Simulating fixed capital dynamics of industrial enterprises

S. Ishchuk

Economy and Forecasting, 2015, issue 1, 131-139

Abstract: The author analyzes the dynamics of fixed capital in Ukraine on the whole, and for this country's industry, in particular, for the period of 2006-2013 by calculating the coefficients of renewal and disposal. The evaluation of the initial value of the indices of fixed capital and investments has been carried out, on which basis the shortcomings of the investment process in Ukraine were outlined. The tendencies of changes in the structure of the sources of capital investment were investigated as well. By modifying the formula for calculation of net profit of an industrial enterprise and based on the capital productivity and its annual growth rate, an equation for determining the critical index of value added growth has been obtained. The forecasting mathematical model for determining the fixed capital dynamics at the micro level provided the engagement of re-investment mechanism has been developed. This model reflects the potential production capacity of the industrial enterprise and its ability to raise its investment potential excluding external limitations (demand for products, conditions in the credit and resource markets etc.). As a result of author's calculations made on the annual financial reporting of the food processing in Lviv region of Ukraine, functional dependences between the indices of the growth of fixed capital and its exploitation efficiency on the one hand, and the share of operating costs in value added on the other hand, have been revealed.

Date: 2015
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