RESEARCH OF INTERACTION BETWEEN THE EFFICIENCY OF CURRENT ASSETS MANAGEMENT AND VALUE OF BUILDING ENTERPRISES

Array

Authors

Keywords:

value-based management, current assets, building enterprises, inventories, accounts receivable

Abstract

Problems of current assets management and its influence on building enterprises management have been researched in the paper. The interaction between current assets management and enterprise value has been proved through the use of revenue approach to business valuation, which is based on cash flows calculation. Taking into account specific of building enterprises activity it was proposed to make an emphasis on inventories and receivables in the process of current assets management. On base of several building enterprises the influence of inventory level change on enterprise value change has been calculated and model of value-based inventory management have been developed. It has been proved that decrease of inventories will lead to increase in cash flows (thus, 1% decrease of inventory will result in 3,5% of cash flows increase). The influence of accounts receivables management process on enterprise value has been also examined. The algorithm of receivables management oriented for enterprise value increase, which includes four main stages, has been proposed. The four stages of receivables management, which were proposed are the following: determining the ability of goods crediting providing; determining the conditions of crediting; monitoring of receivables state and providing conditions of receivables penalty. Main directions in sphere of current assets management in system of value-based management have been highlighted, including formation of accounting and analytical support of value-oriented management of current assets; development of policy of value-oriented management of current assets; implementation of managerial decisions and assessment of the effectiveness of current assets management.

Author Biographies

T. Momot,, O.M. Beketov National University of Urban Economy in Kharkiv

Doctor of Economic Sciences, Professor, Head of Department

G. Shapoval, O.M. Beketov National University of Urban Economy in Kharkiv

Ph.D., Associate Professor of Department

M. Savenkova, O.M. Beketov National University of Urban Economy in Kharkiv

student

References

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Shapoval, G. М., Velichko, K. Y. (2014) Value-based algorithm of construction enterprise inventory management. European Applied Sciences, 1, 187-190.

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Published

2019-03-29

How to Cite

Momot, T., Shapoval, G., & Savenkova, M. (2019). RESEARCH OF INTERACTION BETWEEN THE EFFICIENCY OF CURRENT ASSETS MANAGEMENT AND VALUE OF BUILDING ENTERPRISES: Array. Municipal Economy of Cities, 2(148), 99–103. Retrieved from https://khg.kname.edu.ua/index.php/khg/article/view/5406

Issue

Vol. 2 No. 148 (2019): Series: Economic science

Section

статьи

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