Cloud infrastructure as a growth driver of the modern digital economy

Subject. This article discusses the issues of development of cloud infrastructure in Russia and abroad, the advantages of cloud technologies, and forecasting their potential prospects. Objectives. The article aims to identify the features and potential problematic aspects of the development of cloud technologies in the modern Russian and foreign digital economies and predict the prospects for their advancement taking into account the post-pandemic development of world economies in 2020–2021. Methods. For the study, I used the methods of observation, generalization, and analysis. Results. The article describes the benefits of cloud infrastructure for the growth of global digital economies, as well as potential threats that impede the effectiveness of cloud technologies in Russia and abroad. Conclusions. The article concludes that it is necessary to further implement legislative initiatives in Russia that contribute to the high-quality storage of information and ensure its confidentiality in cloud storage.

Assessing the financial potential of organizations in the context of professional standard ‘Accountant’

Subject. The article addresses the financial potential of the organization, investigates economic relations stemming from financial potential formation and prospects for its growth as a result of actions and initiatives of managerial staff. Objectives. The aim is to disclose the content of the rational approach in financial and analytical studies focused on expressing the analytical value of qualitative and quantitative determination of financial potential in the process of substantiating management decisions on achieving competitiveness and long-term efficiency of economic entity. Methods. The study rests on modern theories of capital structure, methods for developing financial strategy, solving multi-criteria economic problems, including ranking techniques, the graphical and analytical models. Results. We developed methodological recommendations for financial potential assessment, which include the indicators of strategic level of investment capital management based on the systems approach to the use of financial, strategic and investment analysis tools. Their application in practice will increase the informativeness of potential assessment. The findings have an applied focus aimed at professional competencies in the development of organizational and administrative documents that regulate the analysis and assessment of financial potential based on strategic goals. Conclusions. Along with the existing methods, the methodological recommendations form a subsystem of analytical support focused on the organization’s value and finance management. Their use in financial strategy formation enables to identify and study strategic alternatives of development, create financial sections of business plans, justify adjustments to the strategy and tactics of financial management.

Organizational characteristics of preparing and conducting IPO transactions in the banking sector

Subject. The article is devoted to the study of the specific features of banks’ IPO preparation and execution. Objectives. The focus is on the critical analysis of special aspects related to IPO of credit institutions. Methods. The study includes analytical methods for collecting and processing of information, as well as the comparative analysis. Results. I highlight the main characteristics of banks’ economic model, summarize the results of researchers' work on the analysis of factors influencing the profitability of credit institutions, analyze methods for evaluating companies for IPO purposes, identify main approaches to the assessment of bank value, and define the most appropriate methods to evaluate banks for IPO purposes. Conclusions. In general, the process of preparation and execution of banking IPOs is similar to IPO execution by other companies. However, the nature of economic activity of banks determines specific methods for assessing the value of banks for IPO purposes. Currently, there is no single preferred method for valuing banks, while there are certain aspects of the use of general methods to determine the value of credit institutions. For the valuation of companies for IPO, mainly comparative and income methods are used. For the valuation of banks, it is preferable to use the comparative method based on P/E and P/B multiples. As for the income method, it is recommended to use discounted cash flow valuation based on FCFE calculation, as well as the dividend discount model.

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

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.

Approaches to shaping portfolio strategies based on the socially responsible investing concept

Subject. The article considers formulation of portfolio strategies that rest on the concept of socially responsible investing. Objectives. The purpose of this study is to analyze approaches to shaping the portfolio strategies based on the principle of socially responsible investing in the Russian stock market. Methods. The study employs general scientific research methods; logical, comparative, and statistical analyses; graphical analysis techniques. Results. We formulated and tested two strategies of socially responsible investing, i.e. Short ESG Ranking of Russian Companies and Long ESG Ranking of Russian Companies. The testing demonstrated below market return for the entire period. Thus, the strategies cannot be considered effective. To increase profitability, we proposed to optimize the strategies by including ESG-related debt instruments. Green bonds enabled to significantly increase profitability and outstrip OFZ yields. Despite the fact that according to the testing, the effect of both strategies turned out to be worse than IMOEX and MOEXBC indices, the strategies can be considered as relevant and acceptable for portfolio simulation. Conclusions. Under the current conditions in the financial markets caused by serious shocks during the coronavirus pandemic and significant changes in the monetary policy of the Bank of Russia, the proposed strategies can be used by socially responsible institutional investors to shape investment policy and by individuals to manage funds in individual investment accounts. New bonds of Russian issuers in the sustainable development sector of the Moscow Exchange expanded the list of ESG instruments. They can serve as an effective optimization tool.

Analyzing the factors of financial strategy of recreational sphere enterprises

Subject. This article analyzes the role of the factors of the modified model, taking into account the specifics of the recreational sphere. Objectives. The article aims to assess the role of the factors of the modified model for recreational enterprises. Methods. For the study, I used general scientific research methods. Results. Peculiarities of the recreational sphere cause the need to modify the DuPont model. The model is obtained in a mixed form. The model is obtained in a mixed form. This helps take into account the factors of operating and other activities in the financial result and profitability separately. The obtained results help assess the role and importance of factors in the financial management strategy, as well as the reasons for their impact on the efficiency of recreational enterprises. Conclusions. The importance of resource productivity and the increase in the share of operating activities remain underestimated in the model if considering a single enterprise case. For enterprises of the recreational sphere as a whole, there is a need to further study the model by establishing correlations of factors with the performance indicators.

Digitalization as a new way to transform conventional production methods in the natural resources sector

Subject. This article deals with the issues of implementation of digital transformation of enterprises in order to improve their core competitiveness and achieve high rates of development. Objectives. The article aims to analyze and assess the baseline conditions and opportunities for the digital transformation of natural resources sector enterprises. Methods. For the study, we used analytical, quantitative, and expert assessment methods and techniques, and the systems approach. Results. Based on a comparative analysis of the digital infrastructures of Russian natural resources sector enterprises and Chinese industrial sector enterprises, the article reveals a significant lag between Russian and Chinese enterprises in terms of IT-technology, -network, and special software supplying and upgrading. The article emphasizes the importance of training highly qualified natural resources management experts and specialists that have new information and network skills and competencies. Conclusions. The next-generation model of industrial development based on the comprehensive application of next-generation digital technologies, contributes to the creation of a digital world that is changing conventional management and business models. The necessary business management software should primarily be based on home-grown products to manage production in the natural resources sector, rather than on the software used in other economies.

Developing the business valuation technique for Mergers & Acquisitions

Subject. According to empirical data of consulting firms, the synergistic effect does not arise every time, since about 70 percent of M&A deals happen to be unsuccessful, destroying the enterprise value. Objectives. We analyze whether it is possible to make M&A more effective, and develop the business valuation technique for M&A on the basis of the real options method. Methods. The study involves methods of analysis and synthesis, generalization, induction and deduction, methods of systems analysis, statistical methods, chart and graphical techniques for statistical data representation. Results. We analyzed and determined the most applicable method for options premium valuation – the Monte-Carlo method, since it appraises non-listed companies and facilitates computations. As part of equity valuation, we suggest substituting the rating to the assessment of risk components by analyzing corporate performance indicators. Having analyzed potential deals, we proves the zero correlation between the options premium and the maximum premium, thus making a game formula of the synergistic effect. Conclusions and Relevance. The correlation between shareholders’ premium and options premium is identical to the correlation of the maximum premium and options premium. That is, the correlation does not virtually exist. As a result, we made the synergistic effect formula. The conclusions and recommendations herein can be used by business leaders to financially justify non-organic business growth mechanisms, develop the business strategy subsequently. Appraisers may also rely upon the findings to improve the quality of business value prediction models as part of M&A deals.

Analyzing the potential of entrepreneurial activity in the recreational sphere of Greater Yalta

Subject. The article investigates the potential of recreational business activity, which is understood as all financial, production, and entrepreneurial capabilities of enterprises in this area. Objectives. The purpose is to assess the recreational opportunities and provide recommendations, using the Greater Yalta case. Methods. The study employs methods of correlation and regression analysis, being the main tools for analyzing the activities of enterprises in the context of seasonality. Results. The paper shows that the reasons for the current state of recreational enterprises are the problem of seasonality. It establishes that these enterprises have a high level of capacity underutilization – about half of their production (54%), financial (53%), and more than a half of their entrepreneurial capacity (66%). To predict changes in the profits of enterprises, the paper identifies a number of measures for resource optimization. Conclusions. To improve the efficiency of recreational enterprises, it is necessary to find ways to optimize resources, in accordance with their business activity, or to increase the volume of activities during the off-season period. The obtained seasonality coefficients can be used in calculating the need for personnel, training, and determining the required minimum, which will be an object of investment in human capital (20%), as well as the minimum amount of all working capital.

Financial instruments of State support for small and medium-sized businesses in Russia during the coronavirus pandemic

Subject. The article examines financial instruments of State support for small and medium-sized enterprises (SMEs) in Russia, in the context of the crisis and pandemic. Objectives. The purposes are to unveil major financial and economic mechanisms and instruments of State support for SMEs, analyze the results of State policy, aimed at financial assistance to SMEs, assess measures to support SMEs during the crisis and pandemic, and define the main directions of State policy development in relation to SMEs in the coming years. Methods. The study employs methods of logical, statistical, qualitative and qualitative analysis, and graphical methods for presenting the results of information analysis. Results. I identify economic problems, faced by SMEs in the most affected spheres of activity, reveal that the vulnerable position of SMEs rests on insufficient financial stability of companies, which is associated with negative changes in the economy that disrupted the economic linkages among entities, and a decrease in lending from the banking sector. Conclusions. In Russia, there are serious problems in SME development. To solve them, it is necessary to maintain anti-crisis measures and continue targeted support to SMEs in priority sectors of the economy. It is crucial to develop comprehensive financial support for SMEs, consolidate all support tools provided by credit institutions and participants of the National Guarantee System, expand the access of SMEs to participation in procurement of the largest customers, and digitalize the procurement process on the basis of a digital platform.