Goodwill management of metallurgical enterprises using a rating based on optimal financial ratios

O. I. Kalinskiy ()

Russian Journal of Industrial Economics, 2017, vol. 10, issue 3

Abstract: The article puts forward an original method of the business reputation (goodwill) management of an enterprise. This method has been worked out by the author and is based on the optimization procedure where the compiled rating evaluation acts as a criterion function targeted at market value and goodwill while working capital volume and current liabilities act as variables. It is demonstrated that the volume of working capital and current liabilities of the ferrous metallurgy enterprise are not always optimal for the efficient functioning. The article presents the management system allowing the enterprise to obtain such capital structure which will be able to save resources through thrifty use of working capital under conditions of at both stable and sinking market. At the same time this system guards against deficit of working capital at times of higher demand and economic growth. Utilizing model calculations on the sample of two leading Russian ferrous metallurgy companies, it is demonstrated that the implementation of such management procedures allows to obtain sustainable operations and positively influence its market value and goodwill that securing the long term market stability. The article may present interest to students, Master’s and PhD degree candidates as well as to the top management, economists and financial personnel of the Russian and foreign metallurgical companies.

Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ach:journl:y:2017:id:606

DOI: 10.17073/2072-1633-2017-3-215-223

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