Academic journal article European Research Studies

Analytical Monitoring of Entity's Cash Flows as a Guarantee of Financial Security of the Region

Academic journal article European Research Studies

Analytical Monitoring of Entity's Cash Flows as a Guarantee of Financial Security of the Region

Article excerpt


Modern economic development in Russia could be characterized by dynamic shifts of inner and outer factors of business activity, causing the threat for financial interests and increasing financial risks in the course of business. The ability to react swiftly and properly as well as developing measures of minimizing the expose is a ticket to viable business in addition to being an inherent part of financial security both in region and nationwide. The paper is aimed at considering the financial security framework using the entities' cash flow analysis. We consider necessary solving the following problems:

--review theoretical and legal fundamentals of building the financial security of the region;

--analyze the opportunities and restrictions of cash flows of the entity;

--analyze the performance and dynamics of cash flows of the entity basing on the specific technique;

--develop the methodology of improving the financial security.

The object of the research is cash flows of the entity while the subject of the research includes theoretical and practical fundamentals of providing the financial security of the region. The novelty of the research consists in specific measures of providing the financial security of the entities.

Materials and methods

Current interconnection of financial security, performance of the entity, management, and investment policy determines the need in analytical monitoring framework as a guarantee of the region's financial security.

Terms of national security, economic security, and financial security are the conceptual basis of providing the national security framework. The Edict of the President N683 dt 31 December 2015 "On Russian Federation's National Security Strategy" includes the term of national security defined as "the state of protection of the individual, society, and the state against internal and external threats in the process of which the exercise of the constitutional rights and freedoms of citizens of the Russian Federation, a decent quality of life and standard of living for them, sovereignty, independence, state and territorial integrity, and sustainable socioeconomic development of the Russian Federation are ensured". The economic security term was first introduced in Federal Law "Concerning the State Regulation of Foreign Trade Activities". The economic security there was considered as "specific state of economy ensuring the adequate level of social, political, and military protection and Russian Federation's progressive development, sovereignty of economic interests to the internal and external threats".

Chernikova and Vysotskaya (2010) considers national security and economic security, as an inherent part, to be connected directly with forming, assigning, and applying funds in context of state's financial activity. Stated differently, financial security is an inherent part of economic and national security.

Arsentyev (2000) defines the financial security of Russia as "an essential part of economic security based on independence, efficiency, and competitiveness of the financial sector of Russia resulting in the set of measures and indicators of its state and defining the sustainability of finance, adequate assets' liquidity, and availability of monetary, currency, and gold reserves. Other researchers have defined financial security in a similar way (Ivanova et al., 2017; Kuznetsova et al., 2017; Mikhailova et al., 2017; Menshchikova and Sayapin, 2016; Kosinova et al., 2016; Sibirskaya et al., 2016; Medvedeva et al., 2015; Stroeva et al., 2015; Thalassinos and Liapis, 2014; Thalassinos et al., 2014; 2015; Thalassinos and Dafnos, 2015; Duguleana and Duguleana, 2015; Kalanotnis et al., 2014; Xanthopoulos, 2014).

Truntsevsky (2007) notes that financial security of the entity implies a set of conditions when corporate funds are applied in a most efficient way to prevent threats and provide the sustainable business activity from now on. …

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