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Financial Analytics: Science and Experience
 

Predicting sustainable development and operation of companies

Vol. 7, Iss. 48, DECEMBER 2014

Available online: 18 December 2014

Subject Heading: BUSINESS ASSESSMENT

JEL Classification: 

Pages: 12-19

Vasin N.S. State University - Education-Science-Production Complex, Orel, Russian Federation
vasinn@rambler.ru

Importance Maintaining financial and economic stability under conditions of market uncertainty is one of the most important tasks of any modern company. Therefore, the subject of the study is relevant.
     Objectives The objective is to analyze the problems of early detection of trends towards loss of sustainable functioning and development of an enterprise based on integrated preventive diagnostics of major lines of its business.
     Methods I used the time series analysis methodology, which allows obtaining dependences that can be used to solve problems of extrapolation of trends in the indicators characterizing financial and economic stability of an enterprise.
     Results The article emphasizes that the operation of any industrial enterprise can be analyzed in two aspects: in terms of potential of its sustainability and from the perspective of implementing this potential, that is "in statics" (potential assessment) and "in dynamics" (performance appraisal). I have considered an approach to forecasting sustainable development and functioning of an enterprise on the basis of trend extrapolation. However, I have taken into account the need to address the problem of choosing the number of values in the time series, which will be a basis to draw a trend for extrapolation. The time series defines the period of observation based on which a forecast is made taking into account the potential of enterprise's sustainability.
     Practical Application The results of the study may serve as a tool to diagnose the enterprise condition.
     Conclusions and Relevance I conclude about the need to develop a technology of diagnostics management, which can transform depending on specific set of exogenous and endogenous factors. I propose to consider the matching of the volume of investment in the diagnostics and tactical and strategic business objectives, as small investment may be insufficient to create a fairly sensitive system, and considerable cost of diagnostics will divert funds from handling major production problems.

Keywords: economic sustainability, diagnosis, enterprise, indicator, development

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