Home  Journals  Financial Analytics: Science and Experience  1(351) - 2020 January-March

A systems approach to assessing the financial equilibrium of commercial organizations

Received: 24 January 2019

Received in revised form: 16 June 2019

Accepted: 20 August 2019

Available online: 28 February 2020

Subject Heading: Economic policy

JEL Classification: G21, P13

Pages: 4–20

https://doi.org/10.24891/fa.13.1.4

Subject We consider issues that relate to searching and achieving the proportions of financial equilibrium that ensures a balanced state and sustainable development of corporations.
Objectives The aim is to provide objective and complete interpretation of financial equilibrium of a corporate institution as a financial system, define the existing system interconnections and mechanisms for maintaining and restoring the balance, methods of achieving the balance of internal proportions of commercial organizations’ financial equilibrium and their market environment.
Methods We employ methods of analysis and synthesis, induction and deduction, generalization of financial and economic processes and phenomena, and financial equilibrium.
Results We define the category of financial equilibrium as the most important characteristics of commercial organizations’ financial system functioning. The paper identifies significant factors and underpins effective mechanisms for maintaining and restoring the financial equilibrium of financial system of commercial organizations with predetermined properties and characteristics. It also presents methods for achieving the balance of proportions of financial equilibrium, the violation of which leads to dysfunctions in the sustainable development of corporate institutions and in their interaction with market environment.
Conclusions The financial equilibrium is imperative for financial stability and guaranteed solvency. Harmonization of financial systems at different hierarchical levels contributes to efficient flow of financial and real capital to address priority areas of economic growth. The proposed mechanisms can be used for improving the intrafirm management of resource potential and in strategic financial planning when implementing regional programs for territory development.

Keywords: financial system, financial equilibrium, corporate finance

References:

1. Merton R.C. The Financial System and Economic Performance. Journal of Financial Services Research, 1990, vol. 4, no. 4, pp. 293–300. URL: Link
2. Aleshin V.A. et al. Prioritety innovatsionnogo razvitiya finansovoi sistemy Rossii: monografiya [Priorities of innovative development of the financial system of Russia: a monograph]. Moscow, Vuzovskaya kniga Publ., 2013, 303 p.
3. Prangishvili N.V. Sistemnyi podkhod i obshchesistemnye zakonomernosti [The systems approach and system-wide laws]. Moscow, SINTEG Publ., 2000, 190 p.
4. Millard S., Power J. The Effects of Stock Market Movements on Consumption and Investment: Does the Shock Matter? Bank of England Working Paper, 2004, no. 236. URL: Link
5. Eminova N.E. [Working out of effective strategy of innovative development of the enterprise in modern conditions]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2011, vol. 10, iss. 14, pp. 21–25. URL: Link (In Russ.)
6. Kartashev V.A. Sistema sistem. Ocherki obshchei teorii i metodologii [System of systems. Essays on general theory and methodology]. Moscow, Progress-Akademiya Publ., 1995, 325 p.
7. Bogdanov A.A. Tektologiya: Vseobshchaya organizatsionnaya nauka. Kn. 2. [Tectology: General Organizational Science. Book 2]. Moscow, Ekonomika Publ., 1989, 351 p.
8. Volkova V.N., Denisov A.A. Osnovy teorii sistem i sistemnogo analiza: monografiya [Fundamentals of the theory of systems and system analysis: a monograph]. St. Petersburg, SPbSTU Publ., 1997, 205 p.
9. Kovalev V.V. [The formation of the neoclassical theory of finance]. Vestnik Sankt-Peterburgskogo universiteta. Ser. 8: Menedzhment = Bulletin of St. Petersburg University, Ser. 8: Management, 2005, iss. 1, no. 8, pp. 3–24. URL: Link (In Russ.)
10. Kleiner G.B. [System economics as a platform for development of modern economic theory]. Voprosy Ekonomiki, 2013, no. 6, pp. 4–28. (In Russ.) URL: Link
11. Kleiner G.B. [New theory of economic systems and its applications]. Vestnik RAN = Bulletin of the Russian Academy of Sciences, 2011, vol. 81, no. 9, pp. 794–811. URL: Link (In Russ.)
12. Nizhegorodtsev R.M. et al. Institutsional'nye osnovy teorii finansov. Sovremennye podhody: monografiya. [Institutional foundations of the theory of finance. Modern approaches: a monograph]. Moscow, INFRA-M Publ., 2017, 220 p.
13. Crane D.B. et al. The Global Financial Systems: A Functional Perspective. Boston, Harvard Business School Press, 1995.
14. Boot A.W., Thakor A.V. Financial System Architecture. The Review of Financial Studies, 1997, vol. 10, no. 3, pp. 693–733. URL: Link
15. Ryabtsev S.V. [The concept of ‘financial system’ in the modern theory of finance]. Finansy i kredit = Finance and Credit, 2012, vol. 18, iss. 15, pp. 56–62. URL: Link (In Russ.)
16. Carroll C. A Theory of the Consumption Function, With and Without Liquidity Constraints. Journal of Economic Perspectives, 2001, vol. 15, no. 3, pp. 153–184. URL: Link
17. Davis L., North D. Institutional Change and American Economic Growth. Cambridge, 1971, 285 p.

View all articles of issue

ISSN 2311-8768 (Online)
ISSN 2073-4484 (Print)

Journal current issue

Vol. 17, Iss. 1 March 2024

Archive