Evaluating the effectiveness of companies' financial policies using logistic regression: A case study of electric power companies

Abstract

Subject. This article assesses the effectiveness of companies' financial policies using logistic regression. It considers the financial policy assessment as a comprehensive analysis that helps evaluate the company's financial performance and make a conclusion based on a single criterion. Objectives. The article aims to develop a single (universal) criterion helping conclude of the company's financial policy effectiveness. Methods. For the study, I used a comprehensive approach based on the developed logit model, financial analysis, systems approach, and an overview of literature sources on the subject. Results. The article presents a developed methodology for evaluating the effectiveness of financial policy determined by the effectiveness of financial policy (EFP) equation for Russian electric power companies. Relevance. The results obtained can be used in practice to evaluate the financial policy by company external and internal users.