№ 10/2019

Fìnansi Ukr. 2019 (10): 89–101https://doi.org/10.33763/finukr2019.10.089

FINANCES OF THE INSTITUTIONAL SECTORS

TERESHHENKO Oleh ¹, GRINCHENKO Viktoriia ²

¹SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0001-8808-1383
²SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0001-6752-3912

Risk management of corporate enterprises’ capital structure

The article is devoted to capital structure risks and the methods of their management and analysis. The authors analyze the classification of capital structure risks by Ukrainian and foreign scientists and identifies the main types of capital structure risks such as financial stability risk, currency risk, interest rate risk and credit risks. It is substantiated that financial stability risk is the main capital structure risk, taking into account an impact on the probability of bankruptcy of an enterprise. It is also identified an important role of interest rate risk and currency risk for Ukrainian enterprises due to a high volatility of interest rates and exchange rates on the Ukrainian market. Qualitative and quantitative methods of the capital structure risk analysis, such as mathematical expectation, variance, standard deviation, a slope of the distribution curve, kurtosis and an expert method are described. The methods of capital structure risk management, both active and passive methods, are examined. The main methods such as limitation, selfinsurance, diversification and hedging are considered. The author describes such methods of capital structure limitation as limitation of debt finance, limitation of interest expenses, limitation of short-term debt portion and limitation of debt denominated in foreign currencies. Taking into account an uncertain economic position of Ukrainian enterprises, an important role of self-insurance methods is proved. Such methods include creation of reserve funds, the use of retained earnings and insurance reserves. The authors stress upon the drawbacks of limitation and self-insurance methods, as they cannot be used by new and fast-growing firms. At the same time, hedging is proven to be effective for the management of currency and interest rate risks.

Keywords:capital structure, risk management, corporate enterprise, financial stability risk, currency risk, interest rate risk, credit risk

JEL: D81, G32

Tereshhenko O. . Risk management of corporate enterprises’ capital structure / O. . Tereshhenko, V. Grinchenko // Фінанси України. - 2019. - № 10. - C. 89-101.

Article original in Ukrainian (pp. 89 - 101)

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