ENSURING THE EFFECTIVENESS OF ENTERPRISES FUNCTIONING

IN UNCERTAIN CONDITIONS

Scientific supervisor: Candidate of Economic Sciences

N.A. Voloshko.

Student: Bobrysheva О.І.

The theme of the master’s work

The Purpose of the diploma research is to develop the theoretical, methodical and practical actions in management decision making under uncertain conditions of market environment for ensuring the effectiveness of enterprises functioning.

Tasks of the research:1. To corroborate the relevance of the research concerning the effectiveness of

enterprises functioning in uncertain conditions.2. To conduct analysis of EVRAZ DMZ Petrovskogo activities and the major financial

and economic parameters of its performance.3. To analyze the possibility of bankruptcy for EVRAZ DMZ Petrovskogo4. To develop the mathematical model for selecting optimal alternative of enterprise

behavior in uncertainty of market environment. 5. To use the developed model for reducing the negative influence of the lost

possibilities risk at EVRAZ DMZ Petrovskogo

The Object of the investigation: the operation of EVRAZ DMZ Petrovskogo.

The Subject of the investigation: theoretical and practical aspects of ensuring the effectiveness of EVRAZ DMZ Petrovskogo functioning in uncertain conditions.

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Countries Company names Established Bought Capacity, million tonSteel Rolled stock

RussiaNizhnetagilskiy metallurgical plant 1940 1995 8,6 7,1

RussiaZahidnosybirskiy metallurgical plant 1964 1999 5,0 5,0

RussiaNovokuzyetsriy metallurgical plant 1933 1999 1,5 2,0

Check Rep Vítkovice Steel 1830 2005 1,0 1,0

Italy Palini e Bertoli 1963 2005 - 0,5

USA Oregon Steel Mills 1926 2006 1,2 2,3

USA Claymont Steel 1988 2007 - 0,5

UkraineDnepropetrovskiy metallurgical plant Petrovskogo

1887 2007 1,2 2,2

Steel enterprises of EVRAZ Group

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Russia 46,70%

USA 16,70%

Europe 14,80%

Asia 14,70%

CIS 4,50%

Geography of company’s product consumers

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Dynamics of financial indicators at EVRAZ DMZ Petrovskogo

Indicator2011,

thousand HUA

2012, thousand

HUA

2013, thousand

HUA

Growth rate 2012 to 2011,

%

Growth rate 2013 to 2012,

%

1. Balance 4105786 4072982 4877466 99,2 119,75

2. Net income (revenue) from sales

2856355 3674460 4696392 128,64 127,81

3. Sales Profit -351609 -700051 -645596 199,1 92,22

4. Total Profit (loss) -491459 -778560 -797333 158,42 102,41

5- Net profit (loss) -444449 -630047 -805645 141,76 127,87

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Coefficient of bankruptcy possibility at EVRAZ DMZ Petrovskogo

Indicator 2011 2012 2013 Divergence (+,-)

2012 to 2011 2013 to 2012

Х1 -0,295 -0,399 -0,379 -0,104 +0,02

Х2 -0,108 -0,155 -0,165 -0,047 -0,01

Х3 -0,12 -0,19 -0,163 -0,07 +0,027

Х4 0,61 0,25 0,296 -0,36 +0,046

Х5 0,696 0,9 0,96 +0,204 +0,06

Z 0,28 -0,007 0,17 -0,287 +0,177

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Model of choosing the optimal alternative of behaviour under conditions of uncertainty in the market environment

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1. Choosing the dominant risk in operation of the enterprise among the range of financial and business risks

2. Forming multitude of market environment states and alternatives of enterprise behavior within the limits of indicated dominant risk.

3. Building the regression model of dependence of result criterion from factors which were used to form the states of market environment.

4. Building the matrix of alternative behaviour with the glance of market environment states.

5. Building the matrix of risks for each alternative of behavior.

6. Calculation of Wald criterion..7. Calculation of Savage criterion.

8. Calculation of the Routh–Hurwitz stability criterion

9. Choosing the optimal alternative of behavior which is the maximum among the other alternatives as for the Routh-Hurwitz stability criterion.

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Indicators of the market environment Features of indicators

Debtors liabilities - 15 % = + 15 %

Current liabilities - 15 % = + 15 %

Average market rate for annual deposits in national currency

17 % 20 % 23 %

Cost of fixed assets 30 % 20 % 10 %

Average market income for invest funds stocks 30 % 50 % 70 %

Variants of features in the market environment

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Output data for carrying out the regression analysis

Parameter 2010 2011 2012 2013

Financial result (profit / loss), thousand HUA

-425074 -444449 -630047 -805645

Accounts receivable,thousand HUA

874598 72385 77530 221605

Cash resources, thousand HUA

187161 3911 59744 27514

Fixed assets, thousand HUA

3339385 2964201 2600121 2639746

Current liability, thousand HUA

3281084 2309859 3055928 3556012

Inflation, % 9,1 4,6 -0,2 0,5

Accounts payable, thousand HUA

557 129 765 979 926 083 554 399

Production inventories, thousand HUA 204 608,0 208 555,0 290 797,0 431 578,0

Bank loan, thousand HUA 1 617 000,0 0 398 085,0 1 775 973,0

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The model of financial result from the main activity before the taxation which was build according to the method of multiply

regression analysis

Y= 2445,85 - 0,61×X1 + 0,46×X2 + 0,22×X3 -1,72×X4 - 187,57×X5

де X1 - debtors’ liabilities;

X2 - cash;

X3 – fixed assets;

X4 – current liabilities;

X5 – inflation rate.

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Alternative of behavior Profit, thousand HUA

Alternative S1 977,7

Alternative S2 2850,64

Alternative S3 4269,525

Compromised decision according to the Routh-Hurwitz criterion

THANK YOU FOR ATTENTION!

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