Analysis of the Efficiency of a Municipal Company: Economic and Social Dimensions

Abstract

In the context of the dynamic development of urban agglomerations, where utility companies play one of the key roles in ensuring the livelihood of the population, the issue of their operational efficiency becomes particularly relevant. Purpose. The aim of the article is to investigate the efficiency of a utility company, taking into account both economic and social dimensions, and to identify the factors influencing the performance of its operations under conditions of current economic instability. Methods. To achieve the stated objective, financial analysis methods were applied, in particular the calculation and interpretation of profitability and business activity indicators, as well as factor analysis techniques to determine the key drivers of their change. In addition, an analytical approach was employed to assess the social dimension of the company’s performance. Results. Empirical calculations indicate a decline in the return on sales, assets, and equity of the enterprise during the study period, which is explained by a decrease in profit despite the growth in revenue volumes. The analysis of business activity revealed a positive trend in accounts payable management, but highlighted a deterioration in the management of accounts receivable and the efficiency of fixed assets utilization. In the social dimension, the enterprise demonstrated a high level of responsibility. Despite financial difficulties, it managed to preserve staff numbers, ensure regular wage payments, and showed a steady increase in the average wage level. This indicates stability in labor relations, which is a key factor for social well-being under martial law. Conclusions. The study confirms the need to improve financial management in utility enterprises, particularly in optimizing cost structure, managing receivables, and enhancing asset utilization. At the same time, the social component of operations is no less important, especially in times of crisis, as it ensures not only social stability but also stakeholder trust in the enterprise.