CHALLENGES AND PATHWAYS TO IMPROVE COMPANY’S FINANCIAL MANAGEMENT BY RISK MINIMIZATION

Authors

DOI:

https://doi.org/10.30857/2413-0117.2019.1.5

Keywords:

financial activity, financial risk, risk assessment, financial risk management, management mechanism, enterprise financial stabilization mechanism, minimization of financial risks, adaptation, forecasting, external environment, financial loss

Abstract

This paper seeks to explore the essence of financial activity and its principal objectives in the process of business functioning as well as the effects from changes in the capacity and structure of the company's equity and attracted capital. The study provides insights on the impact of financial management practices on the overall company performance and payment of financial liabilities to the government or other business entities along with identifying the key problems and barriers hindering successful development of modern enterprises. The nature of financial risk arising in the process of financial activities or financial transactions has been revealed. It is argued that the given classification of financial risks (systematic (market) / unsystematic (specific) risks) enables to take timely and relevant risk elimination or risk reduction measures, in particular, deploy risk mitigation methods to those risks which cannot be avoided. The purpose of financial risk management is to minimize financial loss. The paper offers an overview of the factors that negatively affect a company’s financial performance and discusses the types of risks that inhibit company’s good performance and further growth. The study findings suggest the priority areas in financial risk management and discuss the risk management strategies by disclosing the types of company financial stabilization mechanisms (operational, tactical and strategic), along with presenting the methods for financial risk minimization as well as a financial toolkit to enhance the company’s risk management policies to prevent possible negative implications.

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Author Biographies

Olena V. Arefieva, Rzeszowska Polytechnic University by Lukashevich, Poland

доктор економічних наук, професор, відділ підприємства, менеджменту та екоінновативності Жешівського політехнічного університету імені І. Лукашевича, Польща

Iryna M. Miagkyh, Kyiv National University of Technologies and Design, Ukraine

доктор економічних наук, доцент, професор кафедри підприємництва та бізнесу Київського національного університету технологій та дизайну, Україна

Antonina M. Yashchuk, National Aviation University, Kyiv, Ukraine

аспірант кафедри економіки повітряного транспорту Національного авіаційного університету, м. Київ, Україна

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Published

2019-06-05

Issue

Section

MODERN TENDENCIES AND MANAGEMENT PROBLEMS