The rule of the fanacial balance in theory and practice in the algerian economic institution Case study Amor ben Amor mills company (2020 – 2022)

Abstract

This study focuses on the importance of the financial equilibrium rule in the management of institutions, as adherence to this rule ensures the institution's ability to meet its debt obligations on their due dates and helps avoid treasury-related issues. Furthermore, the financial equilibrium rule occupies a crucial position in the financial diagnostic process, as financial analysts rely on it when assessing the financial structure by examining key financial equilibrium indicators.

  The case study was conducted on the Omar Ben Omar Mills . The findings concluded that Omar Ben Omar Mills did not adhere to the financial equilibrium rule, which requires that the fixed uses necessary for the life of the institution be financed by permanent resources. The company financed part of its fixed assets using short-term resources. These resources are exceptional elements that cannot be predicted in terms of their value or the resources or needs they will generate in the coming years, placing the company in a risky and unsafe position. Even though it had a positive treasury position during the study period, there remains a constant risk of encountering problems in financing the fixed uses essential for the company’s operations.

Keywords: , Working capital, Working capital needs, Treasury.