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Imperatives of Civil Society Development in Promoting National Competitiveness

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Imperatives of Civil Society Development in Promoting National Competitiveness IMPERATIVES OF CIVIL SOCIETY DEVELOPMENT IN PROMOTING NATIONAL COMPETITIVENESS Proceedings of the 1st International Scientific and Practical Conference December 13-14, 2018 Co-organizers o f the Conference: Odesa Institute o f Trade and Economics o f Kyiv National University o f Trade and Economics, (Odesa, Ukraine) Batumi Navigation Teaching University (Batumi, Georgia) Volume II Included in ACADEMIA.EDU Editor: Prof. Dr. Badri Gechbaia Batumi, GEORGIA 2018 1 Batumi, Georgia, Volume II, December 13-14, 2018 1st International Scientific and Practical Conference «Imperatives of development of civil society in promoting national competitiveness» FINANCIAL LEVERAGE RATIOS TO MEASURE BUSINESS SOLVENCY IN UKRAINIAN ENTERPRISES Vagner Iryna, PhD, Lviv Institute Banking University Pryshlyak Halyna, PhD, Lviv Institute Banking University Aleverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt (loans), or assesses the ability of a company to meet its financial obligations. The leverage ratio is important given that Ukrainian companies rely on a mixture of equity and debt to finance their operations, and knowing the amount of debt held by a company is useful in evaluating whether it can pay its debts off as they come due. Leverage Ratio focus on the long-term solvency of the company with regards to how much capital comes in the form of debt or assessing the ability of the company to meet its financial obligation. We can also say that this ratio measures long-term stability and structure of the firm. A leverage ratio may also be used to measure a company's mix of operatingexpenses to get an idea of how changes in output will affect operatingincome. Finally, the consumer leverage ratio refers to the level of consumer debt as compared to disposable income and is used in economic analysis and by policymakers. This ratio helps the company to determine how much amount they can borrow so as to increase the profitability of the company. This ratio also helps in determining the quantum of debt that can be borrowed. The most well known financial leverage ratio is the debt-to-equity ratio. It is expressed as: D/E Ratio = Total Debt / Total Equity (1) The equitymultiplier ratiois similar, but replaces debt with assets in the numerator: Equity Multiplier = Total Assets / Total Equity (2) An indicator that measures the amount of debt in a company’s capitalstructure is the debt-to-capitalization ratio, which measures a company’s financial leverage. It is calculated as: Long-term Debt to Capitalization Ratio = Long-term Debt / (Long-Term Debt + minority interest + equity) (3) There are two types of Leverage Ratio (table 1) 324 1 Batumi, Georgia, Volume II, December 13-14, 2018 1st International Scientific and Practical Conference «Imperatives of development o f civil society in promoting national competitiveness» Table 1 Types of Leverage Ratio Types o f D efinition Leverage Ratio Capital Structure Ratio - provides details about which type of financing to be used so as to focus on long-term solvency position of the company Equity ratio This ratio indicates total owner contribution in the company. Formula: Shareholder Equity/ Total Capital Employed This ratio indicates total leverage used in the company. D ebt ratio Formula: Total Debt/ Total Capital Employed This ratio indicates total debt used in the business in comparison to equity. A higher Debt to equity ratio represents insecurity to the creditors and other lenders and the low ratio ratio represents more safety or cushion to lenders. Formula: Total Debt/ Shareholders Fund Coverage Ratio - used to check how much margin is available after paying off the obligation which arises in the course of leveraging the business. At the time of leveraging, lenders/banks use this ratio to know whether the company Debt service will be able to pay their dues in due course or not. Generally, 1.5 to 2 is treated as an coverage ratio ideal ratio. Formula: Earning Available for debt service/ Interest + This ratio is used by the lenders to check whether the company will be able to pay off interest due on the instalment on time or not. This ratio also indicates the extent to Interest coverage which fall in earning won’t impact the payment of interest. ratio A high ratio means the company can easily meet its interest obligation. A low ratio indicates inefficient operation. Formula: EBIT/Interest This is an important tool used to check the capital structure of the company. This ratio describes the relationship between the owner’s capital and the amount borrowed Capital gearing by the company on which periodic payment is made. ratio Formula: (Preference share capital + debentures + Long term loan) / (Equity share capital + Reserve and surplus) These financial leverage ratios allow the owner of the business to determine how well the business can meet its long-term debt obligations. These ratios are worth nothing, or very little, in isolation. You have to be able to do trend and industry analysis to be able to determine how well you are managing your debt position. 1 325 1 Batumi, Georgia, Volume II, December 13-14, 2018 1st International Scientific and Practical Conference ____________«Imperatives of development of civil society in promoting national competitiveness»_____________ TURKISH HIGHER EDUCATION AND BOLOGNA PROCESS Caglayan Y.H., Caglayan E.H.....................................................................................................296 MYTH AND SYMBOL IN THE ONTOLOGY OF P.O. FLORENSKY Karpenko M.....................................................................................................................................298 PHILOSOPHICAL REFLECTION OF THE CITY'S SOCIAL ECOLOGY Tikhomirova F ................................................................................................................................300 PHILOSOPHICAL ANTHROPOLOGY AS A SELF-CRITICISM OF HUMANITARIAN TECHNOLOGIES Petrykivska O.S.............................................................................................................................. 303 CREATIVE POTENTIAL OF PHILOSOPHICAL AND PSYCHOLOGICAL EDUCATIONAL PRACTICES Donnikova I.A., Kryvtsova N.V.................................................................................................306 "NEW KANON" DESIGNING A PHILOSOPHICAL AND LOGICAL DISCIPLINES Pavlova O.S..................................................................................................................................... 309 TRANSFORMATION OF THE PARADIGM OF EDUCATION IN THE CONTEXT OF THEORY GENERATION Kuchnikova S..................................................................................................................................312 TRANSFORMATION OF THE INSTITUTION OF EDUCATION IN THE DIGITAL SOCIETY Zinchenko N.................................................................................................................................... 315 SECTION VI. LEGAL SYSTEMS AND INTERNATIONAL RELATIONS PROPERTY OF HUMAN ORGAN ORGANIZATIONS Pasichnyk S.V., Nagachevsky V.Ya., Nanivsky R.A.............................................................. 317 LEGAL FORMS OF REALIZATION OF THE NATIONAL ROAD SAFETY POLICY Nefedova A.V........................... 320 HUMAN CAPITAL INDEX IN THE 21st CENTURY Gaiduchok 0 .1 ............................................................................................................................... 322 FINANCIAL LEVERAGE RATIOS TO MEASURE BUSINESS SOLVENCY IN UKRAINIAN ENTERPRISES Vagner Ir.......................................................................................................................................... 324 HISTORICAL-ANTHROPOLOGICAL PLAN OF MODERN PHILOSOPHY OF HISTORY AND THE SYSTEM OF EDUCATION Aytov S.Sh........................................................................................................................................ 326 11.
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