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Evaluating the effectiveness of financial policy of companies using the generalized Harrington's function

Vol. 26, Iss. 2, FEBRUARY 2020

Received: 9 December 2019

Received in revised form: 23 December 2019

Accepted: 9 January 2020

Available online: 28 February 2020

Subject Heading: Financial control

JEL Classification: G3, G32, M21

Pages: 270–284

https://doi.org/10.24891/fc.26.2.270

Slepov V.A. Plekhanov Russian University of Economics (PRUE), Moscow, Russian Federation
vlslepov@yandex.ru

ORCID id: not available

Pivnyk K.E. Plekhanov Russian University of Economics (PRUE), Moscow, Russian Federation
kirillpivnyk@gmail.com

ORCID id: not available

Subject The article analyzes the essence of financial policy as a factor of effective development of companies. Evaluating the effectiveness of companies' financial policies is a significant scientific and practical problem. It determines the choice of main criteria on the basis of which the effectiveness of financial policy is calculated.
Objectives The aim is to develop a comprehensive methodology for evaluating the effectiveness of companies' financial policies in modern conditions, to define criteria for its evaluation.
Methods The Due Diligence approach is a basis for solving the research tasks, i.e. comparing the existing standards and methods for evaluating companies' financial policy and simplifying its implementation through the proposed method of multivariate coefficient analysis.
Results The article offers a comprehensive approach to evaluating the effectiveness of financial policy on the electric power companies case. The practical significance of obtained results is in their use to increase the investment appeal of companies that are considered as potential investment objects.
Conclusions We offer a method for evaluating the financial policy of companies based on a multivariate, customizable system of financial coefficients. We calculated an effectiveness indicator of the financial policy of companies, which can be recommended for practical use. The obtained results can be used by company management to make management decisions, by investors to choose the best investment option, by market participants to rank companies by efficiency and to determine industry benchmarks.

Keywords: financial policy, efficiency, evaluation methodology, Due Diligence, integrated indicator

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