Received: 2020-06-10  |  Accepted: 2020-06-25  |  Published: 2020-09-30

Title

The influence of the classification of non-current assets as holding for sales on the liquidity of the company’s balance sheet


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.


Keywords

non-current assets, held for sale, liquidity, liquidity analysis, ratio analysis of liquidity, capital, reclassification of non-current assets


JEL classifications

M41 , M21 , G32


URI

http://jssidoi.org/jesi/article/630


DOI


Pages

430-441


Funding


This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Shygun, Mariya M.
Kyiv National Economic University named after Vadym Hetman, Kiev, Ukraine https://kneu.edu.ua
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Ostapiuk, Nataliia A.
Kyiv National Economic University named after Vadym Hetman, Kiev, Ukraine https://kneu.edu.ua
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Zayachkivska, Oksana V.
National University of Water and Environmental Engineering, Rivne, Ukraine http://nuwm.edu.ua
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Goylo, Natalia V.
Kyiv National Economic University named after Vadym Hetman, Kiev, Ukraine https://kneu.edu.ua
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Journal title

Entrepreneurship and Sustainability Issues

Volume

8


Number

1


Issue date

September 2020


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

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References