Financial security of the enterprise: an alternative approach to evaluation and management


Purpose – The main purpose of the article is to justify an alternative approach to assessing the level of financial security of the enterprises based on use the model of modified and adjusted financial statements.

Research methodology – The following methods of general theoretical and empirical research were used in the writing of the article: abstract-logical (when systematizing scientific publications on the problems of financial security management of enterprises), comparisons and grouping (when developing and validating a model of modified financial statements), coefficient (when considering and using models for adjusting modified financial statements), grouping (when clustering enterprises depending on the results of the analysis), formalization (when developing a matrix for diagnosing the level of financial security of enterprises), generalization (when formulating research findings).

Findings – Based on an established sample from nine of sunflower oil production enterprises of Ukraine their modified financial statements have been developed, it was adjusted to the consumer price index, key financial indicators of the model have been identified and the level of their financial security over the past 7 years have been assessed. The research identified a direct relationship between the level of financial security of enterprises and key financial indicators: financial stability, solvency and financial risk. Also, the proposed methodological approach can be not only an important tool for diagnosing the level of financial security of enterprises, but also its forecasting.

Research limitations – The research limitation is associated with sampling size and geographical scope. Also, the diagnostic results may differ depending on the chosen adjustment base, determination of adjustment method and selection of inflation measurement method for the modification financial statements.

Practical implications – Practical use of the proposed model proves that it is a convenient, simple, understandable and effective tool for diagnosing the financial security level of enterprises in terms of the main components: financial stability, solvency, and risk. The use of the proposed approach to the assessment of the financial security of the enterprise can serve as an indicator of the overall efficiency of its management at sunflower oil production enterprises and as an informative tool for factor analysis.

Originality/Value – Consideration of a significantly different, alternative approach that allows enterprises to quickly and easily diagnose the level of their financial security; to manage it effectively during the current period, and can also become the basis for the formation of strategic directions of financial development and forecasting of the level of financial security for prospective period.

Keyword : financial security, modified and adjusted financial statements model, financial stability scale, solvency scale, financial risk scale

How to Cite
Dokiienko, L. (2021). Financial security of the enterprise: an alternative approach to evaluation and management. Business, Management and Economics Engineering, 19(2), 303-336.
Published in Issue
Oct 7, 2021
Abstract Views
PDF Downloads
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.


Abryutina, M. (2002). Financial analysis of commercial activity. Finpress Publishing House.

Association “Ukroliaprom”. (2020). The largest producers of basic types of oil and margarine products in 2019/20 MY.

Association “Ukroliaprom”. (2021a). Exports from Ukraine oil-and-fat products.

Association “Ukroliaprom”. (2021b). Ratings of oil producers in 2020.

Azarenkova, G., Golovko, O., & Abrosimova, K. (2018). Management of enterprise’s financial sustainability and improvement of its methods. Accounting and Financial Control, 2(1), 1–14.

Baranovs’kyy, O. (1999). Financial security. Feniks.

Baranovs’kyy, О. (2004). Financial security in Ukraine (evaluation methodology and support mechanism). KNUTE.

Bilomistniy, O., Bilomistna, I., & Galushko, Y. (2017). Influence external and internal factors to financial security of enterprise. Financial and Credit Activity: Problems of Theory and Practice, 1(22), 97–104.

Blakyta, G., & Ganushchak, T. (2018). Enterprise financial security as a component of the economic security of the state. Investment Management and Financial Innovations, 15(2), 248–256.

Blank, I. (2004). Financial management of the enterprise security. Nika-Centr, Еl’ga.

Britchenko, I., Bohomolova, N., Kravchenko, O., & Pinchuk, S. (2018). Aassessment of the determinats of financial security of railways in Ukraine. Financial and Credit Activity: Problems of Theory and Practice, 4(27), 270–281.

Cernavskis, K. (2012). Financial stability of enterprise as the main precondition for sustainable development of economy. Regional Formation and Development Studies, 3(8), 36–46.

Davydenko, N. (2015). Genesis of enterprise financial security. Economic Processes Management: International Scientific E-Journal, (2).

Delas, V., Nosova, Е., & Yafinovych, O. (2015). Financial security of enterprises. Procedia Economics and Finance, 27, 248–266.

Dokiienko, L., Hrynyuk, N., Lapko, O., & Kramarev, H. (2020). Financial security diagnostics tools for corporate enterprises. Financial and Credit Activity: Problems of Theory and Practice, 3(34), 184–194.

Dokiienko, L. (2020). Diagnosis of financial security level as the main tool of financial strategy development of oil-extraction companies. Economic Bulletin of National Technical University of Ukraine “Kyiv Polytechnic Institute”, (17), 194–206.

Donets, L., & Vashchenko, N. (2008). Economic security of company. Сenter of Educational Literature.

Drobyazko, S., Barwinska-Malajowicz, A., Slusarczyk, B., Chubukova, O., & Bielialov, T. (2020). Risk management in the system of financial stability of the service enterprise. Journal of Risk and Financial Management, 13, 1–15.

Franchuk, V., Omelchuk, O., Melnyk, S., Kelman, M., & Mykytyuk, O. (2020). Identification the ways of counteraction of the threats to the financial security of high-tech enterprises. Business: Theory and Practice, 21(1), 1–9.

Ganushchak, T. (2017). Dynamics of development of financial safety of the enterprise as a complex economic security of the state. Baltic Journal of Economic Studies, 3(4), 32–37.

Hryhoruk, P., Khrushch, N., & Grygoruk, S. (2019). Model for assessment of the financial security level of the enterprise based of the desirability scale. In SHS Web of Conferences, The 8th International Conference on Monitoring, Modeling & Management of Emergent Economy, 65, 03005.

Kharchuk, T., Kredisov, V., Melnik, V., & Purdenko, O. (2020) Improved methods of evaluation of financial security for companies in Ukraine. Financial and Credit Activity: Problems of Theory and Practice, 1(32), 213–222.

Khudoliei, L. (2018). Assessment of the level of financial security of machine-building enterprises of Zaporizhzhia region with the help of integral-rating method. EUREKA: Social and Humanities, 1, 38–45.

Koleda, N., & Lāce, N. (2008, May 23–24). Key factors of financial stability of enterprises: case from Latvia. In Management, Economics and Business Development in the New European Conditions: VI International Scientific Conference, Czech Republic, Brno. Brno University of Technology.

Kondratenko, N., Doroshenko, H., Ternova, I., Babych, S., & Dorosheko, O. (2020). Organizational and methodical provision of the financial and economic security management of the enterprise. Financial and Credit Activity: Problems of Theory and Practice, 1(32), 129–137.

Kosaynova, V., Seredina, N., & Alexeenko, V. (2019). Development of a methodology for assessing the financial security of construction enterprises. IOP Conference Series: Materials Science and Engineering, 698(7), 077037.

Mbatha, N., & Ngibe, M. (2017). Factors affecting financial stability of small and medium enterprises: A case study of emerging markets. Risk Governance & Control: Financial Markets & Institutions, 7(1), 7–17.

Nguyen, V., & Nguyen, T. (2020). Financial security of Vietnamese businesses and its influencing factors. Journal of Asian Finance, Economics and Business, 7(2), 75–87. (2020). Oil and fat industry 2020: trends, forecasts, prospects.

Pera, J. (2017). An enterprise’s financial stability and its sustainable growth. A risk-based perspective. International Entrepreneurship Review, 3(2), 49–62.

Ramskyi, A., & Solonko, A. (2018). Mechanism of formation of financial security of an enterprise. European Scientific Journal of Economic and Financial Innovation European Association of Economists, 1, 14–20.

Rushchyshyn, N., Nikonenko, U., & Kostak, Z. (2017). Formation of financial security of the enterprise based on strategic planning. Baltic Journal of Economic Studies, 3, 231–233.

Safargaliev, E. (2019). Indicators of financial security of small and medium enterprises. Revista San Gregorio, 34, 82–88.

State Statistics Service of Ukraine. (2020). Consumer Price Index.

Sylkin, O., Shtangret, A., Ogirko, O., & Melnikov, A. (2018). Assessing the financial security of the engineering enterprises as preconditions of application of anti-crisis management: practical aspect. Business and Economic Horizons, 14(4), 926–940.

Sylkin, O., Kryshtanovych, M., Zachepa, A., Bilous, S., & Krasko, A. (2019). Modeling the process of applying anti-crisis management in the system of ensuring financial security of the enterprise. Business: Theory and Practice, 20, 446–455.

Sylkin, O., Kryshtanovych, M., Bekh, Y., & Riabeka, O. (2020). Methodology of forming model for assessing the level financial security. Management Theory and Studies for Rural Business and Infrastructure Development, 42(3), 391–398.

Valaskova, K., Durana, P., Adamko, P., & Jaros, J. (2020). Financial compass for Slovak enterprises: modeling economic stability of agricultural entities. Journal of Risk and Financial Management, 13(5), 92.

Vergun, A., & Topenko, Yu. (2016). Evolution of views on financial security as a management unit. Economy: Time Realities, 4(26), 122–134.

Yeletskykh, S. (2017). Аlternative methods for evaluating financial sustainability of an enterprise. Economic Bulletin of Donbass, 4(50), 103–106.

Yermoshenko, M. (2001). Financial security of the state: national interests, real threats, security strategy. Kyiv National University of Trade and Economics.

Yermoshenko, M., & Horyacheva, K. (2010). Financial component of economic security: state and enterprise. National Academy of Management.

Zwolak, J. (2017). The financial security of small- and medium-sized enterprises in Poland. Ekonomski Pregled, 68(4), 399–412.