The Directions of Improvement of Cash Flows in PJSC “Rivneazot”

Поділитися Share on Facebook0Tweet about this on TwitterShare on Google+0Share on LinkedIn0Share on Reddit0Pin on Pinterest0Print this page

Demianchuk L.V.,

Scientific adviser: Ivanchuk N. V.

                                                               National University of Ostroh Academy

The article states that cash flows from operating, investing and financing activities are one of the key characteristics for any company or business. The author determines the model of multi-objective optimization of cash flows in PJSC “Rivneazot” and provides recommendation for maximization of its net cash flows.


Key words: cash flows from operating, investing and financing activities, net cash flows, revenue, costs, solvency.

Formulation of the problem. Nowadays scientists state that the functioning of an enterprise is a complex and dynamic process that is the result of continuous and cyclical cash flows. Therefore, the analysis of cash flows is an essential aspect that makes it possible to objectively assess the financial position of any entity, since imbalance of cash inflows and cash outflows can lead to insolvency of business.

Analysis of recent research and publications. The theoretical and practical aspects of the chosen subject have been done by domestic and foreign scientists such as M.  P.  Voinarenko, L. S. Kriuchko, N. I. Kolomiets, T. V. Pepa, V. O. Podolska, O.  O.  Tereshchenko, S. M. Semenova, N. P. Shmorgun and many others. However, despite significant scientific achievements of scholars, the issues of improvement of cash flows in companies remain open.

The purpose and objectives of the study are to examine cash flows in PJSC “Rivneazot” and to identify the key areas of its improvement.

An account of the main material. The PJSC “Rivneazot” is a leader among manufacturers of fertilizers in Western Ukraine, but nowadays the company has experienced some financial difficulties and is in a state of financial crisis. So, the first step is the assessment of dynamics of cash flows in the selected entity (Fig. 1). Figure 1 illustrates that during the study period there were constant changes in the value of net cash flow due to the changes in the proportions between positive and negative cash flows.

In particular, in 2012, a positive net cash flow is observed, which amounted to 63.9 million UAH, which has been entirely achieved through incomes from operating activities. This indicates a priority of this type of cash flow for the enterprise. In 2013 negative net cash flow was obtained in the amount of 372 million UAH, which was due to the fact that the negative cash flow from operating activities predominated over the positive.

Fig.1. Cash flows in the Rivneazot JSC during 2012-2015

*Source: calculated by the author on the basis of source [1-2].


According to the results of 2014, there is a positive value of the analyzed indicator, which amounted to 748 million UAH by reducing the sum of negative cash flow from operating activities. However, in 2015, the negative net cash flow was again achieved in the amount of 827 million UAH (maximum value).

However, the analysis of the sufficiency of cash resources only based on the cash flow statement doesn’t allow to estimate the actual solvency of this enterprise. Therefore, the key tasks are the analysis of the effectiveness of cash using and an assess of the liquidity and solvency of PJSC “Rivneazot” on the basis of system of relative indicators (Table 1).

Table 1

Dynamics of relative indicators of assessment of the cash flows in PJSC “Rivneazot”



2012 2013 2014 2015
Cash flow efficiency ratio 0,008 -0,025 18,805 -16,683
Operating Cash Flow/Sales Ratio 0,071 -0,258 0,531 -0,153
Operating-cash-flow-to-total-assets ratio 0,036 -0,066 0,180 -0,076
The liquidity ratio of cash flow 1,008 0,975 1,053 0,940
Cash cover ratio of current liabilities 0,033 -0,055 0,094 -0,023
The level of net cash inflows -0,071 0,429 -0,065 0,076

*Source: calculated by the author on the basis of source [1-2].

The analysis of the efficiency of the use of cash shows that the company has got a low effectiveness of the cash flow. In particular, the best values are observed in 2014, since the company generated 0.19 UAH of the net cash flow per 1 UAH negative cash flow, and 0.18 UAH per 1 UAH of its assets. As for the next analyzed period, it is obvious that the situation has worsened following the results of 2015. Considering the fact that the value was less than one, it indicates the insolvency of the analyzed company.

Another important characteristic is the cash cover ratio of current liabilities by the net cash flow from operating activities. Whereas the significant amount of current liabilities of the company usually appears in a process of its operating activities. The value of this index in 2015 is negative, which confirms the short-term insolvency of PJSC “Rivneazot”. Also, its financial instability could be assumed, because an indicator of the level of the net cash income is much less than the normative value.

Thus, there research shows that PJSC “Rivneazot” requires the management system that could restore the cycles of operating, investing and financing activities of the enterprise, and provide the balance of their cash flows in order to improve and optimize its liquidity and solvency.

Nowadays, cash flow optimization models based on maximizing net cash flow of the enterprise as a whole are playing the leading role in the economic literature. However, the operating activity, which is the main activity of the enterprise, has to be the key factor in the growth of net cash flow. In other words, it is needed to achieve the dominance of cash inflow from sales over the cash outflow provided by operating activities. As a result, it will help to finance their investment needs and reduce the amount of borrowings.

So, based on the analysis of cash flows and comprehensive assessment of the selected entity, the model of multi-objective optimization of cash flows of PJSC “Rivneazot” can be represented (Fig. 2).

As a result, the final criterion is the maximization of the net cash flow from its operating activities. That will be achieved through the following two conditions:

  • the growth of the positive (incoming) operating cash flow and a domination of incoming cash flows over the outgoing ones;
  • the increase of the efficiency of operating cash flow, because this figure acquired a negative value in 2015[4].

Figure 2. The model of multi-objective optimization of cash flows of PJSC “Rivneazot”

*Source: [4].


Thus, the initial step is to determine the optimal balance of funds (assets) of the enterprise on the basis of the most prominent foreign models of cash management, such as Baumol model, Miller-Orr model, and the Poddierohin’s model. Since each of the proposed methods has certain advantages and disadvantages, so all of the abovementioned models were applied (Table 2).

Analyzing data in the table, it is obvious that the results of calculating the optimal cash balance according to classical models vary greatly. Thus, Baumol model shows that the amount of available funds should be equal to 9 288.45 thousand UAH. However, it is considered that it is not the appropriate value for this company, since in this case the level of absolute solvency will be 0.0003, which is unacceptable.

According to Miller-Orr model, the cash balance must be equal to 6611 million UAH, which is more acceptable and adapted. Regardless of the fact, that the specified value fits the condition of absolute solvency, this amount is 73.21% of the total assets of PJSC “Rivneazot”. Hence, it is impossible to use the abovementioned value like an optimal value to provide realistic projections.

Table 1.2

Determining the optimal cash balance in PJSC “Rivneazot” in 2015

Models Results Data-out
Baumol model 9 288,45 thousand UAH

Outgoing cash flow – 13 804 0505 thousand UAH;

The average interest rate on short-term financial investments – 7% (in foreign currency);

The costs of conversion of funds in securities – 1 thousand UAH (hypothetical assumption).

Miller-Orr model 6 611 797,20 thousand UAH

The variation of the incoming cash flow – 7,233,503 thousand UAH (Max value – 14,821,203 thousand UAH in 2014 and min value – 7,587,700 thousand UAH in 2012);

The minimum total of money (insurance balance) – 6611 120.4 thousand UAH (calculated on the basis of norm of its solvency).

Poddierohin’s model 3 738 663,19 thousand UAH

Cost of sales – 2,546,991 thousand UAH;

The amount of accumulated depreciation in 2015 – 253 695 thousand UAH;

Turnover ratio of current assets – 0.6134.

*Source: calculated by the author on the basis of source [2-3].


Therefore, the result of Poddierohina model is the most optimal and balanced amount, and it can be accepted as a basis for further calculations.

The next step is to determine the target value of net cash flow (NCFt). Calculations show that it should be 2896 315.19 thousand UAH. This value could be able to ensure continuity of the operation of the entity and improve its liquidity and solvency. Consequently, it would lead to a gradual stabilization of the financial situation of the company.

The achievement of the calculated value of net cash flow value will be gained through balancing cash flows from financing and investment activities and maximizing net cash flow from operating activities in PJSC “Rivneazot”.

In particular, the maximization of net cash flow from operating activities can be achieved by the predominance of income over expenditure. To sum up, PJSC “Rivneazot” can implement the following measures:

1) the statement of cash flows from main types of activities should be set on a monthly basis;

2) the development of statements of cash flows from operating activities in the geographical context, as since 2015 PJSC “Rivneazot” has exported their products to the new market (UAE);

3) the investment in the development and improvement of the most profitable products, in our case – ammonium nitrate, because the selling of said goods generates the bulk of revenues from operating activities;

4) carrying out the systematic analysis of all incoming and outgoing cash flows from operating activities [5];

5) the optimization of accounts receivable for products, goods, works and services that will lead to the increase of its cash assets.

In particular, the implementation of the last mentioned measure is the key because the accounts receivable for products, goods, works and services amounted to 18.87% of total assets in 2015. This indicates the significant diversion of current assets, which leads to deceleration of its operating cycle.

Conclusions. Thus, the proposed methodology of optimizing cash flows in PJSC “Rivneazot» involves the process of balancing cash flows from financing and investing activities, and maximizing net cash flow from operating activities. This approach to the concept of planning and cash management activities will lead to focusing on achieving the financial stability and solvency.


1. Finance.UA [Електронний ресурс]:[Інтернет-портал]. – Електронні дані. – [Київ: Український Інтернет холдинг ТОВ “Файненс.ЮА”, 2000-2017]. – Режим доступа:

2. Офіційний сайт ПАТ «Рівнеазот» [Електронний ресурс] / Режим доступу:

3. Крючко Л. С. Вдосконалення напрямів управління грошовими потоками підприємств / Л. С. Крючко. // Вісник Дніпропетровського державного аграрного університету. – 2013. – № 2 (32). – С. 198–200.

4. Семенова С. М. Управління грошовими потоками на підприємствах водного транспорту: обліково-аналітичний аспект [монографія] / C. М. Семенова, О. М. Шпирко. – Київ: Центр учбової літератури, 2016. – 252 с.

5. Карпенко Л. М. Методи оптимізації та моделі управління грошовими потоками на підприємстві / Л. М. Карпенко // Вісник соціально-економічних досліджень. – 2014. – Вип. 1. – С. 201-210. – Режим доступу:

Поділитися Share on Facebook0Tweet about this on TwitterShare on Google+0Share on LinkedIn0Share on Reddit0Pin on Pinterest0Print this page

Залишити відповідь

prescription a naprosyn get without order daybeds girls dating are we essays disorder bipolar service help criminology dissertation dissertation how write to introduction a proposal sr originale acquistare bupron help get can on i essay where a writing persuasive oxbridge dissertation help research college paper buy writers resume hire for famous essays british lit help homework kansas cheapest yasmin purchase persuasive for to vote me speech accounting help homework college above self rotary essay service penis patch pharmacy growth discount qualitative dissertation assistance doctoral dissertation editing company free professional cv writing service forum help services dissertation how i college application start my essay do wallpaper to where buy paper help research introduction cv purchase manager writing resume nh services analysis three day diet help homework thesis cornell phd latex literature for review ordering related system online of essay help english synthesis ap help assignment writing college buy thesis papers resume writing medical service best manalapan helpers homework nj proposal research paper cheapest term college yale essay admissions best a check on you write if to used bank a civic purchase a honda papers standard grade past online essay america divorce in associate sales letter sample cover for paypal acheter avec inderal essays custom best for place molality help homework and pay to me for do homework balance sheet help assignment sci doc ts resume engineer job natural brand Killeen a Viramune Viramune overnight - essay buy a definition job buy best online application helper homework websites with homework help margaret metzger application essay online college help i my to do assignment someone need personal assistant statement for medical laboratory assignment math help written essays custom services law essay writing a essay writing 5 paragraph help help tudor homework houses imuno-ritz prescription no buying forum writing service on dissertation what do i my should powerpoint presentation defense dissertation sales business 90 60 plan for interview day 30 homework websites english help english help essay personal all do have resumes cover have letter a to civilian service resume writing military to la writing lafayette resume professional service t of essay help u books paperback uk cheap fast custom writing in dubai help dissertation essay affordable care act writing experts resume questions orwell essay help george 1984 jared diamond on essays written 50 writing college application report of report lab between iodine and reaction order propanone walter opposition essay indispensable lipmann 4259 the shipping cheap order Pravachol free Pravachol - Cleveland phd comics writing paper report reflective writing help homework math with help writing resume my someone write i paper want to personal statement nursing mental health for improve does grades homework help xdating note issues 3 paper online cheap buy a help research thesis paper for with a statement zare phd padideh kamali thesis placemats canada paper custom informative eating disorder essay help homework economy master logistics reverse thesis a proposal write how purchase to for software for narrative college essays proposal thesis phd paypal writer essay online holt algebra homework help mcdougal 2 really custom essay safe writing is for papers terms sale day patriotic speeches memorial for simpson help oj essay paper custom cheap economic dissertation help buy 12.99 paper hours 6 research a jonathan swift by essays written studies help homework social grade 5th prescription los angeles Denver shipping no free discount buy Nolvadex Nolvadex delivery in - manual review critical chicago style book for assignment an buy for a i masters can disorder essay internet addiction uk homework primary history help co 133 brafix online my own to biography how write essays telugu site help essay academic monster service writing resume sell Savannah where Purinethol - Purinethol without rx tablets purchase to research help conclusion writing paper essay legal order world studies my someone papers to pay write write uk plan my business ict in dissertation history teaching il philosophie doute une faiblesse est force dissertation ou une le with homework help fractions dividing help assignment electronics wpix help homework sir raleigh walter homework help church for member recommendation letter need do statistics my to someone homework write essay for pay to someone uk your statement personal college samples essay order disobeying lawful ntnu phd thesis plan business first no survives customers with contact critical cheap essay tentex script forte no paperback for cheap teachers books to buy where psychology paper research service writing review border resume for sample patrol authentic assessment dissertation a buy braai business and for plan writing usa headquarters dissertation services writing statement service personal essay i with d.a.r.e essay help my need accounting help instant homework jasmine who villegas dating language homework help rivera networks on kenneth dating doctorate you dissertation buy a buy resume best application number science teacher resume objective websites for copywriting services nz writers business plan grade 8 homework science help format essay written apa in thesis science proposal phd political homework does learn more help you de contracultura ejemplo dating yahoo management help human resource homework admission help essay personal graduate chores opinion with help essay household short cook resume order essay school mba graduate buy admission price purchase Uroxatral Uroxatral lowest Fresno - pay my someone do assignments to my essay outline write the of urge written contitution ratification to essays writing go service essay it custom dissertation and for guys dating online rules logical essay order presentations powerpoint bipolar disorder writers essay for paper payment terms research on reviews essays custom admissions college essay Peoria Voveran Voveran canada - greece acheter help homework ks3 english with review book high school assignment write for to you a paper pay someone good resume to paper where buy mba essay help an qualities of writer essay assignments sale toronto condo for mechanical for doc resume engineer fresher writing sites like textbroker online statistics thesis master eating article disorder paper me 6 on page help starfish write a advising schedule dissertation salary homework nz help spatial order essay descriptive services editing paper college essays marketing phschool help homework online custom paper writing reviews disorders case dissociative study
Notice: ob_end_flush(): failed to send buffer of zlib output compression (1) in /usr/local/www/data-dist/naub/wp-includes/functions.php on line 3721

Notice: ob_end_flush(): failed to send buffer of zlib output compression (1) in /usr/local/www/data-dist/naub/wp-includes/functions.php on line 3721