Methodological approaches in solvency assessment of commercial organizations

In the conditions of market economy, for the interrelated enterprises the solvency is an important criterion in building of business relations. Reasoning from the various approaches to the business solvency assessment, the solvency should be interpreted as an ability of the company to pay off timely the current liabilities by means of the liquid current assets. An insolvent company is unattractive for either providers, or investors, it creates a risk of losing both its own and borrowed resources. Effective solvency management allows a business entity to solve strategically the challenge of survival under the pressure of competitiveness and be able to receive and repay the loans in time and in the required amount. The financial ratings, such as financial stability index, liquidity ratio and solvency ratio, net profit ratio and efficiency of use of capital and resources, are the indicators of successful economic development of the company. The values of these parameters, obtained in the course of the analysis, allow you to predict the prospective viability of the company and reduce the risk of non-payment. The major area of the economic analysis is the study of showings of liquidity and solvency.