What does the term 'financial sustainability' refer to?

The term 'financial sustainability' refers to the ability of an organization to maintain or improve its financial standing over the long term, while still meeting its financial obligations. This concept encompasses the idea that an entity should not only be financially viable in the short term but also have strategies and practices in place that will enable it to thrive in the future.

By focusing on long-term viability, an organization ensures that it can continue operating, invest in growth, and fulfill its commitments to stakeholders without compromising its financial health. This is crucial for ongoing operations, stability, and the ability to weather economic fluctuations or unforeseen challenges. Overall, financial sustainability emphasizes a holistic approach to finance that prioritizes enduring success and resilience over merely achieving immediate profits or cost reductions.