Scientific Bulletin

of Mukachevo State University

Series
Economics
Volume 10, No. 4, 20-31
Journal homepage: https://economics-msu.com.ua/en

UDC 658.153.014
Doi: 10.52566/msu-econ4.2023.20

Directions for increasing the efficiency

of the company's cash flow management
Maria Iorgachova*
PhD in Economics, Associate Professor
Odesa National Economic University
65000, 26 Pushkinska Str., Odesa, Ukraine
https://orcid.org/0000-0003-1933-6447
Olena Kovalova
PhD in Economics, Associate Professor
Odesа Polytechnic State University
65044, 1 Shevchenko Ave., Odesa, Ukraine
https://orcid.org/0000-0002-2080-1150

Abstract. The problem of managing the enterprise's cash flows is relevant, since the successful management of these
resources is the key to the financial security and stability of any business entity. The purpose of the study was to identify
universal recommendations for improving the enterprise's cash flow management by generalizing the theoretical aspects
of cash flow management and analysing the cash flows of PJSC “Odesa Cognac Factory”. The following methods were
used in the study: systematization and generalization (theoretical aspects were studied and existing views of scientists
on the essence and management of cash flows were summarized), factor analysis (key financial factors influencing the
process of enterprise cash flow management were identified), coefficient analysis (analysis of the efficiency of enterprise
cash flow management was carried out). Using the example of the operating enterprise PJSC “Odesa Cognac Factory”,
the dynamics of changes in the key components of cash flow management is analysed and the existing gaps in their
management are identified. The carried out analysis allowed identifying possible directions for improving the efficiency
of cash flow management of the enterprise and to provide certain recommendations, as a result of implementation of
which the enterprise will have a positive impact on its further activities, namely: focusing on optimization of available
cash flows and their balancing; studying the regularity of their movement in the enterprise by calculating the liquidity
and solvency indicators; considering the possibility of introducing the use of budgeting and financial management in
the enterprise as additional tools for managing cash flows; creation of an independent department for controlling the
movement of available cash flows; use of reliable and timely accounting information on cash flows when making certain
management decisions due to the increased use of modern information technologies. The practical value of the study is

Received: 30.07.2023, Revised: 24.11.2023, Accepted: 27.12.2023

Suggested Citation: Iorgachova, M., & Kovalova, O. (2023). Directions for increasing the efficiency of the company's
cash flow management. Scientific Bulletin of Mukachevo State University. Series “Economics”, 10(4), 20-31. doi: 10.52566/
msu-econ4.2023.20.

Copyright © The Author(s). This is an open access article distributed under the terms of the
Creative Commons Attribution License 4.0 (https://creativecommons.org/licenses/by/4.0/)

Corresponding author
*

20
20
 Iorgachova & Kovalova

the universal nature of the recommendations provided for the implementation of measures to improve the efficiency of
cash flow management, since these recommendations can also be used by other similar enterprises

Keywords: influencing factors; cash; income and expenses; balance; synchronism; recommendations

Introduction
Modern companies ensure an appropriate level of solven- relationship between the efficiency of their management
cy by balancing the amount of available cash inflows and and maintaining the required optimal level of liquidity.
outflows, synchronizing them in the course of their devel- Substantiation of the parameters for optimizing the en-
opment, and cash flow management is a crucial component terprise’s cash flows was carried out by G. Azarenkova et
of their financial policy, which involves the constant partic- al. (2022). V.V. Malikov (2020) devoted his work to practi-
ipation of all key parts of the management system. Changes cal recommendations for managing the cash flows of an en-
in the dynamics of the company’s cash flows result in cer- terprise, emphasizing that when using these recommenda-
tain decisions regarding its operations. It is impossible to tions in practical conditions, it becomes possible not only
overestimate the importance and significance of cash flow to reduce time costs but also to build a realistic cash flow
management, as the stable state of an enterprise is affected management system. The author believes that the main tool
not only by its quality and efficiency, but also by its abili- for accounting for cash flows for their proper management
ty to further develop and financial security. Effective cash is the Information Statement on Cash Flows.
flow management can help a company achieve a better bot- The purpose of this study is to analyse the state of man-
tom line and become more profitable. This determines the agement of its cash flows and identify areas for possible im-
relevance of the issue of effective cash flow management, provement of efficiency of cash flow management, which
which includes ensuring appropriate financial balance, and may be effective for other companies, based on generaliza-
the need to develop and provide recommendations for im- tion of theoretical and methodological aspects of cash flow
proving the efficiency of enterprise cash flow management. management and on the example of a real operating enter-
In today’s environment, Ukrainian and global compa- prise – PJSC Odesa Cognac Factory. To achieve this goal,
nies face the need to improve the efficiency of cash flow the following tasks were set: to systematize the existing
management, which has directly prompted a significant views on cash flow and determine the importance of cash
number of experts and scholars to continue researching flow management as a component of a company’s finan-
significant problems related to cash flow. Thus, among cial activities; to identify the key factors that influence the
the modern researchers of this issue, it is worth noting process of managing the company’s cash flows; to analyse
O.O. Oliynyk (2021), who devoted his work to defining the the current state of cash flow management at PJSC “Odesa
essence of cash and financial flows as economic categories, Cognac Factory” and, using the example of this enterprise,
and their distinction when applied in theory and practice to identify universal possible ways to improve the efficiency
in relation to certain phases of the process of expanded of cash flow management of enterprises.
reproduction in the system of modern financial manage-
ment of enterprises. Materials and Methods
Theoretical aspects are also addressed by G.S. Mel- The methodological basis of this study in considering the
nychuk (2020), A.V. Buryak & I.V. Demyanenko (2019), theoretical aspects of enterprise cash flow management
who reviewed the methods and systematized the coeffi- are the methods of systematization and generalization of
cients used in the analysis of enterprise cash flows. Issues the existing views of scientists on the essence and man-
related to cash flow planning are paid attention to in the agement of enterprise cash flows, which allowed allocat-
works of V.V. Skryl & K.Yu. Stupenko (2018), O.I. Dorosh ing the main components that characterize the concept of
& I.V. Plish (2021), in particular, the latter noted that the “cash flow” and comprehensively considering its essence,
formation of cash flows should be based on the use of a using the method of analysis of existing scientific devel-
number of tools, which must include a payment calendar, opments. When considering the process of enterprise cash
budget and cash flow plans, identify the features of plan- flow management as one of the important components of
ning the company’s cash flows and build a clear sequence the overall system of management of financial activity of
of this process. T.G. Shchepina & A.D. Titarenko (2021), enterprise, the article uses factor analysis, which allowed
as well as I. Spilnyk & O. Zagorodna (2017) and O.V. Kry- identifying key financial factors of influence on the pro-
lova (2019). T.O. Mulyk (2022) paid attention to the rele- cess of enterprise cash flow management and importance
vance of improving the efficiency of enterprise cash flow of their balance. Using the graphical method, the article
management, which, in her opinion, is due to the contra- builds a graph of balance (synchronization) of cash flows
diction between the growing needs of economic resources and analyses the efficiency of management of its cash flows
and their limited availability. on the example of a real enterprise. Thus, the construction
I.V. Piskuleva & M.I. Mavrina (2022) consider models of a graph of the balance (synchrony) of cash flows of PJSC
of cash balance management, reveal the main issues of the “Odesa Cognac Factory” for the period 2019-2022 showed

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 Directions for increasing the efficiency...

the existing unevenness of receipts and expenditures of its basis of all areas of the company’s operations, regulating
cash flows for the analysed period, which is due to the sea- the cash flow process at all stages, increasing liquidity, sol-
sonal nature of the company’s activities. vency and ensuring the economic stability of the company.
The ratio analysis was carried out by calculating the Capacity and liquidity undoubtedly depend on the ability
key indicators that characterize the quality of cash flow to control cash flows in a timely manner and in accord-
management, namely the calculation of the following ra- ance with the needs. All enterprises need to implement a
tios: cash flow liquidity, cash flow efficiency, net cash flow holistic concept of planning, controlling, and modelling
sufficiency, net cash flow profitability, return on cash re- cash flow management. O.I. Dorosh & I.V. Plish (2021)
ceived, return on cash spent, and accounts receivable turn- formulated a general definition of cash flow and noted
over. The analysis of the cash flow efficiency of PJSC “Odesa that “the cash flow of an enterprise is the receipts and
Cognac Factory” for 2019-2022 was carried out using the payments, that is, the continuous movement of funds in
following formulas: the enterprise in the process of financial, investment and
Indicator Calculation formula operating activities; it is the most liquid asset”.
Cash flow liquidity ratio
CF+
Cflr = CF− In turn, cash flow management is one of the most
important segments in the financial work of an enter-
NCF
Cash flow efficiency ratio Cfer = prise, and not only current but also future performance
CF−
NCF+ and further future development of any enterprise depend
Net cash flow adequacy ratio Ncfer = O+Res+D
on the efficiency of its organization. To achieve the de-
NP
Net cash flow rate of return Ncfrr = NCF sired result of the company’s activities, it is important to
NP monitor its financial condition in a timely manner and
Rate of return on cash received Ncfrr = NCF respond quickly to negative indicators. Information on
Rate of return on money spent Rrms = CF−
NP the financial condition of the company should be an inte-
gral part of its cash flow management, and the process of
NI
Accounts receivable turnover ratio Artr = Rs cash flow management should be carried out within the
framework of the economic and financial policy of the
where (CF+) – positive cash flow; (CF-) – negative cash company, and be a key tool for achieving the main goal
flow; NCF – net cash flow; O – the amount needed to re- of the company’s activities – increasing annual profit to
pay obligations; – increase in reserves; D – the amount of increase the welfare of capital owners by increasing the
dividends paid to shareholders; NP – net profit; NI – net market value of the company.
income from the sale of products; Rs is the average value Business operations of an enterprise are accompa-
of receivables for the analysed period. nied by cash flow, which provides an estimate of income,
The assessment of the volume and structure of cash expenses, movement of financial sources and assets. The
flows of PJSC “Odesa Cognac Factory” was carried out for process of capital flows occurs in time and space in the
2019-2022 on the basis of the company’s financial state- course of economic activity. The level of economic effi-
ments (Financial statements of PJSC “Odesa Cognac Fac- ciency depends on the availability of cash resources, in-
tory” for 2019-2022), which made it possible to assess the tegrity, and timeliness of the production and sales pro-
state of cash flow management of this company and identify cess. The cash flow of an enterprise is characterized by
universal possible ways of increasing the efficiency of cash total income and expenses secured by cash receipts and
flow management that can be used by other enterprises. payments, as well as by the corresponding positive and
negative changes. Based on the existing definitions of sci-
Results and Discussion entists and the above descriptions, the main components
To ensure the profitability of the company, management that characterize the concept of “cash flow” can be iden-
manages available cash flows. Financial assets are the tified (Fig. 1).

The process that characterises

Object of financial management Ensures the growth of A process that takes
the turnover and transformation
of economic activities the economic effect into account liquidity
of an enterprise's assets

A process that reflects the position

A process that reflects the use of various
of an enterprise in the market by the forms Cash flow
forms of capital
and scope of its operation

A process that takes into account A process that considers The process associated with the specifics
the risk factor the time factor of capital formation and use

Figure 1. Basic characteristics of the concept of “cash flow” of the enterprise

Source: developed by authors based on research O.V. Krylova (2019), T.O. Mulyk (2022), G.S. Melnychuk (2020)

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 Iorgachova & Kovalova

In any case, cash flow refers to the actual amount of which allows solving various financial management tasks
cash receipts and payments generated in the course of the and is a key process towards achieving the main goal of the
economic system, distributed in space and time, in terms enterprise. Effective management of the enterprise’s cash
of economic and production, organizational and economic, flows is a key factor in increasing its capital, i.e. the profita-
and internal economic relations. Enterprise cash flow man- bility of the enterprise directly interacts with the cash flow
agement is an important component of the overall system management system, which should be implemented at the
of management of all financial activities of the enterprise, enterprise through certain stages (Fig. 2).

1.Forecasting and planning Analysing the cash flows of previous periods

2. Implementation of the plan, further financial activities

Develop a plan for cash inflows and outflows

3. Analysing and optimising cash flows

Optimisation and regulation of the average
4. Financial controlling balance of cash assets

5. Adjustment of the plan and evaluation Assessment of the amount and level of the
of the results achieved average balance of cash assets

Figure 2. Stages of enterprise cash flow management

Source: Developed by authors based on research A.V. Buryak & I.V. Demyanenko (2019), O.I. Dorosh & I.V. Plish (2021),
O. Guseva et al. (2021)

It should be noted that the first stage involves planning in the established direction, analysing the formation of
cash flows by their various types based on the results of the cash flow over time, calculating liquidity and cash flow
previous period’s cash flows. This planning is predictive in efficiency. These indicators are tracked in the process of
nature due to the uncertainty of several of its initial prereq- monitoring the current financial performance of the com-
uisites and is carried out through various planned calcula- pany. The stable and efficient operation of modern en-
tions of certain indicators for different possible development terprises is hampered by many problems, including the
scenarios (realistic, optimistic, pessimistic). The purpose national economy, which is generally in crisis, insufficient
of the second stage is to ensure complete and reliable ac- supply of raw materials for processing enterprises, parity
counting of the company’s cash flow statements. This phase relations between raw material producers, fierce competi-
of management is aimed at implementing its principles of tion, lack of proper support from the state, poor quality of
information probability. In the process of implementing finished products, etc. There are also problems associated
this phase of cash flow management, coordination of func- with inefficient cash flow management. It is the efficien-
tions and tasks of the accounting and financial services of cy of cash flow management that determines the further
the enterprise is ensured. The main purpose of the third and ultimate development of the business and the results
stage is to analyse the determination of capital adequacy, of its financial and economic activities. In particular, a
capital efficiency, and the balance of positive and negative high-quality organization of the company’s financial and
cash flows of the enterprise in terms of quantity and time. economic control system will increase efficiency, optimize
Cash flow analysis is carried out for the enterprise as the use of resources, and thus maximize the profit of PJSC
a whole, for individual structural units (responsibility cen- Odesa Cognac Factory.
tres), and by the main type of its economic activity. Opti- The process of cash flow management is consistent
mization is one of the most important components of cash and includes: setting certain tasks and their subsequent
flow management and is aimed at improving efficiency in implementation, preliminary study and comprehensive
future periods. The most important tasks that are solved at analysis of the company’s available cash flows, namely,
this stage of the cash flow management process are: timely determining the level of their balance, sufficiency, and
identification and implementation of reserves to reduce the efficiency of use. An important step in analysing cash
company’s need to use external sources of financing; ensur- flows is to assess their balance, i.e. the synchronization
ing a more complete balance of positive and negative cash of incoming and outgoing cash flows, as well as to study
flows in terms of time and volume (Krylova, 2019). the dynamics of the net cash flow indicator. The dy-
The fourth and fifth stages are the results of fulfill- namics of cash flows of PJSC “Odesa Cognac Factory” is
ing the set targets, forming funds and spending them shown in Figure 3.

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 Directions for increasing the efficiency...

25000
20000
15000
10000
Net cash flows from operating activities
5000
Net cash flows from investing activities
0
Net cash flows from financing activities
-5000
-10000 Net cash flows for the reporting period
-15000
-20000
2019 2020 2021 2022
-25000

Figure 3. Dynamics of cash flows of PJSC “Odesa Brandy Plant”

by types of activity for the period 2019-2022, thousand UAH
Source: compiled and calculated by the authors based on financial statements of PJSC “Odesa Cognac Plant”
for 2019-2022 (n.d.)

As can be seen from Figure 3, the amount of the com- Negative cash flow from investing activities is a
pany’s cash flows for all types of activities, according to natural state for the company, and as of 2020 and 2021,
the data for 2019-2022, tended to decrease until 2022. In the value of the indicator was UAH (-9403) thousand
2022, there was a slight positive net cash flow. However, and UAH (-3946) thousand, respectively. An important
it is worth noting that, given the production needs, PJSC quantitative indicator of economic activity is the result
Odesa Cognac Factory, despite the instability of the total of the assessment of cash flows generated by operating
net cash flow, has fairly stable net cash flow from operat- activities. The absolute value of operating cash flow is an
ing activities. For example, in 2022, net cash flow from important indicator for calculating the net cash flow of
investing activities amounted to UAH (-18 367) thousand, an economic entity and most financial indicators and ra-
which indicates that the company is actively investing at tios used in cash flow management. A risk is a situation
the expense of loans received and proceeds from operating when operating activities consistently consume more
activities. In 2022, only operating activities demonstrated funds than they generate. Table 1 provides a detailed
the ability to generate positive cash flow: net cash flow from analysis of the company’s income and expenses related
operating activities amounted to UAH 2 994 thousand. to operating activities.
Table 1. Dynamics and structure of the company’s positive cash flow
from the operational activities of PJSC “Odesa Cognac Plant”, thousand UAH
2020 2021 2022 Dynamics
Indexes 2021/2020 2022/2021
sum share, % sum share, % sum share, % thousand thousand
UAH UAH
Proceeds from:
Sales of products 1 559
843 961 99.9 917 567 99.4 99.9 73 606 641 959
(goods, works, 526
services)
Return of advances 353 0 4 444 0.5 714 0.055 4 091 (3 730)
Other income 952 0.1 490 0.1 661 0.045 462 171
Total income 845 266 100.0 922 501 100.0 1 560 901 100.0 78 159 638 400

Source: compiled and calculated by the authors based on the financial statements of PJSC “Odesa Cognac Plant”
for 2020-2022 (n.d.)

According to the calculations, there have been cer- 2022 compared to 2021 by UAH 641 959 000, or by 69.9%,
tain changes in cash receipts from the main activity, as in which indicates a sufficiently high quality of positive cash
the last year and the reporting period, a significant share flow from operating activities. Also, its share in the total in-
of cash income from operating activities is income from come increased by 0.5%. Table 2 examines the dynamics of
the sale of products (goods, works, services). The abso- the volume and structure of expenditures for the needs of
lute amount of cash flow from such revenues increased in operational activities.

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 Iorgachova & Kovalova

Table 2. Dynamics and structure of the enterprise’s cash flow from operating activities of PJSC “Odesa Cognac Factory”
2020 2021 2022 Dynamics
Indexes Amount, Amount, Amount, 2021/2020 2022/2021
thousand share, % thousand share, % thousand share, % thousand thousand
UAH UAH UAH UAH UAH
Spending on:
Payment of goods 457 606 54.9 497 120 54.0 555 671 36.1 39 514 58 551
(works, services)
Salary 21 100 2.5 18 854 2.0 25 830 1.7 (2 246) 6 976
Deductions for
5 478 0.7 4 960 0.5 6 785 0.4 (518) 1 825
social events
Obligations for
296 021 35.5 326 398 35.6 547 432 35.6 30.377 221 034
taxes and fees
Expenses for
payment of 52 436 6.3 71 782 7.8 402 664 26.1 19 346 330 882
advances
Other expenses 1 491 0.1 1 238 0.1 1 158 0.1 (253) (80)
Total costs 834 132 100.0 920 352 100.0 1 539 540 100.0 86 220 619 188
Source: compiled and calculated by the authors based on the financial statements of PJSC “Odesa Cognac Plant”
for 2020-2022 (n.d.)

As can be seen from Table 2, the analysed company’s op- by 0.03%. “Tax liabilities” shows the same trend, having in-
erating expenses in 2022 increased by UAH 619 188 thou- creased by UAH 221 034 thousand in 2022, or an increase
sand, which may indicate an increase in the size of this of 67.7%. Therefore, it can be assumed that the company
activity. There is an increase in all items of expenses, except is restricting and controlling unreasonable expenditures on
for the item “Other expenses”. The highest growth rate was “non-emergency” needs.
achieved due to “advance” expenses. Structurally, consum- The study of the factors influencing the change in the
er operating cash flow in 2021 and 2022 consisted mainly company’s cash flow is part of the process of developing a
of payments for goods, works and services, increasing by cash flow management policy and will allow assessing the
UAH 58 551 thousand. It accounted for more than 36.1% available internal reserves and possible external directions
of the total cash flow from operating activities. Also, there of the company’s cash flow formation. The main factors in-
was an increase in capital expenditures for “Labour remu- fluencing the change in the enterprise’s cash flow can be
neration” by UAH 6 976 thousand, their share decreased divided into external and internal (Table 3).
Table 3. Financial factors influencing the company’s cash flows

External factors Internal factors

Financial policy Financial strategy of the enterprise

The state of the country’s financial system Importance and effectiveness of investment policy
Tax policy of the state Attracting investors
Credit policy Depreciation policy of the enterprise
Practice of settlement operations Duration of the financial cycle
System of settlements with counterparties
Solvency and provision of financial resources of the
System of targeted financing and obtaining loans enterprise
Adequate level of management of production stocks
and receivables
Source: developed by the authors based on research by M.I. Iorgachova (2018)

The lack of funds for the formation and management inflows and outflows. The study of this aspect of the enter-
of available cash flows, considering all external and in- prise’s activity is presented in Figure 4.
ternal factors of influence, is a key task for the financial The obtained results of the calculations indicate the
management of any enterprise. The quality of the respec- existing unevenness of cash flows inflows and outflows for
tive cash turnover at the enterprise is determined not only the analysed period, which is due to the seasonal nature of
by the existing composition of cash flows, but also by the company’s activities. PJSC “Odesa Cognac Factory” has
the indicator of rhythmicity and synchronization of cash problems with the consistency of incoming and outgoing

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 Directions for increasing the efficiency...

cash flows, as evidenced by the presence of a temporary of cash resources as a result of the non-synchronous forma-
cash deficit in 2021 and temporarily free cash balances in tion of cash flows poses a risk to the company’s solvency.
2020 and 2022. Both situations have a negative impact on The threat of loss of solvency by an enterprise leads to the
the company, since the presence of a temporarily free cash need to increase attention to the effectiveness of cash flow
flow means that the company’s available resources are not management, as well as the feasibility and importance of
used, which lose their value over time under the influence developing and implementing special measures to normal-
of inflation and other factors, and the temporary shortage ize cash flows.

25 000
20 000 Receipts (positive cash flow
15 000 of PCF), thousand UAH
10 000
Expenditures (negative cash
5 000 flow of NCF), thousand UAH
0
2019 2020 2021 2022

Figure 4. The schedule of balance (synchronicity) of cash flows

of PJSC “Odesa Cognac Plant” for the period 2019-2022, thousand UAH
Source: compiled by the authors based on the financial statements of PJSC “Odesa Cognac Plant” for 2019-2022 (n.d.)

Thus, the analysis of the balance and synchroniza- Thus, the analysis of the cash flows of PJSC “Odesa
tion of cash flow management of PJSC “Odesa Cognac Cognac Factory” showed the need for the enterprise to
Factory” showed the presence of some problems at the strive to increase the amount of incoming cash flows from
enterprise that require further solution: the main share operating activities, since their decrease has a negative
in the structure of revenues is operating activities (for impact on the enterprise’s activities: a decrease in the vol-
the last three years — 100%); the average quality of the ume of activities, an increase in unprofitability, deteriora-
generated cash flow of PJSC “Odesa Cognac Factory”, tion of financial indicators such as liquidity and solvency,
the practical absence of cash flows from financial ac- late payments of the enterprise both for wages and with
tivities; during 2019-2022, there was an unevenness of suppliers, a decrease in the profitability of both the total
receipts and expenditures of cash assets; for the last four and equity capital of the enterprise. Let analyse the effi-
years, the company has not been able to pay for the nec- ciency of using available cash flows by calculating relative
essary measures. indicators and factor analysis (Table 4).
Table 4. Analysis of cash flow efficiency of PJSC “Odesa Cognac Plant” for 2019-2022

Years
Indicator
2019 2020 2021 2022
Cash flow liquidity ratio 1.0 1.0 0.9 1.16
Cash flow efficiency ratio 0.2 0.3 (0.2) 0.16
Net cash flow adequacy ratio 0.1 0.2 (1.0) 0.003
Net cash flow rate of return (43.8) 5.2 (2.6) (14.9)
Rate of return on cash received (1.7) 3.1 2.5 (2.1)
Rate of return on money spent 2.1 4.7 (2.6) 2.4
Accounts receivable turnover ratio 1.3 1.7 0.9 1.9
Source: compiled and calculated on the basis of financial statements of PJSC “Odesa Cognac Factory” for 2019-2022 (n.d.)

Factor analysis of the activity of PJSC “Odesa Cognac circulation (Vasylchak et al., 2023). As shown by the calcu-
Factory” allows determining the causes and consequences lations in Table 4, the indicator “cash flow efficiency ratio” of
of the impact of certain coefficients on the main indicator – the enterprise “Odesa Cognac Factory” for the last four ana-
cash flow efficiency, thereby exploring the strengths and lysed years has an unacceptable value, as well as the indicators
weaknesses of the enterprise in carrying out operating, in- of net cash flow sufficiency and net cash flow profitability.
vestment, financial activities, and the process of accumula- Based on the above calculations, it is possible to
tion and use of financial resources to ensure their effective identify the necessary measures to improve the cash flow

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 Iorgachova & Kovalova

management of PJSC “Odesa Cognac Factory”. The man- should be borne in mind that the model looks different for
agement should regularly analyse competitors in the each enterprise, as it is influenced by the details of the fi-
domestic and foreign markets in order to increase the nancial and economic activities of a particular enterprise.
competitiveness of the enterprise and the quality of its To consider the possibility of using budgeting as an el-
products, since an increase in product sales and expansion ement of enterprise cash flow management. The main pur-
of the product range affects the stimulation of revenues pose of introducing cash budgeting at an enterprise should
from external sources of financing, and increase the effi- be to determine its deficit or surplus in a timely manner.
ciency of cash flows. To pay attention to optimizing the At present, most business entities do not sufficiently use
company’s cash flows and balancing the amount of positive modern forecasting methods, which is a negative aspect,
and negative cash flows, which will include measures to since information support must be effective to improve
improve the quality of cash flow management at the stra- the efficient movement of cash flows. One of such effective
tegic (long-term) and operational (short-term) levels. The elements of strategic accounting is the budgeting process,
company should reduce the amount of accounts payable which consists of the following main components: budg-
and receivable. An increase in accounts receivable has a eting methods (financial planning tools: types and formats
negative impact on the financial condition of the compa- of budgets, targets and standard systems); financial struc-
ny. Therefore, managers should be interested in reducing ture of the company (structural department or enterprise
the maturity of payments. Business entities should com- for which the budget is prepared); budget regulations and
ply with the terms of receivables repayment in accordance budget control mechanisms (procedures for budgeting,
with the terms of the contract and, if possible, by reducing submission, approval); distribution of functions among
the maturity of receivables, using partial early repayment management bodies (between functional services and
or other means of influencing the debtor. structural units) during the period of preparing budget; in-
To make reasonable investments and use current assets ternal regulatory documents (regulations, working instruc-
to eliminate excess inventories, which can be achieved by tions); automation of financial calculations (which involves
forming the optimal amount of the company’s inventory not only the formation of financial forecasts but also the
in accordance with the needs of the company’s activities. creation of so-called continuous management accounting).
This will enable the company to optimize its cash flows Budgeting is characterized by the fact that the choice of
and increase its liquidity. To study cash flow patterns and the budgeting system, budget forms and procedure is not
calculate such indicators as liquidity, business activity, fi- established by law, but is carried out individually for each
nancial stability and solvency based on the results obtained, enterprise, taking into account the specific circumstanc-
to identify problems and deviations in cash flow manage- es of its activities, organizational and financial structure,
ment in a timely manner. To determine the need for funds goals, and objectives of the budget system, completeness,
at the planning stage of the upcoming period, establish a functionality, degree of automation of existing processes
system of sources of funds for the expected amount and and the amount of funds allocated for the implementation
ensure that borrowing costs are minimized. In the event of of the system. This means that each business will have dif-
a crisis, to introduce a cash outflow saving regime, reduce ferent budget requirements and sizes. Practice has shown
production costs, modernize production, increase labour that the weakest link is often the budget execution proce-
productivity, and motivate employees. dures, actions, and processes aimed at achieving the targets
To analyse the factors that may affect cash flow against approved in the budget during the budget period. The lack
the backdrop of domestic economic conditions, uncertain- of interconnection between budgeting and management
ty, and risks at the micro and macro levels. The company accounting systems is also a problem. The ability of the
should analyse and take into account internal factors that existing management accounting systems to provide the
control cash flows. Such methods include leasing, use of data required for planned actual analysis was not consid-
accelerated depreciation, accelerated collection of receiv- ered when formulating certain budget conditions. Organi-
ables, and synchronization of cash inflows and outflows. zational mistakes include: incorrect allocation of financial
In addition, the development of financial models and cash responsibility centres, lack of incentives related to budget
flow forecasting of business entities allows for an effective indicators, inconsistent automation of budget systems, hu-
response to emergencies related to strategic decision-mak- man resources and psychological problems in implement-
ing. Financial modelling is especially important when the ing budget systems (Melnychuk, 2020).
availability and capacity of external financing is reduced It is also important to improve the internal financial
and the risk of liquidity loss increases with a significant control system to prevent inefficient use of financial re-
and disproportionate increase in receivables and payables. sources. Since PJSC Odesa Cognac Factory has a large pro-
Financial modelling for cash flow management helps to: duction volume and sells its own products in the domestic
model the cash flows of planned activities to forecast and and foreign markets, it is better for the company’s manage-
assess the future financial condition of the enterprise; show ment to create an independent control department that will
where funds are generated and spent; ensure consistent an- monitor the implementation of the budget of available cash
alytical work, create favourable conditions for operational flows through the development and implementation of cer-
management and make appropriate informed decisions. It tain internal reporting at this enterprise – the Cash Flow

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 Directions for increasing the efficiency...

Statement. This will allow timely detection of discrepancies investment attractiveness of enterprises. They emphasized
between actual and planned indicators, as well as informa- that free cash flow is a key indicator for determining the
tion on each of the areas of cash receipts and expenditures ability of an enterprise to attract investment. N. Poliukho-
regarding the percentage of their plan implementation. The vych et al. (2022) identified maximizing the amount of con-
basis of cash flow management is the availability of reliable solidated cash flow from operating and financing activities
and timely accounting information generated on the basis as one of the conditions for enterprise development. This
of accounting, management and financial accounting. This emphasizes the importance of increasing cash flow for the
information is very diverse: cash flows in the company’s ac- stable operation and development of enterprises. Studies
counts and cash desks, accounts receivable and payable, tax that focus on the importance of cash flow management in
budgets, loan disbursement and repayment plans, interest certain countries are also of great importance. H. Beladi et
payments, future procurement budgets, etc. The same in- al. (2021), M. Kamel Al Zobi & O. Hel Al-Dhaimesh (2021),
formation comes from different sources, so its collection A. Rahman & R. Bahadur Sharma (2020), T. Alsham-
and systematization must be approached with great care, as mari (2020), H. Dang Ngoc et al. (2020), T. Kliestik et
delays and errors in the provision of information can have al. (2020), study the peculiarities of cash flow manage-
serious consequences for the enterprise (Melnyk, 2017). ment in different countries and develop recommendations
Some managers adhere to old and traditional methods for enterprises operating in these market conditions. In
of cash flow management, and therefore there is an average summary, research in the field of cash flow management
level of application of modern information technologies in is extremely important for the development of enterprises
the processes of cash flow management, which also affects and the stability of their financial activities. Scholars from
the quality and timeliness of obtaining the necessary infor- both Ukraine and other countries are actively contribut-
mation on the state of the enterprise’s cash flows. Due to ing to the improvement of cash flow management prac-
the crisis situation, many enterprises do not always manage tices and the development of new methods for analysing
to adhere to the cash flow plan and comply with the pro- and assessing the financial attractiveness of enterprises.
portions of cash distribution for their activities (Buryak & Many scientists and economists study the impact of
Demyanenko, 2019). To stay ahead of competitors and have cash flows on the activities of an enterprise, but there is a
a profitable business, the company’s management needs to significant lack of separate comprehensive studies on the
make informed management decisions, which is almost im- management of enterprise cash flows that could expand the
possible without an effective cash flow management system. boundaries of conventional analysis, could formulate ap-
Cash flow management at modern enterprises is one of propriate approaches to ensuring their management, could
the key components of financial management and business offer specific ways and effective measures to improve the
success. Research in this area is of great importance for en- efficiency of enterprise cash flow management. It is impor-
terprises, as it allows them to develop effective strategies tant to note that inefficient cash flow management can oc-
and tools for cash flow management that help to increase cur even if a company is officially profitable. This is related
financial stability and competitiveness. Ukrainian and for- to the problem of profitable but illiquid enterprises that
eign scholars have made a significant contribution to this may be on the verge of bankruptcy. The above measures can
area of research. One of the important contributions to the become effective recommendations for improving the effi-
study of cash flow management is the work of C.B. Shubi- ciency of cash flow management not only for the analysed
na & M.Yu. Avakyan (2014), who examined in detail the enterprise PJSC Odesa Cognac Factory, but also for similar
directions of improvement of cash flow management sys- enterprises that seek to improve the efficiency of their cash
tems at Ukrainian enterprises. They identified the main flow management, as they are universal in nature.
shortcomings and proposed optimization of the cash flow
management system as one of the key elements of assess- Conclusions
ing the financial condition of an enterprise. O. Guseva and An appropriate assessment of the efficiency of managing
colleagues (2021) developed a model of competitive advan- the available cash flows of a particular enterprise becomes
tage based on maximizing net discounted cash flow. They the initial information base for making further informed
focused on complementary cash flow management, which management decisions, i.e. forecasting cash flows for the
involves a balanced distribution of the company’s cash future period. Therefore, the analysis of cash flow efficien-
flows, which contributes to the achievement of competi- cy, which reflects the reasons for changes in the liquidity
tive advantage. I. Khoma and O. Kostiuk-Pukaliak (2019) and financial stability of the enterprise, should be carried
devoted their work to the study of new methods of ana- out in the overall financial analysis and should become a
lysing cash flows at enterprises and assessing the efficien- key component of this analysis of the enterprise’s activities.
cy of enterprises, not limited to profit, but using the con- Valid, complete, and reliable information on cash flows
cept of free cash flow. This is suitable for a more accurate should contribute to improving the quality of management
analysis of the financial condition and investment attrac- decisions, which will directly affect the future financial po-
tiveness of enterprises. Scholars such as L.O. Shkvarchuk sition of the company.
& R.A. Slav’yuk (2017) and Z. Fakhroni et al. (2018) also To ensure effective management of the overall cash
expressed the importance of cash flow in assessing the flow and financial activities of an enterprise, the system of

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 Iorgachova & Kovalova

calculating the cash flow indicator should be used as an management of companies to improve cash flow manage-
indicator to measure financial and payment stability, and ment in modern conditions, since the areas discussed in
cash flow planning and management should be used as in- the article are universal and can be used as recommenda-
tegral components of the process of managing the overall tions to improve the efficiency of cash flow management of
activities of an enterprise to achieve financial stability and many companies, which will positively affect their future
solvency. In order to successfully solve the problem of inef- activities. Studying the effectiveness of cash flow manage-
ficient cash flow management, which takes place at the en- ment remains an urgent need for enterprise management
terprise of PJSC “Odesa Cognac Factory”, as evidenced by due to the important role they play in ensuring its effective
the analysis, in particular: unacceptable values of cash flow functioning, and the main role of cash flow management is
efficiency ratios (0.16), net cash flow sufficiency (0.003) and to ensure their balance by type, amount, time interval and
net cash flow profitability (-14.9) over the past four years, other essential characteristics. Further research on the re-
as well as imbalance of cash flows, it is necessary to imple- lationship between the quality of enterprise cash flow man-
ment certain measures regarding the system of accounting, agement and its value, which in turn is closely related to
analysis, planning, and control of cash flows. Planning and the level of investment attractiveness of the enterprise, may
optimization of economic activity of the entire enterprise, become promising areas within this issue.
especially its cash flows, will significantly increase the effi-
ciency of the enterprise. Acknowledgements
The scientific novelty of this study is that the analysis None.
of cash flow management on the example of the enterprise
PJSC “Odesa Cognac Factory” provided an opportunity Conflict of Interest
to identify the key areas that need to be addressed by the None.

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Напрями підвищення ефективності управління

грошовими потоками підприємства

Марія Іванівна Іоргачова

Кандидат економічних наук, доцент
Одеський національний економічний університет
65000, вул. Пушкінська, 26, м. Одеса, Україна
https://orcid.org/0000-0003-1933-6447
Олена Миколаївна Ковальова
Кандидат економічних наук, доцент
Національний університет «Одеська політехніка»
65044, просп. Шевченка, 1, м. Одеса, Україна
https://orcid.org/0000-0002-2080-1150

Анотація. Проблема управління грошовими потоками підприємства є актуальною, оскільки вдале управління
цими ресурсами є запорукою фінансової безпеки та стабільності будь-якого суб’єкта господарювання. Метою
дослідження було виявлення універсальних рекомендацій щодо покращення управління грошовими потоками
підприємства завдяки узагальненню теоретичних аспектів управління грошовими потоками та проведенні аналізу
щодо стану грошових потоків ПрАТ «Одеський коньячний завод». При проведені дослідження були використані
методи: систематизації та узагальнення (досліджено теоретичні аспекти та узагальнено існуючі погляди
науковців щодо сутності та управління грошовими потоками), факторний аналіз (виявлено ключові фінансові
чинники впливу на процес управління грошовими потоками підприємства), коефіцієнтний аналіз (проведено
аналіз ефективності управління грошовими потоками підприємства. На прикладі діючого підприємства ПрАТ
«Одеський коньячний завод» проаналізовано динаміку змін ключових складових управління грошовими потоками
та виявлені наявні прогалини щодо управління ними. Проведений аналіз дозволив виявити можливі напрями
щодо підвищення ефективності управління грошовими потоками підприємства та надати певні рекомендації,
у результаті впровадження яких підприємство матиме позитивний вплив на здійснення подальшої своєї
діяльності, а саме: зосередження уваги на оптимізації наявних грошових потоків та їх збалансуванні; вивчення
закономірності їх руху на підприємстві завдяки розрахунку показників ліквідність та платоспроможність;
розгляд можливості запровадження використання на підприємстві бюджетування та фінансового моделювання,
як додаткових інструментів управління грошовими потоками; створення на підприємстві незалежного відділу
контролю за рухом наявних грошових потоків; використання достовірної та своєчасної облікової інформації щодо
руху грошових потоків при прийнятті певних управлінських рішень завдяки підвищенню рівня застосування
сучасних інформаційних технологій. Практичною цінністю дослідження є універсальний характер наданих
рекомендацій щодо впровадження заходів з підвищення ефективності управління грошовими потоками, оскільки
дані рекомендації можуть бути використанні також іншими аналогічними підприємствами

Ключові слова: чинники впливу; грошові кошти; надходження та витрати; збалансованість; синхронність;
рекомендації

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