Financial and economic security of agricultural business: specifics, analysis methodology, and measures of stabilization

Abstract

Purpose. The article aims to improve the methodology and analysis of the financial and economic security of agricultural business in Ukraine for the identification of problematic aspects and the substantiation of policy measures needed to strengthen it. Methodology / approach. The article offers the methodological approach for the comprehensive analysis of the financial and economic security of agricultural business in a region. The conceptual task of the approach is to calculate the empirical indicator of security (composite method) and its structural components (resources, investment, money and credit, debt, finance-economy, and insurance components) based on the identification of the weight of indicators (Principal Components Analysis). Results. The article reveals that the appropriate level of all components of financial and economic security correlates with the financial independence of agricultural entities. In 2018, the index of insurance security (0.798) and money and credit (0.737), debt (0.724), and resources (0.720) components of agricultural business security in Lvivska oblast were above the moderate level. The period of 2018–2022 faced a significant weakening in the resources (by 16.2 p.p.), investment (16.9 p.p.), money and credit (20.6 p.p.), debt (19.0 p.p.), finance-economy (18.0 p.p.), and insurance (5.3 p.p.) components of the sector’s financial and economic security. The average level of financial and economic security in the period under review was 65.0 %, and the average annual rate of decrease was 4.1 p.p. Originality / scientific novelty. The article improves the methodological approach to the complementary assessment of financial and economic security of agricultural business in a region, contributing to the identification of the degree of financial resilience of business entities in the agricultural sector of the regional economy in conditions of war and instability, in order to develop the mechanism for increasing the investment and economic capacity of business. Practical value / implications. The article offers and substantiates an applied approach to assessing the degree of regional financial resilience of agricultural business. Its implementation will allow carrying out a sectoral cut of the state of financial and economic security of the region’s industry and build architectonics of determinants of financial and economic security of business entities.