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Criteria of the Evaluation of Efficiency for Sanation Measures at Business Entities

Journal: Accounting and Finance (Vol.1, No. 81)

Publication Date:

Authors : ;

Page : 111-117

Keywords : sanation; financial resources; financial ratios; financial ability; insolvency of business entities;

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Abstract

One of the main issues of anti-crisis management is the issue of financial recovery of enterprises – sanation. The main goal of the sanation is the mobilization of financial resources to restore the solvency and liquidity of enterprises, as well as the formation of financial capital for the implementation of sanation measures. Determining the effectiveness of sanation measures provides the opportunity to choose the most optimal of them in terms of comparing the expected result and the resources needed to obtain it. The purpose of the article is to substantiate the criteria for evaluating the effectiveness of sanation measures on the basis of an integrated assessment of the financial potential of economic entities. The indicators and criteria for evaluating the efficiency of sanation measures of business entities were considered. The analysis of the financial conditions of Ukrainian enterprises according to the structure of property and sources of financial resources formation was carried out. The scientific approaches and methods of evaluation of efficiency of sanation were determined. It was grounded that sanation are considered successful if, with the help of external and internal financial sources, organizing and production-of technical measures, the entity exits the crisis (normalizes production activity and avoids bankruptcy announcements) and ensures its profitability and competitiveness in long-term period. An algorithm for estimating the dynamics of the state of financial capacity of economic entities was presented. An integral indicator of the dynamics of the state of financial capacity of economic entities was proposed. The criteria and limits of the maximum, normative and optimal state of financial capacity of enterprises were determined. The proposed approach to assessing the dynamics of the state of financial capacity of economic entities of Ukraine can be used as an integral part of the forecasting and planning system within the framework of national, branch programs or specific financial plans of enterprise development.

Last modified: 2018-10-27 18:41:04