Analysis of liquidity and solvency of JSC Vodokanal

Abstract

The financial stability of an enterprise shows how much the enterprise has the ability to maintain its smooth operation, having certain free funds and the correctness of financial flows. The financial stability of an enterprise is generally recognized according to various criteria. When an enterprise is financially stable, it has the opportunity to attract investments, obtain loans, select suppliers and select qualified personnel before other enterprises of the same profile. Solvency shows the ability of the enterprise in full, and most importantly, to fulfill its payment obligations on time, as well as the availability of funds that are necessary to cover its obligations. An analysis of the solvency of the enterprise helps to reduce the internal costs of the enterprise. An effective assessment of the solvency and liquidity of an enterprise can increase the rate of growth in sales volumes and increase its position in the market. Liquidity is needed in order to determine to what extent an enterprise can quickly and with minimal financial losses change the assets (property) of the enterprise into cash. Liquidity is also characterized by the presence of liquid funds in the form of a cash balance on hand, cash in bank accounts, as well as easily realizable elements of current assets. This paper analyzes the liquidity and solvency of Vodokanal JSC. Based on the results of the analysis, recommendations were given and calculated for assessing the financial condition of the enterprise. By reducing borrowed capital, accumulating accumulated debt, as well as getting rid of unclaimed fixed assets, thereby aligning the balance of the enterprise, it is possible to improve its financial condition.