Assessment of the financial and economic situation at Ukrainian enterprises during the war

Abstract

The financial stability of the enterprise is the main criterion that indicates its financial condition and ensures successful functioning. With the beginning of the war, many Ukrainian enterprises became insolvent due to their own financial problems, illiquidity and circumstances that made it impossible to continue business. The paper analyzes the results of a survey of domestic business entities with regard to their expectations regarding the current financial situation. It is studied the share of enterprises operating at full and almost full capacity compared to the pre-war period. There are clarified the main challenges that domestic enterprises are exposed to during the war, in terms of industries. During the war, problems with electricity, water and heat supply interruptions and rising prices for raw materials shared the first place in the rating of business obstacles. Difficulties with the transportation of raw materials and goods in Ukraine were recognized as the third most significant problem. Labor safety ranks fourth in the rating. Disruption of supply chains ranks fifth. There are summarized the main transformations that took place in the country's economy during the war and affected the financial stability of domestic enterprises. They are the following: enterprises revised their approaches to labor organization and the dimensions of production or service provision; in two-thirds of enterprises there was a reduction in personnel; half of the enterprises reviewed their customer base and/or suppliers; businesses began investing in business continuity (generators, communications) and security (relocation costs or employee safety). All of this complicates the financial condition of the business, because at the same time as income decreases, the items of forced expenses increase. From these positions, indicators of the assessment of the financial and economic situation and expectations in the future at Ukrainian enterprises are studied. As a result, there are systematized the directions of adaptation of domestic enterprises to support financial security in wartime, namely: attraction of direct and indirect financial investments, resumption of export of own products and participation in state and international financial aid programs.