DEFINITION AND METHODS TO ESTIMATE THE FINANCIAL STABILITY OF INDIVIDUALS

Current conditions for conducting financial and economic activities create the necessity to develop a methodology for the financial stability assessment of both legal entities and individuals. It is related to the implementation of entrepreneurial activities by physical entities as individual entrepreneurs, the delivery of professional services as self-employed, and the conclusion of outsourcing agreements. However, the analysis of approaches to the definition of the concept of financial stability of individuals allowed concluding that this issue has not received proper theoretical understanding. The gap between the theory of finance and the practice of conducting financial and economic activities formed the goal of this study: to define and develop criteria for the individual's financial stability assessment. The paper analyzes the approaches to the definition of both the financial stability of a commercial organization and the methods for its assessment and compares the financial and economic activities of legal and physical entities. The paper defines the financial stability of a physical entity, which is understood as its ability to fulfill its obligations at its own expense in the long term. The author developed absolute and relative indicators for the individual's financial stability assessment. The author uses the saving rate, the market value of a property, and the volume of long-term loans and borrowings as absolute indicators of the financial stability of an individual. The market level of the individual's financial leverage and the ratio of fixed financial costs coverage are used as relative indicators. The application of the developed absolute and relative indicators for assessing the financial stability of individuals will rationalize the process of selecting counterparties operating as individuals, improve the quality of financial monitoring of the activities of individual entrepreneurs, and reduce the risks of credit institutions when granting loans to individuals.

financial stability, financial stability of individuals, household finances, absolute and relative indicators of financial stability, outsourcing