Factors Affecting the Financial Condition of a Production Company: the Case of the Lena River Shipping Company (LORP PJSC)

Abstract

   The assessment of the financial condition of a company is carried out taking into account external and internal factors that have an impact on the final financial result. External factors include macroeconomic indicators, the state’s fiscal policy, the level of development of financial markets, and the presence of a competitive environment. Internal factors include the effectiveness of financial resource management, their direction of use and spending. As a result of the analysis, the effectiveness of financial resource management, its liquidity and profitability is revealed.

   The purpose of the study is to conduct a factor analysis on the example of “LORP PJSC, which provides transport services for the delivery of goods to the Russian northeast.

   To achieve this goal, it is necessary to solve a number of issues related to the calculation of the impact of absolute liquidity and return on capital on the financial condition of the company, and the formation of the conclusions arising from it. The last three years preceding the reporting period were taken as the study period, allowing to assess trends in the change in the financial position of the company. According to the results of the study, a negative trend in the calculated indicators was revealed, which inevitably leads to the risk of bankruptcy. Thus, the implementation of effective financial management largely depends on the conduct of high-quality financial analysis, which makes it possible to avoid the likelihood of an insolvent situation and eliminate negative trends. Rational application of the results of the analysis will allow the company to achieve a stable financial position and maintain its position in a competitive environment.