Multifactor models for studying the impact of investment activities of enterprises on their profitability: case of Ukraine

Objectives: Understanding the processes of transformation of the investment activity of domestic business entities is decisive, when making decisions and forming effective scenarios for the further development of business activities aimed at increasing profits. There are complex economic realities for the development of production today, so, the economic agents are faced with the task of finding the optimal ratio between investments in the production restructuring processes and investments in innovative projects. This problem can be solved only by forming the optimal structure of their own capital investments. The purpose of this study is to identify the main trends in the investment activity of domestic enterprises using a comprehensive analysis of the structural dynamics of real investment projects and its impact on their financial results. Methods / Approach: During the analysis of investment process, relative indicators that characterize the shares of the components in the structure of the investments were calculated; charts and graphs were constructed, analytical tables were compiled. Multifactor linear regression models were built to determine the importance of the investment components’ dominance and their impact on the profitability of the enterprise. Canonical correlation analysis was used to study the relationship between financial performance indicators of Ukrainian enterprises and using the high technologies in their production activities. Results: It was found that the dynamics of indicators that identify structural and dynamic changes in the structure of capital investments of Ukrainian enterprises and the selection of certain structural regimes indicate the dependence of the rate of growth and structural shifts on the political situation in the country, as well as on the coronavirus pandemic, which caused significant fluctuations in the investment activity of domestic business entities. Conclusions: The study confirmed that the indicator of the financial performance of Ukrainian enterprises is most influenced gross investment in existing buildings and structures, gross investment in construction and alteration of buildings and gross investment in purchased software.