METHODICAL APPROACH TO THE INTEGRAL ASSESSMENT OF FINANCIAL SAFETY OF MACHINE-BUILDING CORPORATIONS

O V Stashchuk,V V Perevozniuk,O V Borysiuk

doi:10.18371/fcaptp.v3i30.179527

O V Stashchuk, V V Perevozniuk + Show 1 more

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https://doi.org/10.18371/fcaptp.v3i30.179527

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Abstract

The article deals with development of methodical approach to the integral assessment of financial safety position of machine-building corporations with reference to defining safety margins of the certain indicators chosen for the research in order to simplify the analysis and to the fullest extent possible to highlight special features of financial and economic activity of the abovementioned business entities, their organizational and legal form and production life cycle. The research suggests making calculations of the integral value of financial safety by summing up margin safety values for each sub aggregates taking into account their weight coefficient in the concerned assessment that will contribute to smoothing the trend line of the integral value in the dynamic development and increasing the reliability and the accuracy of analysis.Drawing up of methodology for the integral assessment of financial safety at machine-building corporations has been carried out by applying progressive methods of financial and economic analysis and modern approaches to organizing scientific researches and investigations as well as with strict observance of certain stages of the analysis. The concept of a safety margin has been introduced, it is a relative value that shows the real status of financial safety at an enterprise according to a certain characteristic and is calculated in diverse ways depending on the standard value of the analyzed indicator. We offer to set threshold values for a safety margin of financial safety indicators taking into account their possible increase to a certain limit defined by expert means or on the principle of choosing the largest real value of a particular indicator. The rates of weight have been introduced and they enable to adjust a value of the integral indicator in view of technical and technological special features of production and sales of machine-building production.The scientifically-based approach allows assessing financial safety in a completely new format and comparing economic development potential of machine-building corporations which are different in size, equity, branches of activities.

Highlights

In national and foreign research literature methodological aspects of financial safety level determination of enterprises have been thoroughly studied on the ground of express diagnostics that allows assessing the efficiency of formation and use of financial resources at business entities and it is manifested in keynotes or risks of their finance and economic position
The issue of integral analysis of financial security of corporations needs updating, despite the fact that it defines the general condition of security in the specific period and in development, it should take into consideration peculiar features of functioning for business entities with corporate form of propriety
The algorithm to define the integral indicator includes 4 stages: 1) selection of coefficients that most reflect special features of financial and economic activities of corporations in the machine industry and their calculation; 2) determination of a safety margin for each indicator; 3) assignment of significance rate for each indicator in the system of integral value; 4) calculation of the integral value for the indicator to assess the financial safety of joint-stock partnerships in the machine industry

Summary

Introduction

In national and foreign research literature methodological aspects of financial safety level determination of enterprises have been thoroughly studied on the ground of express diagnostics that allows assessing the efficiency of formation and use of financial resources at business entities and it is manifested in keynotes or risks of their finance and economic position. The algorithm to define the integral indicator includes 4 stages: 1) selection of coefficients that most reflect special features of financial and economic activities of corporations in the machine industry and their calculation; 2) determination of a safety margin for each indicator; 3) assignment of significance (weight) rate for each indicator in the system of integral value; 4) calculation of the integral value for the indicator to assess the financial safety of joint-stock partnerships in the machine industry. Safety margins for the referred indicators will be determined by formula 2, namely z2=k2/0,5, z3= k3/0,7, z4=k4/0,7

13 Re-investment coefficient k13

Conclusions