Simulation of internal cash flows of an integrated group of enterprises

An important reserve for the growth of market efficiency of large industrial corporations and integrated businesses is to improve the planning and management of their cash flows, which helps to reduce production and non-production costs and reduce the risks of intra-company opportunism. The purpose of this work is to develop and practically adapt tools of economic and mathematical models and methods of optimal management of intra-company cash flows of an integrated group of enterprises on a sequence of time intervals that make up the medium-term planning horizon. The choice of endogenous and exogenous variables of the model, optimality criteria and system of restrictions is justified. The dynamic version of the model is used to analyze and manage the cash flows of five enterprises and a management company that form an integrated group. The obtained results of cash flow modeling for various options for organizing intra-company transfers, selecting intra-company lending rates and limiting risk levels of the capital structure of the group’s enterprises allowed us to positively assess the adequacy of the proposed tools to the actual practice of functioning of large enterprises and holding associations. In particular, it was confirmed that the increase in the risk of the enterprise’s capital structure as part of an integrated group has a positive impact on the efficiency of its production activities and the growth of the centralized investment Fund of the combined company.