Modeling and Management of Power Supply Enterprises’ Cash Flows

Darya Pyatkina,Vadim Samusenkov,Mariusz Sroka,Tamara Shcherbina,Irina Razinkina

doi:10.3390/en14041181

Abstract

The purpose of the study is to assess the efficiency of cash flow management at power supply companies of the CIS (Commonwealth of Independent States) countries. A methodological approach to cash flow forecasting with the use of linear and polynomial regression has been developed. The study is based on the data provided by 12 power supply companies operating in CIS member countries. Forecasting based on the generated polynomial models of multiple regression of cash flow for the power supply companies under study confirms the strong possibility of extrapolating the studied trends to future periods. Compared to the linear model, the polynomial one confirms higher values of the determination coefficients for the majority of power supply companies. The projected volumes of cash inflow, cash outflow, and net cash flows of power supply companies with the application of the described polynomial multiple regression models have a fairly high degree of approximation. The correlations between operating cash flows and outflows, between total cash inflow and outflow of the majority of power supply companies are high. The low level of synchronization between cash inflows and outflows of the companies under study is associated with the specifics of their financial and investment activities and the cash flow management policy. It has been proven that energy enterprises’ financial stability significantly depends on the synchronization and uniformity of cash flows. The proposed methodological approach allows identifying enterprises by the criterion of riskiness from the standpoint of the synchronization and homogeneity of their cash flows.

Highlights

Power supply companies are an integral component of the energy system
We propose to calculate the coefficient of electricity consumer payments (Ki ) as the ratio of the amount of money that has been paid or will be paid for the electricity consumed to the cost of the electricity supply
The analysis of the average structural financial ratios, which reflect the specifics of the formation of the total cash inflow and outflow of power supply companies in 2015–2019, confirmed the preservation of the structural proportions inherent in the cash flow

Summary

Introduction

Power supply companies are an integral component of the energy system. Economic stability as well as national and international energy security depend on the reliability of their operation. The transition to new systems of incentive tariff setting, the implementation of which affects the size and structure of cash flows of power supply companies in different countries and regions, requires a proper theoretical and methodological justification [1,2,3,4,5,6]. The efficiency of enterprise cash flow management determines their ability to achieve current financial goals as well as ensure solvency, financial stability, and balance in the long term [7]. In the context of the highly dynamic internal and external environment of enterprises, a decrease in their solvency and financial stability is an urgent problem of imbalance and unevenness of cash flows. The economic and legal consequence of this is the insolvency and bankruptcy of a significant number of power supply enterprises [8]

Objectives

Methods

Results

Discussion

Conclusion