Determinants of enterprise's financial security

Larysa Dokiienko; Nataliya Hrynyuk; Igor Britchenko; Viktor Trynchuk; Valentyna Levchenko; Larysa Dokiienko; Nataliya Hrynyuk; Igor Britchenko; Viktor Trynchuk; Valentyna Levchenko

doi:10.3934/QFE.2024003

Quantitative Finance and Economics

2024, Volume 8, Issue 1: 52-74. doi: 10.3934/QFE.2024003

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Research article

Determinants of enterprise's financial security

1.
Department of Organization of Aviation Works and Services, National Aviation University, Kyiv, Ukraine
2.
Department of Professional Education, Restaurant and Tourist Business, Luhansk Taras Shevchenko National University, Poltava, Ukraine
3.
Department of Economics and Security in Transport, University of Security Management in Košice, Košice, Slovakia
4.
Department of Finance, Accounting and Banking, Luhansk Taras Shevchenko National University, Poltava, Ukraine
5.
Department of Finance and Business Consulting, Kyiv National University of Technologies and Design, Kyiv, Ukraine

Received: 02 November 2023 Revised: 22 January 2024 Accepted: 01 February 2024 Published: 06 February 2024
JEL Codes: D25, G32, G33, M21

Our main purpose of the article was to substantiate the methodical approach to assess the enterprise's financial security based on the use of a model set for determining its parameters depending on the characteristics of financing activities and the associated level of risk. The proposed approach created opportunities to determine the parameters of the enterprise's financial security on the scale "level – status – position – zone" in the process of current and strategic management of not only financial security, but also the success of the enterprise as a whole. Based on the financial statements of Ukrainian enterprises by type of economic activity, the key financial indicators calculated and the parameters of their financial security over the past 9 years were determined. The research confirmed the decisive impact on the enterprise's financial security, the features of financing their activities, and the associated risk level. The practical use of the proposed approach proved that it is a convenient, understandable and informative tool for determining the parameters of the enterprise's financial security by the major indicators: Financial stability, liquidity, profitability, and activity financing risk.
- financial security level,
- financial security status,
- financial security position,
- zones of financial security,
- activity financing risk,
- bankruptcy risk
Citation: Larysa Dokiienko, Nataliya Hrynyuk, Igor Britchenko, Viktor Trynchuk, Valentyna Levchenko. Determinants of enterprise's financial security[J]. Quantitative Finance and Economics, 2024, 8(1): 52-74. doi: 10.3934/QFE.2024003

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Abstract

Our main purpose of the article was to substantiate the methodical approach to assess the enterprise's financial security based on the use of a model set for determining its parameters depending on the characteristics of financing activities and the associated level of risk. The proposed approach created opportunities to determine the parameters of the enterprise's financial security on the scale "level – status – position – zone" in the process of current and strategic management of not only financial security, but also the success of the enterprise as a whole. Based on the financial statements of Ukrainian enterprises by type of economic activity, the key financial indicators calculated and the parameters of their financial security over the past 9 years were determined. The research confirmed the decisive impact on the enterprise's financial security, the features of financing their activities, and the associated risk level. The practical use of the proposed approach proved that it is a convenient, understandable and informative tool for determining the parameters of the enterprise's financial security by the major indicators: Financial stability, liquidity, profitability, and activity financing risk.

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