Financial Solvency and Its Impact on the Financial Vulnerability of Medium-Sized Commercial Enterprises in the Canton of Latacunga, 2024

Abstract

Financial solvency is a key factor in a company’s economic stability; it reflects the ability to meet obligations and minimize financial risk. There is limited empirical evidence regarding its impact on financial vulnerability. Given this situation, the main objective of this study was to analyze the impact of financial solvency on the financial vulnerability of medium-sized commercial enterprises in the canton of Latacunga during the year 2024. A quantitative approach was applied, using a non-experimental, cross-sectional design with a descriptive-correlational scope, based on financial data from eighteen organizations registered with the Superintendency of Companies, Securities, and Insurance. Solvency was measured using debt and leverage indicators, and vulnerability was classified according to the level of financial risk. The relationship between variables was established using Spearman’s Rho correlation coefficient. The findings revealed high levels of indebtedness and high and critical levels of vulnerability. Furthermore, a very strong positive association was found between asset-to-debt ratio and vulnerability (ρ = 0.925; p = 0.001), as well as moderate positive correlations for equity-to-debt ratio and leverage (ρ = 0.584; p = 0.011). Consequently, there is a clear need to strengthen financial management and optimize the capital structure.