Modeling the investment strategy of agricultural enterprises

UDC 33.338.2

M. Domaskina Candidate of Economic Sciences, Associate Professor
V. Gursky Masters,
Mykolaiv National Agrarian University

The agricultural sector of Ukraine, being one of the largest sectors of the national economy, is experiencing a number of significant problems, largely inherent in the whole economic mechanism. First of all, this is financial instability, lack of legislative guarantees, low level of management. The crisis of agriculture, characterized by a decline in production, has exacerbated the problem of attracting investment, expanding funding sources and managing investment processes in the industry. Investment activity of an agricultural enterprise is reduced not only to meeting current investment needs, which is determined by the need to replace the assets that have left or their growth, but also to ensure further development in connection with changes in economic activity.
At the present stage, an increasing number of agricultural enterprises are aware of the need for efficient management of investment processes on the basis of scientific methodology, adaptation to the general objectives of enterprise development and environmental conditions.
The strategy of agricultural enterprise development: based on the possibilities of not only domestic investment, but also the attraction of additional external resources, both from the state, and from the private sector, and credit organizations. Only this will increase the investment attractiveness of agricultural enterprises and ensure the possibility of expanded reproduction.
At the same time, the following conditions are possible for the economic and organizational preconditions for the construction of optimal investment strategies for agricultural enterprises:
1) the general purpose is clearly formulated and substantiated – the corporate mission of the enterprise in the specific areas of activity and development;
2) satisfactory balance structure, as well as sufficient, level of financial stability;
3) the possibility of developing agricultural production through the involvement of both external and own sources of investment for development purposes.
In the presence of such general preconditions, the possibility of a stable and effective strategic development perspective can be achieved by implementing such an asset and liability management scheme.
The economic interpretation of the scheme of combined investment is as follows:
1. The primary stimulus of strategic development is the means of external lending – long-term loans and loans, which in the concept of financial analysis are treated as own funds of the enterprise, as well as sources of own funds – retained earnings, accumulation fund – in the total volume x1.
These funds are distributed in two directions:
– in the size x2 – for the development of an agricultural enterprise, connected with modernization and expansion of production capacities, technical preparation of production and marketing of agricultural products, the realization of which requires the growth of non-current assets;
– in the amount (x1 – x2) – on the growth of current assets, especially stocks and costs due to the expansion of agricultural production.
2. Since the investment project involves borrowing funds, it is necessary to determine the estimated interest rate on the loan.
3. The newly created profit ax1 can be divided into three directions:
– in the amount of x5 – to repay the most urgent obligations on payments to budgets of all levels and extrabudgetary funds, payables to suppliers, personnel of the enterprise, payment; interest for using a bank loan;
– in the size of x6 – for development purposes, which require an increase in non-current assets;
– in the amount (ax1- х5-х6) – on the growth of current assets.
4. In addition to long-term loans, loans as a source of investment, short-term loans and loans in the amount of x3 may be attracted, which are also distributed:
– in the volume x4 – for development purposes;
– in volume (х3 – х4) – on realization of the current production (replenishment and increase of stocks).
5. The result of the use of credit funds in the amount of x3 should be the receipt of net income ah3.
6. The gain of ah3 (which, like ah1, is similar in its economic essence to induced investments in macroeconomic processes) is also subject to distribution in three directions:
– in the amount of x7 – on regular and timely repayment of short-term debt;
– in the amount of x8 – for the purchase of fixed assets and other non-current assets;
– in size (ah3 – x7 – x8) – for current production.
According to this scheme, formalized limitations and boundary conditions of the optimization model – the investment strategy of an agricultural enterprise can be formalized. They will determine the area of such values of parameters, investment strategy, which would be acceptable for the requirements of ensuring financial stability of the enterprise and liquidity of its balance sheet.
The most general purpose function is profitability of assets (1), since the effect of the growth of the financial leverage of an enterprise involves increasing the profitability of assets (economic profitability) above the interest rate on investments. This condition is decisive in making decisions about the feasibility and the possibility of investment at all stages of their implementation. In this case, it is necessary to consider the task of maximizing this criterion.
The proposed economic models based on self-financing and combined investment contribute to bringing the balance sheet of the agricultural enterprise to a satisfactory structure that meets the requirements of investors. On the basis of the forecast balance, a financial appraisal of investments is made that allows management decisions to be made. However, a decision can not be considered justified without an economic assessment of investments, therefore, to determine the choice of strategy, it is also necessary to determine the economic efficiency of investments.

Keyword: investment, strategy, modeling, investment strategy, combined investment, economic and mathematical modeling.

Modeling the investment strategy of agricultural enterprises.

Issue 4 (96), 2017