Modeling of a company’s financial results in the retail sector including E-Commerce

Abstract

Importance: а systematic investigation of the financial repercussions resulting from the expansion of online sales within the framework of a large company is necessitated by the need to transition from extensive growth models to economies of scale predicated on digital revenue generation mechanisms. The transformation of distribution channels and consumer behavior necessitates that businesses promptly reassess the principles of cost allocation, turnover management, and strategic planning methodologies. Retailers actively developing e-commerce confront the asymmetric effects of e-commerce on profitability, liquidity, and return on investment metrics, thereby requiring the adaptation of traditional financial models. Purpose: The aim of the research is to develop a model of financial results by identifying quantitative and qualitative changes in the business’s financial outcomes under the influence of digitalization of trading activities in a real retail company. Research design: the concept of e-commerce is considered, factors affecting financial results are presented, unit-economics metrics are introduced, and methods for modeling financial results considering the development of e-commerce are provided. Results: the study’s novelty is in the formalized interpretation of the impact of online sales on the company’s financial results, as seen through the lens of unit economic metrics and their adaptation to the specifics of multiformat retail. A novel financial forecasting model has been created as a unified calculation field that integrates behavioral monetization metrics of the customer base and operating profit indicators.