Bìznes Inform (Dec 2019)
The Financial Security of MTE in the Context of the Freighting Market Development in Ukraine
Abstract
It would be feasible to include in the problems of the transport industry the low level of capitalization of motor transport enterprises due to the lack of both equity capital and the capital borrowed from the credit market; insufficiency of liquid assets, including money and their equivalents; a low profitability level of enterprises. The totality of problems of the formation and use of the financial resources of motor transport enterprises negatively influences the financial security of enterprises, which renders impossible to constantly develop the freight market, in a compliance with requirements of economic agents and environmental requirements. The article is aimed at analyzing the current status of financial safety of motor transport enterprises on the basis of a well-grounded authors’ methodology. The research is carried out using the generalization, table and graphic methods, as well as regression analysis and expert method in defining the importance of indicators of the index of financial security afety of motor transport enterprises. The article substantiates the methodical bases for evaluating the financial security of enterprises on the basis of the Financial Security Index, which in turn is based on 11 relative indicators: coverage ratio; absolute liquidity ratio; money flow liquidity ratio; financial independence ratio; long-term financial independence ratio; agility ratio of the own equity capital; assets profitability; profitability of sales; profit reinvestment ratio; ratio of receivables and payables; ratio of coverage of financial expenditure by means of operating profit. A sample of 11 motor transport enterprises that provide freight services has been formed. Identification of the financial security ststus of motor transport enterprises indicates a largely unstable financial security with a tendency to improve in 2014-2018. From the studied sample of motor transport enterprises, one enterprise has a not acceptable and an absolute status of financial security, one enterprise has an acceptable status, two enterprises are in absolute status, two are in a critical status. The carried out analysis indicates the presence of major and general threats to financial security: low level of profitability, threats of losses from financial and economic activities, insufficient funds to cover current liabilities, unbalanced cash flows in settlements with debtors and creditors. The practical value of the article is that the main provisions of the research can be used by motor transport enterprises and other economic entities during financial and economic activities in order to minimize the financial and reputation risks.
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