|29th IBIMA Conference
3 - 4 May 2017
Financial Policy: Defining Short-Term Credit under Fixed and Circulating Capital for Providing Financial Sustainability of Industrial Enterprise Development
Alexander Sergeevich Sokolitsyn ,Maxim Vladimirovich Ivanov and Natalya Alexandrovna Sokolitsyna
This article considers defining short-term credit for providing sustainable industrial enterprise development with elaborating generalized balance scheme with borrowing short-term credit under fixed and circulating capital with setting rational interconnection between enterprise activity diversification and its financial sustainability. Formed generalized balance is basic to form economically-mathematical model, describing consequences of widening enterprise activity diversification with borrowing short-term credit. Elaborated economically-mathematical model is realized with constructing development strategies, providing both enterprise activity diversification and its financial sustainability. To realize suggested model, there is formed enterprise financial sustainability definition iterative algorithm for short-term crediting under fixed and circulating capital, differing with simultaneous calculating credit and set of unknown, modelled and exogenous parameters, which allows getting sufficient dozen of effective product diversification management strategies. Because most effective (optimal) product diversification strategy choice is concerned with risk management problem, optimization criterion is profit maximum taking into account stochastic product realization estimation. For researched St-Petersburg fuel-energy complex machine-making enterprise, according to the elaborated algorithm of modeling product diversification processes, there are basic activity financial figures in short-term crediting on optimistic, most probable and pessimistic strategies and their comparison economic analysis. Suggested optimization criterion shows the most effective enterprise product diversification strategy.