Significant financial ratios to assess the company's financial policy effectiveness

2021 ◽  
Vol 14 (3) ◽  
pp. 347-360
Author(s):  
Kirill E. PIVNYK
Keyword(s):  
Policy Implementation ◽  
Financial Market ◽  
Systems Approach ◽  
Financial Ratios ◽  
Financial Policy ◽  
Financial Policies ◽  
Market Participants ◽  
Investment Option ◽  
Information Basis ◽  
Base Group

Subject. This article fixates on the financial ratios used to assess the financial policies of companies. Objectives. The article aims to form a base group of financial ratios enabling to measure the effectiveness of company's financial policy implementation. Methods. For the study, I used a correlation analysis, critical review of subject-matter literature, and the systems approach. Results. The article presents a set of financial ratios that can be used to assess the effectiveness of financial policy implemented by companies. Conclusions and Relevance. Taken in totality, the described financial ratios can serve as an objective information basis to assess the effectiveness of companies' financial policies. The findings can be useful for company management to evaluate the financial policy, for investors to choose the best investment option, and for financial market participants.

Creating a group of financial ratios to evaluate financial policy of companies

2020 ◽  
Vol 26 (5) ◽  
pp. 1039-1053 ◽  
Author(s):  
K.E. Pivnyk
Keyword(s):  
Policy Implementation ◽  
Financial Market ◽  
Systems Approach ◽  
Financial Ratios ◽  
Financial Policy ◽  
Financial Policies ◽  
Financial Status ◽  
Market Participants ◽  
Investment Option ◽  
Information Basis

Subject. The article considers the analysis of financial ratios as one of important methods to evaluate the financial status of companies. The analysis results serve as a basis for company financial policy assessment. Objectives. The focus is on creating a basic group of financial ratios enabling to measure the effectiveness of financial policy implementation. Methods. The study draws on the correlation analysis, critical review of sources, and the systems approach. Results. I developed a set of financial ratios, which can be used to evaluate the effectiveness of financial policy implemented by companies. Conclusions. Certain financial ratios can serve as an objective information basis for evaluating the effectiveness of financial policies of companies. The findings can be useful for company management to evaluate the financial policy, for investors to choose the best investment option, as well as for financial market participants.

Evaluating the effectiveness of financial policy of companies using the generalized Harrington's function

2020 ◽  
Vol 26 (2) ◽  
pp. 270-284
Author(s):  
V.A. Slepov ◽  
K.E. Pivnyk
Keyword(s):  
Electric Power ◽  
Practical Problem ◽  
Comprehensive Approach ◽  
Practical Significance ◽  
Financial Policy ◽  
Due Diligence ◽  
Financial Policies ◽  
Market Participants ◽  
Investment Option ◽  
Effective Development

Subject. The article analyzes the essence of financial policy as a factor of effective development of companies. Evaluating the effectiveness of companies' financial policies is a significant scientific and practical problem. It determines the choice of main criteria on the basis of which the effectiveness of financial policy is calculated. Objectives. The aim is to develop a comprehensive methodology for evaluating the effectiveness of companies' financial policies in modern conditions, to define criteria for its evaluation. Methods. The Due Diligence approach is a basis for solving the research tasks, i.e. comparing the existing standards and methods for evaluating companies' financial policy and simplifying its implementation through the proposed method of multivariate coefficient analysis. Results The article offers a comprehensive approach to evaluating the effectiveness of financial policy on the electric power companies case. The practical significance of obtained results is in their use to increase the investment appeal of companies that are considered as potential investment objects. Conclusions. We offer a method for evaluating the financial policy of companies based on a multivariate, customizable system of financial coefficients. We calculated an effectiveness indicator of the financial policy of companies, which can be recommended for practical use. The obtained results can be used by company management to make management decisions, by investors to choose the best investment option, by market participants to rank companies by efficiency and to determine industry benchmarks.

Evaluating the effectiveness of companies' financial policies using logistic regression: A case study of electric power companies

2021 ◽  
Vol 14 (2) ◽  
pp. 208-217
Author(s):  
Kirill E. PIVNYK
Keyword(s):  
Logistic Regression ◽  
Electric Power ◽  
Logit Model ◽  
Systems Approach ◽  
Financial Analysis ◽  
Comprehensive Analysis ◽  
Financial Policy ◽  
Financial Policies ◽  
The Subject

Subject. This article assesses the effectiveness of companies' financial policies using logistic regression. It considers the financial policy assessment as a comprehensive analysis that helps evaluate the company's financial performance and make a conclusion based on a single criterion. Objectives. The article aims to develop a single (universal) criterion helping conclude of the company's financial policy effectiveness. Methods. For the study, I used a comprehensive approach based on the developed logit model, financial analysis, systems approach, and an overview of literature sources on the subject. Results. The article presents a developed methodology for evaluating the effectiveness of financial policy determined by the effectiveness of financial policy (EFP) equation for Russian electric power companies. Relevance. The results obtained can be used in practice to evaluate the financial policy by company external and internal users.

Development of a methodology for evaluating the effectiveness of financial policies of companies

2021 ◽  
Vol 14 (4) ◽  
pp. 364-375
Author(s):  
Vladimir A. SLEPOV ◽  
Kirill E. PIVNYK
Keyword(s):  
Practical Problem ◽  
Practical Significance ◽  
Financial Policy ◽  
Due Diligence ◽  
Practical Application ◽  
Financial Policies ◽  
Market Participants ◽  
Effective Development ◽  
Current Standards

Subject. This article presents an analysis of the essence of financial policy as a factor of effective development of companies. Evaluation of the effectiveness of the implemented financial policy of companies is a significant scientific and practical problem. It determines the choice of the main criteria used to calculate the financial policy effectiveness. Objectives. The article aims to develop a comprehensive methodology for assessing the effectiveness of financial policy of companies in modern conditions, and define criteria for its evaluation. Methods. The Due Diligence approach is the basis for solving the research tasks: comparing the current standards and methods for assessing the financial policy of companies and simplifying its implementation through the proposed method of multivariate coefficient analysis. Results. The article offers a comprehensive approach to assessing the effectiveness of financial policy, considering electric power companies as a case study. The practical significance of the results obtained lies in the use to increase the investment attractiveness of companies that are considered as potential investment objects. Conclusions. The research proposes a methodology for assessing the financial policy of companies based on a multivariate, customizable system of financial coefficients. An indicator of the effectiveness of financial policy of companies was calculated. It can be recommended for practical application. The obtained results of evaluating the effectiveness of financial policy can be used by the companies’ management to make management decisions, investors to choose the best investment option, market participants to rank companies by efficiency, and determine industry benchmarks.

The impact of international diversification on the efficiency of investment portfolio within the Russian financial market

2021 ◽  
Vol 27 (5) ◽  
pp. 1178-1200
Author(s):  
Sergei A. TIMOFEEV ◽  
Yana N. NAKHIMOVA
Keyword(s):  
Financial Market ◽  
Systems Approach ◽  
Investment Strategy ◽  
Graphical Analysis ◽  
Investment Strategies ◽  
Market Participants ◽  
Bank Deposits ◽  
Market Formation ◽  
Retail Investor ◽  
The Impact

Subject. We address the diversified index investing strategy. Objectives. The focus is on the development of an attractive investment strategy within the risk/return coordinate system, to improve the return of a retail investor in the Russian financial market. Methods. We apply methods of analysis, synthesis, logical research based on the systems approach, statistical methods of data analysis (analysis of time series, correlation analysis), methods of optimal solutions, and the graphical analysis. Results. The paper shows the need to use a diversified strategy in the financial market. We developed an investment strategy providing better investment results at a lesser risk. The offered strategy may be integrated into financial instruments of various financial participants of the Russian financial market. The results of our investment strategy are compared with the results of brokers' strategies and the best assets for investment, i.e. gold, currency, real estate, bank deposits, and inflation. The study analyzes the basic principles of the formation of a diversification index-based strategy, formulates the main requirements for the best diversification within the Russian securities market, and presents a diversified index strategy, which is suitable for all classes of investors. Conclusions. In conditions of the modern Russian financial market formation, the results of investment strategies that market participants can offer to retail investors become a crucial factor, since they determine further directions of investment inflow, expand credit opportunities for companies, and contribute to the formation of an effective, progressive and deep financial market in the country.

The Capital Market Authority Effectiveness in the Regulation of Financial Markets perspectives from the financial sector actors

2012 ◽  
Vol 02 (11) ◽  
pp. 15-24
Author(s):  
Charles Kombo Okioga
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Capital Markets ◽  
Capital Market ◽  
Financial Regulation ◽  
International Standards ◽  
Market Regulation ◽  
Financial Market Regulation ◽  
Market Participants ◽  
New Business

Capital Market Authority in Kenya is in a development phase in order to be effective in the regulation of the financial markets. The market participants and the regulators are increasingly adopting international standards in order to make the capital markets in sync with those of developed markets. New products are being introduced and new business lines are being established. The Capital Markets Authority (Regulator) is constantly reviewing existing regulations and recommending changes to regulate the market properly. Business lines and activities are being harmonized by market participants to provide a one stop solution in order to meet the financial and securities services needs of the investors. The convergence of business lines and activities of market intermediaries gives rise to the diversity of a firm’s business operations to meet multiplicity of regulations that its activities are subject to. The methodology used in this study was designed to examine the relationship between capital markets Authority effective regulation and the performance of the financial markets. The study used correlation design, the study population consisted of 30 employees in financial institutions regulated by Capital Markets Authority and 80 investors. The study found out that effective financial market regulation has a significant relationship with the financial market performance indicated by (r=0.571, p<0.01) and (r=0.716, p≤0.01, the study recommended a further research on the factors that hinder effective financial regulation by the Capital Markets Authority.

scholarly journals FINANCIAL CONTROL FOR THE FUNCTIONING OF THE SYSTEM AND MECHANISM OF THE STATE FINANCIAL POLICY

2020 ◽  
pp. 38-41
Author(s):  
Natalia Botvina
Keyword(s):  
Control System ◽  
Internal Control ◽  
Agricultural Sector ◽  
Systems Approach ◽  
Financial Control ◽  
Financial Policy ◽  
Financial Flows ◽  
Financial Decisions ◽  
Control Procedures

The functioning of the financial control system should be aimed at achieving the goals set by the financial policy. The role of the financial control system is to monitor the efficiency of financial resources, the optimality of financial flows, the creation of an information base for financial decisions to address deficiencies or regulate the objectives of financial policy. Based on the application of the systems approach in the study, it should also be noted that the system of financial control does not operate in isolation, but is a subsystem of a more complex system. It is also possible that it should be distinguished between smaller subsystems. The purpose of the article is to reveal the main problems of financial control over the functioning of the system and the mechanism of financial policy. The article substantiates the functions of financial control, which should contribute to the formation and strengthening of entrepreneurship, further developed the principles of the financial control system, by substantiating the principle of limitation of the application of control procedures. Determining the place of the system of financial control in the implementation of financial policy to ensure sustainable development of the agricultural sector, we concluded that the system of internal control is a subsystem of financial policy.

scholarly journals FORMATION OF THE REGULATION OF THE NATIONAL ECONOMY’S FINANCIAL SECTOR

2021 ◽  
Author(s):  
Roman Sharavara
Keyword(s):  
Financial Market ◽  
Financial Services ◽  
Technological Development ◽  
Financial Sector ◽  
Cash Flows ◽  
Financial Supervision ◽  
National Regulation ◽  
Market Participants ◽  
Modern Economic ◽  
National Economies

An analysis of the applied forms of cross-sectoral approach to the organization of supervision and regulation of the financial sector of different types of national economies, including the Ukrainian one, is presented. Particular attention is paid to the role of the central bank in improving the coordination of regulators of the national financial market. It is determined that effective financial supervision, in the modern sense, should combine the performance of three key functions: macroprudential supervision, microprudential supervision and business integrity supervision. With technological development, the integration of financial sector segments and the emergence of complex financial products, the segmental core of regulation has been lost. One of the main current problems is to identify the risks posed by integrated financial instruments, financial corporations take them on, and also track the ways in which they spread. Institutional and sectoral models of financial supervision are analyzed. A common feature of institutional and functional approaches is the growing need to improve the coordination of national financial regulators and comprehensively increase its efficiency. The expediency of creating a macro-regulator in the conditions of modern economic systems is substantiated. The possibility of consolidated supervision is revealed, which eliminates interdepartmental conflict of interests, better control of transactions and cash flows. Peculiarities of macroregulators functioning in Great Britain, Australia, and the Netherlands have been studied. Developing a unified approach can increase the speed of response to identified threats and its adequacy, as well as reduce regulatory arbitrage by supervised organizations. The mega-regulator is able to provide due attention to the control of the integrity of business by financial market participants, protection of interests and awareness of market participants and consumers of financial services in comparison with the functional and institutional models. The priority system of national regulation of the financial sector for the Ukrainian economy is determined.

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