THE INTERRELATION OF PROFIT AND INVESTMENTS AS A BASIS FOR ENTERPRISE ADAPTATION TO ECONOMIC TRANSFORMATIONS

Abstract

The research examines the relationship between profitability and investment activity of Ukrainian enterprises under economic transformation caused by war and market instability. Understanding how profit generation influences investment decisions helps companies build resilient strategies during turbulent times. The methodology combines financial statement analysis, ratio calculation, trend analysis and scenario-based forecasting over three consecutive years, examining net profit, gross profit, operating profit and profitability ratios. Reinvestment coefficients measure the proportion of profit directed toward capital expenditures. Investment activity assessment includes fixed assets dynamics, depreciation patterns, working capital changes and cash flow movements. The findings demonstrate consistent profitability growth despite challenging external environment through cost optimization rather than revenue expansion. However, investment activity follows conservative patterns with low capital expenditure compared to generated profits. The reinvestment coefficient shows significant decline, indicating management preference for financial reserve accumulation over equipment modernization. Fixed assets renewal proves insufficient relative to depreciation rates. The enterprise maintains zero debt policy, relying entirely on internal financing. Working capital structure shifts toward current assets, particularly cash reserves and inventory buffers. Scenario analysis projects significant investment potential growth with estimated capital expenditure ranging from moderate to substantial levels. The practical value lies in providing actionable insights for management. Recommendations include investment portfolio diversification combining tangible and intangible assets, gradual reinvestment rate increase as situation stabilizes, and balanced approach to financial security and development needs. The concept proposes balance between profit and sustainable development through financial policy combining current profitability with strategic goals.