Management of the company’s own capital in conditions of uncertainty (on the example of PJSC "KAMET-STАL")
Students Name: Yarema Kyrylo Volodymyrovych
Qualification Level: master (ESP)
Speciality: Finance, Banking and Insurance
Institute: Institute of Economics and Management
Mode of Study: full
Academic Year: 2022-2023 н.р.
Language of Defence: ukrainian
Abstract: Management of the company’s equity capital is a complex process that requires an individual approach in each specific case and significant information resources [5]. In conditions of uncertainty and during a crisis, external threats increase as do the risks associated with them. The increase in the cost of financial resources, the deterioration of logistics, the threat of physical destruction, etc. All these problems actualize the issue of managing the company’s equity capital [1,4]. Metallurgical enterprises had not suffered significant losses from the crisis caused by the COVID-19 pandemic. In turn, the full-scale invasion of the Russian Federation troops on the territory of Ukraine made the issue of the industry’s survival more urgent than ever. Ensuring the functioning of this sphere directly affects the economic situation in the country and the well-being of the population [2]. The company’s own funds are the main source of its financial stability, they allow to reduce the amount of loan capital and to form the necessary level of liquidity and solvency [3]. Therefore, the formation of sufficient equity capital is a guarantee of stable activity of a business entity in the crisis conditions. However, excessive use of own funds by the enterprise reduces its economic efficiency. It is the optimal volumes of own sources of financing activities that allow the enterprise to minimize threats and at the same time conduct effective activities. The object of the study is the management of the equity capital of PJSC "KAMET-STAL" under conditions of uncertainty. The subject of the study is the methods of formation and use of equity capital of PJSC "KAMET-STAL" in the conditions of a difficult economic and political situation for the preservation and sustainable development of the enterprise. The purpose of the study is to develop theoretical provisions and methodological and practical recommendations for the management of equity capital ofPJSC"KAMET-STAL". In the first chapter of the master’s thesis the theoretical principles of further research have been formulated, the financial condition of PJSC "KAMET-STAL" was analyzed and an assessment of capital management approaches used at the enterprise was carried out. The analysis made it possible to identify positive and negative aspects of financial work at the enterprise. It was established that, mainly, the deficiencies in the business entity’s activities were caused by the purchase of the assets of PJSC DMK by PJSC DKHZ with the funds of the Metinvest Group at the end of 2021. The level of the company’s profitability indicators is very low, which is caused by a negative financial result in two of the three studied periods. And if the study of the company’s property status revealed a fairly good state of assets, then indicators of business activity are quite problematic due to significant amounts of receivables and payables. Low indicators of financial stability are a consequence of the model of capital formation chosen by PJSC "KAMET-STAL" when the absolute majority of financial resources are loans. In the second section, a SWOT analysis was conducted, external and internal environment factors influencing the enterprise’s activities were identified and structured. The strategic directions of the development of PJSC "KAMET-STAL" have been determined. With the help of economic-mathematical modeling of capital formation factors, calculations of forecast values of equity indicators were made. A comparison of approaches to capital formation of enterprises of various branches of the national economy in the conditions of the COVID-19 pandemic was carried out. In the third section on the basis of preliminary calculations, problematic aspects of the activity of PJSC "KAMET-STAL" were identified, possible models of capital formation were described and recommendations were given regarding the management of own capital and capital in generaland measures to optimize the capital of the enterprise were proposed. As a result, the implementation of project solutions will allow to significantly improve the financial situation of the enterprise in conditions of uncertainty. Keywords: financial stability, capital formation, metallurgy, forecasting, anti-crisis management. References: 1. Augustyn R. Strategic approaches to managing the financial stability and solvency of the enterprise. Actual problems of management and public administration in the conditions of modern challenges. Materials of reports of the IV All-Ukrainian scientific and practical conference with international participation. Ternopil ZUNU. 2023. P. 11-14. 2. 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