Conclusions

5 Conclusions

Thus, the real increase in equity in terms of accumulated retained earnings occurs in the amount of its capitalization. Of course, the factor of profit capitalization is not the only one to ensure a stable financial condition and development of the company. But it is extremely important and should be taken into account when making management decisions. All concepts of dividend policy should be interconnected and aimed at developing an optimal balance between maximizing the welfare of owners and ensuring adequate funding for current and investment activities. When developing management decisions, it is necessary to coordinate the company's reinvestment policy with its current financial condition and to justify the possibilities of a more rational use of profits. In particular, with insufficient financial stability and solvency, it is advisable to consider part of the profit intended for consumption as a potential reserve, which, with a more rigid capitalization option, can be used to replenish its own working capital and capital in general. A tougher capitalization of profits should be considered as a safety margin or “safety cushion” in the event of deteriorating market conditions and forecasting crisis phenomena in the company and the economy as a whole. Irrational use of profit (directing it mainly to consumption / dividends) can have the same negative effect on financial condition as losses in loss-making companies. With regard to the latter, it can be concluded that their own sources of development are reduced (absent), their own capital is reduced and financial stability is weakened. In this case, the focus should be on loss factors and the rationale for their elimination. In the article, we focused on the impact of the financial results of the company on its financial condition, including issues of bankruptcy risk and sustainability of

economic growth. However, feedback cannot be excluded - the higher the financial stability, the higher the competitiveness of the company, ceteris paribus, and the possibility of obtaining and increasing profits

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