Determination of the permissible debt burden of the company

The main concentration of systemic risk associated with the debt burden of the corporate sector falls on the largest companies with a high level of debt burden. In this regard, it is important to note the relevance of this study, since excessive debt burden can have a negative impact on financial stability, both in the country as a whole and at an individual enterprise. The paper presents a methodology for determining the allowable debt burden of the company. The peculiarities of the proposed methodology is the fact that the calculation of the best, in the current conditions, the amount of the debt burden of the company, as well as the assessment of planned measures, occurs by changing the structure of the borrowed capital. Moreover, the forecast of changes in the financial results of the company’s activities is proposed to be made on the basis of two approaches: With an average level of net profit for previous periods and with an increase in net profit. The methodology proposed by the authors is calculated on the example of a large metallurgical company - PJSC “Mechel”. Detailed calculations and conclusions were made for each of the testing stages. Calculations are presented on the impact of measures to change the company’s debt burden on the amount. In conclusion, it is presented how the creditors’ opinion about the attractiveness of the company as a whole will change, through the amount and structure of the borrowed capital.