The methodological approaches development to assess the creation and use of the financial capacity of the state

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The article focuses on the development of scientific and methodological approach to determining the level of creation and use of financial capacity to identify current trends of its transformation and perspective directions for development. The research urgency is due to the need to ensure high level of national security, ineffective use of the existing financial capacity of the state, disputability of scientific approaches to identifying its components and the need to choose the vector for the state’s further development. This requires additional research methodological aspects aimed at obtaining objective and well-founded assessment of the financial capacity level.
The methodological approach proposed involves comparing the actual rated values of creation and use of the authorities’ financial resources (the ratio of the deficit/surplus of the state budget to GDP, the level of GDP redistribution through the consolidated budget, the ratio of the government and government-guaranteed debt to GDP and gross international reserves of Ukraine in the months of imports), financial resources of business entities (the level of listing companies capitalization, the ratio of non-performing loans to total gross loans, credit interest rate, companies’ ROA) and the financial resources of households (the share of cash income in total household resources, the ratio of the average amount of old-age pension to the average monthly nominal wage, the share of spending on food and non-alcoholic beverages in total household spending) with their recommended limits and the establishing a scoring making it possible to form an integral indicator that reflects the level of creation and use of the state’s financial capacity. The methodological approach has been tested using Ukraine as an example. This has made it possible to identify the negative tendencies of the creation and use of Ukraine’s financial capacity (the state budget imbalance, significant debt burden on the budget, high interest rates, significant share of household expenditure on consumption). Based on the results, perspectives for development of the state’s financial capacity are proposed.

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    • Figure 1. The state’s financial capacity as a system
    • Figure 2. Scientific and methodological approach to determining the level of creation and use of the state’s financial capacity
    • Figure 3. The level of GDP redistribution through the consolidated budget in 2008–2017, %
    • Figure 4. Credit interest rates in Ukraine in 2008–2017
    • Figure 5. The listing companies capitalization to GDP ratio in 2008–2017, %
    • Figure 6. Return on assets of the Ukrainian enterprises in 2008–2017
    • Figure 7. Indicator values of assessing the efficient creation and use of the household financial capacity in 2008–2017
    • Figure 8. Integral indicator of the efficient creation and use of the Ukraine’s financial capacity in 2008–2017
    • Table 1. Recommended values of indicators of the efficient creation and use of the state’s financial capacity
    • Table 2. Scale of rating assessments of the level of creation and use of the state’s financial capacity
    • Table 3. The ratio of the state budget balance to GDP in Ukraine and the EU countries in 2008–2017, %
    • Table 4. The government debt to GDP ratio in Ukraine and the EU countries in 2008–2017, %
    • Table 5. Gold and foreign exchange reserves in Ukraine and the EU in 2008–2017, months of imports
    • Table 6. Indicators of the efficient creation and use of Ukrainian authorities’ financial capacity in 2008–2017
    • Table 7. The ratio of non-performing loans to aggregate gross loans in Ukraine and the EU countries in 2008–2017, %
    • Table 8. Assessment of indicators of efficient creation and use of the Ukrainian economic entities’ financial potential during 2008–2017
    • Table 9. Assessment of indicators of efficient creation and use of Ukrainian household financial capacity in 2008–2017