FINANCIAL AND ECONOMIC SUPPORT OF THE FUNCTIONING OF ENTERPRISES OF THE MATERIAL SPHERE OF PRODUCTION: A PRACTICAL DIMENSION

Abstract

There are enterprises of different types of economic activity at the market, which should be classified into tangible and intangible enterprises. The first group includes enterprises in industry, agriculture, forestry and fisheries and construction. The second group consists of companies engaged in trade and providing various services to market participants. In general, 128.9 thousand enterprises operated at the market at the beginning of 2021. With a share of 35.5% of the total number of enterprises, they produced products worth UAH 3.9 trillion, which is almost a third of the market. We consider the financial support of the material sphere enterprise through the prism of planning the needs of production in financial resources directed to its resource provision. If the company lacks its own financial resources, it is forced to look for external sources to cover costs. An important role is played by the imbalance in revenue and expenditure growth, which amounted to -6.4%, the growth of receivables (in industry and construction). The reduction of enterprises' own cash by this amount is caused by a constant increase in energy tariffs, a decrease in the purchasing power of the population, an increase in tax pressure, and other factors. The management of enterprises compensates the shortage of financial resources by attracting bank loans and borrowings (long-term and short-term), issues of shares and bonds. Thus, long-term liabilities and collateral increased (+ 23.2%), especially due to an increase in bond issues (4.8 times). At the same time, the amount of funds raised from the placement of shares decreased significantly (almost 6 times) against the background of uncertainty and instability of the stock market. Even in the conditions of economic instability in 2020, enterprises make capital investments in tangible and intangible assets, although to a much lesser extent than in 2016 (almost a quarter less). The financial results of enterprises are the lowest in 2016-2020, especially in industry and construction, where there is a loss of 43.1%. The situation that arises requires a detailed in-depth study and the formation of appropriate recommendations for enterprises, depending on the type of economic activity.