Using Selected Financial Indicators for Managerial Decision-Making

Abstract

In recent years, Mongolian state-owned enterprises (SOEs) have experienced a persistent deterioration in financial stability, characterized by excessive leverage and a heavy reliance on long-term borrowing. According to consolidated financial statements, the debt-to- equity ratio exceeded theoretical and sectoral benchmarks in 2024, indicating that total liabilities were four to six times higher than equity. This imbalance constrains investment capacity, increases default risk, and weakens fiscal sustainability. Therefore, identifying an optimal balance sheet structure with minimal disruption to existing operations has become a critical policy and managerial issue. This paper proposes a mathematical optimization framework to address this challenge.