Use of rating methodology for evaluation of the financial condition of the enterprise

Issue: № 10/2, 2020

Doi: https://doi.org/10.37634/efp.2020.10(2).3

Introduction. A necessary condition for effective corporate finance management, rational use of enterprise resources is a reliable and comprehensive evaluation of the financial condition of the enterprise. In the modern practice of financial management, the problem of qualitative and quantitative justification of management financial decisions is solved through the widespread use of information about the financial condition of enterprises, which are the main subjects of economic relations. The purpose of the paper is to research of essence and features of use of a rating evaluation of a financial condition of the Ukrainian enterprises in modern economic conditions Results. There are many methods for evaluation the financial condition of an enterprise: balance methods, express analysis, efficiency analysis, bankruptcy evaluation, rating evaluation, integrated evaluation. The choice of method of conducting a comprehensive evaluation of the financial condition of the enterprise depends on a number of factors: type of economic system, the degree of development of market relations, the peculiarities of the balance sheet and other forms of reporting, industry characteristics, type of activity, form of ownership of the enterprise, etc. We recommend the rating evaluation of the financial condition of the enterprise. The methodology of rating evaluation of the financial condition of the enterprise is based on an integrated approach; indicators of profitability, liquidity, financial independence and financial stability of the enterprise, and also data on efficiency of use of financial resources and production potential of the enterprise are used at its construction. Calculations of indicators of the financial condition of the enterprise according to the rating assessment method were carried out on the basis of the data of the company's public financial statements for the period 2017–2019. According to the results of calculations, the enterprise received a score of 0.615 points, which corresponds to the AA rating. Conclusion. The use of rating assessment of the financial condition of the enterprise is an effective tool of financial analysis, which allows to obtain a final evaluation of the financial and economic activities of the investigated enterprise.

Keywords : financial condition of the enterprise, financial analysis, coefficient analysis, rating evaluation, financial stability of the enterprise

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