Financial justification of short-term entrepreneurial decisions: issues and practical situations

Abstract

The authors examine short-term decisions in comparison with long-term decisions. The article describes intuitive and rational approaches to decision-making methods. The authors propose practical and improved approaches to the financial justification of short-term entrepreneurial
decisions. The types and characteristics of entrepreneurial decisions are summarized along with practical recommendations and calculations for the financial justification of entrepreneurial decisions are presented. The significance and content of financial and economic indicators, used as a criteria for evaluating the alternatives considered in the justification of entrepreneurial decisions, are defined. Specific examples are used to review and summarize algorithms for calculating the financial
justification for various types of short-term entrepreneurial decisions, including those related to limiting factors, purchasing or producing components in-house, discontinuing a business segment, accepting or rejecting an order, pricing, producing joint products, and their further processing. The study also identifies non-financial (qualitative) factors influencing entrepreneurial decision making. The practical value of the research is complemented by the concise presentation of the material and well-chosen case examples, which are of practical value for financial specialists and entrepreneurs. The recommendations proposed in the article for the financial justification of short-term entrepreneurial decisions will help improve the quality and increase the efficiency of entrepreneurial decisions.