Financial Stability Assessment Research Articles

PECULIARITIES OF THE SYSTEM FOR ASSESSING THE FINANCIAL SECURITY OF UKRAINIAN ENTERPRISES

The aim of the study is to improve the system for assessing the level of financial security of an enterprise. The subject of the study is the systemic processes of building and assessing the level of financial security of an enterprise. The study used the methods of theoretical and logical generalization. In the article, it is described the key points which characterize the methods of assessing the financial security of the enterprise. The results of the study consist in the formation of a system of indicators for assessing and managing financial security for a production and trade enterprise. The authors selected a set of indicators used for evaluation, involving an indicator method and visual image in graphic representation. There were analyzed results of the enterprise activity for three years in order to assess financial and property condition and financial security; diagnostic parameters were classified into five groups: assessment of property status, solvency, profitability, business activity (turnover) and financial stability. There are specified the content and problems of determining the indicators of financial security and enterprise operating efficiency on the example of a production and trade enterprise.

ОЦЕНКА ПОТЕНЦИАЛЬНОСТИ БАНКРОТСТВА И РАЗРАБОТКА КОМПЛЕКСНЫХ МЕРОПРИЯТИЙ ПО ПОВЫШЕНИЮ ЭКОНОМИЧЕСКОЙ УСТОЙЧИВОСТИ КОММЕРЧЕСКОЙ ОРГАНИЗАЦИИ

At the present stage of economic development, one of the most important areas of financial analysis is to assess the potential for bankruptcy. It is based on a comprehensive analysis of the financial condition of the organization, special attention is paid, first of all, to the assessment of solvency, financial stability, business activity and profitability. At the final stage of assessing the potential of an organization’s bankruptcy, anti-crisis strategies should be developed, which come in different directions: production, marketing, etc. At the same time, special attention should be paid to cost reduction issues, that is, production strategy. The purpose of this work is to develop an industrial anti-crisis strategy based on the assessment of the potential bankruptcy of organizations engaged in the provision of services in the field of electricity and energy supply. To achieve this goal, the following tasks were set and implemented: the theoretical foundations of diagnosing the potential bankruptcy of an organization and developed anti-crisis strategies were studied; an assessment of the potential of bankruptcy based on a multi-criteria approach to its diagnosis was carried out (indicators characterizing liquidity, financial stability, business activity and profitability of the studied organizations were evaluated); a comprehensive analysis of the financial condition was carried out and an assessment of the potential of bankruptcy was given according to the methods of William Henry Beaver and Edward Altman; an anti-crisis production strategy was developed to improve the financial condition of the organization and prevent bankruptcy. The object of the study is an organization engaged in the transmission of electricity and technical equipment, located on the territory of the Krasnodar Territory and the Republic of Adygea.

СУЧАСНІ ПІДХОДИ ДО ОЦІНКИ ФІНАНСОВОЇ СТІЙКОСТІ ПІДПРИЄМСТВА

This article examines modern methodical approaches to assessing the level of financial stability of an enterprise. The location of the analysis of the level of financial stability as a component of a comprehensive study of the financial state of the enterprise is determined. The main approaches to the analysis of the level of financial stability of the enterprise are considered.It was determined that the aggregate approach to the assessment of the financial stability of the enterprise involves the analysis of absolute indicators of financial stability. The absolute indicators of financial stability are considered, which characterize the degree of supply of reserves and expenses by the sources of their formation. Four types of financial stability of the enterprise are characterized. The coefficient approach to the assessment of financial stability was studied, which involves the analysis of relative indicators of financial stability and their comparison with the recommended (normative) values of financial stability. The main indicators of financial stability within the limits of the coefficient approach are considered. The marginal approach was analyzed, which allows to estimate the margin of financial stability, which provides a certain level of protection of the main activity of the enterprise at the moment. Indicators within the margin approach were considered: marginal income, profitability threshold, safety zone, as well as indicators of operational, financial and operational-financial leverage. The basics of using a point-based approach to assessing the level of financial stability, which is implemented on the basis of a formed point-based assessment, have been studied.Within the framework of the use of an integral approach to the assessment of the financial stability of the enterprise, the peculiarities of the formation and use of the integral indicator are determined. Peculiarities of using point and matrix approaches to assessing the financial stability of the enterprise are considered. It was determined that the matrix approach to assessing the financial stability of the enterprise is one of its most effective tools. It is based on a matrix model that reflects the results of all the financial work of the enterprise, gives a qualitative description of the efficiency of activities and helps to understand at what cost they were achieved. Peculiarities of forming the matrix balance and the balance of differences are considered. It is emphasized that the matrix balance at the end and the beginning of the year has a static character (on a certain date), and the matrix balance of differences characterizes changes, therefore it has a dynamic character.

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

Теоретичні аспекти формування стратегії фінансово-економічної безпеки підприємства

It was established that the formation of a strategy for ensuring the financial and economic security of the enterprise is a necessary element of business management aimed at preserving financial stability and creating a foundation for further successful development. It is emphasized that the formation of a company's financial and economic security strategy begins with a detailed analysis and assessment of the company's financial condition, its current situation, internal and external factors affecting its financial security. The task of forming a strategy for financial and economic security of the enterprise is defined: assessment of financial stability; determination of financial and economic risks and development of risk management mechanisms; financial planning and budgeting; attraction of investments and resources; monitoring and control; staff training and development, communication and cooperation; increasing competitiveness. It is emphasized that the strategic goals of economic security must be interconnected with the general strategy of the enterprise and take into account its features, values and goals.

Special aspects of analyzing and assessing the financial stability of non-profit organizations: The case of the Chamber of Commerce and Industry of the Altai Krai

Subject. The article deals with financial stability and efficiency of entrepreneurial activity of non–profit organizations, using the Altai Chamber of Commerce and Industry case. Objectives. The purpose is to consider and systematize theoretical and practical features of analysis and assessment of non-profit organizations’ financial stability, to analyze the financial condition and financial stability of the Chamber of Commerce and Industry of the Altai Territory. Methods. We employed general scientific methods of analysis and synthesis, comparative analysis, horizontal analysis, calculation of financial coefficients. Results. We investigated the specifics, highlighted the main financial aspects in the functioning of non-profit organizations in Russia. On the case of the Altai Chamber of Commerce and Industry, we considered and defined the specifics of analysis and assessment of financial stability of non-profit organizations. Conclusions. Based on empirical analysis of finances of the largest non-profit organization of the Altai Territory, which provides organizational, legal, foreign economic, and other business support, we concluded on high financial risks of such companies and the possibility of divergent results of financial stability and financial position of non-profit organizations. This is also typical of commercial organizations in general.

SOME CHALLENGES TO FINANCIAL STABILITY DURING THE ECONOMIC DOWNTURN

Financial stability issues, arising during the COVID-19 pandemic and the ongoing conflict in Ukraine, have affected the problems of financial market instability: interest rates of commercial banks started to rise, inflation increased, affecting consumer solvency issues, the need for bank financing and investment opportunities decreased, part of the staff was lost, labour supply decreased, productivity declined due to emerging economic stabilisation problems. Financial stability cannot be achieved without effective operation of the financial system, which is explored in this article, based on the evaluation models of financial stability. These models illustrate the integral relationship between the impact of individual factors and the effects on the interest rates of commercial institutions, the impact of interest rates on household financing, and the assessment of the interaction between interest rates and inflation. The assessment of financial stability takes into account the performance, liquidity, solvency, and evaluation of adverse conditions of banks as financial institutions.

Assessment of Financial Stability of Transport Infrastructure Facilities in the Context of Economic Regulation

The importance of state regulation of the activities of transport infrastructure facilities is directly related to the key role of infrastructure facilities in maintaining state integrity, economic stability and the need for effective economic growth. One of the key manifestations of the economic crisis is the infrastructure crisis, the impact of which on national economic systems is aggravated by inflationary processes. The problems of sustainable functioning and development of infrastructure facilities currently require the development of a system of state regulation due to the macroeconomic role of the infrastructure complex of the economy. Based on the results of the generalization of scientific discussions about the content of the concept of "financial stability", an approach to the assessment and interpretation of the existing methods of analyzing financial stability in relation to transport infrastructure facilities in the short and long terms is propounded. The indicators and results of the assessment of the financial stability of the infrastructure facility — JSC "Irkutsk International Airport" are presented. The conclusions and results of the research presented in the article summarize the author's ideas about the importance of assessing financial stability from the perspective of identifying problems in the development of transport infrastructure facilities. The article formulates the directions of development of instruments of state regulation aimed at ensuring the financial stability of transport infrastructure facilities in the Russian Federation.

Studying tourism recovery options under economic constraints: does stakeholder engagement and financial stability matter?

Researchers neglected the relevance of combining tourism with stakeholders' engagement and financial stability for unlocking the economic constraints. For this, current research intended to study the interplay of tourism recovery options under economic constraints with the role of stakeholders' engagement and financial stability. According to our data, China outperforms the other OECD members. The results shown that Russia comes in second with a consistent in tourism recovery, financial stability, and stakeholders' engagement; Indonesia and Turkey, which finished fourth and fifth in the rankings, have good tourism recovery prospects. Mexico and Brazil come in second and third, respectively, with the worst performance and the lowest scores recorded in the survey findings. The overall interplay among the variables was empirically produced based on the findings of this study and is a new inclusive assessment of financial stability and tourism recovery parameters. It is a useful tool for policy development and evaluation. This study also addresses the criticism of load selection at random and accurately depicts the entire scope of fiscal intervention in the economy to prudently enhance tourism recovery at large.

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

EVALUATION OF THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEM DURING THE INNOVATIVE DEVELOPMENT OF INDUSTRIAL ENTERPRISES

The article considers assessment of efficiency of internal control at enterprises. It identifies that there is no single classification of types of internal control and systemises classification of types of internal control in accordance with the main tasks and by the most essential and stable features. It is emphasised that the assessment of the stable existence of an enterprise should be based on its financial indicators. In this regard, a model for assessing the internal control system was developed and proposed based on analytical indicators of the financial condition (assessment of financial stability, assessment of business activity and turnover, assessment of profitability, assessment of liquidity in accordance with the main criteria of the internal control system (stability, complexity, efficiency, objectivity, effectiveness, quality, economy and efficiency). It is analysed that it is necessary to characterise the internal system of enterprise on the basis of the stages of organisation of internal control. The study of the organisational and legal framework for the functioning of the internal control unit of an institution provides recommendations for "building" a model of efficiency of the internal control system.

Default Prediction Model for Emerging Capital Market Service Companies

The author tested the hypothesis that default prediction based on financial data may be inapplicable to Russian service sector organizations by analyzing the differences in the accuracy of models based solely on financial data for service providers from Russia and developed European countries.
 Logistic regression, Random Forest and K-nearest neighbors machine learning methods were used as modeling tools on a sample of 404 Russian firms and 304 firms from developed European countries.The results suggest that the prediction error is significantly higher in the case of Russian firms than in the case of firms from the control group (European service firms). Thus, the use of financial ratios for default prediction for service firms in Russia seems insufficient.
 These findings can be used by organizations that provide credit scoring, and by any other market participants interested in the financial stability assessment of their counterparties.

ФІНАНСОВА СТІЙКІСТЬ КОМЕРЦІЙНОГО БАНКУ ЯК НЕОБХІДНА УМОВА ЙОГО ЕФЕКТИВНОГО ФУНКЦІОНУВАННЯ

Financial stability is one of the prerequisites for the effective functioning of the financial market and its participants in today's turbulent conditions. Within the framework of a commercial bank, financial stability means the bank's constant ability to meet its obligations and ensure profitability at a level sufficient for normal functioning in a competitive environment, as well as ensure purposeful development by transforming resources and minimizing risks, withstanding the influence of external and internal environmental factors. The work examines the content and components of financial stability on the example of a commercial bank, and evaluates the factors affecting it. In order to identify the means of its provision, an assessment of financial activity indicators of JSC "Credit Agricole Bank" was carried out. As a result of the analysis of financial reporting indicators, the satisfactory financial condition of JSC "Credit Agricole Bank" was determined, the basic indicators are within the normative values, but due to the high sensitivity to risks, they are unstable. It is noticeable that before the realization of the risk of a full-scale Russian invasion, all indicators of the bank show consistently high values. The assessment of financial stability through the application of a set of analytical techniques made it possible to identify and evaluate the influence of factors and justify management decisions based on the obtained data. Proposed measures to ensure financial stability in the current conditions, which include: maintaining the stability of the resource base of the banking institution, balanced asset management, timely recognition, proper risk management with the aim of eliminating or limiting them are necessary indicators of maintaining the stable activity of a commercial bank in the war period, taking into account the risk its duration and the post-war reconstruction of Ukraine's economy. Strengthening the financial stability of domestic commercial banks and the banking system in general is facilitated by regulatory measures: stress testing and a wide range of NBU macroprudential policy instruments.

Theoretical and methodological aspects of financial risks management of the enterprise

The article is devoted to the theoretical and methodological aspects of the financial risk management of the enterprise. The paper analyzes approaches of Ukrainian and foreign scientists and economists to the definition of the concept of «financial risk of the enterprise» and highlights the key concepts inherent in them. Based on the identified advantages and disadvantages, it is proposed to interpret the concept of financial risk in broad and narrow aspects. In a broad aspect, financial risk should be understood as the risk of the financial condition deterioration, the threat of bankruptcy and liquidation of the enterprise. In a narrow aspect, financial risk should be considered as the risk of loss of profitability, liquidity, financial stability, solvency, or business activity, as well as the risk of income underachievement or overspending. Furthermore, approaches of scientists and economists to the methods of assessing risks that may arise in the enterprise are summarized. It is determined that the most common methods for analyzing financial risks in domestic practice are such as comprehensive, systematic, statistical, normative, rating, expert, analytical and assessment of financial stability. The specified methods are summarized with the description corresponding to them. The method of financial risk assessment, developed by Prof. Zakablukom G.O. was highlighted and tested. «Mikrokredit» LLC, which has been engaged in lending to individuals for more than ten years, was selected for testing. According to the application results of the financial risk assessment method, it was found that during 2020–2021 the financial risk at the enterprise was low, while in 2022 it was high. Based on that, the strategies that the company's financial risk management system should meet are proposed. Among the most significant of them, it is worth highlighting the following: development and implementation of a risk management system at the enterprise; the monitoring system improvement; improvement of risk management technology at enterprises; formation of an information database necessary for risk analysis and assessment; development and implementation of the financial risk management system in the enterprise; the risk management monitoring system improvement; improvement of the methodology of risk assessment and methods of assessing of risk management effectiveness. A model of financial risk management of the enterprise has been developed, which consists of a clear sequence of interrelated stages and considers the conditions and specifics of domestic enterprises activities.

СТРАТЕГІЧНА ФІНАНСОВА СТІЙКІСТЬ УНІВЕРСИТЕТІВ: МЕТОДОЛОГІЧНИЙ ТА ПРАКТИЧНИЙ АСПЕКТ

The activities of universities are implemented in accordance with the strategic priorities of their development, in the conditions of expanding financial autonomy and uncertainty. The purpose of this article is to develop a methodology for assessing the strategic financial stability of the university, sub-stantiating its components, and carrying out a practical test of the express assessment of financial stabil-ity as an indicator of determining the financial potential of higher education institutions. The results of the study were tested based on financial information publicly disclosed on university websites for 2017–2022. The sample includes 35 HEIs that are similar and different in type, scale, and location. In order to achieve the defined goal, a review of literary sources related to solving the problem of strategic financial sustainability of universities was carried out; the analysis of the strategies of Ukrainian universities that were included in the research sample was carried out, the key directions of strategic development, which were laid in theirbasis, were determined and systematized; a methodology for assessing the strategic financial stability of the university was developed, which includes an express assessment of financial stability to assess the financial potential for achieving the strategic priorities of the development of higher education institutions and tools (a prospective plan for the need for financial resources; a model for the formation and distribution of financial resources; a model for calculating the cost of educational ser-vices, taking into account the costs of accreditation of educational programs; correlation of the interac-tion of financial, management accounting, rating and key performance indicators; monitoring of expected results in accordance with the terms of implementation of strategic development priorities), groups of indicators of current financial stability to assess the achievement of strategic objectives of higher education institutions; a practical approbation of the express assessment was carried out on the example of 35 HEIs of Ukraine and appropriate conclusions were drawn regarding the potential of implementing strat-egies

РЕАЛИЗАЦИЯ ИНВЕСТИЦИОННОГО ПРОЕКТА КАК ИНСТРУМЕНТ ПОВЫШЕНИЯ ФИНАНСОВОЙ УСТОЙЧИВОСТИ ОРГАНИЗАЦИИ

This article examines the financial stability of the organization, factors affecting the economy and the functioning of economic entities. The definition of the concept of “financial stability” and indicators of financial stability assessment, divided into absolute and relative, were considered. The principles of financial stability management techniques were also listed and characterized. With the help of the golden rule of economics, the reproduction security and stability of the organization’s position in the market are calculated and the corresponding conclusions are formulated. The role of profitability indicators in financial analysis was determined and their dynamics was revealed on the example of a specific organization. As a recommendation to improve the financial stability of the organization, it was proposed to open its own store as an investment project, and the economic efficiency of this project was calculated.

COMPREHENSIVE CHARACTERISTICS OF AN ENTERPRISE'S FINANCIAL STABILITY

One of the most important characteristics of a company's development is its financial stability, formed by complex impact of a large number of external and internal factors. At the same time, the assessment of financial stability in some cases is ambiguous and requires the use of a combined approach. The article evaluates the main financial indicators characterizing liquidity and financial stability of organizations, which are calculated according to the accounting (financial statements) for 2000-2021, published by the Federal State Statistics Service. Some of the indicators calculated on average for organizations of the Russian Federation, on the whole, positively characterize the level of financial stability (equity ratio) and liquidity (current liquidity ratio) and their good dynamics, but, as the data reviewed show, it is usually impossible to comprehensively assess the financial stability of an enterprise using one or even several particular indicators. It is necessary to use several indicators, both financial and those characterizing the efficiency of using resources by the enterprise (material, labor, fixed assets). It is likely that such indicators will include several external factors of financial stability formation that do not imply a quantitative assessment, for example, such as political, legal and socio-cultural indicators. The relevance of assessing the financial stability of an organization is due to the fact that the main methods of such assessment are mainly focused on using only quantitative data, which are considered, as a rule, in isolation from each other, which makes it impossible to unambiguously assess the dynamics of an organization's financial stability. Using the method of pair-wise comparisons, the author obtained the results that led to the following conclusions: the list of evaluation indicators should include not only quantitatively, but also qualitatively varying indicators, which requires the use of more universal methods of criteria convolution, for example, the method of pair-wise comparisons used in the method of hierarchy analysis.

List of IMF Member Countries With Delays In Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months

"Volume 2022 (2022): Issue 060 (Dec 2022): List of IMF Member Countries With Delays In Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months" published on 19 Dec 2022 by International Monetary Fund.

Stability of financial development: Problems of measurement, assessment and regulation.

Adequate measurement, assessment, and regulation of financial development stability are key components, the formation of effective macroprudential policies, and the coordination of these policies among countries. However, an analysis materials on the subject shows that work in this area is fragmented,. In this regard, the purpose of this study is to develop a methodology for diagnosing and regulating the stability of financial development based on a systematic approach. The study used systematic, comparative, and GEO analysis, econometric methods. As a result, new indicators have been developed to diagnose the financial development of countries. The authors also propose criteria, which could be used to signal the need for countercyclical regulation tools. The novelty of the study lies in a systematic approach to the diagnosis and regulation of the stability of financial development. The systemic nature of the study is ensured by the application of the statistical framework of the System of National Accounts. Testing of the developed indicators and criteria was carried out in relation to the OECD+ (Organisation for Economic Co-operation and Development) countries for the period 2007-2020. As a result of the testing, a rating of countries was built according to the level of stability of financial development. This rating highlighted leading countries as well as countries generating systemic risks. The study also assessed the legal grounds behind the introduction of a countercyclical markup by a number of countries. The new diagnostic and regulatory system has a number of advantage-it is highly representative and objective by nature, and has a wide range of applications. The use of this system will improve the complexity and quality of diagnosing and regulating the stability of financial development at the national and global levels, as well as increase the effectiveness of public decision-making.

Methodological approaches to the diagnostic and assessment of the probability of business bankruptcy

Introduction. Methodological approaches to forecasting the financial state of enterprises from the point of view of possible bankruptcy are generalized and systematized. The classification of crisis diagnosis methods was studied and the stages of the crisis were considered. The modern practice of using foreign models for diagnosing the probability of the threat of insolvency of business entities is analyzed, with the identification of their advantages and disadvantages. Recommendations for improving approaches to assessing the probability of bankruptcy of national enterprises using foreign methods have been formulated, aimed at increasing the objectivity of the results of such an assessment. An algorithm for diagnosing and assessing the probability of bankruptcy for Ukrainian enterprises is proposed. The purpose of the paper is to study the methodological approaches of forecasting the bankruptcy of the enterprise. Results. The application in Ukraine of foreign multi-factor methods of assessing potential bankruptcy based on a qualitative approach is complicated by the need to adapt them to the domestic realities of doing business by specifying the critical values of relevant indicators by industry, which requires the processing of a significant layer of accumulated statistical data. Therefore, painstaking scientific research in this direction cannot be dispensed with. In addition, the use of similar methods at the level of a specific enterprise will require the involvement of highly qualified financial analysts, the payment of whose services will have a negative impact on the cost of the bankruptcy proneness diagnosis process. Methodical approaches to assessing the state of bankruptcy of enterprises were studied, which made it possible to classify the methods of diagnosing a crisis state from three positions: quantitative, qualitative, combined. Each of the methods is used depending on the types of crisis phenomena (local, systemic). Such phenomena can be detected on the basis of the viability assessment model. The vast majority of methods are based on the assessment of financial stability and financial balance. Conclusion. It was also determined that foreign models should not be used for Ukrainian enterprises, because they will not give a reliable result. This is due to the instability of the Ukrainian macroeconomic environment. Tereshchenko's model should be used for Ukrainian enterprises.