RELEVANCE OF FINANCIAL BALANCE INDICATORS FOR DIAGNOSING AN ENTITY'S FINANCIAL POSITION
This paper is focused on identifying the economic-financial indicators necessary for the correct and complete diagnosis of the financial position of an entity. Specifically, it highlights the need to use financial balance indicators in knowing how the entity's management succeeds or fails to...
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| Format: | Article |
| Language: | English |
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Academica Brâncuşi
2023-08-01
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| Series: | Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie |
| Subjects: | |
| Online Access: | https://www.utgjiu.ro/revista/ec/pdf/2023-04/14_gadoiu.pdf |
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| author | GÂDOIU MIHAELA BĂNUȚĂ MARIANA |
| author_facet | GÂDOIU MIHAELA BĂNUȚĂ MARIANA |
| author_sort | GÂDOIU MIHAELA |
| collection | DOAJ |
| description | This paper is focused on identifying the economic-financial indicators necessary for the correct and complete
diagnosis of the financial position of an entity. Specifically, it highlights the need to use financial balance indicators in
knowing how the entity's management succeeds or fails to achieve its major objective, namely maximizing the entity's
value. The consistent achievement of the major objective of an entity can only take place under the conditions of a
profitable activity and maintenance of financial balance. So, starting from this aspect, the importance of analyzing the
financial balance can be seen, as well as the correlation with the entity's performance. The analysis of the financial
balance is obtained by means of indicators determined with the help of information from the balance sheet, namely the
net position, the working capital, the need for working capital and the net treasury. Achieving financial balance can be
achieved by adjusting the imbalances that manifest in the entity's current activity, more precisely between its financial
sources and its resource needs. In order to ensure a state of perfect equilibrium, all the due dates of the payments or
receipts should be perfectly correlated, which is very difficult to achieve in the practical activity of the entity because
most of the time, the receipts precede the payments and thus are released a profitable activity.
|
| first_indexed | 2024-03-11T12:59:33Z |
| format | Article |
| id | doaj.art-728407d79a144d59ac5b2c8529d3a738 |
| institution | Directory Open Access Journal |
| issn | 1844-7007 |
| language | English |
| last_indexed | 2024-03-11T12:59:33Z |
| publishDate | 2023-08-01 |
| publisher | Academica Brâncuşi |
| record_format | Article |
| series | Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie |
| spelling | doaj.art-728407d79a144d59ac5b2c8529d3a7382023-11-03T16:55:15ZengAcademica BrâncuşiAnalele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie1844-70072023-08-014124131RELEVANCE OF FINANCIAL BALANCE INDICATORS FOR DIAGNOSING AN ENTITY'S FINANCIAL POSITIONGÂDOIU MIHAELA0BĂNUȚĂ MARIANA1LECTURER PH.D., FACULTY OF ECONOMIC SCIENCES AND LAW, NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY POLITEHNICA BUCHAREST, PITEȘTI UNIVERSITY CENTER, ROMANIALECTURER PH.D., FACULTY OF ECONOMIC SCIENCES AND LAW, NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY POLITEHNICA BUCHAREST, PITEȘTI UNIVERSITY CENTER, ROMANIAThis paper is focused on identifying the economic-financial indicators necessary for the correct and complete diagnosis of the financial position of an entity. Specifically, it highlights the need to use financial balance indicators in knowing how the entity's management succeeds or fails to achieve its major objective, namely maximizing the entity's value. The consistent achievement of the major objective of an entity can only take place under the conditions of a profitable activity and maintenance of financial balance. So, starting from this aspect, the importance of analyzing the financial balance can be seen, as well as the correlation with the entity's performance. The analysis of the financial balance is obtained by means of indicators determined with the help of information from the balance sheet, namely the net position, the working capital, the need for working capital and the net treasury. Achieving financial balance can be achieved by adjusting the imbalances that manifest in the entity's current activity, more precisely between its financial sources and its resource needs. In order to ensure a state of perfect equilibrium, all the due dates of the payments or receipts should be perfectly correlated, which is very difficult to achieve in the practical activity of the entity because most of the time, the receipts precede the payments and thus are released a profitable activity. https://www.utgjiu.ro/revista/ec/pdf/2023-04/14_gadoiu.pdf: financial analysisfinancial diagnosisfinancial positionfinancial balanceeconomic and financial indicators |
| spellingShingle | GÂDOIU MIHAELA BĂNUȚĂ MARIANA RELEVANCE OF FINANCIAL BALANCE INDICATORS FOR DIAGNOSING AN ENTITY'S FINANCIAL POSITION Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie : financial analysis financial diagnosis financial position financial balance economic and financial indicators |
| title | RELEVANCE OF FINANCIAL BALANCE INDICATORS FOR DIAGNOSING AN ENTITY'S FINANCIAL POSITION |
| title_full | RELEVANCE OF FINANCIAL BALANCE INDICATORS FOR DIAGNOSING AN ENTITY'S FINANCIAL POSITION |
| title_fullStr | RELEVANCE OF FINANCIAL BALANCE INDICATORS FOR DIAGNOSING AN ENTITY'S FINANCIAL POSITION |
| title_full_unstemmed | RELEVANCE OF FINANCIAL BALANCE INDICATORS FOR DIAGNOSING AN ENTITY'S FINANCIAL POSITION |
| title_short | RELEVANCE OF FINANCIAL BALANCE INDICATORS FOR DIAGNOSING AN ENTITY'S FINANCIAL POSITION |
| title_sort | relevance of financial balance indicators for diagnosing an entity s financial position |
| topic | : financial analysis financial diagnosis financial position financial balance economic and financial indicators |
| url | https://www.utgjiu.ro/revista/ec/pdf/2023-04/14_gadoiu.pdf |
| work_keys_str_mv | AT gadoiumihaela relevanceoffinancialbalanceindicatorsfordiagnosinganentitysfinancialposition AT banutamariana relevanceoffinancialbalanceindicatorsfordiagnosinganentitysfinancialposition |