The Conceptual Principles of Evaluating the Economic Potential of Agricultural Enterprises

The article is dedicated to summarizing unresolved theoretical and methodological issues and substantiating the conceptual foundations for assessing the economic potential of agricultural enterprises. It is asserted that the existing volume of economic potential and the rate of its growth significantly influence the enhancement of competitiveness, financial stability, and efficiency of the economic activities of agricultural enterprises. By systematically monitoring the implementation of economic potential, it is possible to adjust internal capabilities, identify hidden reserves, prevent crisis situations, and formulate a program of action for the future. It is found that, despite the significant number of scientific publications on the issue of assessing the economic potential of an enterprise, the analysis of literary sources has revealed unresolved issues regarding: the differentiation of the concepts of «assessment» and «evaluation», which are often equated and used as synonyms; the lack of a sufficiently clear scientific position on defining the principles of potential evaluation; insufficient attention from scientists to the criteria for evaluating the potential of an enterprise; the substantiation of the targeted orientation of evaluating the economic potential of an enterprise and the directions of its evaluation; the debate over assessing the economic potential of an enterprise in both natural and monetary terms; the significant number of methods for evaluating the potential of an enterprise, which requires systematization; the determination of individual indicators of assessment of the economic potential of an enterprise, which is more closely related to the efficiency of its implementation. The assessment of the magnitude of the economic potential of an agricultural enterprise is presented as an organized and purposeful process of determining the monetary value of production-technological, agro-ecological, and innovative-investment potentials, taking into account the direction of the dynamics of the efficiency indicators of their implementation. A qualitative assessment should ensure compliance with the principles, methodological approaches, methods, evaluation procedures, and well-founded assumptions that the company can make in calculations. The conceptual basis for assessing the potential of an enterprise includes a set of principles, goals, and objectives for potential assessment, criteria, approaches, and methods for assessing its value. The proposed principles for evaluating the potential of an enterprise, which fully correlate with the defined criteria of these principles, will contribute to meeting the needs of economic entities for relevant and reliable information regarding the value and effectiveness of potential implementation for making appropriate managerial decisions. It is substantiated that the main criterion for evaluating the economic potential of an agricultural enterprise is the increase in newly created value (net output) generated by the economic entity. It is proved that it is methodologically incorrect, in the context of assessing the economic potential of an agricultural enterprise, to evaluate it in physical terms based on the volume of economic resources used by the enterprise and the amount of products, works, and services that the enterprise can market. It has been concluded that the methodology for assessing the economic potential of enterprises combines three generally recognized approaches, each characterized by its own methods and techniques: the income approach; the comparative (market) approach; the cost approach. Along with this, individual methodologies have a number of modifications and varieties, which creates additional difficulties in their identification and use. It is noted that all methods of evaluating the potential of an enterprise have drawbacks and limitations. Overall, a significant number of methodologies for assessing the potential of an enterprise have been developed to date, but there is a lack of consistency and coherence in the views of researchers, which creates a problematic field for further research in this subject area.