A comparison of strategies for working capital management of listed food companies from Northern Europe

The research presents the application of fuzzy logic for synthetic evaluation of strategies for working capital management of twelve food companies from Northern Europe in 2005-2015. A set of financial ratios formed an aggregated indicator reflecting the complexity of relationships between the level and structure of current assets and liabilities of a firm. Based on the proposed indicator, four types of strategies for working capital management were identified and characterized in terms of risk and return preferences. Only a few companies from the sample demonstrated a direct orientation on liquidity or value within their strategies for working capital management. To retain flexibility in short-term financial management, most firms applied moderate policies for current assets and liabilities that helped them in maintaining liquidity and reducing the cost of financing. The integrity of the proposed method for the synthetic evaluation of working capital management makes it a convenient managerial tool suitable for use in firms operating in a turbulent business environment.Peer reviewe

Financial Sustainability and Value of Joint-Stock Companies from Food Industry in Central and Eastern Europe

The research presents the analysis of relations between financial sustainability and value of joint-stock companies from food industry in Central and Eastern Europe. Increase of volume of assets, shareholders’ equity and revenues demonstrated an improvement of financial sustainability and resulted in growing valuations of companies in the study period. Sample business entities achieved relatively high liquidity and profitability that proved their financial sustainability in terms of risk and return. At the same time rising operating profit margins and liquidity ratios determined higher enterprise value of joint-stock companies. This emphasized a positive relation between enterprise value and financial sustainability. Joint-stock companies demonstrated a robust capital structure with a minor decrease of corporate debt in 2011-2015. However changes in sources of financing could provoke a trade-off between financial sustainability and enterprise value. According to a regression model factors positively influencing enterprise value included revenue, cash and cash equivalents, operating profit, current liabilities and shareholder’s equity. Stimulating revenue and increasing operating profit as well as maintaining higher cash balances improves financial sustainability while debt extension can significantly deteriorate continuity of business

THE EVOLUTION OF THE ENERGY SYSTEMS OF UKRAINE AND THE ORGANIZATION OF MANAGEMENT ACCOUNTING IN ENERGY COMPANIES IN CONDITIONS OF RISK

An essential prerequisite for the development of Ukraine is a rationally formed energy system that covers the electricity demand of society and assures the smooth functioning of the national economy. The study presents the characteristics of different types of power plants in Ukraine, such as thermal, hydraulic, nuclear, geothermal, and tidal. Furthermore, the share of Ukraine’s contribution to the energy supply of other countries is indicated. Today, the United Energy System of Ukraine is one of Europe’s most significant energy com- plexes with seven regional electric power systems (REES), including Dnipro, Western, Crimean, Southern, Southwestern, Northern, and Central. The research presents the structure of electricity consumption by consumer groups in Ukraine. It indicates the extent of the destruction of Ukraine’s energy capacities by Russia’s invasion. The issue of developing electricity production from alternative energy sources in Ukraine is discussed. Permanent risks and the threat of destruction of energy system objects encourage managers of economic entities to carefully search for quick and accurate problem-solving tools for avoiding critical situations. The accounting system, in particular, management accounting, provides the in- formational component that satisfies the timeliness of providing boards with recommendations on making managerial decisions. The study highlights and describes the stages of implementation of management accounting in energy supply companies in Ukraine. The effectiveness of management accounting in this aspect is emphasized

Categorical characteristics of wine classifications in the system of internal regulation of accounting

PURPOSE: The article aims to present and discuss the categorical characteristics of wine classifications in the system of internal accounting regulations.DESIGN/METHODOLOGY/APPROACH: Developing the wine industry in Ukraine and increasing the strictly regulated geographical location of grapes and all stages of production of controlled wines by origin require strengthening Ukrainian legislation on wine labeling requirements, classification methods, control of names quality control, and its institutional consolidation.CONCLUSIONS: The interdependence of domestic and foreign markets for raw materials and accounting regulation system affects the application of the method of accounting for business transactions, as well as the relationship between the provisions of accounting, contractual, and tax policies.PRACTICAL IMPLICATIONS: The presented internal regulation of accounting of wine production is provided by the accounting policy, which highlights the relationship of elements of the accounting method in the system of contractual and tax policies aimed at quality characteristics of wines and business results of wine companies.ORIGINALITY/VALUE: It is proven that the effectiveness of control and information accounting functions in the management system provides quality characteristics of wines and economic results for wine companies.peer-reviewe

EKONOMICZNA WARTOŚĆ DODANA A RYZYKO W PRZEDSIĘBIORSTWACH ROLNICZYCH – ZWIĄZKI I PRZYCZYNY ICH WYSTĘPOWANIA

Celem opracowania jest przedstawienie zależności między zdolnością do generowania wartości a ryzykiem w przedsiębiorstwach rolniczych. Zdolność do generowania wartości w badanych podmiotach określono za pomocą stopy zwrotu z zainwestowanego kapitału, mierzonej kategorią ekonomicznej wartości dodanej (EVA). Do scharakteryzowania ryzyka działalności zastosowano miary dźwigni operacyjnej i finansowej. W okresach występowania wyższych dźwigni odnotowano niższe stopy zwrotu z zainwestowanego kapitału przedsiębiorstw rolniczych. Główną przyczyną wzrostu poziomu dźwigni było zwiększenie udziału kosztów stałych w marży brutto wraz ze zmniejszeniem zysku operacyjnego. Świadczyło to o niekorzystnym oddziaływaniu ryzyka operacyjnego wyrażonego wskaźnikami dźwigni na zdolność do generowania wartości w przedsiębiorstwach rolniczych

POLISH DIRECT INVESTMENTS ABROAD AS AN INSTRUMENT OF VALUE CREATION FOR INVESTORS

The research presented a financial approach to an issue of estimation of efficiency of the Polish foreign direct investments abroad (FDIA) as an instrument of value creation for investors. Besides the volume and distribution of Polish FDIA according to economic activity and geographical zone were analyzed. The volume of Polish FDIA outward position constantly grew due to an increase of equity capital, reinvested earnings and other capital in 2000-2012. The period after financial crisis (2010-2012) was characterized by a higher activity of Polish investors while the fluctuation of income from FDIA was mainly caused by a significant level of their concentration. Government bond yields were higher than return on FDIA that gave an evidence of relatively lower efficiency of FDIA

Determinanty tworzenia wartości dla właścicieli w przedsiębiorstwach rolniczych

The goal of the research was to present the ability of value creation for owners in agricultural companies and to estimate the relations between the defined value ratio and financial parameters of these entities. To measure the value of agricultural companies for owners a concept of Economic Value Added (EVA) was applied. In 2005-2012 agricultural companies systematically increased the value of invested capital. In the analyzed period agricultural companies were characterized by a low ability of value creation. In the analyzed groups of companies an increase in capital investments was associated with the decrease of rate of return on invested capital measured by EVA

THE EFFICIENCY OF FOREIGN DIRECT INVESTMENTS IN POLAND – DOES THE RISK OF INVESTING IN EMERGING MARKET COUNTRY LEAD TO A HIGH RATE OF RETURN?

The goal of a research was to determine the efficiency of foreign direct investments (FDI) in Poland comparing to alternative forms of capital allocation. The analysis of Polish FDI according to economic activity and geographical zone was conducted. In 2000-2012 the inward position of FDI rose significantly due to a surge in equity capital and reinvested earnings as well as in other capital in form of various debt instruments. Generally the rate of return on FDI in Poland was higher than the Polish and US government bond yields that gave an evidence of a higher efficiency of FDI comparing to a low risk financial instruments

The Concept of Financial Sustainability Measurement: A Case of Food Companies from Northern Europe

A managerial approach to the financial sustainability of a company derives from the principle of value maximization for shareholders at an acceptable level of risk, using the best combination of investments and available sources of financing. The research presents the concept of financial sustainability measurement in the example of food companies from Northern Europe. We applied fuzzy logic to quantify complex interrelations among various financial factors and classify companies according to the level of their financial sustainability. A unique combination of factors formed a single complex indicator, which measured a relative level of financial sustainability of food companies. Considering the duality of financial sustainability in terms of risk and return, the relationship framework for synthetic evaluation included the vector of value and the vector of continuity that consisted of such variables as profitability, market capitalization, productivity, operating efficiency, debt, liquidity, interest coverage, and retained earnings. We received evidence that the level of financial sustainability of entities changed in 2005–2015 and was statistically different among sample companies. The proposed method can be applied as a practical tool in a decision-making process to evaluate financial sustainability or other aspects of business performance in larger groups of entities on the basis of various financial criteria

Relations between input efficiency and financial situation of agricultural companies

The research defines the input efficiency and estimates relations between factors of efficiency and financial situation of agricultural companies. In 2005-2013, the input efficiency of agricultural companies was low which was illustrated by insufficient profitability. An increase in investments did not result in a substantial improvement in return on capital. It was stated that the highest impact on financial situation of companies had the labour factor, while capital and land factors were of lesseru importance. The efficiency of capital use was highly related to assets’ capacity of agricultural companies, although labor and land were strongly connected to sales revenue and operating profit