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CORRELATION DEPENDENCE OF INVESTMENT IN FIXED CAPITAL ON FINANCIAL INDICATORS

R. Kuzmich, O. Almabekova, E. Antosik, I. Filimonenko

First published: 2017https://doi.org/10.5593/SGEMSOCIAL2017/HB11/S03.073View metrics

Abstract

One of the burning issues in identifying the financial status of an industrial enterprise is a well-balanced system of financial indicators. Existing methods of financial assessment are similar in comprising the following indicators: current liquidity ratio; profitability ratio; indicators of financial sustainability and financial results: receivables and payables; limiting constraints. The specifics of extractive industry companies dictate the need to consider dependence of financial indicators on investments in fixed capital. A brief description of the concepts of current liquidity ratio, profitability ratio, indicators of financial sustainability and financial results, receivables and payables, internal and external limiting constraints are presented in the interpretation of Russian scientists. Correlation matrices are constructed and correlation window technique is applied to identify relations between independent and dependent variables for different periods of companiesВ’ operation. The data for the case of extracting companies is taken from All- Russia integral interagency system of information and statistics. Frequent dependences occur between the following pairs of independent variables: current liquidity/corporate loan payables; return on assets/financial results; corporate loan payables/limiting constraints. The data from correlation windows substantiated the dependence of investment in fixed capital on financial indicators, specifically close relations between independent variable of current liquidity and dependent variability of investment in fixed capital are revealed. This fact can lead to the conclusion that current liquidity ratio is most essential indicator for creation and reproduction of corporate fixed assets.

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Publication details

Title
CORRELATION DEPENDENCE OF INVESTMENT IN FIXED CAPITAL ON FINANCIAL INDICATORS
Authors
R. Kuzmich, O. Almabekova, E. Antosik, I. Filimonenko
Proceedings
References: 4th International Multidisciplinary Scientific Conference on Social Sciences and Arts SGEM2017, www.sgemvienna.org, SGEM2017 Conference Proceedings, ISBN 978-619-7105-93-3 / ISSN 2367-5659, March 28-31, Book1, Vol.1, 589-596 pp, DOI:10.5593/SGE
Publisher
STEF92 Technology
Year
2017
Pages
589-596
SWS Citekey
Kuzmich20173589596
ISSN
2367-5659
ISBN
978-619-7105-93-3
Language
en
Publication type
Proceedings Paper
Keywords
correlation coefficientcorrelation windowcurrent liquidity ratiofixed capital investmentlimiting constraintsfinancial indicator
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