On the Issue of Profitability Management of Enterprise's Equity Capital on the Basis of Target Indicators
Journal Title: Бізнес Інформ - Year 2015, Vol 1, Issue 0
Abstract
The article is aimed to study and substantiate the approach to the profitability management of enterprise's equity capital. The concept of «profitability management of equity capital» has been improved, which makes it possible to determine the components and goal of management. The mechanism for determining the target profitability of equity capital as ratio of target amount of net profit to the target value of enterprise's equity capital was considered. In the present context, more attention should be paid namely to the target level of profitability, rather than the maximum level. Target level of profitability depends on the amount of net profit that is necessary for enterprise's development and formation of reserves as well as amount of equity capital in terms of the acceptable financial risk. It has been proposed to manage the profitability of equity capital through the factor indicators that form this profitability, their possible change in the planned year and target values should be taken into consideration.
Authors and Affiliations
Iuliia Chernetska
Keywords
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