FINANCIAL STABILITY OF AGRICULTURAL BUSINESS ENTITIES AS AN ELEMENT OF ITS FINANCIAL SECURITY

Abstract

Аbstract. This scientific article investigates the critical problem of ensuring the financial stability of Ukrainian agricultural enterprises, a strategic imperative for national food, economic, and security resilience, especially under wartime conditions and during post-war recovery. The study argues that conventional financial stability assessment tools are insufficient for the agricultural sector due to its unique risks: long production cycles, high capital intensity, structurally uneven cash flows driven by seasonality, dependence on climate and on volatile global commodity markets, and exacerbated wartime logistical shocks. The core hypothesis posits that financial stability is not merely a retrospective indicator but a dynamic capability and a proactive strategic resource, forming the fundamental foundation of an enterprise's financial security system.
The purpose of the article is to substantiate the role of financial stability as a system-forming element of financial security for agricultural business entities and to develop practical recommendations to strengthen it.
The methodology involves a critical analysis of existing theoretical approaches, the identification of industry-specific internal and external determinants of stability (e.g., asset structure, state subsidies, climate, and exchange rate risks), and the conceptual adaptation of diagnostic tools.
Results.The scientific novelty of the obtained results is as follows: the conceptual reimagining of financial stability not as a retrospective indicator but as a dynamic capability and a proactive strategic resource, which constitutes the fundamental foundation of an enterprise's financial security system; proposal of a conceptual scheme for modifying the Z-model to account for seasonality of cash flows, asset structure specificity, and the impact of state support; development of an original graphical cyclical model mapping causal relationships among threats, financial indicators, security levels, and corrective management actions; and proposal of an adapted system of financial ratios tailored to agricultural business specifics.
A key outcome is the proposed system of adapted financial ratios (e.g., profitability, including subsidies, and a financial stability ratio considering long-term liabilities) tailored to the specifics of agricultural businesses. The article significantly advances the field by demonstrating the limitations of classical bankruptcy forecasting models (like Altman's Z-score) in an agricultural context and proposing a conceptual scheme for their adaptation (a conditional Z_agr model) to account for state support, asset specificity, and exogenous risks. Furthermore, the study develops an original graphical cyclical model that visually maps the causal relationship among external/internal threats, the deterioration of key financial indicators, the resulting decline in financial security, and the corrective feedback loop of management decisions.
Practical value of the study. This model underscores the necessity of proactive, integrated management. Based on this analysis, the article formulates a comprehensive set of recommendations structured across strategic, operational and control levels.
Conclusions. The findings confirm that strengthening financial stability requires an integrated approach that combines financial, operational, and risk-management instruments, with due regard for sectoral specifics. In the context of this study, financial stability is understood as financial resilience, the dynamic capacity of agricultural enterprises to withstand wartime shocks, adapt to disrupted logistics and volatile markets, and ensure long-term viability. Financial stability is established as the foundational pillar of financial security and long-term viability of agricultural enterprises, underpinning their solvency and operational continuity amid elevated risks. Given the industry's inherent seasonality, asset structure, and dependence on state support, the direct application of universal financial models proves inadequate. Effective stability enhancement rests upon a coordinated set of financial, economic, and managerial actions that together create a robust protective framework. A critical shift is required from retrospective diagnostics toward proactive risk-scenario modeling. Promising directions for future research include developing industry stability standards, assessing the impact of digitalization (AgriTech, FinTech), exploring new financing instruments, and modeling post-conflict recovery scenarios for agribusiness in de-occupied territories.