Financial stability is one of the most important characteristics of an enterprise in a market economy. Financially stable is a creditworthy and solvent enterprise that has a certain supply of its own funds, provided that their value exceeds the size of borrowed sources.
Instructions
Step 1
To improve financial stability, strictly control and manage accounts receivable, monitor its quality and ratio. Violation of the company's contractual obligations and late payment for the goods sold lead to the loss of the business reputation of the company and, as a result, to its illiquidity and insolvency. For effective management of accounts receivable, it is necessary:
- control the payment discipline of buyers;
- target a larger number of buyers in order to reduce the risk of non-payment by one or more of them;
- monitor the ratio of receivables and payables.
Step 2
To accelerate the turnover of accounts receivable and ensure the timeliness of settlements, provide discounts to debtors for shortening maturities, use bills of exchange in settlements with debtors, factoring operations, use commercial credit in relations with customers.
Step 3
In order to increase financial stability, create a reserve for doubtful debts. It represents a receivable from an organization that has not been repaid within the terms established by the contract and is not provided with the necessary guarantees. The creation of a reserve will save on the amount of income tax, it mitigates the negative consequences of bad debts, but does not eliminate them.
Step 4
Another option for increasing financial stability is to increase the company's equity capital, for example, by issuing securities and reinvesting profits. When deciding on the attraction of borrowed sources, it is necessary to assess the existing structure of liabilities. A high share of borrowed sources in them can make the attraction of new funds dangerous for the financial stability of the enterprise.
