Economic Analysis: Theory and Practice

Assessing the availability of working capital in economic sectors of the Far East of Russia

Vol. 17, Iss. 6, JUNE 2018

Received: 27 December 2017

Received in revised form: 1 February 2018

Accepted: 2 April 2018

Available online: 30 June 2018


JEL Classification: D24, G32, O12, O16, R11

Pages: 1136–1149

Savalei V.V. Vladivostok State University of Economics and Service, Vladivostok, Russian Federation

ORCID id: not available

Samsonova I.A. Vladivostok State University of Economics and Service, Vladivostok, Russian Federation

ORCID id: not available

Tatarenko E.Yu. Vladivostok State University of Economics and Service, Vladivostok, Russian Federation

ORCID id: not available

Importance The article is devoted to the analysis and evaluation of working capital availability in the industries of the Far East. This is important for identification of problematic factors that reduce the efficiency and competitiveness of regional enterprises under measures undertaken by the government to liberalize investment and business climate in the region.
Objectives The purpose is to develop tools enabling to reveal industry-specific features of circulating asset financing, to conduct cross-industry comparison of structure and duration of operating cycles of enterprises and on this basis to improve the mechanism of financial decision-making in the field of working capital management.
Methods The study employs methods of financial ratio analysis and comparison.
Results The analysis of statistical reporting for 2012–2016 shows that the average periods of accounts receivable payment and accounts payable turnover are higher than the objective level in the economy of the Far Eastern Federal District and especially in the construction and manufacturing sector. This entails problems with working capital replenishment, generates credit risks of enterprises. Irrational structure of operating cycles leads to increased cost of net working capital formation and a decrease in profitability of financial and economic activity.
Conclusions It is critical to make managerial decisions on optimizing the operating cycle duration and structure in the economy of the Far Eastern Federal District, to focus on long-term sources of funding for its enterprises and industries.

Keywords: working capital, receivables, operating cycle


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June 2018