Estimation of solvency of enterprise–borrower on basis of indexes of financial reporting

The subject of the research is to increase the validity of banking decisions regarding the provision of loans to business entities depending on the credit ratings of potential borrowers. The purpose of the study is to improve the methodology for assessing the creditworthiness of borrowers and increase on this basis the validity of banking decisions regarding the provision of loans to businesses depending on the level of creditworthiness of potential borrowers. Methodology of work – the work used general and specific methods, in particular, economic and logical methods and techniques of economic analysis; for visual presentation and generalization of results of the carried–out calculations the graphic and tabular method is used. The results of the work – a system of financial ratios is proposed, which allows to determine the prospects of ensuring the creditworthiness of the enterprise on the basis of research and quantification of impact factors, primarily those that create crisis threats to financial stability and profitability. Conclusions – assessment of the creditworthiness of a potential borrower is a necessary condition for making decisions regarding the provision of a bank loan and determining the conditions established by the institution of the bank to obtain it. The purpose of determining the creditworthiness of the borrower is to reduce the credit risk to which the banking institution is exposed when lending to a business entity. Methodological principles of assessing the creditworthiness of borrowers need to be improved in terms of justifying the choice of financial indicators and the formation of an effective system of phased assessment in a crisis of the domestic economy to help improve the soundness of banking decisions to provide loans to potential borrowers