TOOLS FOR EFFECTIVE MANAGEMENT OF FINANCIAL POTENTIAL IN THE CONSTRUCTION INDUSTRY
DOI:
https://doi.org/10.60022/sis.2.(02).3Keywords:
construction industry, financial management, revenue growth, profit margin, Ukrainian construction companies, financial performance, sustainability strategiesAbstract
Critical to the economic growth of any nation, the construction industry needs effective financial management to be able to grow and survive the challenges that it is facing. This study examines the financial performance of major construction companies in Ukraine from 2019 to 2023, with a focus on two key financial metrics: Revenue Growth Rate and Profit Margin, taking the form of either Rate of Return on Sales or Rate of Return on Investment. This research is relevant due to the increasing complexity in construction sector with changing material costs, regulatory changes and changing market conditions. With these challenges involved, construction companies must adopt appropriate financial strategies that improve their competitive advantage as well as sustainability.
The purpose of this research is to evaluate financial potential of Ukrainian construction companies through a projection of revenue growth and profitability, and then determine which factors contribute to the growth of these companies. The research uses quantitative methods, relying on financial statements of the leading companies in the industry, within the period 2019–2023. Through studying revenue growth trends and profit margins the study attempts to decipher the key financial strategies supporting success in the construction sector.
The research results reveal that almost all companies studied had steady revenue growth and increasing profit margins over the last five-year period. The greatest improvements in financial performance were shown by companies such as Automagistral-Pivden and Autostrada, while companies like Kosul and Monolit Budservice demonstrated much meager growth. Although their performance levels differed considerably, most of the companies were able to improve their profit margins and thus provided evidence of solid cost management and operational efficiencies.
Practical value is offered through the recommendations made in this study to construction companies on how to improve their financial management strategies. Finally, it adds to the knowledge on financial management in construction industry in general and in the post transition economies, in particular, in Ukraine. These findings are meant to inform the industry stakeholders, such as policymakers, financial managers and business owners, how to optimally design the financial strategies and increase profits of the construction sector.
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