Investment Policy: Determining Short-term Credit Under Circulating Capital

This article is about determining short-term credit under enterprise circulating capital with forming generalized enterprise balance scheme for setting relation between product diversification and financial sustainability. This generalized balance scheme is the base for forming economically mathematical model, describing this relation in widening enterprise activity with borrowing short-term credits under circulating capital. This model realization allows forming effective management strategies for product diversification and enterprise financial sustainability. The suggested model is the base for forming iteration algorithm of modeling management processes for product diversification and financial sustainability in short-term crediting, differing with simultaneous calculating credit and set of unknown, modelled and exogenous parameters, which allows getting sufficient dozen of effective product diversification management strategics. Because most effective (optimal) product diversification strategy choice is concerned with risk management problem, optimization criterion is profit maximum taking into account stochastic product realization estimation. For researched St-Petersburg fuel-energy complex machine-making enterprise, according to the elaborated algorithm of modeling product diversification processes, there arc basic activity financial figures in short-term crediting on optimistic, most probable and pessimistic strategies and their comparison economic analysis. Suggested optimization criterion shows the most effective enterprise product diversification strategy.