facebook
twitter
vk
instagram
linkedin
google+
tumblr
akademia
youtube
skype
mendeley
Wiki

EVALUATION OF COMPANY’S FINANCIAL CONDITION AS A STAGE OF CRISIS MANAGEMENT

Автор Доклада: 
Loshchina L.V, Nilova N.M.
Награда: 
EVALUATION OF COMPANY’S FINANCIAL CONDITION AS A STAGE OF CRISIS MANAGEMENT

УДК 658. 15

EVALUATION OF COMPANY’S FINANCIAL CONDITION AS A STAGE OF CRISIS MANAGEMENT

Loshchina L.V, Ph. D, assistant professors
Nilova N.M., Ph. D, assistant professors
Ukrainian Academy of Banking of the National Bank of Ukraine

In the paper is given new method of approaching to the financial condition of undertaking on the basis of cumulative indicator that enables monitoring of its financial activity and promotes crisis management decisions.
Keywords: financial conditions of undertaking, cumulative indicator, methods of multidirectional analysis, crisis management

From the precise analysis of threats (proper selection of indicators for assessing the financial condition of the undertaking) depends a set of necessary measures to prevent possible crises in its work. The most important task of crisis management in the undertaking is to develop scientifically based method of evaluating financial condition.

Developing new approaches for solving the problem of complex evaluation of the undertaking’s financial condition allows a non-detailed comparison of a large number of indicators for monitoring its activities over a certain period of time. Analysis of such evaluation methods shows that they have certain drawbacks that prevent use of methods in practice, viz.:

  • - Different approaches to selection of financial condition indicators’ system, give opposite results;
  • - Used of such methods for establishing integrated indicator of financial condition as addition or multiplication of individual indicators that comprise the system, leads to that indicator has no economic sense.

Thus, to determine cumulative indicators of the financial condition of integrated undertaking, it is appropriate to apply multivariate analysis methods that allow the set of individual indicators to obtain the cumulative indicator. To determine the cumulative indicators of innovation enterprise should use the method of distances. Herewith, the condition of application of this method is the standardization of economic indicators’ values which are includes in matrix of research and divided into two groups: stimulators and deterrents. Stimulators include indicators of growth that are desirable, and to deterrents - performance with the opposite property. Distribution of parameters into two groups makes it possible to construct so-called reference rate, which is characterized by maximum values ??of indicators - stimulants and minimum performance - deterrents. After defining distances ci0 between the indicator that is analyzed and the benchmark, the cumulative indicators yi defines by the formula:

where

n - number of indicators;
So - the distance between the n - an indicator system and its benchmark.
The value of the cumulative indicator varies in the range from zero to one. The closer the value of yi to 1, the higher the financial stability of the company and better its financial position.

Scorecard, which is available to calculate the cumulative indicator of financial companies must meet the following requirements:

  • • include indicators that show the financial condition for the typical groups of indicators;
  • • provide the ability of comparison of indicators used for analysis at various locations;
  • • focus on implementation of current and future problems;
  • • has to be consistent with existing reporting;
  • • according to the chosen system of indicators, the cost for collecting and processing information should be minimal.

Considering the above, to calculate the cumulative indicator of the financial condition of the company, the system performance for typical groups should include the following: coverage ratios, total liquidity, autonomy, financial leverage, product profitability, return on assets, return on equity, return on debt capital for a net cash flow core undertaking profitability, return on assets from operating profit and turnover of capital and current assets.

Thus, a comprehensive assessment of the financial condition that is based on the cumulative indicator, makes it possible to monitor financial activity, identify trends in the dynamics of its financial situation and create conditions for decision making in crisis management, including financial management. Not only managers and owners might be interested in obtaining such information, but also external users, such as the assessment of a company’s value or in the analyzing enterprise as a potential undertaking partner, or to determine its competitiveness. However, the main sphere of its use is still company’s internal demand to constantly monitor economic changes and the impact of management decisions on financial results and financial position of enterprises. The proposed research enables receiving complete and unbiased information about this condition and possible dynamics of this indicator in the future. Overall, it allows the company to avoid many violations of the financial security of its activities and monitor the process of its financial support.

Literature:

  • 1. Никитина, Н. Антикризисное финансовое управление предприятием: исследование факторов [Текст] / Н. Никтина // Проблемы теории и практики управления. - 2007.- №7. - С.91 -102
  • 2. Козлянченко, О.М. Інфляційне забезпечення аналізу фінансового стану підприємства при загрозі банкрутства [Текст] / О.М. Козлянченко // Актуальні проблеми економіки. – 2010. - №10. – С.182 – 188.  
10
Your rating: None Average: 10 (1 vote)
PARTNERS
 
 
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
image
Would you like to know all the news about GISAP project and be up to date of all news from GISAP? Register for free news right now and you will be receiving them on your e-mail right away as soon as they are published on GISAP portal.