Factoral Analysis of the Financial Leverage of the Enterprise

Izolda Chiladze

Applied Finance and Accounting, 2019, vol. 5, issue 1, 42-48

Abstract: The activities of the enterprises always involve some uncertainty, therefore there is always a risk that objectives may not be achieved. So, theoretical and practical aspects of business risks are always relevant. The goal of the research is to select the general indicator of the financial risk between the leverage coefficients of the enterprises and to create its¡¯ factorial model. The subject of research is the system of financial leverage ratios of the enterprise. Financial information on Georgian wine companies is used for the practical provision for research. As a result of the research has been created a new factor model of the general indicator of financial leverage. It is possible to measure five-factor indicators making an impact on the level of financial leverage. Its regular analysis will help enterprise management to fully control and manage the financial risks of the enterprise, to implement adequate measures on the basis of which the financial stability of the enterprise would not be jeopardized, which is also in the public interest.

Keywords: business risks; risk indicators; financial leverage; a factorial model (search for similar items in EconPapers)
Date: 2019
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