Korop E.A.
Issues of searching for utilities activity funding sources
One of the main conditions of regions economics sustainable development
is municipal companies’ successful activity. The issue of opportunity to refinance
the resource requirements of these businesses must be of vital validity for
regional authorities. Municipal companies are basis for viability of the regional
population. Development level of the cities, regions and country as a whole depends
on effective activity of municipal companies [1].
But issues of municipal company’s financial resources managing had not
been solved.
The definition “Financial management” appeared in the 60s of the 19 th
century in
Financial science development in
Russia is dealt with the names of U. Krizhanich (1617-1683), G.
Kotoshihin (1630-1667), I.T. Pososhkov (1665-1726), I. Turgenev (1789 - 1871), Ì. Orlov (1788 - 1842), I. Gorlov (1814-1890), V.
Lebedev (1833 - 1909), I. Yanjul (1846-1914), I. Ozerov (1869 - 1942), A.
Bukovetskiy (1881-1972) and others. Systematic statement of “company finance”
was not formed in the beginning of XX century.
The concept “Financial management " appeared after the World war II
[2].
In a given stage of economic
development of
Municipal companies’ provision
system formed is ineffective and expensive. Its maintaining in current
conditions is impossible both for the consumers and budget. Consumed services
debt is continuously growing. Regional authorities advance tariffs, but they are not capable of compensating
fully the difference between the services cost and selfcost. The development
and improvement of municipal companies is a nation-wide problem. But at a local
level there also are many conflicts due to the long crisis phenomena in
economy. Issues of financial maintenance, development and financing the modernization
of working capacities are acute.
The condition of networks and constructions reached the drastic point;
housing fund condition is constantly deteriorating. The level of capital investment in developing
utilities does not provide improvements of their technical condition. Solving
the issue of finding financial resources for municipal companies’ activity is a
crucial condition of their development.
Analysis of financial resources will permit to uncover alternative
funding sources for successful companies’ activity. The focus is to be on searching
for companies’ own resources as an alternative to other funding sources. Municipal companies’ activity having been unprofitable,
manufacturing development at the expense of profit is impossible. Therefore amortization
politics has to be developed, action of which would be of maximum effect. The
amortization fund can be used as an additional source of capital renewal.
But even by rational use of own financial resources enterprises will not
be able to support networks and facilities in normal technical conditions. Consequently,
it negatively influences the quality of afforded services.
Therefore activities process of housing and communal companies in market
economics conditions must be treated.
The purpose has been to
treat theoretical and methodological concepts concerned with forming and
functioning mechanism of financing utilities activity. Issues must be solved regarding to peculiarity
of utilities activity.
Tasks of the research are:
i)
to highlight the papers of the domestic and foreign
economists with the aim to reveal economical essence and framework of the
corporative financial resources;
ii)
to define current characteristics, substance and prospects of
development utilities;
iii) to analyze the domestic and foreign
experience of financing municipal companies;
iv) to uncover inner and outer factors to
effect mechanism of financing utilities forming and functioning;
v) to treat financial resources structure
characteristic and its formation sources in the municipal economy companies;
vi) to analyze the trends of municipal
economy companies activity within decade;
vii) to substantiate needs of searching
subsidiary funding source for utilities activity;
viii) to highlight current mathematical and
statistical methods, to be used abroad and in
ix) to implement and test treatment results
for the particular municipal economy companies.
The above
mentioned mechanism structure must fall into economical and mathematical
methods; financial methods and levers; legal acts and base on data, obtained
from companies.
For the
elucidation of the mentioned problem it is necessary to use theoretical and
practical scientific methods of economic phenomena treatment. It is necessary
to be familiar with mathematical methods and practical knowledge of data
processing. The most significant methods for elucidating the problem may be
mathematical and statistical models concerning financial resources management;
financial analysis of companies activity, namely: analysis of financial
stability; analysis of paybility; analysis of solvency.
Value of the problem will be
encompassed in:
*) evaluation of outer
environment and inner factors influence on mechanism of financing utilities
formation, function and application;
**) further development of
financial resources classification;
The treatment results are
supposed to influence and upgrade financial and economical state of municipal
economy companies.
The positive
changes of municipal economy companies are assumed to occur due to implementing
proposed mechanism of financing utilities activity.
Effective
mechanism of financing utilities will lead to the Ukrainian companies’ activity
stabilization. In current situation, mechanism of financing companies’ progress
should be developed taking into consideration particularities of their
activity.
References:
1. Çàáàøòàíñüêèé Ì.Ì.
Äæåðåëà ôîðìóâàííÿ ô³íàíñîâèõ ðåñóðñ³â êîìóíàëüíîãî ãîñïîäàðñòâà//Àêòóàëüí³
ïðîáëåìè åêîíîì³êè. – 2005ð. - ¹6. – Ñ.
25-29
2. Ôèíàíñû: Ó÷åáíèê äëÿ âóçîâ / Ïîä ðåä.
ïðîô. Ì. Â. Ðîìàíîâñêîãî, ïðîô. Î. Â. Âðóáëåâñêîé, ïðîô. Á. Ì. Ñàáàíòè. – Ì.: Ïåðñïåêòèâà, Þðàéò, 2000.
3.
Bodie Zvie Essentials of investment –
4.
Rosen Harway S. Public Finance – 3rd ed. – Home-wood –