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Financial Analytics: Science and Experience
 

Company's self-financing indicators: evaluation methods and applications

Vol. 8, Iss. 5, FEBRUARY 2015

Available online: 6 February 2015

Subject Heading: BUSINESS ASSESSMENT

JEL Classification: 

Pages: 29-41

Sizykh N.V. Moscow State Industrial University, Institute of Control Sciences of RAS, Moscow, Russian Federation
sizykh@mail.ru

Sizykh D.S. Institute of Control Sciences of RAS, Moscow, Russian Federation
D.Sizykh@gmail.com

Importance The various self-financing indicators of a company can be used as indicators of the possible increase of the company's capital, company's performance operation efficiency, and also as an indicator of the company's financial performance in terms of profitability, stability, credibility, and investment attractiveness, etc. At the same time, deficiency and inaccuracy of information by methods of evaluation and an analysis of self-financing indicators hamper the selection of used indicators, their calculation methods and directions of their practical application for guaranteeing an adequate result in managerial decisions making.
     Objectives The goal of research is the implementation of system analysis of different directions and evaluation methods of self-financing indicators and making of recommendations by their practical application. We realize the following objectives: analysis of functional purpose and practical use of various evaluation indicators of a company's self-financing process; analysis of the developed methods for evaluation of self-financing indicators and possible variants of their modification; the creation of new indicators for evaluation of self-financing; analysis of calculation methods of self-financing indicators.
     Methods By using a system analysis, econometric methods, coefficient analysis, dynamic analysis, comparative approaches, we have researched various directions and evaluation methods of self-financing indicators.
     Results The paper summarizes theoretical aspects and practical features of evaluation and application of various indicators of company's self-financing, gives results of the analysis of modern directions and evaluation methods, and makes recommendations on their practical application for decisions making. We provide formulas for calculation of self-financing indicators, and their possible modifications, and also propose the new indicators and make recommendations on their application. The paper offers the real data on the regulatory standard of self-financing indicators of same companies with their analysis and comparative estimation.
     Conclusions and Relevance We research the financing indexes and their evaluation, which are necessary for decisions making in respect of expanding and effective use of the process of self-financing of a company, and for the evaluation of influence of self-financing on operation results, and on financial performance of an entity. These parameters are important as additional indicators, which make possible to receive a more objective evaluation.

Keywords: self-financing, company, indicator, self-financing source, evaluation method, indicator

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