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Three-dimensional financial security model as a tool for financial strategy formation in the context of value-based management

Vol. 26, Iss. 1, JANUARY 2020

Received: 30 November 2016

Received in revised form: 12 December 2016

Accepted: 27 December 2016

Available online: 30 January 2020

Subject Heading: Financial control

JEL Classification: С54, G32

Pages: 81–100

https://doi.org/10.24891/fc.26.1.81

Pochitaev A.Yu. Kazan (Volga Region) Federal University (KFU), Kazan, Republic of Tatarstan, Russian Federation
strangerlight@mail.ru

ORCID id: not available

Akhmetov R.R. Kazan (Volga Region) Federal University (KFU), Kazan, Republic of Tatarstan, Russian Federation
rust-ar@mail.ru

ORCID id: not available

Subject The development of the modern theory and practice of risk management and growing complexity of domestic market functioning necessitate new tools to test and simulate public companies' financial strategy for financial security as part of value-based approach to financial management.
Objectives The purpose of the study is to design a three-dimensional matrix of financial security using econometric modeling, simulate standard values of parameters of the matrix, and consider its practical application.
Methods The paper rests on fundamental assumptions of the financial management theory related to risks. In the research, we also apply econometric and matrix modeling.
Results We identified relationships between factors and value indicators, derived regression equations reflecting a type of interrelation based on nine econometric verifications, simulated standard values of chosen parameters of the matrix for three groups under consideration, i.e. optimum, critical and catastrophic situation. The paper presents a qualitative assessment of the matrix and recommendations for its modeling on the case of PAO Nizhnekamskneftekhim.
Conclusions The research results may be useful for developing a financial strategy for risk management of joint-stock companies. The results of regression analysis show that achieving the optimal position in the matrix contributes to the growth of company value in the long run. The developed matrix may be applied within a complex analysis of company's financial strategy efficiency together with other models.

Keywords: matrix, financial security, strategy, modeling

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