ASSESSMENT OF THE LEVEL OF FINANCIAL AND ECONOMIC SECURITY OF AN ENTERPRISE USING FACTOR ANALYSIS

Crisis processes have a significant destabilizing impact on the economic condition of enterprises, especially under conditions of high uncertainty and instability in the external environment. Such circumstances considerably increase the risk of losing financial and economic security, which, in turn, may lead to a loss of economic independence and the enterprise's ability to self-preserve. The purpose of this study is to substantiate the feasibility of applying factor analysis in the assessment of an enterprise's financial and economic security, and to identify the key factors that most significantly influence its level. The object of the study is the financial and economic activity of the enterprise in the context of ensuring its financial and economic security. The subject of the study is the set of economic indicators and influencing factors that determine the level of financial and economic security, as well as methodological approaches to its assessment through factor analysis. The research employed the following methods: theoretical generalization and analysis of scientific literature – to clarify the conceptual framework of financial and economic security; economic and statistical methods – for processing statistical reporting indicators; factor analysis (principal component method) – to reduce data dimensionality and identify the key determinants influencing the level of financial and economic security. The article examines the category of “financial and economic security of an enterprise” as a complex latent concept that integrates a range of individual economic factors and indicators. It is established that the latent indicator – financial and economic security – possesses specific structural characteristics. It is proved that this indicator has a hierarchical structure, which includes four distinct levels. The selection of indicators for integrated assessment is based on a set of methodological principles. The study proposes the use of factor (component) analysis as a suitable tool for evaluating the latent indicator of financial and economic security. The main objective of applying factor analysis is to transform the initial multidimensional dataset into a smaller number of generalized and meaningful latent components. It is demonstrated that the entire process of applying factor analysis consists of two major sequential stages, each comprising several specific steps. The study presents a flowchart of the principal component method procedure used for assessing the level of financial and economic security. Financial statements of the enterprise are used as the main source of input data for the factor analysis.