TOOLS FOR ANALYZING FINANCIAL STABILITY
DOI:
https://doi.org/10.14456/tisr.2024.15Keywords:
Financial Stability, Firm Value, Risk Assessment, Investment DecisionAbstract
This article aims to present knowledge from a literature review on Financial Stability analysis. It explains the meaning, various concepts, tools used, advantages, and limitations of using tools to forecast Financial Stability. The literature review found that several tools can be used to analyze Financial Stability. Two popular forecasting tools are Altman's Z-Score, which is a financial ratio model, and Tobin's Q which is used to measure value by combining financial and market data. Both tools can be developed into Financial Stability assessments for stakeholders to use in their decision-making. The recommendations from this study are that investors, companies, and data users can apply the knowledge to guide investment and business decisions effectively. Additionally, data users should seek other sources of information to support their decision-making if they want to invest in a business, even after assessing its Financial Stability.
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