The influence of the classification of non-current assets as holding for sales on the liquidity of the company’s balance sheet
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Date
2020-09
Journal Title
Journal ISSN
Volume Title
Publisher
Entrepreneurship and sustainability center
Abstract
Enterprises are in constant search for additional sources of financing their activities and increasing the liquidity of their balance.
One of these methods is the classification of non-current assets as held for sale, which causes changes in the structure of assets of the
company, affects its liquidity and solvency. At the same time, users of information should be sure of the reality of such operations for the
classification of non-current assets. It is important to avoid manipulating balance sheets and artificially enhancing their liquidity by
changing the structure of assets. The results of a study of the impact of operations on classification of non-current assets as held for sale on
the liquidity of the company's balance sheet are presented in this article. The impact of non-current assets held for sale on liquidity is shown
separately provided that they are included in the groups of fast-selling assets and slow-selling assets. The impact of such groupings on the
liquidity indicators is shown by means of coefficient analysis. The nature and level of the impact of non-current assets held for sale on the
liquidity of the balance sheet is identified by modelling a consistent change in their volume relative to the value of non-current assets and
capital of the company. For the purpose of effective asset management, the optimal indicator of non-current assets held for sale in the
company's balance sheet has been proposed, which avoids the risk of lowering the productivity of the existing equipment while ensuring
the release of financial resources due to the sale of assets.
Description
Keywords
non-current assets, held for sale, liquidity, liquidity analysis, ratio analysis of liquidity, capital, reclassification of non-current assets
Citation
The influence of the classification of non-current assets as holding for sales on the liquidity of the company’s balance sheet [Electronic resource] / Mariya Shygun, Nataliia Ostapiuk, Oksana Zayachkivska, Natalia Goylo // Entrepreneurship and Sustainability Issues. – Electronic text data. – 2020. – Vol. 8, № 1 (September). – P. 430–441. – Mode of access: https://jssidoi.org/jesi/uploads/articles/29/Shygun_The_influence_of_the_classification_of_noncurrent_assets_as_holding_for_sales_on_the_liquidity_of_the_companys_balance_sheet.pdf. – Title from screen.