FINANCIAL LEVERAGE AND UKRAINIAN SPECIFITY OF ITS USE
Journal Title: Східна Європа: економіка, бізнес та управління - Year 2018, Vol 3, Issue 14
Abstract
This publication is relevant in modern economic science and is devoted to the study of the mechanism of financial leverage. The shown mechanism provides increase in return on equity due to optimum management of its liabilities structure and of the differential of financial leverage, both of which are under control of the financial management of the enterprise. The article considers specific economic conditions that have developed in Ukraine and which must be taken into account when using the mechanism of financial leverage. This conditions are significant amounts of accounts receivable and accounts payable. Accounts receivable divert financial resources of the enterprise and adversely affect the effect of financial leverage. Accounts payable, on the contrary, contribute to the increase of this effect, as the creditors' funds are used in the activities of the enterprise, and the fee for these funds is practically zero in Ukraine. Taking into account the above aspects, the article substantiates the adjustments to the formula of the financial leverage effect when it is used in the conditions of Ukrainian enterprises.
Authors and Affiliations
V. M. Antonenko
Keywords
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- EP ID EP673915
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