Financial Education - Financial stability in business organizations

The financial stability of business organizations refers to the ability of companies to remain productive and resist imbalances and problems that may arise.

Financial stability has two perspectives, one from the economic point of view, where financial systems are analyzed, and the other from the business point of view, where the solvency of the organization is analyzed from the financial and operational point of view, measured through assets and liabilities.

By virtue of what is expressed by the author, financial stability can be approached by the company from the financial plane, where solvency, economic and accounting factors should be included.

To measure economic and financial stability, specific methods developed to evaluate the financial stability of an organization are used.

The best known method is CAMEL (Capital, Asset, Management, Earning and Liquidity), which is made up of six components: capital identity, asset quality, earnings, reasonable management, liquidity and risks.