Modern Economics (Dec 2018)
Optimal Balance Sheet Structure as a Prerequisite to the Financial Stability of the Enterprise
Abstract
Introduction. It is necessary to evaluate correctly and completely the financial condition of the enterprise for a stable and efficient enterprise development in the context of crisis situation and constant competition intensification, because this analysis provides information on how and in what directions the enterprise should carry out its activity. Today’s realities are so, that the market dictates grim conditions, and enterprises are forced to change quickly their management policy to stay on the advanced position of the market. This, of course, requires the improvement of property capital structure through the formation of its optimal structure, which is necessarily to gain certain goals: maximizing profits, minimizing risks, maximizing profitability, accelerating the turnover of equity capital, etc. Purpose. The purpose of the article is to create optimal balance sheet structure of industrial enterprise of PAO “ArcelorMittal Kryviy Rih” as the prerequisite to determining the level of its financial stability, as well as outline measures for practical implementation of the goal. Results. The article examines the essence of the definition “balance”, that is considered on the basis of research works which are done by domestic and foreign scientists, the general characteristic of construction of an asset and a liability of the enterprise balance is presented. It is highlighted that the problem of formation and improvement of the property and capital structure is an actual problem of the present for economic entities. For example of PAO “ArcelorMittal Kryviy Rih” during 2015-2017 dependence between the change in the data of the balance and the indicators of financial stability is revealed. The total amount and amount of structural elements of the PAO “ArcelorMittal Kryviy Rih” balance are analyzed and general tendencies of dynamics are determined: permanent growth of the sheet total balance; reduces the proportion of non-ent assets and a parallel increases the proportion of floating assets in an aggregate amount their total amount, which indicates the process of mobile assets construction formation, growth of sales volumes and consenescence of basic capital funds; the advantage of current engagements over long-term, which leads to an increase of unbalanced financial indicators risk. An analysis of the effect of the balance structure transformation (according to the method of A. V. Grachev) on the financial stability ratios of PAO “ArcelorMittal Krivoy Rog” was carried out. Optimal balance sheet structure of this enterprise is formed due to the correction of the elements of “working capital”. Proposals for search directions of practical implementation in the life methodology are presented. Conclusions. So, in general we say that the proposed model of V. A. Grachev is effective and provides an opportunity to improve the financial condition and financial stability indicators of the enterprise, which is clearly reflected for example PAO “ArcelorMittal Kryviy Rih”. The recommended methodology has a number of advantages, including simplicity and clarity of calculation, complexity, versatility and the ability to be easily implemented. Thus, the hypothesis is confirmed that the development of an effective model of structural elements optimization of the balance provides a possibility to improve significantly the financial sustainability of the enterprise.
