Company’s financial state forecasting: methods and approaches
-
DOIhttp://dx.doi.org/10.21511/imfi.14(3).2017.09
-
Article InfoVolume 14 2017, Issue #3, pp. 93-101
- Cited by
- 980 Views
-
193 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Planning company’s activity is a complex process, in which foresight is of great importance. The paper presents a method to predict financial state of a company using available financial data. For the prediction of quantitative indicators of the company currently there are different ways to build predictive models, such as simple and multiple regressions, autoregressive model and others. In this paper, to predict financial indicators of the company we use econometric modeling techniques. Tools to check the time series for the seasonality and stationarity are used in constructing the models. To check the reliability of the analysis techniques applied backtesting. To apply the developed method we used the values of financial indicators of the Kazakh national oil producing company. However, the method can be used for any company despite its size, industry, and so on. Albeit the method proposed is universal one and enables to predict financial state at any company, it has certain shortcomings and should be used along with fun¬damental analysis tools. The method proposed in the paper illustrated adequate results with sufficient accuracy according to the backtesting results. Therefore, based on the results of forecasting the financial state indicators, one can conduct a financial analysis of the expected state in upcoming period and use the derived values for future planning.
- Keywords
-
JEL Classification (Paper profile tab)C58, G30
-
References13
-
Tables1
-
Figures1
-
- Figure 1. Financial state indicators forecasting process chart
-
- Table 1. Backtesting of the model adequacy
-
- Azarenkova, G., Pasko, T., Golovko, O., Kovalchuk, Y. (2017). Financial planning and improving of its methods. Accounting and Financial Control, 1, 39-47.
- Gottardo, P., Moisello, A. M. (2015). The impact of socioemotional wealth on family firms’ financial performance. Problems and Perspectives in Management, 13(1), 67-77.
- KASE (2015a). Annual Report of JSC “KazMunaiGas EP” for 2014.
- KASE (2015b). The consolidated financial states of JSC “KazMunaiGas EP” for 2003-2014.
- Eliseeva, I. (2004). Econometrics. Мoscow: Finance and Statistics.
- Engle, & Granger. (1987). Cointegration and error correction: Representation, estimate, and testing. Econometrica, 55, 251-276.
- Frolov, S., Strilec, V., Balatskyi, I. (2017). Foresight technologies in financial provision of small business in Ukraine. Problems and Perspectives in Management, 15(1-1), 200-209.
- Jackson, T., Leonard, M. (2000). Seasonal Adjustment Using the X12 Procedure. SAS Institute.
- Johansen, S. (1995). Likelihood- Based Inference in Cointegrated Vector Autoregressive Models. Oxford University Press.
- Jumadilova, S., Sailaubekov, N., & Dildebaeva, Z. (2013). Management of financial and economic sustainability of oil & gas enterprises. Actual Problems of Economics, 139(1), 265-273.
- Makarenko, I., Serpeninova, Y. (2017). Public companies’ transparency in Ukraine: key regulatory requirements. Public and Municipal Finance, 6(1), 8-14.
- Sailaubekov, N. T., & Jumadilova, S. G. (2013). Estimation of competitiveness of oil and gas companies based on the normative model. Paper presented at the Proceedings of the 3rd IASTED Asian Conference on Modelling, Identification, and Control, AsiaMIC 2013, 260-265.
- Sims, Ch. (1980). Macroeconomics and Reality. Econometrica, 48(1), 1-48.