CRITERIA OF IMPROVING FINANCIAL AND CREDIT SUPPORT OF AGRICULTURAL ENTERPRISES DEVELOPMENTJournal: Academic Bulletin "Economics and Region" (Vol.2, No. 51)
Publication Date: 2015-04-29
One of the problems of financial and credit support of the company is to determine the optimal structural proportions between equity and debt. They have a significant impact on the performance of the company and the final results of its operations. Improving the ratio of equity and debt, based on the capital pricing as a relative value of the costs incurred by the organization to attract financial resources from various sources, the author suggests a refined method of calculating the price of individual capital elements in view of the agricultural enterprises functioning. An approach to improving the financial and credit support of agricultural enterprises is based on economic and mathematical methods and specific criteria, which allow to reliably calculate the cost of financial resources attracted from various sources and to provide an optimum level of profitability and financial stability. The peculiarity of the agricultural production is the land use. Today, the agricultural land use law in Ukraine provides the following options: the right to private property, leased land and permanent use. In this paper, a refined method of calculating the value of agricultural enterprises’ financial resources borrowed from various sources is suggested, taking into account the normative value of the land and characteristics of the financial and credit support of agricultural production, which will allow to reliably determine the cost of capital and profitability. The optimal capital structure is a ratio of equity and debt sources, which will ensure the best value of the improvement criteria for a given level of financial stability and achieving the maximum efficiency of their use, while minimizing the weighted average price of capital. To find the optimal combination of capital structure and the level of financial sustainability of agricultural enterprises, a model is offered to optimize the capital structure of the criteria to minimize its weighted average prices, taking into account the characteristics of the agricultural production, and to maximize efficiency of the financial resources using.
Other Latest Articles
Last modified: 2016-07-19 16:00:27