Professional paper
Methods for an Accounting Estimation of Company’s Capital Adequacy
Živko Bergant
orcid.org/0000-0002-0613-9439
; College of Accounting and Finance, Ljubljana, Slovenia
Igor Manohin
; College of Accounting and Finance, Ljubljana, Slovenia
Abstract
The capital adequacy of a company is basic information about the risk of solvency that means a risk not to be able to settle obligations on long-term. Monitoring capital adequacy is mostly required by actual insolvency legislation. The author gives an overview of practical approaches to accounting analysis of company’s capital adequacy. In
doing so, he distinguishes between basic and implemented methods, and addresses their strengths and weaknesses. Among these methods, also the fastest one is presented. This new method allows the first estimate even if a company has not made balance sheet yet. Therefore it is very useful for monitoring company’s risk about its solvency.
Keywords
business analysis; capital adequacy of the company; net working capital; financial mediating position
Hrčak ID:
244887
URI
Publication date:
1.7.2020.
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