing financial stability of an enterprize, improving the quality of economic assessments during the fourth industrial revolution

DOI

10.2991/sicni-18.2019.51How to use a DOI?

Keywords

balance method, financial stability, solvency, working capital, liabilities

Abstract

The article provides a reliable way to assess the indicator of rational use of enterprise resources - its financial sustainability, which improves the quality of substantiation of management decisions implemented by economics in the fourth industrial revolution. The article provides a critical assessment of existing methods for evaluating the financial stability of enterprises. The author has presented a method for assessing financial stability with the aim of eliminating a number of methodological contradictions, such as the presence of financial stability in an insolvent enterprise, assimilation of financial stability with current solvency, comparison of own and borrowed sources of assets formation and others. The developed balance rapid test for assessing the financial stability of an enterprise is based on an original approach with respect to similar methods, expressed in the condition of preserving the ability to continue economic activity in case of a simultaneous settlement of all obligations. This method does not associate the value of the company's own working capital with the amount of reserves, does not use the ratio of own and borrowed sources of the enterprise assets. The developed method requires a simple restructuring of the balance sheet to verify the criterion relationships, which determine the stability of the enterprise. The methodical simplicity of the balance rapid test for assessing financial stability gives grounds for its widespread use in analytical procedures.

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/).

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TY  - CONF
AU  - Aleksey Chernenko
PY  - 2019/01
DA  - 2019/01
TI  - Balance rapid test for assessing financial stability of an enterprize, improving the quality of economic assessments during the fourth industrial revolution
BT  - Proceedings of the 2nd International Scientific conference on New Industrialization: Global, national, regional dimension (SICNI 2018)
PB  - Atlantis Press
SP  - 251
EP  - 256
SN  - 2352-5398
UR  - https://doi.org/10.2991/sicni-18.2019.51
DO  - 10.2991/sicni-18.2019.51
ID  - Chernenko2019/01
ER  -