Theoretical aspects of defining the essence of enterprise insolvency risk

Abstract

Abstract: The purpose of the study was to reveal the theoretical aspects of determining the essence of the risk of insolvency of an enterprise, which was envisaged by conducting a theoretical generalization of existing definitions of the essence of the risk of insolvency of an enterprise; formulating a comprehensive definition of the concept of the risk of insolvency of an enterprise based on the analysis carried out The research methods are based on a systematic approach to considering the essence of the risk of insolvency of an enterprise, as well as on the use of methods of analysis, synthesis, generalization and morphological analysis. This made it possible to identify scientific approaches to the interpretation of the risk of insolvency and to reveal its essence. The results of the study are to define insolvency risk as the probability of a situation when, due to an imbalance between the volume and time structure of obligations and the real possibilities of covering them at the expense of liquid assets and cash flows, the enterprise loses the ability to fulfill its financial obligations in a timely manner, which creates a threat to the interests of key stakeholders - creditors, investors, employees, the state and counterparties, and can manifest itself both in the form of short-term liquidity gaps and in the form of long-term loss of financial stability. Conclusions. The study made it possible to clarify the essence of insolvency risk and determine its key manifestations in the activities of enterprises. It was established that this risk is a complex concept and directly affects the financial stability and prospects for business development. Further scientific research should be focused on the development of methodological approaches and practical tools for quantitative assessment of the risk of insolvency of enterprises in the context of ensuring effective management for the purpose of prevention. Keywords: insolvency, risks, enterprise activities, liquidity, solvency, bankruptcy, cash flows, enterprise resources.