Peculiar properties of the financial state of companies with falling income
The recent rise in inflation in Europe, caused by the pandemic, the increase in prices for energy resources and the violation of the logistics of energy supplies, has led to a decrease in company income. This makes it relevant to study the financial condition of companies with falling revenues. The...
Saved in:
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | Russian |
| Published: |
Government of the Russian Federation, Financial University
2023-07-01
|
| Series: | Финансы: теория и практика |
| Subjects: | |
| Online Access: | https://financetp.fa.ru/jour/article/view/2202 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849690243194683392 |
|---|---|
| author | P. N. Brusov T. V. Filatova A. D. Kashirin V. L . Kulik |
| author_facet | P. N. Brusov T. V. Filatova A. D. Kashirin V. L . Kulik |
| author_sort | P. N. Brusov |
| collection | DOAJ |
| description | The recent rise in inflation in Europe, caused by the pandemic, the increase in prices for energy resources and the violation of the logistics of energy supplies, has led to a decrease in company income. This makes it relevant to study the financial condition of companies with falling revenues. The purpose of this study is the development of tools for quantifying the impact of falling company incomes is becoming essential for making adequate management decisions. Until recently, such tools in capital structure theory did not exist. Two main theories of the capital cost and capital structure — Brusov — Filatova — Orekhova (BFO) theory and Modigliani — Miller (MM) theory — described companies with constant revenue: the first — for arbitrary age company, the second — for perpetuity companies. Within last couple years both these theories have been generalized for the case of variable revenue. In this paper the peculiar properties of the financial state of companies with falling income are studied within the modern capital cost and capital structure theory — Brusov–Filatova– Orekhova (BFO) theory, generalized for the case of variable revenue. As part of the goal, the tasks are solved to study the behavior of the main financial indicators (the cost of raising capital, the discount rate, the company’s capitalization, the cost of equity, and others), their dependence on debt financing, the age of the company in the face of declining income, which will make it possible to make adequate management decisions and reduce risks for companies. |
| format | Article |
| id | doaj-art-dec3da4ca28d4c7bbc8c15f2ff734899 |
| institution | DOAJ |
| issn | 2587-5671 2587-7089 |
| language | Russian |
| publishDate | 2023-07-01 |
| publisher | Government of the Russian Federation, Financial University |
| record_format | Article |
| series | Финансы: теория и практика |
| spelling | doaj-art-dec3da4ca28d4c7bbc8c15f2ff7348992025-08-20T03:21:22ZrusGovernment of the Russian Federation, Financial UniversityФинансы: теория и практика2587-56712587-70892023-07-0127315417510.26794/2587-5671-2023-27-3-154-1751047Peculiar properties of the financial state of companies with falling incomeP. N. Brusov0T. V. Filatova1A. D. Kashirin2V. L . Kulik3Financial UniversityFinancial UniversityFinancial UniversityDeutsche Bank LtdThe recent rise in inflation in Europe, caused by the pandemic, the increase in prices for energy resources and the violation of the logistics of energy supplies, has led to a decrease in company income. This makes it relevant to study the financial condition of companies with falling revenues. The purpose of this study is the development of tools for quantifying the impact of falling company incomes is becoming essential for making adequate management decisions. Until recently, such tools in capital structure theory did not exist. Two main theories of the capital cost and capital structure — Brusov — Filatova — Orekhova (BFO) theory and Modigliani — Miller (MM) theory — described companies with constant revenue: the first — for arbitrary age company, the second — for perpetuity companies. Within last couple years both these theories have been generalized for the case of variable revenue. In this paper the peculiar properties of the financial state of companies with falling income are studied within the modern capital cost and capital structure theory — Brusov–Filatova– Orekhova (BFO) theory, generalized for the case of variable revenue. As part of the goal, the tasks are solved to study the behavior of the main financial indicators (the cost of raising capital, the discount rate, the company’s capitalization, the cost of equity, and others), their dependence on debt financing, the age of the company in the face of declining income, which will make it possible to make adequate management decisions and reduce risks for companies.https://financetp.fa.ru/jour/article/view/2202generalized brusov–filatova–orekhova (bfo) theorythe companies with falling incomeequity costthe weighted average cost of capitalcompany capitalization |
| spellingShingle | P. N. Brusov T. V. Filatova A. D. Kashirin V. L . Kulik Peculiar properties of the financial state of companies with falling income Финансы: теория и практика generalized brusov–filatova–orekhova (bfo) theory the companies with falling income equity cost the weighted average cost of capital company capitalization |
| title | Peculiar properties of the financial state of companies with falling income |
| title_full | Peculiar properties of the financial state of companies with falling income |
| title_fullStr | Peculiar properties of the financial state of companies with falling income |
| title_full_unstemmed | Peculiar properties of the financial state of companies with falling income |
| title_short | Peculiar properties of the financial state of companies with falling income |
| title_sort | peculiar properties of the financial state of companies with falling income |
| topic | generalized brusov–filatova–orekhova (bfo) theory the companies with falling income equity cost the weighted average cost of capital company capitalization |
| url | https://financetp.fa.ru/jour/article/view/2202 |
| work_keys_str_mv | AT pnbrusov peculiarpropertiesofthefinancialstateofcompanieswithfallingincome AT tvfilatova peculiarpropertiesofthefinancialstateofcompanieswithfallingincome AT adkashirin peculiarpropertiesofthefinancialstateofcompanieswithfallingincome AT vlkulik peculiarpropertiesofthefinancialstateofcompanieswithfallingincome |