Financial Stability as an Element of Ensuring Financial and Economic Security of an Enterprise

Abstract

The paper is devoted to studying the essence and content of the category “enterprise’s financial stability” as a key element of ensuring the financial and economic security of the enterprise. Based on a comparative evaluation of scientific studies, the paper highlights scientific and methodological approaches to determining the essence of the enterprise’s financial stability concept.  In particular, it defines financial stability through the prism of the excess of income over expenses, the enterprise’s solvency, the ability of the enterprise to fulfill its obligations to customers, and the ability to adapt to changes in the economic environment.

The paper proposes to define the core of the category “enterprise’s financial stability” in the context of ensuring its financial and economic security as an ability of the financial and economic system to maintain a state of dynamic equilibrium and promote the implementation of the enterprise’s development strategy in conditions of minimizing the impact of threats and dangers. Based on the literature review, we highlight the main characteristics of the enterprise’s financial and economic security and propose to define it as a financial and economic state characterized by resistance to threats, the enterprise’s ability to implement its strategic goals and objectives through sufficient amounts of financial resources, as well as the focus on effective and sustainable development. We emphasize the enterprise’s financial stability is one of the most important elements that contribute to achieving and maintaining the state of the enterprise’s financial and economic security. 

The paper proposes to assess the enterprise’s financial stability using a system of financial indicators, such as liquidity, solvency and financial independence. The development of standards for these indicators will make it possible to differentiate the levels of the enterprise’s financial stability. The paper substantiates that to ensure financial and economic security, the enterprise must have an effective self-monitoring system based on a warning system to identify signals of deviations from accepted standards, including from the required level of financial stability.