Abstract
The study substantiates the need to develop the authors’ model for strategic evaluation of financial potential in corporations based on stochastic simulation, which provides for determination of an absolute indicator for sustainability of financial potential resources (i.e. strategic permanent resources for financial potential and relative strategic ratio), as well as actual and strategic indicators values deviations, the study also provides prerequisites for relevant expert conclusions. Such model implies influence of emergent (macro-, meso-) environment on financial potential of corporations. Its application is of a universal character, it contains integrated interests of different stakeholder groups (owners, financial managers, lenders, potential owners, creditors, investors, suppliers, auditors, lawyers, associations, trade unions) allowing in a short period identify internal actual and potential financial opportunities, risks and hidden potentials, takes into account emergent environment influence on financial potential condition in corporations, thus contributing to development of strategic policies for its generation.
Highlights
Financial potential carrying tactical and strategic characteristics of corporations’ capabilities should conceptually reflect phenomenon of their current and strategic financial performance
From the perspective of evaluation of corporations’ financial potential factorial approach to definition becomes interesting when decisive importance is given to factors that affect financial potential of the corporation
– factor evaluation of corporations’ financial potential allows depicting only pre-emptive part of its generation policy and excludes strategic component; –significant internal factors that affect financial potential efficiency were distinguished in factor hierarchical structure; they require special regulation and monitoring in corporations’ financial management systems; – it is recognized that in operational financial management system of corporations’ internal factors that influence efficiency of financial potential utilization are identified, evaluated and monitored; that demands development of an author's model for strategic evaluation of the potential that should be founded on Monte Carlo simulations which consider influence of emergent environment factors
Summary
Financial potential carrying tactical and strategic characteristics of corporations’ capabilities should conceptually reflect phenomenon of their current and strategic financial performance. The process of corporations’ financial potential generation and evaluation should be focused at efficient application of financial mechanisms to achieve intermediate and strategic goals. Methodological approach to the issue reveals that most methods of corporations’ financial potential evaluation characterize retrospective and current financial potential status and exclude prospective status assessments (Rashid and Jabeen 2018; Wang, Reimsbach and Braam 2018; Dungey, Tchatoka and Yanotti, 2018; Malaquias and Zambra 2018). N.A. Sorokina (Sorokina 2009) directly correlates assessment of corporations’ financial potential with achievement of their strategic development goals, and highlights the following strategic indicators: revenue, sales profit, net assets, and capital intensity of products, capital turnover, and added value
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
