Medium-term Financial Planning Research Articles

МЕТОДИКА ОЦЕНКИ ЗАВИСИМОСТИ МЕЖДУ ОБОРОТНЫМ КАПИТАЛОМ И ПРИБЫЛЬЮ СЕРВИСНЫХ ОРГАНИЗАЦИЙ

This article proposes a methodology for assessing the relationship between the turnover of working capital and the profit of organizations, as well as a method for increasing the efficiency of its use. The proposed methodology will help stabilize the cash flow of the business, provide high liquidity, manage working capital well, help companies be proactive in spending, in short and medium term financial planning. As a result of the study, we can conclude that there is a deep relationship between turnover and financial results: the higher the rate of capital movement, the greater the financial result the organization will receive.

The Determinants of Cash Conversion Cycle and Firm Performance: An Empirical Research for Borsa Istanbul Turkey

The ultimate goal of firms is to make a profit and to achieve this ultimate goal, firms execute various functions. Finance is one of the basic functions of firms and firms need financial instruments such as cash reserve and outsource to carry out their activities. Cash management within the finance function is an important issue that needs to be carefully considered, especially in the short and medium term financial planning stage. Presently, the high competition among firms forces companies to manage their cash in the most effective way. The conceptual studies on the subject are quite old and date back to Keynes. According to Keynes, firms demand cash for transaction, prudence and speculation. As a result of analysis, it has been determined that cash conversion cycle has an impact on return on assets (ROA) and return on equity (ROE). There is a statistically significant and negative relationship between cash conversion cycle (CCC) return on assets (ROA) and return on equity (ROE). In addition, there is a positive relationship between return on assets (ROA) and firm size while there is a negative and statistically significant relationship between debt ratio (DEBT) and return on assets (ROA).

Budget Safety as the Level of Budgetary Potential of the State

Budget safety, as a component of financial security, depends on the results of the implementation of an effective state financial and economic policy as the basis for the achievement of national interests. Effective using of the budget, namely, effective management of the state's cash flows, should ensure the regulation of economic and social processes in the interests of society, and create stable conditions for economic development of the country. Budget policy is an integral part of the state's financial policy and as one of the driving forces of Ukraine's development implies further stabilization of public finances, ensuring economic growth and raising standards of living for the maintenance of balanced development of the state. In today's conditions of development, the state faces the task of ensuring the balance and stability of the state budget against adverse external influences, establishing effective management of the country's cash flows, establishing effective budget and monetary policy, as well as long-term fiscal sustainability and stability. In recent years, to overcome this task, control over the activities of financial institutions has intensified, as a result they guided by the principles of responsible management of public finances, aimed at introducing the principles of medium-term financial planning, the availability of a system of forecasting budget parameters, ensuring the feasibility of economic forecasts, and creating and maintaining necessary financial reserves.

Budget planning in Ukraine: modern state and prospects for improvement

The research is devoted to the study of the modern state of the implementation of the planning function. It is advisable to introduce the long-term and medium-term financial planning into the Ukrainian practice, which would cover all еру components of public finances including the state budget. The necessity of forming the theoretical, organizational, and normative-legal bases that will regulate the essence and order of planning for the future is substantiated. It is proposed to base strategic financial planning at the macro level on the assessment of resources and opportunities for their use, which will help to balance the public interest and financial potential of the country. It is determined that long-term budget plans should include the general indicators of the budget resource, needed for implementation tasks that is provided by the development strategy or program of the ruling party. The article analyzes the legislative norms, which regulate the implementation of the medium-term planning in Ukraine, and proves their declarativeness. The author expresses the view that the implementation of medium-term gliding financial and budgetary planning will promote a consistent state policy and increase the responsibility of managers to society. The paper formulates the proposals on the procedure for drawing up the perspective budget plans, also through the use of the information approach and the proposed indicators of social developmen. The author proves the need to establish the moratorium on making changes to the short-term budget plans that will allow the public to receive reliable information on their execution.

IMPACT OF EUROPEAN INTEGRATION PROCESSES ON THE NECESSITY OF LONG-TERM BUDGET PLANNING INTRODUCTION IN UKRAINE

The Association Agreement between Ukraine and the European Union was ratified in September 2014. Ukraine has undertaken to implement and enforce EU standards, including in the financial sphere, which are regulated by international law. The purpose of the study is to determine the impact of European integration processes on the necessity of the long-term budget forecasting process introduction into the budget process of Ukraine and the revelation of special budgetary rules regulated this process in the EU. The methodology. The list of requirements (budget procedures and rules) for their introduction by law into the budget process of Ukraine was determined based on the generalization and systematization of normative legal acts that regulate the medium-term financial planning as the EU standard. The results showed that the long-term budget forecast developing procedure in the budget process will allow the government to timely identify the unfavourable trend in the state’s fiscal policy and introduce preventive measures, determine the full scale of economy’s and business’ reaction to the reforms’ introduction and new laws adoption, estimate fiscal space for fiscal policy implementation for coming years, take into consideration the budget forecast’s indicators during the annual adoption of budget decisions. The study defines the difference between the budget forecast and the planned budget: the forecast is for five years and more, the plan is for one year only; forecast indicators are not mandatory for implementation, they are only guidelines, and planned indicators are mandatory for implementation; the budget forecast is approved by the order of the Cabinet of Ministers of Ukraine and annually specified, the planned budget (for the current budget year) is approved by the Verkhovna Rada of Ukraine by adopting the relevant law, amendments are an exception and also approved by law. The practical implementation. Governments of countries that systematically undertake long-term budget forecasts have developed effective measures to ensure the state sustainable development through the pension systems’ restructuring or the creation of special funds for future needs. Publicity and availability of information about long-term sustainable development trends is a prerequisite for obtaining public support and confidence from the government’s efforts to reduce the long-term budgetary tension.

Особенности среднесрочного финансового планирования и прогнозирования наукоемких предприятий

Особенности среднесрочного финансового планирования и прогнозирования наукоемких предприятий

NAKİT DÖNGÜSÜNÜN FİRMA KÂRLILIĞINA ETKİSİNİN SEKTÖREL ANALİZİ

Isletme sermayesi yonetimi finans yoneticisinin onemli gorev alanlarindan birisidir ve zamaninin onemli bir kismini almaktadir. Ozellikle kisa ve orta vadeli finansal planlama asamasinda firmanin isletme sermayesi yapisi, icinde bulundugu sektorun ozellikleri de dikkate alinarak analiz edilmelidir. Bu calismada panel veri analizi kullanilarak, isletme sermayesi analizi icinde degerlendirilen isletmenin nakit dongusu ve bu dongunun isletmenin karliligina etkisinin olup olmadigi, varsa yonu ve derecesi arastirilmistir. Calismada, IMKB’de islem goren ve imalat sektorunde faaliyet gosteren 52 isletmenin 2000-2010 donemine ait veri seti kullanilmistir. Analiz sonucunda, imalat sanayi genelinde beklenenin aksine isletmelerin nakit donusum suresini (NDS) artirarak karliliklarini artirabilecekleri ortaya cikmistir. Kimya ve tas alt sektorlerinde ise karlilik ile NDS arasinda ters yonlu bir iliski bulunmustur.

Budgeting and governing for deficit reduction in the UK public sector: act 2 ‘the annual budget’

This paper explains how the UK government sets its annual budgets within the context of multi-year spending reviews, yet was able to announce policies in the 2011 annual budget that sat outside the 2010 spending review framework. As such, it illustrates that the budget process remains an enabler of changing circumstances and is not constrained by medium-term financial planning. This finding has implications for other jurisdictions that may be considering how best to balance annual flexibility with multi-year stability in public spending.

Medium-term financial planning at regional and municipal levels: Problems and instruments

The paper analyses problems in medium-term financial planning, considers the practice and possibilities of the use by executive authorities of Russian Federation constituent members and municipalities of budget planning entities’ reports on the results and main directions of their activities as a medium-term financial planning instrument. Problems of local importance and the fiscal provision of regional and rural municipalities, budgetary and tax policy trends, and the possibilities of financing and fulfilling expenditure obligations by local administrations are correlated.

Planning or Propaganda? An Evaluation of Germany's Medium-term Budgetary Planning

In Germany, the medium-term financial planning (Mifrifi) was introduced at the end of the sixties. This study scrutinizes the experience of the German Bund with more than thirty years of financial planning. In the first step, the paper explores the potential normative and political-economic driving forces of fiscal projections. The following empirical part evaluates Mifrifi's forecasting quality with regard to expenditures, taxes and deficits. A model is tested relating the forecasted budgetary trends to economic, institutional and political-economic factors. The financial planning turns out to be ineffective in making budgetary policy more predictable. The projections are heavily biased towards over-optimism. The Maastricht Treaty appears to have transformed Germany's budgetary planning not into the direction of more credible and binding projections, but rather towards the production of less realistic and unduly favourable outlooks. The policy conclusion hints towards an independent institution taking over the responsibility for fiscal forecasts. Such an institution would not face the government's inherent problem being unable to promise in a credible way the production of unbiased forecasts.

Planning or Propaganda? An Evaluation of Germany's Medium-term Budgetary Planning

In Germany, the medium-term financial planning (Mifrifi) was introduced at the end of the sixties. This study scrutinizes the experience of the German Bund with more than thirty years of financial planning. In the first step, the paper explores the potential normative and political-economic driving forces of fiscal projections. The following empirical part evaluates Mifrifi's forecasting quality with regard to expenditures, taxes and deficits. A model is tested relating the forecasted budgetary trends to economic, institutional and political-economic factors. The financial planning turns out to be ineffective in making budgetary policy more predictable. The projections are heavily biased towards over-optimism. The Maastricht Treaty appears to have transformed Germany's budgetary planning not into the direction of more credible and binding projections, but rather towards the production of less realistic and unduly favourable outlooks. The policy conclusion hints towards an independent institution taking over the responsibility for fiscal forecasts. Such an institution would not face the government's inherent problem being unable to promise in a credible way the production of unbiased forecasts.

Medium-term financial planning: An answer to community budget crises?

In June 1988 the Council, the European Parliament and the Commission concluded an “Interinstitutional Agreement on Budgetary Discipline and Improvement of the Budgetary Procedure”. A key element of the agreement is a commitment to medium-term financial planning for the Community for the period up to 1992. Can this agreement put the Community budgetary procedure on a new footing and ensure that the decisions taken at the Brussels summit on agricultural reform and budgetary discipline can be implemented?

Multicriteria Programming for Financial Planning

Multiobjective programming methods would appear to offer a very attractive alternative to conventional single objective LP models for medium term financial planning. However, prior to implementation, many technical and procedural problems need to be solved. This paper presents in case study form some of these problems and discusses possible approaches to their solution.