FINANCIAL INDICATORS AS MEASURES OF ECONOMIC RESILIENCE: CLASSIFICATION, ADVANTAGES, AND LIMITATIONS OF EXISTING APPROACHES
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Abstract
Introduction. The global economy is facing an era of unprecedented turbulence caused by pandemics, wars (notably Russia’s full-scale invasion of Ukraine), energy crises, and systemic shocks. These conditions expose the limitations of traditional financial indicators in assessing firms' ability to withstand and recover from crises. Financial resilience is becoming a key priority for stakeholders, yet existing financial metrics—developed for stable environments—fail to capture the speed, scale, and multidimensional nature of current economic risks.
Purpose. The purpose of the study is to classify financial resilience indicators and critically analyze their advantages and limitations under crisis conditions. The authors aim to develop an improved toolkit for diagnosing and forecasting financial resilience, particularly under extreme uncertainty and shocks.
Results. The article presents several key findings:
- Traditional financial indicators (e.g., liquidity and profitability ratios) lag in response and fail to capture crisis-specific risks such as disrupted supply chains or geopolitical instability.
- A crisis-adaptive toolkit is proposed, including real-time liquidity measures (e.g., Cash Runway ≥ 60 days), adjusted liquidity ratios accounting for credit lines, and the ESG Resilience Index.
- Additional tools include early warning systems for counterparty risk, zero-based budgeting, stress-testing models (VaR), and AI-based cash flow forecasting.
- These instruments enable a shift from retrospective analysis to proactive financial monitoring and crisis preparedness.
Originality. The novelty of the research lies in the integration of financial and non-financial indicators within a multi-level framework (strategic, operational, analytical, and organizational). This includes the adaptation of ESG metrics, liquidity stress tests, and scenario planning methods for enterprise-level resilience assessments—tools traditionally reserved for macroprudential analysis.
Conclusion. The study concludes that transitioning from passive financial monitoring to active crisis forecasting is essential for ensuring enterprise resilience in an era of permanent global shocks. The implementation of the proposed tools can significantly enhance crisis readiness, reduce liquidity losses, and improve the accuracy of financial distress predictions. Ukrainian businesses, in particular, must embrace flexibility and innovation-driven resilience rather than merely preserving the status quo.
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