Management of the enterprise’s floating capital in the modern realities of the domestic economy

Abstract

The research indicates that in the conditions of financial crises and recessions, the importance of working capital management increases and becomes almost the most important factor in the way of survival of modern business. In the modern conditions of the functioning of the domestic economy, weakened by military aggression from the northern neighbor, the problem of working capital management takes on dangerous limits both for the entire country and especially for industrial enterprises.

The work proves that, both in foreign and domestic practice, the problem of working capital management in crisis conditions is most acutely faced by small businesses. This is due to both the general complication of access to attracting additional capital due to the financial market situation, the loss of sales markets and a decrease in the volume of activity, and due to a number of specific factors - lower credit ratings and worse conditions for attracting additional capital due to the lack of the possibility of using certain financial instruments.

A peculiarity of domestic business practice has been established, which is that for large industrial enterprises of Ukraine, the problem of improving working capital management is more acute than for small and medium-sized enterprises, since this category of enterprises consumes more than half of the working capital used in industry.

The work refutes the assertion established in foreign practice that there is a stable dependence between the provision of working capital as one of the main criteria for the efficiency of working capital management and the financial results of business activity. Instead, it was determined that the Ukrainian business has a high dependence of both absolute and relative indicators that characterize the effectiveness of the formation of financial results of activity precisely on the total amount of working capital used. At the same time, the highest level of dependence on the profitability of the operating activities of domestic enterprises is most typical for large businesses and the least for medium-sized ones.

The authors provided recommendations on the priority of solving the problem of providing domestic business with working capital, focusing on the priority of solving this problem of small businesses, as the most vulnerable to crisis phenomena in the economy and the financial results of which depend quite strongly on the general provision of working capital.