Low Liquid Level Research Articles

Asset liquidity and venture capital investment

We examine the relationship between asset market liquidity and venture capital (VC) investment and find that it is inverted U-shaped. Asset liquidity and VC investment are positively related for low levels of asset liquidity but negatively related for higher levels of asset liquidity. We also document evidence that VC firms with more industry experience invest more in a liquid asset market than those without industry experience or with significant experience in other industries. Portfolio companies obtained their first investment in a liquid asset market are less likely to exit successfully; however, given a successful exit, they prefer to exit through mergers and acquisitions rather than going public.

PHYSICAL MODELING OF STEEL HOMOGENIZATION DURING FINISH ALLOYING IN THE MOLD

The article describes the method of finish alloying steel in molds in top and bottom casting. Due to the reduction of oxygen activity in the metal due to the relatively lower casting temperature than the previous stages of steelmaking redistribution, it is achieved the reduction of the ferroalloys loss and increasing the yield of useful elements of ferroalloys. An important indicator of the implementation of the proposed technology is the alloying of steel in the mold to obtain steel of a certain brand in small volumes. The aim of the study is to determine the rational place of addition of alloys into the volume of the melt and the method of casting, for the best dissolution of alloys in steel directly in the mold. To solve this problem, the method of physical modeling on a water transparent model using a fluorescent dye that glows brightly in ultraviolet light was used. The experiment consisted of three series of with different methods of casting and introduction of dye: 1) top casting with the introduction of dye into the mold; 2) bottom casting with the introduction of dye into the mold; 3) bottom casting with the introduction of dye in the trumpet. It was analyzed that the averaging of the dye is more efficient at a lower liquid level in the mold, because mixing occurs due to the flow of liquid in the mold, the higher the liquid level in the mold, the weaker the mixing flows. The research revealed minimization of averaging time at the optimal fluid level. For top and bottom casting with the addition of dye to the mold, the optimal level is 33%. When the dye is introduced into the center, there is a slight directly proportional increase in the time of complete homogenization with an increase in the liquid level in the mold. Among the analyzed methods of steel casting, the most effective in terms of homogenization of the alloying additive is bottom casting. The color of the liquid at different stages of filling the mold with the introduction of the dye at the level of 25% of the height of the mold is analyzed.

Marine riser failure analysis for offshore conventional drilling and managed pressure drilling operations

The objective of this paper is to present an analysis of marine riser integrity in conventional and Controlled Annular Mud Level (CALM) offshore drilling operations. A mathematical model was developed to predict the three-dimensional (axial, tangential, radial) and the Von Mises Equivalent (VME) stresses along risers for a typical API X-65 55.88-cm OD, and 2500-m long marine riser. A sensitivity analysis was carried out to investigate the effect of riser thickness, bending, surface backpressure, liquid level, buoyancy modules, and tension from surface tensioners on riser mechanical behavior. To evaluate the riser integrity, the calculated VME stress was compared against the maximum allowable stress recommended by API RP 16Q. The key findings of this study are as follows. First, when maximum VME stress at riser surface is less than the maximum allowable stress, increasing riser thickness does not improve riser integrity. Second, increasing dog-leg severity from 0 to 4 deg./100 ft increases the riser surface VME stress 57% and the riser bottom VME stress 1%. The former VME stress is insignificant because high dog-leg severity occurs near riser bottom where VME stress is small. Third, when tension of 20% of the riser buoyant weight is applied at the surface, the riser integrity is improved more than when using buoyancy modules, which have a density of 4.5 ppg. Fourth, lower liquid level in the riser during CALM drilling operations results in an increase of VME stress, with the highest increase at the top of the riser liquid level. However, under severe conditions, VME stress is often less than maximum allowable stress, indicating that riser collapse is not a concern during controlled annular mud level drilling operations.This study has introduced a simple and accurate method to evaluate the riser's integrity during conventional offshore and Controlled Annular Mud Level drilling operations. The results of this study improve not only the design of risers, but also ensure safe and economic offshore drilling operations.

Međuzavisnost berzanskih indikatora i BDP-a na primeru odabranih balkanskih zemalja

Stock markets and the level of their development have a great impact on economic growth. The purpose of this research is to empirically determine if there is interdependence between gross domestic product and (1) total turnover and (2) market capitalization in analyzed stock markets. By analyzing the ratio between total turnover and market capitalization into gross domestic product, the level of liquidity and activity of these stock markets can be determined, which enables the comparison of analyzed stock markets based on the mentioned financial indicators. This research included Zagreb, Ljubljana, Montenegro and the Bucharest stock market - in the period 2011-2019. The obtained results show that the analyzed markets are small and not developed, with a low level of activity and liquidity and they indicate the presence of interdependence between gross domestic product and the mentioned financial indicators.

MACROECONOMIC CHARACTERISTICS OF FINANCIAL AND ECONOMIC SUSTAINABILITY OF TRADE ENTERPRISES IN UKRAINE

The relevance of the researching and ensuring financial and economic sustainability of trade is proved. The essential structural characteristics of financial and economic sustainability are generalized. The specifics of managing the financial and economic sustainability of trade business are indicated. The macroeconomic characteristics of financial and economic sustainability of trade in Ukraine as the volume of equity, balance currency, sales of goods of the trade enterprises, current assets, current liabilities and provision, own current assets of trade enterprises are analysed. The financial and economic sustainability of trade enterprises in Ukraine was assessed using the ratios of provision of current assets to own funds, provision of stocks with own funds, maneuverability of equity, mobility, permanent assets, financial stability and financial dependence. Purpose. The purpose of the research is to analyse the condition and development trends of macroeconomic characteristics of financial and economic sustainability of trade in Ukraine and justification proposals for public policy to stimulate its strengthening. Methodology. The following scientific methods were used during the research: analysis, synthesis and comparison – to research the prerequisites for ensuring the financial and economic sustainability of trade enterprises; statistical analysis – to calculate the key macroeconomic characteristics of financial sustainability and liquidity of trade enterprises; groupings, logical analysis, strategic management – to form priorities and means of state policy to stimulate the strengthening of financial and economic sustainability of trade business. Results. The low level of financial sustainability and liquidity of the trade sector in Ukraine has been empirically proven. It is established that a critical decrease in the financial and economic sustainability of the trade business occurred in 2014-2015. In 2012, the level of financial sustainability and liquidity of trade enterprises was the highest. Since 2016, the gradual restoration of financial and economic sustainability of trade business in Ukraine has begun. However, its level is still insufficient, which requires justification and implementation of effective measures of state regulation in this area. It is proved that strengthening the financial and economic sustainability of trade enterprises in Ukraine requires the formation and implementation of a common (state and business entities) policy aimed at strengthening the financial and economic sustainability of trade enterprises in Ukraine. The policy should be implemented in the following areas: alternative forms of the financial result formation, improvement of financial and economic attractiveness of enterprises, distribution of financial and economic risks with the manufacturing sector, realization of financial potential of domestic market by enterprises. Practical implications. The means of the state policy of stimulation and strengthening of financial and economic sustainability of the trade enterprises in Ukraine are defined. Value/originality. The methodical approach to the formation of tools and means of policy to strengthen the financial and economic sustainability of the country’s trade business has been further developed.

Self-oscillatory loop flow of an external air-lift loop

• Downcomer subjected to either annular or core jet impingement at low liquid levels. • Slug flow regime in the riser leads to regular and periodic loop liquid oscillations. • The downcomer’s slug flow with Taylor bubbles is the result of the riser’s churn flow. • Longer and smaller peak oscillations together forms a cycle of the oscillatory flow. • FFT, scatter and time delay plots are the tools to examine the excursive behavior. The present experimental investigation revealed that the hydrodynamic behavior of the external air-lift loop deviates significantly from its normal behavior when it is operated under low liquid inventory. To capture this excursive behavior a micro-processor based magnetic flowmeter is placed in line with the downcomer and recorded the temporal loop flow rate variation. The loop flow signals are analyzed rigorously using different techniques of nonlinear dynamics such as FFT, scatter, and time delay plots along with visual observations. Investigations show that with the increase in the rate of air injection in the riser, oscillations of loop liquid flow rate through the downcomer increases, and its behavior shifts from a periodic to chaotic nature. The diversity in loop liquid flow rate in the downcomer has the major influence on flow regime formation in the riser and a clear transformation is observed visually from slug flow to churn flow.

Energy Saving through Efficient BOG Prediction and Impact of Static Boil-off-Rate in Full Containment-Type LNG Storage Tank

Boil-off gas (BOG) from a liquefied natural gas (LNG) storage tank depends on the amount of heat leakage however, its assessment often relies on the static value of the boil-off rate (BOR) suggested by the LNG tank vendors that over/under predicts BOG generation. Thus, the impact of static BOR on BOG predictions is investigated and the results suggest that BOR is a strong function of liquid level in a tank. Total heat leakage in a tank practically remains constant, nonetheless the unequal distribution of heat in vapor and liquid gives variation in BOR. Assigning the total tank heat leak to the liquid is inappropriate since a part of heat increases vapor temperature. At the lower liquid level, BOG is under-predicted and at a higher level, it is over-predicted using static BOR. Simulation results show that BOR varies from 0.012 wt% per day for an 80% tank fill to 0.12 wt% per day at 10% tank fill.

Low Refractive-Index and Temperature Crosstalk Fiber-Optic Liquid Level Sensor Based on Cascaded Quasi-Microfiber and Double-Cladding Fiber Structure

In this paper, a novel in-fiber modal interferometer for liquid level sensing is proposed and experimentally demonstrated based on the cascaded quasi-microfiber and double-cladding fiber (QM-DCF) structure. The QM is utilized to monitor the change of liquid level with intensity modulation and the part of DCF is always immersed into the liquid and serves to sense the variation of ambient temperature. Then the comprehensive tests are performed and the experimental results show that, due to the massive loss of evanescent field in the area of taper waist, a competitive liquid-level response up to -0.972 dB/mm with high linearity is gained and the calculated detection limit reaches ~ 10μm. Moreover, this cascaded structure is almost immune to the varied refractive index (RI) of liquid especially in the range of 1.33-1.357 RIU and its temperature sensitivity is 0.164 nm/°C but with a fluctuation of <; 0.1 dB. Thus, high intensity-sensitive liquid-level measurement is achieved with near-zero crosstalk in terms of RI and temperature. Besides our sensor with the merits of practicality, low-cost, ease of fabrication is very promising and potential for simultaneous high-discrimination measurement of multi-parameter.

How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic

Utilizing transaction-level financial data, we explore how household consumption responded to the onset of the COVID-19 pandemic. As case numbers grew and cities and states enacted shelter-in-place orders, Americans began to radically alter their typical spending across a number of major categories. In the first half of March 2020, individuals increased total spending by over 40% across a wide range of categories. This was followed by a decrease in overall spending of 25%–30% during the second half of March coinciding with the disease spreading, with only food delivery and grocery spending as major exceptions to the decline. Spending responded most strongly in states with active shelter-in-place orders, though individuals in all states had sizable responses. We find few differences across individuals with differing political beliefs, but households with children or low levels of liquidity saw the largest declines in spending during the latter part of March.

X-ray measurements of thin liquid films in gas–liquid pipe flow

This paper presents a method for reconstructing the thickness profile of the thin liquid film being present in steady, fully developed gas–liquid annular pipe flow, taking advantage of nonintrusive X-ray measurements. Experiments have been performed with low liquid loading, annular flows, in a near horizontal pipe system (inclination +2.5°), using a high-density gas (SF6) and Exxsol D60 oil. Special care was taken to ensure the flows were fully developed, and statistically steady. The superficial gas velocity was maintained at a constant value of 10 m/s, while the superficial liquid velocity was varied between 0.5 mm/s and 42 mm/s. The X-ray measurements were supplemented by gamma ray densitometer data and isokinetic data. An explicit mathematical method is presented, whereby the shape and thickness of very thin liquid films can be reconstructed if X-ray images of the flow have been obtained from two independent directions: one with a vertical view of the pipe, and another with a horizontal side view. The method can be straightforwardly applied to cases where the film volume dominates the total volume of droplets suspended in the gas phase. This condition is generally satisfied for the experiments presented in this paper, as verified by isokinetic measurements.Mean liquid hold-up values determined by gamma densitometer are in reasonable agreement with the X-ray results. It is found that the mean film thickness at any position on the pipe wall increases with the superficial liquid velocity. While the film thickness is maximal at the pipe bottom in virtually all experimental cases, its profile exhibits multiple local maxima and minima, with the smallest thickness apparently 20°–30° away from at the pipe top. The presented film reconstruction method is highly sensitive; even at extremely low liquid levels, with a superficial liquid velocity less than 0.01% of the mixture velocity, the film and its thickness profile are clearly detected. An analytical fit for the film profile as a function of perimeter angle and superficial liquid velocity is given. The fit captures the main features of the profile as derived from X-ray measurements, for thin films with maximum thickness less than 5% of the pipe diameter.

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This paper examined the impact of liquidity, leverage, and total assets size of the bank on profitability. This study employed bank scope data of all 28 commercial banks operating in Nepal during the period of 2010/11 – 2016/17. Altogether, the168 observations were used in the study. Three ordinary-least-squares models were applied to analyze the impact of liquidity, leverage, and the total size on the bank’s profitability. The first regression model reveals that the higher loan to deposit ratio (low level of liquidity) was observed to have the negative effect on the bank’s ROA, ROE, and NIM; however, ROE and NIM were statistically insignificant. The result of the second regression model shows that higher equity to assets ratio (lower leverage) positively affected two profitability measures, ROA and NIM, and was statistically significant—but was negatively related to ROE and statistically insignificant. The result of the final regression model reveals that the higher bank size appeared favorable to the Nepalese commercial banks and was found to have positive effects on all three profitability measures: ROA, ROE, and NIM. The results of the study could help bankers and policymakers to take an effective action in order to improve banks’ profitability.

Micro-Drilling of Sapphire using Electro Chemical Discharge Machining.

Electrochemical discharge machining (ECDM) refers to a non-traditional machining method for performing effective material removal on non-conductive hard and brittle materials. To increase the ECDM machining efficiency, traditionally, the method of increasing the machining voltage or increasing the electrolyte concentration is used. These methods can also cause overcut reaming of the drilled holes and a rough surface on the heat affected area. In this study, an innovative combinational machining assisted method was proposed and a self-developed coaxial-jet nozzle was used in order to combine two assisted machining methods, tool electrode rotation and coaxial-jet, simultaneously. Accordingly, the electrolyte of the machining area was maintained at the low liquid level and the electrolyte was renewed at the same time, thereby allowing the spark discharge to be concentrated at the contact surface between the front end of the tool electrode and the machined material. In addition, prior to the machining and micro-drilling, the output of the machining energy assisted mechanism was further controlled and reduced. For the study disclosed in this paper, experiments were conducted to use different voltage parameters to machine sapphire specimens of a 640 μm thickness in KOH electrolyte at a concentration of 5 M.

Liquidity, profitability, tax rate and bankruptcy risk in Colombian SMEs

This article looks for statistical evidence for the correlation between liquidity, profitability, tax rates and bankruptcy risk for the period 2011 - 2016 between Small and Medium Enterprises in Bogota (Colombia). To do so, the authors conducted a quantitative, longitudinal research for which the Altman Z’’ Score index was used. Data from 2,084 enterprises belonging to 19 industries was collected. The relations between the variables were analyzed by the Pearson correlation coefficient. A significant positive correlation between the risk of failure and low levels of liquidity was evidenced in several industries. The results for the relation between the risk of bankruptcy and profitability were not conclusive, neither significant. Not enough statistical evidence that related rates of return or tax rates to risk of failure was found.

The growing importance of the closing auction in share trading volumes

The increasing concentration of share trading volumes at the end of the day is a phenomenon that can be witnessed to varying degrees on all the main markets worldwide. France is, however, one of the markets where this trend has reached the highest levels, with close to 41 per cent of CAC 40 volumes traded at the closing auction on Euronext Paris in June 2019. This rate is well above the 12–14 per cent level seen in the United States. Several factors could account for this phenomenon: • The rapid growth in passive management, for which unit creation and cancellation generally takes place at the end-of-day liquidation value and for which a precise replication entails trading at the closing price. • The obligation of ‘best execution’ and especially reporting obligations of the tradeand- cost-analysis type to which fund managers have been subject since the application of MiFID II. By trading at the closing auction, this type of reporting becomes superfluous. • A move to avoid high-frequency trading (HFT) arbitrageurs, who rarely get involved in the closing auction phase. • Lastly, the role of execution algorithms, which have amplified the preceding factors, as liquidity attracts liquidity. The study also describes the price formation process during the closing auction phase and shows that while volumes and prices converge rapidly towards their final level during the first half of the order accumulation phase (90 per cent of the volumes traded are already present in the order book with an average price differential of 0.30 per cent), final convergence takes place in the last 15 seconds of the auction. Finally, this change in market structure is accompanied by the emergence of certain risks, in particular an increased exposure to operational incidents, which could occur during this very brief phase, and lower levels of liquidity in the rest of the session.

A time-saving method to evaluate the thermal insulation performance of cryogenic vessels

Equivalent mass loss is a critical index used to evaluate the thermal insulation performance of cryogenic vessels. The current test standards for measuring the thermal insulation performance of cryogenic vessels in different countries require a long testing time and waste a considerable amount of working medium. In this study, a method that can shorten the test time of the thermal insulation performance of cryogenic vessels is established. Different from the current test methods that rely entirely on experiments, the method proposed in this paper is a semi-experimental and semi-analytical calculation method. The proposed method is based on the one-dimensional heat transfer analysis of a cryogenic vessel and short-term experimental test data, and it can be used to predict the mass loss over a long period of time. Moreover, the method can predict the mass loss of a cryogenic vessel at a high liquid level when the mass loss at a low liquid level is known. When this method is used to predict the mass loss, the comparison with the experimental data shows that the maximum relative error of the instantaneous mass flow is 21.1% and the relative error of the cumulative mass flow is less than 8%. When this method is used for the calculation of heat leakage between different liquid levels, the results show that the larger the difference between the two liquid levels, the greater the error of leakage heat, and the maximum is 18.9%.

Оценка основных компонентов кредитного риска в секторе коммерческого кредитования организаций Кемеровской области

Introduction. Market evolution requires a constant improvement of monetary relations. Commercial credit expands the ability of enterprises to maneuver their working capital. It also mobilizes and redistributes free commodity resources in the production sector. The paper presents a holistic research in the field of credit risk assessment in a particular sector of commercial lending.&#x0D; Study objects and methods. The theoretic section of this publication identifies the design features of a commercial loan and the specific credit risks. The theoretical studies were performed in the context of the classical, legislative, scientific, and synthesized copyright formats. To conduct an assessment, it is necessary to focus on a separate segment of the commercial loan market, with a given regional and industry affiliation. By sorting the market participants according to the balance of outstanding pending debts, the authors chose the metallurgical enterprises of the Kemerovo region as research object.&#x0D; Results and discussion. The applied section reflects the authentic three-stage methodological approach, which includes the following stages of experimental and analytical work. The first stage involves structuring the risk situation and the structural elements of credit risk. The macroeconomic level involves three zones of indirect impact: state, region, and industry. At the microeconomic level, the authors identified several types of risk, in the order of their manifestation. The first one is the risk of delay in repayment of debt arising from the risk of capital structure and business risk. The second type involves subsequent risk of default on the loan, associated mainly with the potential risk of bankruptcy of a potential debtor. The second stage reflects the identification of private indicators for assessing credit risk in the context of its structural elements as based on 17 popular techniques, models, and recommendations of leading foreign and domestic scientists. The targeted selection was based on a given preference criterion, i.e. frequency of applying the coefficient in analytical practice. Thus, the authors obtained the following thematically differentiated combinations: financial independence ratio (capital structure risk indicator), indicators of the quality and correlation of receivables and payables (business risk indicators), coefficient current liquidity and the ratio of own working capital (bankruptcy risk indicators). The third stage involves an analysis of private indicators of the main components of credit risk. The analysis is based on the formed valuation design and the synthesis of valuation characteristics at a given regional and industry level, as compared with all-Russian trends.&#x0D; Conclusion. The analysis of most indicators revealed an unstable situation in the credit policy of metallurgical enterprises in the region, i.e. huge arrays and a high share of overdue debts, an irrational capital structure, a low level of liquidity of the balance sheet, and a significant proportion of unprofitable enterprises. Thus, a high level of risk of delay in repayment of debt and an increasing risk of bankruptcy can increase the level of risk of loan default.

The effects of internals and low aspect ratio on the fully developed flow region and bubble properties in a pilot-plant bubble column

This work investigates, for the first time, the effects of the presence of internals and low dynamic liquid levels on the bubble dynamics in industrial-size pilot plant bubble columns. Experimental work that conducted in a bubble column of 0.6 m inner diameter and 3.9 m height with an air-water system was utilizing our advanced four-point fiber optical probe technique to measure the radial profiles of the bubble properties. The superficial gas velocity varied from 0.2 to 0.45 m/s to cover the churn turbulent flow regime. PVC pipe of 0.06 m diameter used to represent the heat exchanging internals, occupying 24% of the column cross-section area, and three different aspect ratios (H/D = 3, 4, and 5) were used. Data obtained show that the presence of internals slightly increases the overall gas holdup and significantly affects the radial profiles and distribution of the bubble properties, particularly in the fully developed flow region. However, the presence of internals increases the local gas holdup, the bubble pass frequency, and the interfacial bubble area, especially in the wall region, while decreases the bubble chord length and the bubble rise velocity. The variation in the aspect ratio (H/D) and the presence of internals exhibited a slight impact on the bubble dynamics in the sparger region, whereas the effect of internal on the local gas holdup was concentrated in the wall region. Meanwhile, the axial location (Z), where the fully developed flow region occurs, appears a high sensitivity toward the internals existence and the variations in the aspect ratio and the superficial gas velocity. However, the presence of internals and the increase in aspect ratio both show that the fully developed flow region begins at lower axial locations, while an increase of the superficial gas velocity delays the transition to fully developed flow to a higher axial location.

The Influence on Response of a Combined Capacitance Sensor in Horizontal Oil–Water Two-Phase Flow

In the process of production logging interpretation, a water cut is one of the key factors to obtain the oil phase content in the oil well. In order to measure the water cut of the horizontal oil–water two-phase flow with low yield, the response characteristics of the combined capacitance sensor (CCS) are investigated under different flow patterns. Firstly, the measuring principles of coaxial, cylindrical, and CCS are introduced in detail. Then, according to the different flow pattern conditions of the horizontal oil–water two-phase flow, the response characteristics of the CCS are simulated and analyzed using the finite element method. Additionally, compared with the other two sensors, the advantages of the CCS are verified. Finally, the temperature and pressure calibration experiments are carried out on the CCS. The horizontal oil–water two-phase flow patterns in a low yield liquid level are divided in detail with a high-speed camera. Dynamic experiments are carried out in a horizontal pipe with an inner diameter of 125 mm on the horizontal oil–water two-phase flow experimental equipment. The simulation and experimental results show that the CCS has good response characteristics under different working conditions.

THEORETICAL FOUNDATIONS MANAGE LIQUIDITY AND SOLVENCY

The article deals with the essence of the definitions "liquidity" and "solvency" of the enterprises. It is stated that the definitions are complementary and closely related to each other, but herewith they should be distinguished. The article provides an interpretation of the economic category "liquidity and solvency management" of the enterprise, namely, the authors of the article state that it is a process of developing and making effective management decisions by the economic entities to fulfill their obligations in full and within the established deadline at the expense of the available means of payment in order to ensure the sustainable development of the entity both in the current and future periods. Besides, the article determines the purpose and main tasks of liquidity and solvency management of the enterprise, the main steps in the process of managing the liquidity and solvency of the economic entities, as well as the main stages of their analysis. Also, the article determines and characterizes the absolute and the relative indicators with the help of which it is possible to carry out the analysis of the liquidity and solvency. There was carried an analysis of liquidity and solvency according to the groups of indicators. The analysis of liquidity and solvency of the domestic economic entities which was carried out for the period of 2013 - 2017 indicates a low level of liquidity and prospective solvency of Ukrainian enterprises. Such a situation negatively affects the efficiency of their functioning, which is due to the inability of economic entities to discharge short-term liabilities in time. This estimation was made on the basis of an analysis of liquidity and financial firmness ratios, which are the basis for drawing conclusions on prospective solvency. The authors of the article noted that liquidity and solvency management of enterprises are the important components of the financial management of business entities and that the implementation of effective liquidity and solvency management is the basis for ensuring the further development of enterprises, which in turn will affect their investment attractiveness and competitiveness. Keywords: liquidity, solvency, management, prospective solvency, liquidity and solvency ratios.

Inicijalna javna ponuda kao izvor finansiranja i njen značaj za razvoj tržišta kapitala u Srbiji

Initial public offering has often been used in many economies in the privatization process of state-owned companies, primarily with those companies of strategic importance for the country. This further affected the private sector companies to decide on this step and thus gain additional capital in order to finance their further development. Based on the previous experience of many developed countries and countries in the region, the privatization through public offering of shares has significantly contributed to the development of the capital market in these countries, which is predominantly reflected in the growth of market capitalization, volume of turnover, number of transactions and participation of local and foreign investors in these markets. Through the conducted analysis of the capital market of Serbia, this paper points to its modest market capitalization and low level of liquidity largely caused by the long-term negligence of the role that the stock market can have on its development. The aim of the paper is to present the initial public offering of shares as a form of financing of companies, which can also make a significant contribution to the development of the Serbian capital market.