CREDIT CAPACITY ASSESSMENT OF COMMERCIAL BANK BORROWER

Abstract

The purpose of the article is to study the essence of solvency of the enterprise, to determine the approaches to assessment and analysis of solvency. Since the assessment of the borrower's solvency is the key to the successful functioning not only of the financial and credit institution, but also of the enterprise itself, so in the conditions of formation and development of market relations lenders need to have an accurate idea of the borrower's solvency. Relevance of the research topic is explained by the fact that today the solvency of the enterprise requires a thorough and comprehensive research in terms of the solvency of enterprises and the development of a scientific justification for a common algorithm that borrowers can use to calculate their credit obligations. Today, there is no single algorithm for determining a borrower's solvency. Each banking institution uses its own methodology, which, in its opinion, is the most effective and takes into account a wide range of financial indicators. According to the valuation specificity for the assessment of legal entities regulated by the NBU, determining the borrower's solvency involves analyzing its financial and economic characteristics Requirements of the Regulations on the determination of the size of credit risk by the banks of Ukraine established the calculation of the credit risk indicator, which provides for the definition of the integral indicator, calculation of the borrower's financial class and the probability of default. Within the limits of the given research the complex estimation of Technologia JSC solvency has been carried out, by results of which the quantitative indicators received as a result of construction of the integral model, are included into the range of values corresponding to the second class of the borrower. Calculation of the overall qualitative indicator confirmed the high level of solvency of the studied enterprise, with a minimum probability of default. In order to improve the quality of the solvency assessment of the borrower we propose, in further studies, to consider the competitiveness of the enterprise as a factor of more accurate determination of its financial condition and solvency. Keywords: solvency, borrower, financial standing, financial factors.