FORMATION OF ENTERPRISE INVENTORIES AND THEIR LIQUIDITY DEGREES IN COMPARISON WITH OTHER COMPONENT CURRENT ASSETS

Abstract

The article examines the financial and economic foundations of enterprise inventory formation and their role in ensuring the continuity of operational activities. The composition of inventories as a key component of current assets is revealed, and their impact on the overall liquidity of the enterprise is determined. It emphasizes that inventories, although the least liquid part of working capital, play a critical role in maintaining the stability of production processes and the ability of an enterprise to respond to fluctuations in demand in a timely manner. The paper analyzes methods for assessing and optimizing inventory levels (ABC analysis, XYZ analysis) and presents approaches for determining their degree of liquidity in comparison with other elements of current assets, such as cash, short-term financial investments, and accounts receivable. The impact of excess inventories and insufficient inventories on the company's performance indicators is determined. Additional financial risks from the accumulation of inventories during wartime are presented. The need for the company to achieve an optimal balance between the level of inventories and the speed of their conversion into cash, taking into account the specifics of production activities and market demand, is proven. Particular attention is paid to financial indicators that reflect the speed of conversion of inventories into cash, in particular the current liquidity ratio, quick liquidity ratio, and working capital maneuverability index. It has been shown that effective inventory management increases the ability of an enterprise to maintain financial balance, minimize the risk of resource shortages, and ensure an optimal level of liquidity. For the practical implementation of inventory management policy, it is proposed to detail key approaches to the model of inventory replenishment and optimization of delivery batches through ABC analysis. Based on the analysis, recommendations have been formulated for improving inventory management policies, which contribute to increasing the flexibility of the enterprise's financial system and strengthening its competitive advantages in a changing market environment.