Financial stability of the company

About what is financial stability and how to achieve it in one or the other time thinks every able-bodied person. The same issues are in the focus of attention of managers of large and small companies and individual entrepreneurs. History of economic relations clearly shows that the birth and development of the financial system occurred in parallel with the development of technology. Games exchange or trade relations maintained from time immemorial, however, the financial system appeared only a few centuries ago.

A New, more productive technology can increase the volume of consumer goods. As a result of these processes increasingly important to the mechanism of distribution of wealth. The main tool in this case is money. In turn, banknotes from banks. In recent decades, a situation has arisen where the financial stability of the Bank determines the well-being of many enterprises in different fields of activity. Factories that produce goods, and trade enterprises implementing them keep their financial resources in Bank accounts.

Rather to say that banks serve these enterprises. Their duties include the preservation of funds and shipment of a particular amount to the addresses specified by the client. To this list, you can add calculations with the budget and insurance funds, cash management services, issuing plastic cards and other services. If you look at the essence of the process, the financial stability of any commercial structure, to a certain extent depends on the stable operation of the institution. Of course, no commercial Bank is not responsible for the financial policies of their customers.

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At the same time, the experience of recent decades and the global financial crisis demonstrated that financial stability of manufacturing companies depends on a stable banking system. As with any market structure, the Bank is engaged in commercial activity. Its purpose – profit. This and the profits it brings customers. One category provides services for settlement and cash services. Other issued loans and credits. In this business, like any other, has its dangers and difficulties.

Currently, some banks have a very risky surgery. For example, give loans to customers without checking their creditworthiness. So it was in 2008 in the United States. Loans were given to everyone. And when it turned out that a significant portion of issued funds can not be returned, the banks suffered losses and some of them were on the verge of bankruptcy. Now I must say that the financial stability of the company – is the ability at any time to pay its obligations.

What obligation do a modern company which is engaged in production of construction materials? One of the main – timely payment of wages to its employees. Then you need to pay suppliers of raw materials and components. Then for the consumed electric and thermal energy. And the list of settlements goes on. Now imagine how the company will be able to meet its obligations, if the Bank ceased to operate? The answer is obvious – nothing. All the money was stored on accounts of the institution, issued by insolvent borrowers, and the Bank there is nothing to dispose.

The Current historical moment is characterized by the fact that the financial sustainability of many, even very large companies depends on how effective the financial system as a whole. Importantly, how does a particular Bank, which provides services to the company or individual entrepreneur. Experts recommend to have settlement funds in other commercial banks. And it is desirable that one of them was established by the government. Such banks are successfully operating in all the regions.