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Financial Stability - The Pre-Requisit Of A Successful Financial Activity

Author

Listed:
  • Chirila Emil

    (University of Oradea, Faculty of Economic Sciences)

Abstract

Essential component of social life, the economic activity is faced with the problems of permanent balance. General economic balance implies the existence of a correspondence between needs for material goods and goods possibly available; needs for labor force and manpower available; needs for financial resources and opportunities for their procurement; between revenues of the population and their possible coverage with goods and services; between needs for foreign currency resources and those potentially available in given circumstances. We believe that the financial balance of an company must reflect, through financing rates, the method of ensuring, allocating and using financial resources, on the one hand, and the economic-financial results obtained from the activity performed on the other hand, as well as reflect the relation between cash flows generated by operation activities, by investments and financing, on the one hand, and cash flows used for these activities, on the other hand. The financial balance study, according to "Cross-border research programme - performance indicators of entities in the Bihor- Hajdu Bihar Euro-region" - HURO/0901/204/2.2.3 was based on the basis of financial reporting for the years 2008-2010 for a number of 50 companies grouped in the representative activity sectors contributing to the countyâ€(tm)s GDP performance as follows: Processing industry, Building, Building materials industry, Light industry, Agricultural products processing, Forestry and wood-processing industry, Commerce, Tourism services, Transport services. The calculation of balance indicators for the examined Bihor county companies are presented in the tables from the second chapter and briefly interpreted. It is important to note that companies which are representative for the economy of the Bihor county, possess 93,7% of the total subscribed and used capital, given that the number of public limited companies is 330 and represents only 1%, while the number of private limited companies is 21644 and represents 66,7% of the total of companies. In the same period, Hungary was on the first position by the number of companies with foreign capital, representing 1639 companies with registered capital of 21.6 million Euros.

Suggested Citation

  • Chirila Emil, 2012. "Financial Stability - The Pre-Requisit Of A Successful Financial Activity," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 671-677, July.
    • Handle: RePEc:ora:journl:v:1:y:2012:i:1:p:671-677
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    More about this item

    Keywords

    Corporate finance; Financial Statements; Financial Stability;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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