A RESEARCH AND METHODOLOGICAL TOOLKIT TO ASSESS THE ENTERPRISE FINANCIAL SECURITY

Abstract

The article attempts to tackle theoretical and methodological issues related to enhanced understanding of the nature of enterprise financial security as well as the use and the selection of research and methodological tools for its evaluation. An emphasis is put that in the current vulnerable economic environment, domestic enterprises are greatly challenged by a wide range of risks and threats caused by a number of negative effects from external and internal factors. It is argued that the lack of argument and consistency in building a robust financial security framework for business entities might translate into a drop in revenues and profits, loss of liquidity, solvency and financial independence, along with spurring unreasonable amounts of receivables and payables and, consequently, triggering a crisis situation. The purpose of this research is to explore modern analytical, financial, economic and statistical tools to assess the enterprise financial security and to enclose its advantages, disadvantages and applicability in the financial management context. Within the scope of this research, the enterprise financial security is viewed as a particular enterprise state characterized by the most efficient use of resources, profitability, and financial stability which acting together contribute to gaining a successful business performance, eliminating the negative effects from external and internal destabilizing factors over an indefinite period of time. According to the research findings, to assess the enterprise financial security, it is suggested employing a research and methodological toolkit based on the cash flow analysis, evaluation of financial stability, financial indicators, resource-based and functional approach, as well as implementation of integrated indicators. The conclusions of the study resume that given the different criteria and indicators embedded in different approaches (each of them having its pros and cons), to render a comprehensive and informative analysis, using a number of approaches to assess the level of enterprise financial security sounds reasonable enough and thus is strongly recommended.