Formation of A Strategy of Industrial Enterprise Financing With the aim of Profitability Increase

Abstract

The paper refers to nature and the necessity of a strategic approach to financing in the industry. The author considers reasons and characteristics of an industrial enterprise financial strategy under contemporary complicated economic conditions. A methodology of selection of the most sufficient financial strategy f or an industrial enterprise in the proc ess of corporate financing is suggested. The independence of industrial enterprises, their economic and legal responsibility regarding activity results forms in terms of the Ukrainian economy development under the current economic conditions. The significance of industrial enterprise financial stability increases dramatically. This causes an objective need to determine tendencies of the dynamic formation of their financial position and prospective financial opportunities. An industrial enterprise financial strategy, as a system of prospective purposes of a financial and economic activity and the choice of the most effective methods and ways of their achievement, focuses on the solution of the determined above issues. The formation of a proper strategy of industrial enterprises financing with the aim of the enterprise profitability increase is provided by: the possibility of modeling a financial and economic situation; to detect and prognosticate the necessity of strategic modifications; to apply powerful and reliable instruments and a methodology; to implement the constructed industrial enterprise financial strategy in order to rec eive planned and desirable activity results. All possible types of the financial and economic strategy of industrial enterprises may be represented in the form of a matrix of a financial and economic strategy of an enterprise. Strategic analysis within the suggested matrix enables to c onsider the problem in dynamics. Moreover, it also makes possible not only to formulate a financial strategy, but also to change it operatively as a result of dynamic changes of certain targeted sufficient parameters of an industrial enterpri se activity. A strategic directive in the industrial enterprise activity generally stipulates its financial strategy of providing the profitability. Thus, the correlation between them is much stronger than a cause and effect relation, as it may be suggested in the process of cursory examination. An industrial enterprise financial strategy is independent to a certain extant compared with an industrial enterprise general strategy. During the creation and implementation of a financial strategy the industrial enterprise is more independent than during the process of implementation of its general strategic direc tion of an activity. Also this paper focuses on the development of recommendations concerning the consideration of the determined problem in dynamics. This enables not only to formulate a financial strategy of profit gaining, but also to modify (change) it as a result of the modification of many important parameters of industrial enterprise func tioning.