CVP-analysis as a tool for improving economic sustainability in the cost management system of health resort organizations

Costs are the basis of any type of activity and are the factor that has a direct impact on the financial results of the organization. That is why organizations are urgent issues of implementation of methodological tools that would allow to reduce costs and ensure their rational distribution between individual responsibility centers. To identify cost reduction reserves, it is necessary to provide an effective management system using modern tools. CVP-analysis is such a tool, which provides an opportunity to take into account the impact of costs on the results of the enterprise’s activities and to evaluate alternative management decisions. The paper demonstrates the possibility of using CVP-analysis to manage costs and financial results in the health resort sector on the example of enterprises of the Republic of Crimea and Sevastopol. The necessity of application of CVP-analysis as an important tool in the management of economic stability is determined and the prerequisites for minimizing entrepreneurial risk are revealed. The relationship between costs, production volume and profit in the sanatorium-resort sphere is presented and substantiated, taking into account the current economy, namely the conditions of uncertainty and risk. The study of CVP analysis aims to identify the level of sales revenue at which the enterprise will cover fixed and variable costs to strengthen economic sustainability. Despite the fact that the CVP system does not solve all the problems of effective management, it is on the basis of the data of the classical CVP-analysis that it becomes possible to assess the risk by the indicators of financial strength reserve, sensitivity to changes in the coefficient of variable costs and the amount of fixed costs in the same way as it is offered by some methods of risk analysis. CVP-analysis capabilities allow to effectively manage costs, find the optimal ratio between fixed and variable costs, price and volume of production (services), effectively forecast and plan the company’s profit. Since the main indicator of the efficiency of the enterprise is the ratio of profit and costs, the management of the enterprise can make balanced managerial decisions to ensure high performance of operating activities and achieve the desired financial performance, using the methodology of CVP-analysis. All this allows the enterprise in conditions of uncertainty and risk to increase the potential of profit formation and, accordingly, to strengthen economic stability.

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