Financial management of socially responsible enterprises in the service sector in competitive conditions of innovative entrepreneurship

Abstract

The article is devoted to implementing the financial management of socially responsible enterprises in the service sector in competitive conditions of innovative entrepreneurship. Based on the research, it was proposed to streamline the adaptation tools of financial management of socially responsible enterprises in the service sector. The study aims to study the financial management of socially responsible enterprises in the service sector in the competitive conditions of innovative entrepreneurship. It is substantiated that managing financial stability involves considering the main risks that lead to the loss of financial stability and are the result of uncertainty. Their possible causes and factors are also revealed. Such risks include inefficient capital structure, a decrease in the company's liquidity, credit risk, tax risk, investment risk, operational activity risk, and risk of inefficient organizational structure of socially responsible enterprises in the service sector. It is proposed to divide all financial stability risk management methods into external and internal. The system of internal risk management mechanisms for reducing the financial stability of socially responsible enterprises in the service sector involves the use of the following methods of optimization: avoidance, limitation, minimization, and diversification of risk, as well as self-insurance and hedging of financial risks. External methods of reducing the risk of loss of financial stability of socially responsible enterprises in the service sector include insurance and risk sharing. It has been proven that the primary goal of financial managers is to choose such a capital structure that, at the lowest cost of capital, will contribute to maintaining stable dividends and income and enrich shareholders. In other words, the optimal capital structure should minimize the WACC and, at the same time, maintain the credit reputation of the enterprise at a level that allows attracting new capital on acceptable terms. Achieving the set goal is possible using different approaches. Next, we will successively consider the peculiarities of establishing the optimal ratio of the company's own and borrowed capital by each financial management approach of socially responsible enterprises in the service sector in the competitive conditions of innovative entrepreneurship. Keywords: financial management, socially responsible enterprises, service sector, competitive business conditions, innovative entrepreneurship.