Available online at ScienceDirect. Procedia Engineering 129 (2015 ) International Conference on Industrial Engineering

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1 Available online at ScienceDirect Procedia Engineering 129 (215 ) International Conerence on Industrial Engineering Analysing the economic stability o an enterprise with the help o eigenstate method Moeev V.V., Bunova E.V., Perevedentceva A.V.* South Ural State University, 76, Lenin Avenue, Chelyabins, 4548, Russian Federation Abstract An analysis o enterprise perormance is considered. The problem is solved based on the analysis o the base indicators o enterprise perormance in terms o improving economic stability. An autoregulation mechanism o the economical stability o an enterprise is developed. An eigenstate method is proposed to analyse the basic indicators o the enterprise as it allows to construct an economomical stability model o such enterprise. The article describe the methodology or analyzing the economic stability o an enterprise on the basis o eigenstate method. It provides ormulas or calculating the complex indicator o economic stability. The eiciency o the methodology is demonstrated with evidence rom the economic stability analysis o the trading company. 215 The Authors. Published by Elsevier Ltd. 215 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license ( Peer-review under responsibility o the organizing committee o the International Conerence on Industrial Engineering (ICIE- Peer-review 215). under responsibility o the organizing committee o the International Conerence on Industrial Engineering (ICIE-215) Keywords: economic stability; enterprise, analysis; principal component; eigenstate method; 1. Introduction In modern maret conditions the basis or the stable operation o the enterprise is economic stability. When the enterprise is economically stable, it has several advantages over other companies in the same ield or loans and investment, in the selection o suppliers and qualiied sta. The higher economic stability o the enterprise maes the enterprise more autonomous rom unexpected changes in maret conditions and leads to decrease o banruptcy ris. Lac o economic stability can lead to enterprises insolvency, to lac o unds to inance current and investment activities, to banruptcy at aggravation o a inancial state. The excess o economic stability puts * Corresponding author. Tel.: address: moeyev@mail.ru, albv7@mail.ru The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license ( Peer-review under responsibility o the organizing committee o the International Conerence on Industrial Engineering (ICIE-215) doi:1.116/j.proeng

2 682 V.V. Moeev et al. / Procedia Engineering 129 ( 215 ) obstacles in the way o enterprise development, burdening them with unnecessary costs. There is no doubt that the eectiveness o the enterprise is caused by its inancial capacity and eiciency o inancial management. The low level o inancial management leads to a crisis and deterioration o enterprise s inancial condition, i.e. to the loss o its inancial stability. The issues o economic stability o enterprises are considered in a large number o scientiic wors [1-12]. Economic sustainability as the enterprise's ability to provide economic growth and eiciency by using accumulated economic potential is considered by researchers in Reerence[13]. Nevertheless, the problem o economic stability companies demands urther studying rom the point o view o creation and using the tools that prove operating o the mechanism o autoregulation. Mechanism o economic stability autoregulation o companies includes a regular assessment and orecasting o the main indicators o unctioning and also acceptance o reasonable administrative decisions on the basis o this analysis. In Reerence [14] it is said that "main objective or many enterprises in Russian economy there is survival and such mechanisms are extremely necessary to provide their sustainable development". Here introduce the paper, and put a nomenclature i necessary, in a box with the same ont size as the rest o the paper. The paragraphs continue rom here and are only separated by headings, subheadings, images and ormulae. The section headings are arranged by numbers, bold and 1 pt. Here ollows urther instructions or authors. Competent approach to administrative management is basis or stable existence in modern economic conditions. It s impossible to build the eective control system o enterprise based only on intuition. The eective control system has to provide ast and proper response to the changes o activity conditions o the enterprise. In paper we describe the overall control algorithm, which is based on the regular analysis o the deviations o the reerence values rom real values o indicators to identiy the reasons o these deviations and maing decisions or correction o negative inluences. Each corrective action is tested or the possibility o increasing the economic stability o the enterprise, but it is possible only when orecasting indicators o the enterprise activity is used. The principal component analysis eective approach allowing establishing and measuring the causal relationships between various processes within the socioeconomic systems [15-17]. One o the important advantages o the method o principal components is that it allows presenting the behavior o the system under investigation as a set o (statistically) independent components, each o which can be analyzed separately. In paper the methodology o the analysis o economic stability o enterprise with the use o eigenstate method is described [18-2]. The analysis o economic stability o enterprise includes ormation o model which uses only eigenstates satisying the economic stability conditions. The use o analysis on the basis o eigenstate method allows to relect the complex tendencies o development o enterprise in the simpliied orm (model) and to analyze their development in the real world with the help o the obtained model. 2. Mechanism o economic stability autoregulation Mechanism o economic stability autoregulation o enterprise is based on an inormation system o the enterprise, or example, the 1C: Enterprise. It allows to regularly provide to the management personnel the main indicators o business processes o enterprise and actors o stability with a list o signs o instability on the basis o the registration data obtained by inormation system. In Fig. 1, the diagram o mechanism o maintaining economic stability o enterprise is shown. This diagram allows the leader o the enterprise to monitor the enterprise state real-time. Inormation system o enterprise can be used or data collection. The model o economic stability o the enterprise is ormed using sample o data generated. The obtained model allows to compute the value o the indicator o economic stability o enterprises, to analyses the signs o instability and quicly tae the corrective actions. Thus the leader o enterprise analyse the indicators o the company in the terms o economic stability, but also to orecast the enterprise activity on the basis o a economic stability model and mae competent administrative decisions to support the sustainability o the business. For example, resource reallocation, incoming cash low increment and implementation activities can be such administrative decisions

3 V.V. Moeev et al. / Procedia Engineering 129 ( 215 ) Fig. 1. Functional diagram o adoption o the administrative decision to maintain the economic stability o enterprise. Eective way o analysis o enterprise economic stability is eigenstate method, which is the development o principal component analysis. In act, when we use the principal component method, we implement transer rom the initial indicators to new indicators which are called principal components. The principal component is combination o initial indicators in which members o group (initial indicators) are connected among themselves, but group (principal component) as a whole is independent rom other groups (principal components). The weighted coeicients o the principal components are determined by calculation o the eigenvectors o the covariance matrix. Each eigenvector corresponds to its eigenvalue. The eigenvectors are sorted in descending order o the eigenvalues. Thus, -th eigenvector comprises weighted coeicients o -th principal component, and the eigenvalue corresponding to the eigenvector is equal to the dispersion -th principal component. Each eigenvector has the same length as the state vector o the economic system, which maes it possible to interpret it as an eigenstate o the economic system. Thus, at any moment o time the state o the economic system can be described by weighted combination o eigenstates. Then the state o system is described not by a set o initial indicators, but by as a set o principal components. But each principal component relects not a separate initial indicator, but group o initial indicators which are called eigenstates. Eigenstates have two important properties [2]. Property 1: In describing the state o the economic system as a weighted sum o eigenstates, the principal components o the eigenstates are statistically independent. Property 2: The change o the unit state associated with the change o the principal component o the j-the eigenstate can only be proportional to the coeicients o the j-th eigenstate. These properties play an important role in the construction o economic systems models. To analyse the economic stability o enterprise the model o economic stability is proposed to build. The model represents a combination o eigenstates, satisying the conditions o economic stability o enterprise. The economic stability conditions represent restriction on interrelation o a number o ey indicators. For example, proit mar up o the enterprise must be accompanied by a decrease in production costs. The economic stability model is an idealization o a real business and serves as a model o the system in terms o its economic perormance. Any enterprise is suiciently complex system with a large number o indicators that change over time. Management o economic stability is primarily a regular analysis o perormance indicators o economic systems and planning strategies or their improvement, including the determination o the required unds and resources. Usually some indicators o the system are improved, others are deteriorating, which aects the economic stability o the enterprise. But it is very diicult to determine how the stability o the enterprise changes when the parameters change. A set o indicators that characterize the behavior o the system orms the economic state o the enterprise. The state space o enterprise is a inite-dimensional space, which belongs to the state o the enterprise. Economic stability analysis o enterprise includes the ormation o a model that uses only eigenstate satisying the conditions o

4 684 V.V. Moeev et al. / Procedia Engineering 129 ( 215 ) stability. This condition is imposed on communication o volume and quality o the products sold with the volume and quality o the resources o the unit. Economic stability o enterprise at any time interval is estimated by comparing the actual and reerence values o the indicators. Reerence values o indicators are calculated using economic stability model o enterprise. Large deviations rom reerence indicators are interpreted as signs o destabilization o the enterprise. Thus, the main objective o management enterprise is timely detection o the deviations destabilizing activity and deinition o possible threats, research o sources and reasons o their causes and their elimination that provides economic stability o the enterprise as a system, in condition o the changing environment. The complex economic stability indicator o the -th moment o time can be obtained by the ormula R 1 (1) where is a mean square value o penalty unctions which is determined as 1 r r j 1 2 j R 1 (2) In equation (2) is deined as j is the value o penalty unctions o j-th basic parameter o the -th unit. The penalty unction j et ( xj xj )/ xj et et ( xj xj )/ xj ( xj xj )/ xj R 1 (3) x j where are actual values, j are reerence values, lim permissible variation. As we can see the penalty is assigned only i the deviation exceeds the allowable value. 3. Research o economic stability o trading company x et The proposed methodology is demonstrated on the example o the analysis o stability o the large company trading in jewelry. The indicators o inancial and economic activity were chosen as the initial data or the analysis. They are: x accounts payable (billion rubles), x revenue (billion rubles), 1 2 x current assets (billion rubles), 3 x 4 accounts receivable (billion rubles), x proit on sales (billion rubles), 5 x cost price sales (billion rubles), 6 x 7 accounts payable turnover ratio, x accounts receivable turnover ratio, 8 x current assets turnover ratio, 9 x 1 return on sales, x margin costs, 11 x the proitability o the organization, 12 x price o gold (thousand rubles per 13 gram), x price o silver (thousand rubles per gram). 14 The cost price is understood as the costs o trading activity, including administrative costs. The values are presented in Table. 1. Eigenstates are used to build the economic stability model o company with the help o eigenstates, which are calculated rom second initial moments matrix (the data not centered). The weighted coeicients o the eigenstates are represented in Table. 2. Building the economic stability model o the company requires the ormulation o requirements o economic stability o the considered company. Such condition is the ollowing requirement: the growth o gold and silver prices leads to increased cost (rising price o purchased goods), but at the same time proit margins and sales should not be reduced. Restrictions on other parameters are not imposed, although it is possible to mae claims to other indicators o inancial and economic activity o the company, i.e. this requirement may be supplemented by other restrictions on indicators change.

5 V.V. Moeev et al. / Procedia Engineering 129 ( 215 ) Table 1. Financial and economic activity o the company. Feb March Apr May June July Aug Sept Oct Nov Dec Jan x x x x x x x x x x x x x x Within the irst and second eigenstate increase in the prices o gold and silver leads to increased costs (increasing purchase prices or jewelry), proit and proitability o sales. Thereore, the irst and second eigenstates are used in the ormation o a sustainable development model o the trading company. The other eigenstates do not correspond to conditions o sustainable activities, as they describe the process by which the increase in the price o gold and silver results in a decrease in proitability. Table 2. Coeicients o eigenstates. Indicator x 1 x 2 x 3 x 4 x 5 x 6 x 7 x 8 x 9 x 1 x 11 x 12 x 13 x 14 Number o eigenstate

6 686 V.V. Moeev et al. / Procedia Engineering 129 ( 215 ) Fig. 2 shows the value o the "Revenue" indicator, and Fig. 3 demonstrates the value o the "Proit on sales" indicator. Actual values are shown by the solid line, and the values o parameters obtained using the economic stability model are represented by the dashed line. We assume that the deviation o actual values rom their reerence values by more than 2% is a sign o instability. Thus, the value o the penalty unction is calculated by ormula (3) where =2%. Values o penal unctions or the indicators are presented in table 3. The table shows the values o the penalty unctions or indicators "Proit on sales", "Return on sales", "The proitability o organization" reach their maximum values in September. The value o the penalty unction in April is equal to zero. The complex economic stability indicators o company are calculated according to the ormula (1) and their values are shown in Fig. 4. The solid line represents change o complex economic stability indicator, calculated with using penalty unctions o irst 12 indicators, and the dashed line shows the change in stability indicator, obtained by the penalty unctions o the irst six indicators. Fig. 2. Functional diagram o adoption o the administrative decision to maintain the economic stability o enterprise.

7 V.V. Moeev et al. / Procedia Engineering 129 ( 215 ) Fig. 3. Sales proit: solid line (actual values), dashed line (reerence values). Table 3. Penalty unction values. x 1 x 2 x 3 x 4 x 5 x 6 x 7 x 8 x 9 x 1 x 11 x 12 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

8 688 V.V. Moeev et al. / Procedia Engineering 129 ( 215 ) Fig. 4. Dependencies o complex economic stability indicator within a year. 4. Conclusions In paper the solution o analysis o economic stability tas o the company has been considered. Relevance o problem o economic stability analysis and development o the mechanism o enterprise management by criterion o economic stability led to that today in economic literature, along with wors o oreign authors, there is enough the domestic wors devoted to methodologies o the analysis o economic stability o the enterprise. The most o methodologies o the economic stability analysis o company are based on calculation o economic stability indicators and comparison with their standard values. When one o indicators goes beyond standard values, the enterprise is considered economically unstable. Such the result oten incorrectly estimates economic stability o the enterprise. Thus, now there is no eective approach o the economic stability analysis o company. For the solution o tas o company the economic stability methodology with use o eigenstate method is oered. The methodology allows to reveal structure o their interrelations at simultaneous reduction o number o the economic activity indicators o the enterprise and to build the complex indicator characterizing economic stability o the enterprise. The basis o this methodology is the development o economic stability model o enterprise (reerence model), which is ormed rom their eigenstates satisying the economic stability conditions. New indicator was proposed in order to assess the company development stability. It is named the economical stability indicator. The complex indicator o economic stability is deined by comparison o parameters o the actual and reerence activity o the enterprise with the help o method o penal unctions. The oered methodology includes ormation o a set o indicators, the describing inancial, production, ecological processes; the ormulation o requirements o economic stability o the enterprise, the representing restrictions on changes o a number o indicators, calculation o eigenstate o the enterprise characterizing a certain tendency o development o the enterprise and chec o compliance o own states to requirements o economic stability o the enterprise describes own state. Formulas or calculation o the complex indicator o economic stability o the enterprise are given in wor. The eigenstate method can be used in the analysis o such complex systems, as the company (enterprise), the city, the region. The methodology o economic stability analysis o enterprise on the basis o eigenstate method represents the tool or eective control over assets o the enterprise and successul management o its expenses, and also reduction o time o adoption o administrative decisions is described. The developed methodology can be used or the companies o various ields o activity. The eectiveness o the methodology is demonstrated on the example o economic stability analysis o the large trading company. As a result o research the model o economic stability o the company is constructed, also the complex economic stability indicator o the company is calculated. Results o researches can be used or development o the regulation mechanism o economic stability o the company. This wor was supported by the Russian Foundation Basic Research (project no ). Reerences [1] M.S. Abryutina, Enterprise Economy, Case and service, Moscow, 24. [2] D.G. Baur, N.N. Schulze, Financial maret stability, A test. Journal o International Financial Marets, Institutions and Money. 19(3) (29) [3] C.T. Albulescu, Forecasting the Romanian inancial system stability using a stochastic simulation model, Romanian Journal o Economic Forecasting. (21) [5] A.N. Zhilina, Financial Management. Financial analysis o a company, INFRA-M, Moscow, 25. [6] J. Creela, P. Huberta, F. Labondance, Financial stability and economic perormance, Economic Modelling. 48 (215) [7] T.I. Orainets, Theory o management o inancial stability o the company, Bauman, Moscow, 26. [8] C.T. Albulescu, Financial stability and monetary policy: A reduced orm model or the euro area, Romanian Journal o Economic Forecasting. (213) [9] B.Gadanecz, K. Jayaram, Measures o inancial stability a review, Proceedings o the IFC Conerence on "Measuring inancial innovation and its impact". 31 (29)

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