DIAGNOSTICS OF THE CREDIT ABILITY OF THE ENTERPRISE WITH THE PURPOSE OF INCREASING THE STABILITY OF BUSINESS

Abstract

When commercial banks provide loans to companies (borrowers), it becomes essential for them to assess the creditworthiness of the borrower. This assessment is mandatory because loans contribute significantly to the revenue of commercial banks, thereby influencing the efficiency of their operations. The assessment of their own creditworthiness is equally crucial for a business entity (borrower) since this procedure helps identify any problematic aspects within the company and take necessary steps to address them. Understanding the issues allows for timely resolution or even prevention, which subsequently impacts the bank's decision regarding loan provision. Assessing creditworthiness is a crucial factor that can minimize credit risk. This article is relevant for commercial banks, other financial institutions, or simply for enterprises seeking to diagnose their own creditworthiness. The purpose of the article is to improve the diagnostics of an enterprise's creditworthiness on the example of a real enterprise – PJSC "Milk Alliance" to develop recommendations for further effective functioning and self-diagnosis. This article examines in detail various methods of diagnosing the creditworthiness of enterprises. It is proposed to use the method of assessing the financial condition and further assessment of the class of the borrower. This method allows you to make a comprehensive analysis of the company's financial activity and determine its ability to fulfill financial obligations. Furthermore, the implementation of the Altman model was suggested to evaluate the financial condition of the enterprise and gauge the risk of bankruptcy. Alongside the previously mentioned approaches, a viability coefficient model was employed to assess industrial enterprises. The article's findings highlight the practicality of employing the mentioned approaches when evaluating the creditworthiness of companies. Integrating these methods enables a more unbiased and thorough evaluation of the enterprise's financial stability and creditworthiness, leading to a more comprehensive assessment overall.