THEORETICAL AND PRACTICAL ASPECTS OF THE NORMALIZATION OF AN ECONOMIC ENTITY'S FINANCIAL STABILIT

Abstract

Introduction. The formation and maintenance the optimum efficiency of business is a most important task of activity of economic entity. Each company must provide the effect of profit stabilization. In this case it will better perform its activities. This situation creates the necessary potential for the future. Exactly in this way the process of assets accumulation and distribution happens without undue cost and effort. Resources are become cheaper, the activities and the results are become more predictable, stable correspondent relations are formed, markets are expanded and prices are stabilized. The higher the level of stability the more the company easier to adapt to sudden changes in market conditions, the lower the risk of financial loss from such influences. On the other hand, a quick, painless and effective response to external pressure indicates an effective system of management, good planning, well-chosen priorities and goals. Purposes. The purpose of the article is to study the basic theoretical aspects of the formation and creation the performance criteria of the processes of financial stability of economic entities. Results. Company's financial stability is formed by the results of a clear strategy. If the enterprise has enough funds for the current activity, it indicates that the previous actions were effective. When the company has a good financial system, it can easily and continuously carry out all operations, maneuvering the resources. Each economic entity focused on success should direct some effort to achieve optimal profitability in the long term. It must seek to stabilize costs and revenue, to normalize risks. This can be achieved through effective allocation of resources. The considerable attention must pay to optimizing the financial, material and information flows. Except this, it must maintain a high level of liquidity of assets. The ability of the economic entity to function effectively under conditions of constant change and maintain the optimal level of liquidity and profitability over a long period, reaching set of tactical and strategic goals is a financial stability. Conclusions. Today there are a number of approaches to the assessment of financial stability. In our opinion, the most promising is an approach whereby the level of financial stability is assessed using systematic and integrated methods. Two additional indicators must be included here: the dynamic indicator of profit stability, indicator of expenses profitability.