Capital and liquidity assessment in the context of preventing corporate insolvency

Abstract

The relevance of the study is stipulated by the need for a comprehensive assessment of the financial stability of enterprises through the analysis of the capital structure and liquidity in the conditions of an unstable economic environment. Directions for improving the assessment of the capital structure and liquidity of enterprises in the context of preventing insolvency have been substantiated in accordance with the purpose of the study. The methodological basis of the study included the statistical analysis, correlation research and visualisation of empirical data based on scatter plots and histograms of Equity-to-Assets and Quick Ratio indicators distribution on the example of seven enterprises of Ukraine operating in the field of non-specialised wholesale trade for the period 2021-2024. The obtained results demonstrated a moderate positive correlation between Equity-to-Assets and Quick Ratio indicators, which confirmed the complex multifactorial nature of the solvency formation. It gave grounds to argue that the general trend of increasing the share of equity capital contributes to improving the quick liquidity of the enterprises, which formed the sample under study. The analysis of Equity-to-Assets and Quick Ratio indicators distribution revealed the asymmetry in the distribution, which emphasised the feasibility of using additional research methods, in particular, cluster analysis for enterprise typology. A significant part of enterprises is concentrated in the range of moderate capitalisation (5-30%) and a sufficient level of liquidity (>80%), however, the enterprises with signs of the financial condition deterioration emphasised the need to strengthen financial risk management and restructuring of obligations. The practical value of the study is determined by the integration of modern quantitative analysis tools into the processes of insolvency prevention, creating the basis for a well-founded adaptation of management strategies in response to the identified statistical patterns of relationships between key solvency indicators, in particular Equity-to-Assets and Quick Ratio, which is of particular relevance in the conditions of destabilised macroeconomic environment and growing external and internal risks for business entities.