Methodical Approaches to Diagnosing the Financial Status of the Enterprise

• Main Author: Cevhanova Vira
• Format: Article
• Language: English
• Published: Mykolayiv National Agrarian University 2019-05-01
• Series: Modern Economics
• Subjects: diagnostics; financial condition; liquidity; solvency; profitability; financial stability
• Online Access: https://modecon.mnau.edu.ua/issue/14-2019/sosnovska.pdf

Introduction. Diagnostics of financial activity is one of the most important components of business economic analysis. It contributes to the indication of the competitiveness of a business, to monitor its liquidity, creditworthiness, financial stability and market position, and to develop mechanisms to guard against bankruptcy. All subjects related to the business life of the company and business should use financial analysis methodology to make data-driven decisions aimed at optimizing their interests. The process of diagnosis of the financial status of the enterprise is a complex concept that uses a combination of factors, which are the basis of methods of bankruptcy forecasting, assessing the borrower’s creditworthiness and analyzing the investment attractiveness of the enterprise. Appropriately based diagnosis helps to ensure that the financial resources are used rationally and therefore the efficiency and the competitiveness of the enterprise are managed. Purpose. The purpose of the research is to review and compare the methods and tactics used to diagnose the financial status of enterprises and the results of their activity. This will enable enterprises to identify and prevent shortcomings in financial activities, find reserves for improving the financial position of the company and its solvency. Conclusions. The article sets out the subject matter of the financial status of enterprises, together with relevant researched theoretical and methodical foundations and modern scientific approaches to its interpretation are generalized. The significance and necessity of diagnostics of financial conditions are substantiated. The fundamental stages of conducting financial diagnostics are identified, the collection of indicators employed is analyzed, the main tasks of action are formulated. Criteria and primary methods of diagnostics of the financial status of enterprises are considered.