Justification the strategy of enterprise development: PJSC Elektrotermometriya: case study

The research is orientated to the actual issues of strategic management of industrial enterprises. The theoretical aspects of strategic management are generalized, its role is certain in organization development, methods and processes of strategic management are investigational. In this context the main objective of study is based on the strategic analysis of PJSC «Elektrotermometriya», formation ways to improve the strategic management of the company with regard to the readiness of the company to strategic changes and conducting of developments and recommendations for improvement activity of the enterprise. To answer to the main objective it was conducted the strategic analysis of activity of PJSC «Elektrotermometriya». The results proved the basic strategy to achieve the strategic goal of PJSC «Elektrotermometriya». According to the life cycle, and based on the current conditions of its functioning, is appropriate to use the strategy of gradual growth. Forecast implementing strategies defined by the optimistic, probable and pessimistic forecasts. According to the pessimistic forecast the company should use a strategy of stabilization, while to the optimistic and the most likely scenario - moderate growth strategy. Thus to achieve the main strategic goals according to each scenario PJSC «Elektrotermometriya» should use set of functional strategies and define the business strategy.

Ratios and indicators that determine return on equity

This study aims to investigate factors that may affect return on equity (ROE). The ROE is a gauge of profit generating efficiency and a strong measure of how well the management of a firm creates value for its shareholders. Firms with higher ROE typically have competitive advantages over their competitors which translates into superior returns for investors. Therefore, seems imperative to study the drivers of ROE, particularly ratios and indicators that may have considerable impact. The analysis is done on a sample of 90 largest non-financial companies which are components of NASDAQ-100 index and also on industry sector samples. The ordinary least squares method is used to find the most impactful drivers of ROE. The extended DuPont model’s components are considered as the primary factors affecting ROE. In addition, other ratios and indicators such as price to earnings, price to book and current are also incorporated. Consequently, the study uses eight ratios that are believed to have impact on ROE. According to our findings, the most relevant ratios that determine ROE are tax burden, interest burden, operating margin, asset turnover and financial leverage (extended DuPont components) regardless of industry sectors.