scholarly journals Tools for modeling the capital dynamics of financial organizations

2021 ◽  
Vol 16 (95) ◽  
pp. 48-65
Author(s):  
Olga I. Yarkova ◽  
◽  
Olga S. Chudinova ◽  
Keyword(s):  
Financial Stability ◽  
Financial Institution ◽  
Software Tool ◽  
Simulation Models ◽  
Cash Flows ◽  
Descriptive Statistics ◽  
Financial Resources ◽  
Financial Risks ◽  
Risky Assets ◽  
State Pension

The issues of ensuring the financial stability of financial institutions, which is understood as the sufficiency of assets to meet obligations, are of paramount importance both for clients and the management of a financial institution, and for the country's economy as a whole. Most often, the inability to fulfill obligations is associated with a lack of funds, therefore it is important to monitor the dynamics of the monetary capital of organizations, to assess their financial risks, including in the conditions of investment. Purpose of the study: development of tools for assessing the risks of financial organizations. Statement of the problem: to develop a simulation model that allows one to study the dynamics of the capital of an organization, whose financial resources are formed due to heterogeneous flows of inflow and outflow of funds and investment, including in risky assets, in an inflationary environment. The paper proposes a modeling algorithm that allows to collect a descriptive statistics on the distribution of financial resources, to estimate the dynamics of the money capital of financial organizations and investigate the "sufficiency" of the company's funds to meet financial obligations basing on data of cash flows for various types of contracts and returns (growth rates) of assets, presented in the form of statistical data and/or characteristics of time series models. The description of the software tool is given. A computational experiment was based on data of the inflow and outflow of funds of a non-state pension Fund under the program of non-state pension provision. Descriptive statistics are given for the distributions of the size of organization's funds constructed as a result of modeling. The probability of organization’s downfall in dynamics and the risk of entering the zone of financial insecurity are assessed. The proposed tools have scientific novelty in the field of designing simulation models and decision support systems for analyzing the activities of financial organizations and determining effective directions for their development.

scholarly journals BUSINESS REPUTATION AND ITS IMPACT ON FINANCIAL STABILITY OF BANKS

2021 ◽  
Vol 1 (54) ◽  
Author(s):  
Victoria V. Kovalenko ◽  
Keyword(s):  
Financial Stability ◽  
Large Scale ◽  
Social Role ◽  
Financial Institution ◽  
Financial Instability ◽  
Financial Risks ◽  
Economic Relations ◽  
Stage Of Development ◽  
Banking Business ◽  
The Impact

In the article, the author considers the main aspects of the impact of goodwill on the financial stability of banks. It is substantiated that among the numerous threats that lead to financially unstable development of the banking business, a special place should be given to the support of banks’ business reputation. The main reasons are the phenomena of financial instability caused not only by the cyclical development of the economy, but also the ability to take into account a certain state in which the financial system is able to: effectively allocate resources, assess and manage financial risks, absorb shocks. It is proved that the relationship between business reputation and financial stability is determined by the characteristics of the conceptual apparatus; the system of risks to which they are exposed in the course of their activities; methodical approaches to assessing their level. The author concludes that the key challenges for the banking business in the context of digital transformation should be considered from the standpoint of customer interests, from the standpoint of investors (owners) of the banking business and from the standpoint of the regulator. In today’s realities, when the systemic banking crisis has imposed on a large-scale economic, the decisive factor for success and continued activity in the market is the quality of business reputation. The methods of quantitative assessment of the bank’s business reputation include balance-normative, methods of additional and excess profits, methods of royalties and residual value, the method of rating and comprehensive assessment. It is proved that the level of business reputation is related to the life cycle of banks, which includes the stages of formation, growth, maturity and decline. Measures to ensure business reputation depending on the stage of development of the bank are considered. Both the business reputation and financial stability are affected by the established image of the bank. The article states that a positive image is able to maintain the bank in times of financial instability. It is determined that depending on the group of users (non-financial corporations, households, government agencies or social organizations) the image of the bank should be different and meet all requirements.It is determined that a modern bank is not only an institution of the financial market, but also a financial institution for which social role and reputation in social and economic relations become the primary criteria for ensuring their competitive position.

scholarly journals THE ESSENCE AND DIAGNOSTICS OF THE ENTERPRISE FINANCIAL STATUS

2021 ◽  
Author(s):  
Iurii Tararuiev
Keyword(s):  
Capital Structure ◽  
Cash Flow ◽  
Financial Stability ◽  
Financial Resources ◽  
Practical Implementation ◽  
Financial Risks ◽  
Financial Status ◽  
Managerial Decisions ◽  
The Matrix ◽  
Definition Of

The paper is dedicated to the problems of identification and diagnostics of the enterprise financial status. The main attention is paid to the methods of assessing the current financial status of the enterprise. The author’s definition of financial status of the enterprise is performed in the paper, as a result of the analysis of current variants of that concept determinations. The financial status of the enterprise is determined in the paper as a multiple enterprise characteristic which includes current incoming, distribution and investment financial resources. The diagnosis of financial status is defined in the article as an evaluation of incoming, distribution and investment of financial resources of the enterprise with indicators that comprehensively characterize its current activities. The factors of capital structure, liquidity and cash flow effectiveness is proposed in the paper as indicators of the enterprise financial status. which can be used to provide the diagnostics. The integrated indicators of enterprise financial status and its current effectiveness (which based on enterprise cash flow factors) is presented in the paper in order to summarize the results of financial status diagnostics. This approach illustrates the important choice of enterprise between such alternatives as: a) accelerated development and financial risks; b) financial stability and limited capital growth. The final result of the paper is the matrix called «financial state-efficiency of activity» which allows to get interpretation of the concluding diagnostics procedures. Key features of the matrix application are similar to those used to substantiate managerial decisions in the strategic management. The practical implementation of this matrix allows the enterprise to ensure equilibrium between development (by increasing current liabilities) and improvement of enterprise financial positions (by increasing the value of liquid assets and optimization of capital structure). The results of the paper can be used to improve the financial status of enterprises, regardless of its sectoral specificity.

scholarly journals DIRECTIONS OF USING THE INSURER'S FINANCIAL RESOURCES THROUGH THE PRISM OF THE CONTROLLING SYSTEM

2021 ◽  
pp. 148-159
Author(s):  
Svitlana Korol ◽  
Iryna Ivashkiv
Keyword(s):  
Financial Stability ◽  
Net Present Value ◽  
Relevant Information ◽  
Cash Flows ◽  
Insurance Market ◽  
Insurance Companies ◽  
Financial Resources ◽  
Insurance Company ◽  
Advantages And Disadvantages ◽  
Controlling System

Introduction. Given the constant challenges of today, the key to survival and the basis of stable development of insurance companies is the effective management of financial resources, the skillful use of which allows a stable competitive position in the insurance market and determines the vectors of their development. It is the financial resources of insurers that are one of the most important resources that are designed to support their activities. Since the insurance, financial and investment activities of insurers are closely linked, the use of their financial resources is aimed not only at making insurance payments, but also at investing. In fact, skillful management of financial resources is the basis for financial stability and competitiveness in the insurance market, which stimulates the introduction of modern methods and approaches in the field of management. Therefore, just controlling is almost the only possible tool for building optimized management systems in the activities of insurers. At all levels of government, it allows you to provide timely and relevant information in order to make optimal decisions. The study of the process of building an insurance controlling system within the operation of the insurance company in order to optimize the use of financial resources will determine the current controlling tools and the effectiveness of the controlling system on the example of the insurance company. The importance of financial resources in the financial and economic activities of insurance companies and the possibility of their optimization in the controlling system in today's conditions becomes especially relevant, which requires further research. Purpose. Initiate the process of building an insurance controlling system within the functioning of the insurance company, which will allow optimizing the use of its financial resources. Method (methodology). In the process of research such methods were used as logical, which allowed to analyze scientific works in the field of financial resources of the insurer; analytical, which was used to analyze and evaluate the costs of implementing a controlling system, as well as the effectiveness of its application; graphic, which made it possible to interpret the process of building an insurance controlling system within the functioning of the insurance company in a visual form. Results. The importance of financial resources in the activities of insurance companies is determined. The role of controlling for the purpose of optimized utilization of financial resources of insurers is revealed. The advantages and disadvantages of creating a controlling service within the activities of the insurance company are highlighted, which allowed us to see that the creation of such a system has more advantages than disadvantages. A system of topical controlling tools for insurers is recommended. A visual process of building an insurance controlling system within the operation of an insurance company is proposed. The characteristics of the construction of the controlling department on the example of PJSC IC "Euroins Ukraine" are given. The efficiency of introduction of the controlling system at PJSC IC "Euroins Ukraine" with the use of the indicator of net present value of cash flows is determined. As a result of calculations it is determined that the introduction of a controlling system in the insurance company is appropriate. It is established that the practical aspects of the study of financial resources in the system of controlling insurance companies need further study in the direction of optimizing their use.

Effects of Financial Innovations on Profitability for Deposit Taking Microfinancing Institutions in Kenya

2018 ◽  
Vol 9 (6) ◽  
pp. 529-536
Author(s):  
Martin Khoya Odipo ◽  
Keyword(s):  
Financial Institutions ◽  
Positive Relationship ◽  
Financial Institution ◽  
Secondary Data ◽  
Financial Statements ◽  
Descriptive Statistics ◽  
Primary Data ◽  
Microfinance Institutions ◽  
Financial Innovations ◽  
Strong Positive Relationship

Recent studies have documented that innovations improve profitability of firms. This article documents that deposit taking micro financial institutions that have adopted financial innovations have increased their profitability. The study covered five years between 2009-2013. Both primary and secondary data were used in the study. Primary data was obtained through administration of drop and pick questionnaires to selected employees of the institutions. Secondary data was obtained from financial statements and management reports of these deposit taking microfinance institutions. Data was analyzed using descriptive statistics, return on asset and multi-liner regression model to determine the effect of each financial innovation applied on profitability on the micro-financial institution. The results showed that most deposit taking microfinance institutions adopted these financial innovations in their current operations. There was strong positive relationship between individual innovations and profitability. In line with profitability ROA also showed improvement each year after the adoption of these financial innovations.

Financial Risks of the Bank: Assessment and Mechanism of Neutralization

2020 ◽  
Vol 22 (1) ◽  
pp. 6-12
Author(s):  
Nelia Volkova ◽  
◽  
Alina Mukhina ◽  
Keyword(s):  
Risk Assessment ◽  
Financial Stability ◽  
Financial Risk ◽  
Stable Operation ◽  
Financial Risks ◽  
Negative Consequences ◽  
Conceptual Approach ◽  
Relevant Today ◽  
Banking Institution ◽  
The Impact

Abstract. Introduction. The issue of financial risk management of commercial banks is quite relevant today, because the activity of banks is the most risky of all. The presence of risks in banking can lead to unexpected losses, namely the loss of own resources. That’s why for the stable operation of the bank without loss the priority is to assess the financial risks, which is the basis for their further neutralization. Purpose. The purpose of the article is to develop conceptual provisions for assessment financial risks and justifying the need to neutralize them. Results. The article analyzes the impact of risks on the financial stability of a banking institution. The main methods of bank risk assessment are considered. All these include the statistical method, the analytical method, the expert method, the analogue method and the combined method. The necessity of neutralization of financial risks in order to avoid negative consequences is substantiated. Also the methods of bank risks neutralization are considered. It should be noted that these methods of neutralization can not only be used, but also supplement the list with new methods must be done, which in the future will protect the bank from the influence of undesirable factors. A conceptual approach to the assessment and neutralization of financial risks is proposed. This conceptual approach aims to ensure effective assessment of the level of risk with their subsequent neutralization Conclusions. Use of a conceptual approach will allow an effective risk assessment and decision-making to avoid or accept risk. Thanks to using this approach, the banking institution will be able to react swiftly to the presence of financial risks and to prevent the occurrence of negative consequences, which may lead to a violation of the financial stability of the bank.

ANALYTICAL TOOLS AND MANAGEMENT METHOD OF CASH FLOWS AT THE ENTERPRISE

2017 ◽  
pp. 93-105
Author(s):  
Olha NIPIALIDI
Keyword(s):  
Financial Stability ◽  
Cash Flows ◽  
Sustainable Growth ◽  
Financial Health ◽  
Traditional Assessment ◽  
Financial Condition ◽  
Efficient Management ◽  
Expert Assessments ◽  
Analytical Tools

Introduction. The most important factors for “financial health” of the company are effectively structured cash flows, precondition for sustainable growth and achievement of high end results of economic activity as a whole. Knowledge and practical use of modern methods of organization and efficient management of cash flows enables transition of the company to a new quality of economic development. Purpose. The aim of the article is the research and development of theoretical, methodological and practical recommendations concerning the organization of the management process of cash flows at the enterprise. Results. Methodology of traditional assessment of financial stability of the enterprise, its elements and the factors influencing it can significantly complement and improve through the use of advanced mathematical models that allow to analyze the accuracy and objectivity of expert assessments for determination the level of the financial condition of the enterprise. Conclusion. The system of indicators used in the analysis of cash flows at the enterprises is investigated and systematized. It is advisable to choose those indicators from the total aggregate of indicators that are the most attracted to specific users of accounting information. Methods for analyzing cash flow is supplemented as regards the determination of the integral index of financial stability, which makes it possible to install ranked of the investigated enterprise. Proposals for amendments the methodological approaches to estimating of future cash flows will allow more effectively increase usefulness and reliability of accounting and analytical information for making management decisions.

scholarly journals Financial Stability and Climate Change

2020 ◽  
Vol 9 (3) ◽  
pp. 27-43
Author(s):  
Nikola Fabris
Keyword(s):  
Climate Change ◽  
Financial Institutions ◽  
Financial Stability ◽  
Financial Risk ◽  
Negative Impact ◽  
Weather Conditions ◽  
Extreme Weather ◽  
Financial Risks ◽  
Balance Sheets ◽  
Sea Levels

AbstractFighting climate change is one of the biggest challenges in the 21st century. Climate change that leads to global warming has been increasingly visible in our environment. Extreme weather conditions such as hurricanes, floods, and droughts have been escalating and their acceleration can be expected in the future. They cause changes in sea levels, epidemics, large fires, etc. Increasingly, we are witnessing minor or major damage caused by these extreme weather conditions. Numerous studies have proven that climate change has negative impact on economic growth and prosperity. However, this paper starts from the premise that in addition to unequivocally identified threats, climate change also creates opportunities.The paper reaches a conclusion that climate change can adversely affect balance sheets of financial institutions. Therefore, climate change is a source of financial risk and thus a part of the mandate of central banks and supervisors in preserving financial stability. This type of risk has not been given enough attention by either supervisors or financial institutions over the past period. This paper develops a model for managing financial risks as a result of climate change.

scholarly journals FINANCIAL STATEMENT FRAUD DETECTION USING PERSPECTIVE OF FRAUD TRIANGLE ADOPTED BY SAS NO. 99

2016 ◽  
Vol 1 (2) ◽  
pp. 317 ◽  
Author(s):  
Shabrina Prasmaulida
Keyword(s):  
Financial Reporting ◽  
Financial Stability ◽  
Stock Exchange ◽  
Cash Flows ◽  
External Pressure ◽  
Financial Statement ◽  
Fraud Triangle ◽  
Manufacturing Companies ◽  
Financial Statement Fraud ◽  
Financial Need

Financial statements generally aim to provide information about the company’s financial position, performance, and cash flows to the interested parties. The motivation to gain trust from the users, especially investors, shareholders and creditors, leads someone to commit fraud in the financial reporting. This study aims to detect and predict financial statement fraud based on the perspective of fraud triangle adopted by SAS No. 99. The dependent variable in this study is financial statement fraud which is proxied by earnings management, while the independent variables in this study are financial stability pressure, personal financial need, ineffective monitoring, effective monitoring, external pressure, and financial targets.Population of this research is manufacturing companies listed in Indonesia Stock Exchange period 2012 - 2014. Samples are selected using purposive sampling method and obtained 150 companies out of a total population of 162 companies. The results show that financial stability pressure and external pressurehave significant positive effect on financial statement fraud. Meanwhile, personal financial need, ineffective monitoring, effective monitoring, and financial targets do not have significant effect on financial statement fraud.

scholarly journals DIAGNOSIS OF THE LEVEL OF FINANCIAL DECENTRALIZATION OF LOCAL BUDGETS ON THE BASIS OF INTEGRAL EVALUATION

2021 ◽  
Author(s):  
Yurii Puhach
Keyword(s):  
Financial Stability ◽  
Local Level ◽  
The State ◽  
Financial Resources ◽  
Financial Security ◽  
Regional Strategies ◽  
Self Development ◽  
Decentralization Reform ◽  
Objective Description ◽  
Functional Components

The process of implementing socio-economic change at the local level is closely linked to administrative reform and financial decentralization as important tools for regulating and allocating budget funds. Problems of reforming the administrative-territorial system, the formation of budgetary policy of the regions with the expansion of powers should be based on the development of regional strategies and a comprehensive analysis of financial resources. Approaches to the economic analysis of the efficiency of the allocation of financial resources in the context of decentralization reform are becoming increasingly important. The analysis of individual indicators somewhat narrows the perception of economic processes and does not allow to assess the level of provision of funds of administrative-territorial units by areas and in general. The issues of improving the methods and tools for assessing the financial resources of local budgets in the context of decentralization are becoming important. The article proposes improved approaches to the analysis of the level of financial decentralization of local budgets on the basis of aggregate indicators by areas. The technique allows analyzing the state of resource-functional components over time. The application of integrated assessment contributes to the objective characterization of the level of financial security of the regions, the revision and development of economic opportunities in the context of limited resources of local budgets. The proposed approach contributes to the formation of an objective description of the level of financial security of the region, and hence the financial opportunities for self-development. The methodology reveals the state of resource-functional components, the dynamics of deviations of integral values, allows monitoring of quantitative benchmarks to achieve the desired level of financial stability of regions and allows focusing on objective reasons for real financial decentralization in Ukraine. The results of the analysis focus on the assessment of regional development trends in the context of financial decentralization and form the need for further research in this direction.

Sign in / Sign up

Export Citation Format

Share Document