Diagnosis of financial risks in the activities of agro-industrial enterprises within the enterprise risk management system as a tool of financial engineering

Abstract

Given the volatility of market conditions and the specific nature of the agro-industrial complex, timely diagnosis of financial risks not only enables loss minimisation but also ensures adaptability to external changes, optimises capital structure, and enhances solvency. This is particularly relevant for attracting investment and financing, as investors are guided by the enterprise’s risk profile. The aim of the study was to improve methodological approaches to the diagnosis of financial risks as an important tool of financial engineering within the risk management system of agro-industrial enterprises. The study employed methods of scientific inquiry, namely: the systems approach, analysis, synthesis, scientific abstraction, and generalisation. To diagnose the level of financial risks using agro-industrial enterprises as examples, the method of calculating financial ratios and the method of taxonomic analysis were applied, along with tabular and graphical methods for presenting the research findings. The integral indicator (IFR) was constructed based on the main areas of risk assessment: liquidity, financial stability, solvency, profitability, and settlement efficiency. The study assessed the level of financial risk of agro-industrial enterprises during the period 2021-2023. The lowest risk was observed in EFI “Viterra Ukraine” (IFR = 0.114), while LLC “TAS Agro Center” demonstrated negative dynamics: the IFR increased from 0.022 to 0.572. Consistently high risk was identified in LLC “Agrotrade-Production” (IFR = 0.620 in 2023), with the highest level observed in LLC TC “Vitagro” (IFR= 0.688). The practical value of the study lies in the proposed approach to diagnosing the level of financial risks, which can be used to justify and make current and future management decisions in the risk management system of a business entity.