Economic Analysis: Theory and Practice

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Industrial enterprise cost management based on financial performance target

Vol. 18, Iss. 6, JUNE 2019

Received: 19 February 2019

Received in revised form: 4 April 2019

Accepted: 25 April 2019

Available online: 28 June 2019


JEL Classification: L25

Pages: 1124–1139

Gryazev M.V. Tula State University (TulSU), Tula, Russian Federation

ORCID id: not available

Sorvina O.V. Tula State University (TulSU), Tula, Russian Federation

Petrovicheva S.E. Tula State University (TulSU), Tula, Russian Federation

ORCID id: not available

Subject The article addresses the methodology for using the financial performance target to control the development of target costs of the main business processes of industrial enterprises.
Objectives The aim of the study is to disclose the financial efficiency indicator as a new tool for strategic cost management of industrial enterprise focused on controlling the development of target cost groups and evaluating the performance enhancement.
Methods We reveal the main elements of cost management system, analyze the existing methods of cost management, systematize focus areas of control over costs by core business process.
Results We present a methodology for the calculation of financial efficiency indicator to control target costs inherent in major business processes.
Conclusions The application of financial performance target enables a comprehensive approach to the assessment of the impact of various business processes on the performance of industrial enterprises in real time. Regular control over financial performance target helps utilize it in the cost management process.

Keywords: costs, business process, financial efficiency target, financial performance


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