What are the main goals and objectives of financial analysis of solvency and liquidity of an enterprise? First of all, the analysis of the solvency of an organization is carried out to understand whether it is close to bankruptcy. It is worth noting that the liquidity of a company and its potential are not related to each other. The liquidity assessment can only reflect the current state of affairs. When a company works according to a long-term plan, this indicator is no longer so important. This means that the possibility of further growth of the company should be assessed from the point of view of solvency. Some financiers conduct solvency analysis based on the balance sheet.
The most important way to marketing with stockholder database determine the liquidity and solvency of a company, as well as the financial stability of the company, is to conduct a ratio analysis. Actual ratios are compared with the recommended ones. After that, an opinion is formed on whether the organization is solvent, whether it is financially stable, whether it is profitable, and also how high its business activity is. But often in practice, conducting the analysis in question is not enough. For a more extensive understanding of the financial condition of the company, it is necessary to evaluate the indicators of accounting statements in the process of development.
It should not be forgotten that, having conducted a comprehensive economic analysis of the company's work, based on its liquidity and solvency, it is possible to understand how much it needs cash investments in the current financial situation. At the same time, any organization itself assumes obligations for liquidity and solvency both for the short term and for the future.
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Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
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