Assessment of influence of receivables volumes on the operational and financial risk level of the aircraft repair enterprises

Аuthors

Fomkina V. I.^*, Shatlovskaya K. V.^**

Moscow Aviation Institute (National Research University), 4, Volokolamskoe shosse, Moscow, А-80, GSP-3, 125993, Russia

*e-mail: k508@mai.ru
**e-mail: shatlovskay@mail.ru

Abstract

The biggest part of financial assets of the aircraft repair enterprises is concentrated in receivables which represent the immobilized part of its own current assets, also they are distracted from a turnover of the enterprise and accumulated at clients.
Researchers showed that with growth of a share of receivables in assets of the aircraft repair enterprise, level of the production lever grows. But even at the insignificant size of receivables in value terms, the size of the production lever will increase with a growth of a share of debt in enterprise revenue.
For ensuring economic activity of the enterprises with financial resources it is necessary to minimize negative consequences from a big share of receivables in the amount of current assets.
For expansion of market sales of the enterprise needs investment in the main production. During such investments the share of constant expenses, that leads to growth of operational risk, grows.
Investment in the main production also increases financial risk which is caused by attraction of large volume of financial resources. The increase in volume of borrowed funds leads to growth of a financial leverage.
Level of a financial leverage shows how many percent the net profit will change at change of operating profit for one percent.
Net profit is influenced by revenue size from sales and rendering services which depends on receivables size. The volume of net profit, which the organization for satisfaction of the needs has, depends on volume and a maturity date of debt. Outstanding receivables can have catastrophic consequences for activity of the air enterprises. At high level of a financial leverage any delays in its payment involve serious consequences. Therefore management of receivables, its volumes and sources of emergence is an important task of the enterprises of the aviation industry.
The assessment of operational and financial risk allows to avoid essential losses for the enterprise, and in certain cases to warn irreversible negative consequences.

Keywords:

strategic management, receivables, operational risk, financial risk, aircraft repair enterprise, lever

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