 Strategic Financial Analyses of Sanatorium Corporations under Conditions of SeasonalityVadim Malyshenko () and
Kostyantyn Malyshenko ()
Journal of Corporate Finance Research, 2019, vol. 13, issue 1, 40-59 Abstract: The purpose of this study is to develop a new method of financial analysis that aids the strategic development of financial sustainability in businesses operating in the context of pronounced seasonality. In this study, we consider the example of the sanatorium industry, which is a crucial industry for the Greater Yalta region. In this case, the seasoned reporting financial period can make it difficult to determine a company’s value and to assess relevant financial risks, and can restrain investment activity in these businesses.The limitations of classical analytical methods are apparent in the absence of tools available to objectively justify programmable temporary decreases in financial standing. However, such a strategic program is practically a prerequisite for maintaining competitive status in this particular region and industry, given the constant threat of recessions and the ubiquitous necessity for mobilisation of financial resources. It is important to be able to methodically separate those recurring trends of financial activities that are inherent in individual stages in the life cycle of such organisations from the temporary fluctuations in financial conditions created through the influence of seasonality.This study aims to fill a methodological gap between the general provisions of strategic management studies and the strategic financial analyses of foreign and domestic authors. The first part of the methodological base relates to the provisions of the School of Configuration (as per the classification of the strategic management schools of H. Mintzberg). This approach involves management based on a chain of profiles (“firm-environment”) and the gradual achievement of competitiveness. The second approach is related to the classification of the types of financial crises experienced by firms according to domestic authors, of which capital, profits, and liquidity are the paramount factors. This sequence of factors was additionally complemented by the inclusion of business activity and cash flow crises. The foregoing factors formed the basis for the ranking of financial ratios according to the new analytical model presented in this study, which is based on the central danger of bankruptcy. Methods of financial analysis establish only incoming conditions and several alternatives for the transformation of a business’s financial state. Sanatoriums may be faced with the situation whereby the number of alternative competing sources of respite or similar services available to their potential customers would increase progressively each year. A successive series of good or bad commercial seasons may easily require a substantial reappraisal of a business’s fundamental financial strategy. The application of the new model presented in this study reveals a phased sequence of strategic implementation which is catered more specifically to the potential challenges of seasonality inherent to these corporations. Keywords: financial standing; financial model; financial risk; financial analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hig:jcorpf:v:13:y:2019:i:1:p:40-59 Access Statistics for this article More articles in Journal of Corporate Finance Research from National Research University Higher School of Economics |
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