Small business finance management on the example of LLC "EUROAGRO TRANS"
Students Name: Boiko Nazarii
Qualification Level: magister
Speciality: Finance, Banking and Insurance
Institute: Institute of Economics and Management
Mode of Study: part
Academic Year: 2022-2023 н.р.
Language of Defence: ukrainian
Abstract: In connection with the constant change in the conditions of the market economy, it is increasingly difficult for domestic enterprises to adapt and survive in the field of small business, and it is financial stability and independence that is the basis of a stable state and a guarantee of survival in the conditions of the current policy[1]. It is increasingly obvious that it is necessary to create new or reorganize existing enterprises according to criteria that would meet the world level of efficiency and productivity. The problem of the formation and use of financial resources becomes extremely relevant in a period of economic instability, primarily due to the fact that the activity of an enterprise in such conditions leads to a decrease in the amount of current assets, poor use of resources belonging to the enterprise, a decrease in production capacity, as well as an increase in the probability of bankruptcy[2;3]. Rational formation, as well as effective use of the company’s financial resources in order to obtain the planned amount of income is the basis for the financial stability of the country’s economy in crisis economic conditions[4;5]. In the first chapter, the theoretical aspects of the organization of financial management at small business enterprises were considered, the financial condition of LLC «EUROAGRO TRANS» and the main indicators of its financial and economic activity were assessed. According to the results of the analysis of the financial condition of LLC «EUROAGRO TRANS» for 2019-2021, the following conclusions can be drawn: in 2021, there is a negative decrease in the currency of the balance sheet by 31,83%, which is mostly caused by a reduction in the amount of receivables for goods, works, services, and as well as residual value of fixed assets. The assets of the balance sheet of LLC «EUROAGRO TRANS» include non-current assets, the share of which in the total asset structure of the balance sheet in 2019 is 65,51%, in 2020 and 2019 it is reduced to 47,74% and 40,62%, respectively. The most significant item of current assets is receivables for goods, works, services, the share of which in the overall structure of the balance sheet is 22,04% in 2019, 45,59% in 2020 and 35,87% in 2021. In general, current assets decreased by 22,55% in 2021, but their share in the asset structure of the balance sheet is increasing every year and is 34,49% in 2019, 52,26% in 2020 and 59,38% in 2021. The results of the analysis of the capital structure of LLC «EUROAGRO TRANS» proved that it includes only equity and current liabilities and collateral, and the change in equity is affected only by the change in the amount of retained earnings (uncovered loss). In 2019, the share of equity in the total liability structure of the balance sheet is 14,87%, in 2020 – 6,11%, and in 2021 equity is negative due to the presence of an uncovered loss in the amount of UAH 10033,1 thousand. The results of the study of the report on the financial results of LLC «EUROAGRO TRANS» for 2019-2021 showed the following: in 2020, there was a sharp positive increase in the amount of net income from sales by 426,36% and by another 17,58% in 2021, amounting to 6253, 9 thousand hryvnias by the end of 2021. The total costs of LLC «EUROAGRO TRANS», which include the cost of goods sold and other operating costs, increased by 696,15% in 2021 compared to 2019 and amounted to UAH 4,973,000. in 2021. During 2019-2020, LLC «EUROAGRO TRANS» was profitable, in particular, in 2019, the company received a profit of 46,9 thousand UAH, and in 2020 – 284,1 thousand UAH. But in 2021, the company suffered a large loss in the amount of 1387,6 thousand hryvnias, which makes it necessary to find ways to reduce the cost of production and other operating expenses. The results of the analysis of the main financial and economic indicators of LLC «EUROAGRO TRANS» for the years 2019-2021 showed that the financial condition of the enterprise during the entire period is unsatisfactory, and in 2021 it is generally critical. In addition, it turned out that the company is financially unstable, its borrowed funds are 100 percent greater than its own and it is completely dependent on loan sources, it is unprofitable and unable to settle with creditors at the expense of debtors within one year in 2021[6]. Summarizing the results of the conducted SWOT analysis in the research and forecasting part, we can summarize that the threats that, in my opinion, can affect the work of LLC «EUROAGRO TRANS», are great competition in the market of transport services, the unstable political situation in the country and the aggravation of international relationships, which may lead to customer losses. Also, an increase in the prices of fuel and lubricants will lead to an increase in the cost of transport services and an increase in competition on the market. Also, in the second chapter, an economic-mathematical model for optimizing the receivables of LLC «EUROAGRO TRANS» is proposed, which is advisable to use when developing a strategy for effective management of the company’s current assets in order to improve its financial condition. This will make it possible to maximize financial income from receivables, and at the same time minimize the costs of its maintenance, which as a result will improve the level of the company’s solvency, and therefore its financial stability, which are critical for the company in 2021. Forecasting of current assets and current liabilities of LLC «EUROAGRO TRANS» using the three-term moving average and least squares (trend) methods showed that in the I, II, III and IV quarters. In 2022, both current assets and current liabilities are expected to increase. Summarizing the results of the implementation of the proposed measures in the recommendation part, it can be concluded that the recommended measures will have a positive effect on the financial results and indicators of its financial condition. LLC «EUROAGRO TRANS» is recommended to attract loan capital for the renewal of capital equipment according to the current state program «Affordable loans 5-7-9%» for small business entities. It is estimated that the implementation of the recommended measures will ensure an increase in net income from sales, a decrease in the cost price and other operating expenses, as well as an increase in net profit. It is estimated that the recommended measures will also improve the indicators of property status, financial stability and profitability. 1. Krystyniak M. B. Small business and small entrepreneurship as an important factor in the development of the national economy. Formation of market relations in Ukraine. 2021. No. 11. P. 21-26. 2. Paderin I. D. Strategic management at small and medium-sized enterprises. Economic Herald of Donbass. 2022. No. 2. P. 163-167. 3. Fastovets A.A., Fisun I.V. Small business finance: education. manual / A.A. Fastovets, I.V. Fysun. - K.: Condor Publishing House, 2018. - 254 p. 4. Dudar Yu. Peculiarities of managing financial resources of a small enterprise. Scientific Bulletin of Odessa National Economic University. 2018. No. 9. P. 53-65. 5. Strelets V. Yu. Ensuring the development of small enterprises: theory, methodology, practice: monograph / V. Yu. Strelets. – Poltava: PUET, 2019. – 457 p. 6. Boyko N. Financial activity of EUROAGRO TRANS LLC during the war // Transformation of the national model of financial and credit relations: challenges of globalization and regional aspects: collection of materials of the VII All-Ukrainian Scientific and Practical Conference (Uzhgorod, November 30, 2022) – Uzhgorod: DVNZ "UzhNU", 2022. – p. 140.