Financial Potential of an Enterprise and its Significance in the Economically Unstable Environment
DOI:
https://doi.org/10.31767/su.1(76).2017.01.04Abstract
Practical aspects of the study of financial potential, its relationship with economic potential of an enterprise, the impact of financial potential of the economic performance and strategic goals of an enterprise are highlighted. It is demonstrated that financial potential takes on the role of lever building the mechanism for transforming resource and production potentials into the financial results of an enterprise. In the current economic conditions characterized by the development of market economy, int ensification of globalization and competition, domestic enterprises need to operate more effectively and to focus their activities not only on meeting the current needs in form of profit, but also on planning future performance and building the financial potential. In this context, study of the essential features of financial potential of an enterprise and its relationship with production, innovation, investment, marketing and organizational management potentials has been of special importance.
The study shows that financial potential enables for transforming resource, production, innovation, investment, marketing, organizational and managerial potentials into financial performance results, and is used to achieve strategic and tactical goals of an enterprise. The essential features of financial potential are outlined:
- financial potential is a broader concept than financial resources of an enterprise;
- financial potential is a factor for financial capacity of an enterprise and their implementation in certain circumstances;
- financial potential is a factor for financial stability and competitiveness of an enterprise;
- financial potential is a factor for positive financial result;
- the scopes of financial potential determine the development trend of an enterprise.
Diagnostics of financial potential involves regular financial analysis to determine financial security. Key data on the financial performance of an enterprise need to be used in evaluating the achieved goals and problem solutions in the current period and in the future, in taking balanced management decisions with due account for the provision of investment and reserve finances
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