Stock Companıes of Uzbekıstan

International Journal of Advanced Science and Technology Vol. 29, No. 8, (2020), pp. 3098-3104 Analysıs Of The Current Status Of Attractıng Fınancıal Resources In Joınt- Stock Companıes Of Uzbekıstan

Shomirov A.A. 1, Zoyirov L.S 2 1 Ph.D in economics, associate professor, Tashkent Financial Institute 2 Candidate of economic sciences, associate professor, Tashkent Financial Institute

Abstract The article analyzes the activities and the state of attracting financial resources of joint-stock companies operating in the country, and also draws conclusions and recommendations on the development of the industry. Keywords: Joint-stock companies, financial resources, share capital, additional paid-in capital, listing, infrastructure bonds.

INTRODUCTION

At present, the successful operation of any business entity directly depends on the efficient use of financial resources, which is the main criterion of the management system. At the same time, in the world practice, financial managers have begun to think not only about how to accumulate financial resources, but also how to store and multiply them. Of course, successful business development without the knowledge of modern methods of financial resources management is impossible, financial managers need to be aware of the latest economic achievements, how and where to attract financial resources, how to distribute it, how to sell products, how to integrate various financial mechanisms. It is also important to know. From the foregoing, one of the main problem in managing the financial resources of joint stock companies operating in Uzbekistan is the importance and weakness of the use of financial instruments in raising additional funds. In the country, 86% of the total authorized capital of joint stock companies is formed by the state, and the rest of the charter capital falls on the share of commercial enterprises and private investors [1], which also demonstrates the high level of administrative and governmental intervention in the management of their financial resources. This was emphasized by the President of the Republic of Uzbekistan Sh.Mirziyoev on January 24, 2020, saying that "... it is necessary to take measures to curtail state-owned enterprises in the private sector and competitive industries, with the registration of nearly 3,000 state-owned companies". reveals the true nature of the problem.

LITERATURE REVIEW Improving financial management mechanisms in joint stock companies, including some aspects of managing financial resources of companies, have been studied in the scientific works of foreign scientists. In particular, J.K. Van Horne and J.M. Vakhovich studied the basics of financial management in his scientific works. Lapustas [5] studied the financial features of firms in their textbooks. I.A. Blank [6] investigated the conceptual dimensions of financial management. In his textbooks, Shokhahazemi [7] studied the issues of corporate policy in joint-stock companies, while B. Tashmuradova [8] studied topical issues of corporate finance management. R. Karlibayeva [9] investigated the financial features of joint stock companies in a market economy. In the textbooks and scientific works of S. Elmirzaev [10], the role of the financial market in the operation of corporate structures and the problems that arise in this area are discussed in detail.

RESEARCH METHODOLOGY

To complete this scientific research work, methods including inductionand deduction, comparison analysis, synthesis, generalization, classificationof logical and comparative analysis, quantitative and qualitative indicatorsare used.

ANALYSIS AND RESULTS

International Journal of Advanced Science and Technology Vol. 29, No. 8, (2020), pp. 3098-3104 In conditions of high competition for financial resources, it is important for joint-stock companies to attract, place and invest in financially sustainable investment and financial mechanisms and manage financial resources. Uncertainty, especially in the context of globalization of the financial and consumer markets, the significant fluctuations in prices for raw materials and thermal energy make these tasks more relevant, in particular, the risk level increases, liabilities increase, and income opportunities decrease. This article analyzes the main trends associated with the formation of financial resources of joint stock companies operating in the Republic, with a special focus on the status of their authorized capital and attracted resources, the volume of foreign investments in the activities of joint stock companies, and their cross-sectoral allocation of funds. Table 1 The number of joint stock companies in the Republic of Uzbekistan as of April 1, 2019[11] Volume of of Number of № Joint-stock companies Number emissions shares (million (billion soums) units) 594 122 373,07 9 956 654,30 Including: 1 Industry 162 56 653,75 2 398 236,88 2 Agriculture 198 4 755,49 1 534 612,13 3 Servicing 167 17 624,05 160 950,58 4 Financial Sector 67 43 339,78 5 862 854,71

Table 1 shows that as of February 1, 2020, shares issued by joint stock companies operating in the country amounted to 122.3 trillion. soums. If we review the ratio of the total authorized capital of joint stock companies operating in Uzbekistan to the GDP of the country, this figure is 22%,[12]67 of the total number of joint-stock companies, or 11.3% are in the financial sector whichmakes 35.4% of the authorized capital of all joint-stock companies. In Table 2 below, we analyze the top market capitalization companies in the world today. Table 2 The 10 largest companies in the world and their market capitalization share in the country's GDP [13]

GDP of developed Market capitalization Market № № Company name countries by the end of Ratio to GDP of the capitalization 2018 (US $) country (%)

The USA 1. Amazon Inc. 0,802 3,93 2. Microsoft 0,789 3,86 3. Alphabet Inc. 0,737 3,61 4. Apple inc. 0,721 3,53

Berkshire 5. 0,482 2,36 Hathaway Inc. 20,4

6. Facebook 0,413 2,02 7. Johnson & Johnson 0,347 1,70

8. JPMorgan Chase 0,332 1,62

Total 4,623 22,6

ThePeople's Republic of China 9. Tencent 0,411 11,8 3,48

International Journal of Advanced Science and Technology Vol. 29, No. 8, (2020), pp. 3098-3104 10. Alibaba Group 0,392 3,32 Total 0,803 6,80

As can be seen from the table above, 8 of the 10 largest or most expensive companies in the world are currently based in the United States, and the other two are in the People's Republic of China. Eight companies are among the 10 largest companies in the world with a market capitalization of $ 4.6 trillion as well as 22.6% of GDPof the United States. In particular, Amazon Inc., which today is the true leader in the e-commerce industry market capitalization of the company is 802 billion US dollars, which is about 4% of GDP of the world's most developed economy. When analyzing the activities of joint-stock companies operating in the country, we can see that the state share in their authorized capital exceeds 83.0% in commercial banks and over 88.0% in charter companies. Taking this into account, the of the of the Republic of Uzbekistan on April 29, 2019 "On measures to further improve the mechanism of attracting foreign direct investments into the economy of the Republic" also positively influenced the efficiency of financial resources management of joint stock companies is coming. According to the Presidential Decree, the state shares (shares) in the authorized capital of business societies are offered for sale to investors, including foreign investors. 100% state-owned share in the charter capital of Shakhrisabz yulduzi”, the state share capital of the joint stock companies, such as JSC “Kattakurgan Yog-Moy”, JSC "Kokand Yog-Moy", JSC "Asaka Yog", JSC "Kokand Mexanika Zavodi" is for sale by the Agency for State Property Management of the Republic of Uzbekistan [14]: As a result of increased foreign investments into the economy of Uzbekistan, modern technologies will be introduced to enterprises, increase of the ability of enterprises to export finished goods, decrease of unemployment rate of population and reduction of debts of enterprises to the state budget. As the above figures indicate, the level of financial resources attraction to the joint stock companies of our country is very low, and there are a number of problems that need to be addressed. Specifically: - underdevelopment of the secondary securities market in the country; - underdeveloped practice of passive income of legal entities and population and lack of confidence in them; - weak supply of money by the state mega-regulator, and currently the level of financial support of the economy is 29.5%. This figure was around 24-25% as of September 2017, and as a result of the liberalization of the foreign exchange policy it increased to 29.5% due to the devaluation of the national currency, which is 5.5% due to devaluation of the national currency to foreign currencies; - imbalance between the corporate securities markets and the regions, the smooth distribution of financial resources of joint stock companies in the provinces and cities of the country, which, in turn, does not allow the development of the country's branches and regions. In the process of examining the above issues, we have studied the financial statements of JSC "Uzpakhtasanoat".

Table 3 Structure and dynamics of financial resources of "Qorasuv Pakhta Tozalash" Joint Stock Company* [15] (in percentages as of January 1) The source of financial resources 2015 2016 2017 2018 2019 I. Equity capital 5,0 30,2 37,8 30,8 24,2 Including: 100 100 100 100 100 - authorized capital 7,6 1,0 0,9 2,9 3,6 - added capital 0,0 0,0 0,0 0,0 0,0 - Reserve capital 77,5 9,9 9,6 12,1 16,5 - undistributed (uncovered loss) profit 7,8 1.0 2,8 3,7 4,6 - Targeted revenues and funds 7,1 86,3 85,9 81,3 75,4 - Reserves for the next period 0 1,9 0,8 0 0 II. Liabilities 95,0 69,8 62,2 69,2 75,8 1 Long-term liabilities 0 0 9,3 2,8 6,5 2 Current liabilities 100 100 90,7 97,2 93,5

International Journal of Advanced Science and Technology Vol. 29, No. 8, (2020), pp. 3098-3104 Including: - current accounts payable 100 100 84,3 98,3 99,3 - Short-term bank loans 0,0 0,0 18,6 1,7 0,7 Total (I + II) 100 100 100 100 100

Table 3 shows the structure and dynamics of financial resources of JSC “Qorasuv Pakhta Tozalash” located in Tashkent region as of January 1, 2015, according to which, as of January 1, 2015, the share of equity in the JSC's liabilities is only 5%. As of January 1, 2019, it was 24.2 percent or an increase of 19.2 points over the same period. As can be seen from Table 3 above, the share of reserve capital in the own funds of JSC " Qorasuv Pakhta Tozalash" as of January 1, 2015 was 77.5%, and as of January 1, 2019 it was reduced by almost 5.5%. The main reason for this is that in the structure of own capital of "Qorasuv Cotton Clearing" the target revenues and funds increased over the same period from 7.1 to 75.4 percent. Analysis of financial resources of “Qorasuv Pakhta Tozalash”JSC as of January 1, 2015-2019 suggests that there are a number of problems in the management of the Company's financial resources, the first of which is the increase of its financial dependence on external entities and businesses in recent years. has been going on for the last four years. Secondly, a significant decline in the share of equity in “Qorasuv Pakhta Tozalash”JSCin the past three years reduces its ability to invest effectively. Table 4 below summarizes the financial performance of the “Qorasuv Pakhta Tozalash”JSC based on criteria set by our government to determine the financial and economic performance of joint stock companies. Table 4 Indicators of economic efficiency of JSC “Qorasuv Pakhta Tozalash” (coefficient) [16] Calculated results for 2015-2019 № Indicators 2015 2016 2017 2018 2019 1. (CIR — Cost Income Ratio) 0,96 0,98 0,98 0,99 1,01 ROCЕ— Return on Capital 2. 0,07 0,01 0,01 0,03 0,01 Employed)* 3. (ROE — ReturnOnEquity) 0,51 0,49 1,04 0,77 0,18 4. Return on assets 0,005 0,006 0,010 0,015 0,005 5. Absolute liquidity ratio 0,0014 0,0046 0,0091 0,0001 0,0004 Coefficient of financial 6. 0,05 0,29 0,37 0,30 0,24 independence 7. Accounts payable, in days 352,3 377,8 229,1 182 335 Accounts receivable turnover in 8. 13,3 14,7 59,3 70,4 43,7 days Coefficient of redemption 9. 0,91 1,26 1,54 1,28 1,27 (Solvency)

As can be seen from Table 4, most of the profits generated by the JSC “Qorasuv Pakhta Tozalash”, located in Tashkent region, are spent as expenses. Therefore, this figure is shown in line 2 of Table 4, with a coefficient of less than 0.95 for the period 2015-2019 analyzed, especially as of January 1, 2019, 1.01. Of course, the ratio of the costs of a joint stock company to income is very high, and all of its revenues are cost-oriented. As mentioned above, as well as local and international practice, it is advisable to have a value of 0.80-0.85. The sixth row of Table 4 presents the results of the analysis of the financial independence of JSC “Qorasuv Pakhta Tozalash”, which showed a successive increase in 2016-2017, with a coefficient of 0.05 or 5% as of January 1, 2015. 29% as of January 1, and 37% as of January 1, 2017. However, the financial independence of the joint stock company has declined for the last two years, reaching 24% as of January 1, 2019. There are also problems with the joint-stock company, which is that in the world practice, financial independence of economic entities should be at least 50%. However, the situation at JSC “Qorasuv Pakhta Tozalash” is twice less than the norm. Based on the results of the analysis and study of the Joint Stock Company's solvency indexes, it can be said that the results of the analysis in JSC “Qorasuv Pakhta Tozalash”are positive. For example, the

International Journal of Advanced Science and Technology Vol. 29, No. 8, (2020), pp. 3098-3104 solvency of the JSC (the coefficient of coverage) was not lower than 1.26 or 126% as of 01.01.2016- 2019. In the course of our research we have analyzed some of the key performance indicators of the three largest joint stock companies operating in the Republic of Uzbekistan: JSC "Uzpakhtasanoat", JSC "Uzdonmahsulot", JSC "Uzbekistan Railways" and JSC "Kvartz". The first line of the table below shows the profitability of each joint-stock company as of January 1, 2016-2018, and we can observe a positive trend compared to the three largest joint-stock companies that remain in JSC "Kvartz".Coefficient of profitability of the authorized capital - describes the efficiency of using the authorized capital of the enterprise and reflects the net profit for 1 Soum. The larger the index, the more efficiently the capital invested in the company's capital. The highest rate of charter capital for the last 3 years was 0.5% in “Uzpakhtasanoat” JSC, 7% in “Uzdonmahsulot” JSC, 6% in “Uzbekistan Railways” JSC and 8% in JSC "Kvartz". Another important indicator is the absolute liquidity ratio shown in Table 3 in Table 5. This indicator reflects the availability of the most liquid assets to promptly repay current liabilities. This characterizes the organization's "instant" solvency. The highest ratio of absolute liquidity for the last three years was 0.8 units in JSC "Uzpakhtasanoat", 1.04 units in Uzdonmahsulot, 0.3 units in Uzbekistan Railways, 12.4 units in JSC "Kvartz".

International Journal of Advanced Science and Technology Vol. 29, No. 8, (2020), pp. 3098-3104

Table 5 Indicators of the financial and economic situation of large joint-stock companies operating in the Republic of Uzbekistan [17]

JSC “Uzbekistan JSC "Uzpakhtasanoat" JSC “Uzdonmahsulot” JSC "Kvartz" № Indicators Railways” 2016y 2017y 2018y 2016y 2017y 2018y 2016y 2017y 2018y 2016y 2017y 2018y Profitability ratio of 1 the authorized capital 0,0004 0.002 0,005 0,07 0,004 0,002 0,01 0,06 0,037 0,89 0,44 0,46

The general solvency 2 coverage ratio 0,95 1,64 0,574 1 1,003 1,008 1,99 1,95 26,86 8,4 23,6 11,8

Absolute liquidity 3 ratio 0,84 0,79 0,119 1,04 0,0006 0,0001 0,2 0,08 0,39 1,2 12,4 0,53 Ratio of own funds to 4 attracted funds 0,01 0,025 1,168 0,3 0,29 0,2367 0,5 0,86 0,92 0,88 1,2 13,1

The ratio of the issuer's own funds to debt 5 0,01 75,95 0,856 -0,004 0,29 4,2905 0,5 0,86 26,73 9,36 9,7 4,8

International Journal of Advanced Science and Technology Vol. 29, No. 8, (2020), pp. 3098-3104 We can conclude that even in terms of absolute liquidity ratios, we can see a more positive trend than the rest of JSC "Kvartz"(the minimum standard ratio of absolute liquidity should be 0.2 points).

CONCLUSIONS AND SUGGESTIONS

In summary, there are a number of pressing issues in the management of financial resources of joint stock companies, and most importantly, the powers of the board of directors in managing their activities and allocating resources are important, so it is important to increase the efficiency and scope of financial resources. It is advisable to put into practice the following proposals related to improving the efficiency of management of financial resources of joint-stock companies: 1. Provide access to certain existing financial instruments to attract additional financial resources in joint stock companies, including bill of exchange and infrastructure bonds. 2. Undeveloped practices of passive income generation and the lack of confidence in the legal entities and the public, ie to create more practical work to increase the population's interest in purchasing securities of joint stock companies. 3. It is necessary to create a concept for the general solution of issues related to the management of financial resources of joint stock companies.

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