Orlova Yekaterina

Faculty: Computer Science and Technology

Speciality: Economic Cybernetics

Abstract of the master's work:

Ways of increasing economic and financial indicators of business

Introduction

The basic indicators of industrial enterprises and ways to improve it are studying in the dissertation.

Also consider optimization of the enterprise as an example of "Donetskgormash. Will develop recommendations for improving the enterprise in the final section.

Aims and objectives

The aim of this paper is to study various aspects of the industrial enterprise, the optimization of various articles of its operation, the identification of reserves to improve performance and develop recommendations for the industry.

The main tasks of master's thesis:

1. To study the basic indicators of the company engaged in industrial activities.
2. Consider ways to improve indicators.
3. Identify the possible schemes for business development and describe their features.
4. Select the most successful global companies and identify the situation in Ukraine.
5. To study the possible reserves of the company, which can be used to improve its efficiency.
6. To optimize the activity of the company as an example of "Donetskgormash".
7. Develop recommendations for improving the enterprise.

Currency

Topic is relevant, since any company interested in increasing its efficiency, which directly depends on the profit. Production plans are reviewed and figures are recalculated in accordance with the arising of the enterprise and the economy of the state of the situation continuously to optimize activity. Therefore, the study of the subject in order to identify new reserves is important.

Scientific novelty and practical value

Master's thesis provides guidelines on the identification and use of reserves for the optimization of the enterprise. Since the calculations are based on actual data exists and functions of an industrial enterprise, received the recommendations can be applied in practice.

Summary

Key indicators of the enterprise are:

Cash ratio characterizes the company's ability to repay current obligations through funds of funds in banks and short-term investments. The minimum value of the coefficient, which is considered normal is 0.2 [1].

Interim coverage ratio characterizes the company's ability to repay current liabilities due to current assets. The normal value of the coefficient is not less than 0,8.

If the current ratio is an acceptable range, and quick ratio is unacceptably low, then the company can recover its technical capacity to pay through the sale of its inventory and receivables, but because of this it may lose the opportunity to function normally [2].

Current ratio characterizes the company's ability to repay current liabilities due to current assets. Considered normal value of the index above 2 [3].

The financial independence characterizes the share of the property owners of enterprises in the total amount of advances. The coefficient is of great importance to investors and creditors, as the higher the value, the less risk of losing investments, and loans. The recommended value of the index is not less than 0.5 [4].

The share of loans in the property value. If the share of equity in the property value of the enterprise exceeds 50%, the risk to the lender is minimal. The company will be able to repay the debt by selling his property in case of need [5].

Debt ratio is the ratio of total debt on short-and long-term liabilities to equity ratio. Increasing debt to equity ratio more than 1:1 is considered as a risk [6].

Accounts receivable is the sum of debts of businesses and individuals to this enterprise. Evidence of diversion of funds the company from economic circulation [7].

Return on sales shows the share of profits earned in each monetary unit [8].

The main source of income increases is expanding production of goods and services. There are two ways to achieve increasing volumes of manufacture:

• Extensive development of the company is increasing production by a simple quantitative increase of production factors themselves, i.e. increasing the number of workers without skills, expanding consumption of material resources without improving their efficiency, due to the growth of investment without improving technology. Performance (efficiency) factors of production is not changed.
• Intensive development is the growth of production through more efficient use of production factors, i.e. through the introduction of new, more efficient technologies through the renewal of fixed assets, by improving the organization of production (new structure of economic relations, management and cooperation, etc.) by improving the use of fixed, revolving funds to accelerate their turnover, depreciation for by improving workforce skills and improve the scientific organization of labor. Productivity increases, lower material and labor of the main production, which affects the increase in profits and profitability [9].

The optimization curve is used to evaluate the effectiveness of the enterprise (Figure 1)

Figure 1 Optimization curve (Animation, GIF Animator, 17 frames, 5 repetitions, size - 109 KB, size - 400x400)

Resource support work in terms of money deposited on the horizontal axis, the results of the organization in terms of money deposited on the vertical axis.

The narrower the optimization curve, the higher the complexity of managing the firm, the harder it is to maintain its maximum efficiency [10].

Reserves are used to increase the efficiency of the enterprise.

Reserves of the company is untapped potential to reduce current costs and advances of materials, labor and financial resources of the enterprise.

Reserves can be measured as the difference between the achieved level of resource utilization and possible level of their use.

External and internal reserves are distinguished. External reserves is a common national economic, sectoral and regional reserves. Use of external reserves affects the level of economic performance of enterprises, but the main source of savings in enterprises are internal reserves. [11].

Fortune Global 500 is a list of 500 largest global companies, which serves as criteria for establishing the company's revenue. American Fortune magazine compiles and publishes the list annually.

Also, specialists make an annual ranking of Fortune's most profitable companies in the world. 10 most profitable companies on the ranking, published July 26, 2010 were:

1. Gazprom (in the ranking of Global 500 occupies 50 seats);
2. Exxon Mobil (in the ranking of Global 500 takes place 3);
3. Industrial & Commercial Bank of China (in the ranking of Global 500 takes place 87);
4. BP (in the ranking of Global 500 companies takes place 4);
5. China Construction Bank (in the ranking of Global 500 has 116 seats);
6. Petrobras (in the ranking of Global 500 occupies 54 seats);
7. Barclays (in rating Global 500 occupies 96 seats);
8. Microsoft (in the ranking of Global 500 has 115 places);
9. Wal-Mart Stores (in the ranking of Global 500 companies takes 1st place);
10. Vodafone (in the ranking of Global 500 occupies 66 place) [12].

As can be seen from the ranking, high revenue does not mean profitability and profitability. Must take into account the size of enterprises, taxation, economic and political situation in the State in whose territory the main department of the company and numerous other factors.

As for Ukraine, no one company was included in the Fortune Global 500 and is unlikely to happen soon. The reason is not the efficiency of domestic business and being unwilling to demonstrate the actual performance.

"Ukrainian companies are very closed compared to European, even to Russians companies. Business very carefully concealing its financial statements, trying to minimize the profitability, thus reducing the size of tax payments"- says an analyst at Phoenix Capital Alexander Lozowy. The most profitable company in Ukraine, analysts say "SCM" of Rinat Akhmetov [13].

After the analysis of the leading companies can draw conclusions about the success of firms is such basic parameters:

• international sales markets;
• the established system of transportation of goods;
• high-quality products;
• system of rewards for regular customers;
• coordinated the work of highly qualified personnel, etc.

Conclusion

In the future we plan a detailed study of Donetskgormash, optimization of its activities and on the basis of analysis of the results will be developed recommendations for improving the efficiency of the enterprise and increase its profitability.

References

1. Прохоров В. Финансовый анализ – Коэффициент абсолютной ликвидности
2. Прохоров В. Финансовый анализ – Коэффициент быстрой ликвидности
3. Прохоров В. Финансовый анализ – Коэффициент текущей ликвидности
4. Прохоров В. Финансовый анализ – Коэффициент финансовой независимости
5. Курс предпринимательства – Под редакцией проф. Горфинкеля В.Я., проф. Швандара В.А.
6. Буряковский В.В. Финансы предприятий
7. Экономический словарь
8. Audit-it.ru – Ваш финансовый аналитик – Справка: Финансовые показатели
9. Экономика и развитие предприятия – Основные факторы развития предприятия
10. Большаков А.С. Менеджмент (учебное пособие)
11. Буряковский В.В. Финансы предприятий – учебник
12. Global 500 2010: Most Profitable Companies: Profits – FORTUNE on CNNMoney.com
13. «Газпром» назван самой прибыльной компанией на планете

Important note

The master’s work has not completed yet. Completion date is December 2011. Full text can be received from the author or his scientific advisor after this date.