Development of a methodology for assessing the financial security of construction enterprises

Abstract

One of the key challenges in the housing market is to ensure the developer's reliability. The transition to the project financing mechanism requires the financial sustainability observation within the limits of the established standards by the specialized developers. In current economic conditions a more comprehensive analysis including not only financial sustainability indicators is needed for the disclosure of the financial situation of a building industry company. The authors selected the indicators groups and identified the specific indicators for the construction industry. These indicators were considered in comparing their actual values with standards. They reflect the financial security. The highest degree of safety is achieved under the condition that the whole complex of indicators is within the permissible limits of its threshold values, and the threshold values of one indicator are achieved with no connection with the others. In the process of implementing the assessment methodology the cumulative indicators were calculated for each group of indicators. On the basis of the above-mentioned, an integral index was obtained for each of the enterprises included in the sample. The authors adapted the financial security assessment model based on the data presented on the portal of the Unified Developers Register taking into account a specific territory (Bryansk Region). The formulated and tested model made it possible to assess the financial security of the largest enterprises in the construction industry, draw appropriate conclusions and propose management solutions within the framework of these or those indicators.