Evaluation of solvency

Financial management

The scheme shows that the information base for assessing solvency is a balance sheet, income statement, cash flow statement and accounting information for the current account.

Solvency - is one of the characteristics of financial stability of the company, which shows that it had funds sufficient to repay the debt for all short-term obligations and simultaneous implementation of continuous production and sales.
Potential means to repay the debt is cash, accounts receivable, which in normal circulation of money in cash should become available stocks of inventory, which can also be implemented. In some cases, the debts can be sent to non-current assets after their implementation. Solvency of the company is estimated liquidity balance. The need to analyze liquidity balance arising in connection with the needs of the current credit scoring and monitoring of financial calculations.

In this regard, all assets of the company can be grouped by degree of liquidity and liabilities - by strokovistyu maturity. Liquidity - the rate of conversion of assets into cash and liquidity balance - the degree of coverage obligations company of its assets, the term transformation in which cash corresponds maturity obligations.