Analytical potential of financial reporting for assessing enterprise stability

Abstract

Abstract: The article focuses on exploring the potential of financial reporting as a tool for evaluating an enterprise’s financial stability under current conditions. The aim of the study is to determine the analytical capacity of financial reporting in the context of assessing a company’s financial stability and to identify the main limitations of its use. The research applied general scientific methods of cognition: analysis and synthesis; induction and deduction; abstraction; comparison; generalization; a systematic and structural-logical approach. The results indicate that financial stability is a complex economic category reflecting the balance between own and borrowed resources, as well as the ability to maintain continuity of operations and long-term profitability. The study concludes that the assessment of financial stability is based on a system of indicators characterizing liquidity, solvency, autonomy of the enterprise, and the state of fixed and working capital. It has been found that financial reporting serves as the primary source for such assessment, although it has certain objective limitations — particularly, it does not fully reflect information on investment activity, digital assets, risks, and socio-economic factors. This is especially true for simplified reporting forms used by small enterprises, whose analytical potential is limited to basic indicators. The study shows that traditional methods of financial stability analysis dominate in Ukraine, relying on publicly available reports and classical ratios. At the same time, international practice actively introduces automated accounting systems powered by artificial intelligence, which integrate both financial and non-financial data. The main issues in domestic practice include insufficient digitalization, lack of unified standards for integrated reporting, and limited access to high-quality analytical data. The practical value of the study lies in identifying areas for improving the analytical function of reporting in order to enhance the competitiveness of enterprises.