DIAGNOSIS OF FINANCIAL LIQUIDITY AND SOLVENCY -TOOL OF THE APPRECIATION OF THE ENTITY PAYING CAPACITY

• Published in: Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie 2018-11, Vol.1 (Special issue), p.187-192
• Main Authors: HADA IZABELA DIANA, MIHALCEA MIHAELA MARIA, DOHAN (LITAN) CRISTINA SUSANA
• Format: Article
• Language: English
• Subjects: insolvency; liquidity; solvency; strengths and weaknesses of paying capacity; the role of the diagnosis
• ISSN: 1844-7007; 1844-7007

In the economic area that enables entities is often assailed by numerous changes: economically, socially, and financially. In a competitive environment entities must know resources to assess risks that may affect the activity, to fix the vulnerability in the face of the economic environment, to measure weaknesses, opportunities for development, thus leading to the smooth implementation of the objectives and the development of the enterprise. The main purpose of this article is to those out to the importance of diagnosis of the liquidity and financial solvency, as a means of appreciation the payment capacity of the entity, both short-term and long-term. Research shows us that the diagnosis gives us a realistic view of the entity paying capacity by identifying strengths and weaknesses in terms of liquidity and solvency of the entity. The diagnosis of the two components constitutes a preventive measure against the risk of insolvency, to be used by policymakers for substantiation.