The organization's own financial resources include: Own and attracted resources of the enterprise
General concept of financial resources
Cash income accumulated by their owners for subsequent spending, as well as funds raised as loans, constitute financial resources, which are divided into their own and borrowed (credit). For budgets of all levels, financial resources are mobilized income and attracted loans. For enterprises, this is equity capital, profit, loans received and securities placed on the market. For workers, a financial resource is income in the form of wages, as well as loans (for example, bank, consumer and pawnshop).
Own financial resources are at the complete disposal of their owner, while credit resources are attracted for a period of time and are subject to repayment along with interest payments for their use.
Sources of credit resources are temporarily free funds of enterprises, the population, and in some cases the state. The purchase and sale of these resources is concentrated in the financial market. It consists of two parts: the loan capital market and the securities market. Its main function is to provide business entities with additional funds at a certain percentage.
Principles of organizing enterprise finances. Cash flow in the enterprise
The predominant part of the financial resources of the general economic financial system is formed at enterprises. Since up to 80% of the budget revenue base is formed from taxes, and tax revenues are dominated by payments from enterprises, enterprise finances form the national financial system.
The organization of corporate finance is based on the following principles:
- independence in the field of financial and economic activities;
- self-financing;
- interest in work results;
- responsibility for these results;
- formation of financial reserves;
- division of funds into own and borrowed;
- priority fulfillment of obligations to the budget;
- financial control over the activities of enterprises.
The cash flow cycle of an enterprise can be represented as follows:
Figure 1. Enterprise cash flow cycle
Cash flow in an enterprise is a continuous process. For each direction of use of funds there must be a corresponding source. A business's assets are its net uses of cash, while its liabilities and equity are its net sources. For an operating enterprise there is no starting and ending point for the movement of funds. Cash levels fluctuate depending on production schedule, sales volume, accounts receivable collections, capital expenditures and financing.
In the overall cash flow of an enterprise, the following relationships can be distinguished:
- formation and use of target funds for intra-economic purposes (statutory fund, production development fund, incentive funds, etc.);
- arising from participation in other enterprises (making share contributions, participating in the distribution of profits from joint activities, etc.);
- with employees of the enterprise;
- with product buyers;
- with insurance organizations;
- with the banking system;
- with the state;
- with higher management structures.
Financial resources of the enterprise and their structure
Definition 1
Financial resources of the enterprise is its fixed and working capital.
Formation and replenishment of financial resources(fixed and working capital) is an important financial problem. The primary formation of these capitals occurs at the time of establishment of the enterprise, when the authorized capital is formed.
Definition 2
Authorized (share) capital- property of the enterprise created through the contributions of the founders.
Definition 3
Financial resources- these are the funds remaining at the disposal of the enterprise after the implementation of current costs to cover material costs and wages.
The main source of financial resources is profit.
Sources of formation of the enterprise's financial resources: profit; proceeds from the sale of disposed property; depreciation; increase in sustainable liabilities; loans; targeted revenues; share contributions. In addition, an enterprise can mobilize financial resources in various sectors of the financial market: sale of shares, bonds; dividends, interest; loans; income from other financial transactions; income from the payment of insurance premiums, etc. (Fig. 2).
Figure 2. Grouping of enterprise financial resources
Significant financial resources of an enterprise can be mobilized in the financial market.
Definition 4
The main direction of use of funds- investing in expanded reproduction.
The use of financial resources is carried out in the following areas:
- Investing in capital investments to expand production;
- Investing in securities;
- Payments to the budget, banking system, contributions to extra-budgetary funds;
- Formation of monetary funds and reserves.
Enterprise financial management
The formation and use of financial resources is impossible without a financial management system for enterprises.
Definition 5
Financial management (financial management)- this is an activity aimed at achieving the strategic and tactical goals of the functioning of a given enterprise.
Enterprise financial management includes:
- organization and management of the enterprise’s relations in the financial sector with other enterprises, banks, insurance companies, budgets of all levels, as well as financial relations within the enterprise;
- formation of financial resources and their optimization;
- placement of capital and management of the process of its functioning;
- analysis and management of cash flows in the enterprise.
Main functions of a financial manager:
- financial planning, enterprise budgeting, pricing policy formation, sales forecasting;
- formation of the capital structure and calculation of its price;
- capital management (working with securities; control and regulation of monetary transactions; investment analysis; management of fixed and working capital);
- financial risk analysis;
- property protection;
- assessment and consultation.
And etc.); regional finance(budgets and extra-budgetary funds of various administrative-territorial entities); finance of enterprises, organizations, firms. The finances of firms and enterprises occupy a decisive position in the structure of the country’s financial system, since it is at the enterprise level that the predominant mass of the state’s financial resources is formed.
General concept of financial resources
Cash income accumulated by their owners for subsequent spending, as well as funds raised as loans, amount to financial resources, which divided into own and attracted(credit). For budgets of all levels, financial resources are mobilized income and borrowed loans. For enterprises, this is equity capital, profit, loans received and securities placed on the market. For workers, a financial resource is income in the form of wages, as well as loans (for example, bank, consumer and pawnshop).
Own financial resources are at the complete disposal of their owner, and credit cards are attracted for a period and are subject to return along with interest payments for their use.
Sources credit resources These are the temporarily free funds of enterprises, the population, and in some cases the state. The purchase and sale of these resources is concentrated in the financial market. It consists of two parts: the loan capital market and the securities market. Its main function is to provide business entities with additional funds at a certain percentage.
Enterprise finance is part of the national financial system
Enterprise finance- an integral part of the whole.
The finances of business units depend on the government's economic policy. The main areas of state regulation of the financial activities of enterprises include: pricing, tax system, money circulation, credit, forms of payments and settlements, organization of circulation (), state licensing of economic activities, foreign economic relations, budget financing (Fig. 55).
Control function
The control function of an organization’s finances is to monitor the financial condition and effectiveness check her activities. For example, control over allows you to determine the degree of effectiveness of the organization’s economic activities. Along with this, an organization’s finances can influence the degree of efficiency of its economic activities through the so-called ruble control which is carried out within the organization, in its relationships with other participants in business transactions, a higher organization, the state and other participants in the financial system. Within the enterprise, the ruble controls the quality and quantity of labor, use, etc. Ruble control in relationships with other participants in business transactions is carried out subject to compliance with contractual obligations. The economic activities of the enterprise are controlled by the ruble in the process of fulfilling obligations to the budget.
The control function is implemented in two ways through:
- financial indicators in statistical and operational reporting;
- financial impact, which is carried out using economic levers and incentives (taxes, benefits, subsidies, etc.).
Maintenance function
The function of servicing the organization's income flow is the second function that reveals the content of the enterprise's finances. Since the movement of enterprise income is associated with the renewal of consumed resources, this function is often called reproductive. The presence of this function is due to the need to ensure continuous flow of income in the process of economic activity of the enterprise. The effectiveness of the process of servicing an organization’s finances for the movement of its income depends on the correspondence of the flows and cash resources that support the organization’s economic activities. In many ways, this compliance determines the ability to timely and fully fulfill its obligations to other subjects of financial relations.
Distribution, servicing and control functions reveal the content of the organization’s finances in the process of movement of each of the three forms of its income - primary, secondary and final.
The financial functions of an organization are interconnected and interdependent. Maintaining the flow of income is impossible without its distribution, and ensuring compliance between the flows of material and financial resources is achieved through the control function of the organization.
As part of the financial relations of enterprises The following groups of financial relations of enterprises are distinguished:
- with counterparties regarding the generation of income and use of funds;
- with enterprises regarding the distribution of finances; in a non-fund form (payment and receipt of fines for violation of contractual obligations, making various share contributions, participation in the distribution of profits from joint activities, purchasing securities of other enterprises and the state, receiving dividends on them, etc.);
- with consumers of products in accordance with contracts;
- with insurance organizations regarding various types of compulsory and voluntary insurance;
- with the banking system regarding settlement and cash services in connection with the receipt and repayment of loans, the payment of interest, as well as the provision of free funds to banks for temporary use for a fee;
- with the state regarding the formation and use of budgetary and extra-budgetary funds;
- vertical and horizontal relationships with higher management structures regarding intra-industry redistribution of financial resources.
These groups of monetary relations constitute the overall content of enterprise finance. Company finances represent monetary relations associated with the formation and distribution of monetary income and savings among business entities, and their use, fulfillment of obligations to the banking system, financing of current costs and costs of expanded reproduction, social security and material incentives for workers.
Financial resources of the enterprise and their structure
Financial resources enterprises are his and .
Formation and replenishment financial resources(main And working capital) is an important financial issue. Primary the formation of these capitals occurs at the time of establishment of the enterprise, when it is formed.
Authorized (share) capital- property of the enterprise created through the contributions of the founders.
Financial resources— these are the funds remaining at the disposal of the enterprise after the implementation of current costs to cover material costs and wages.
Main source formation of financial resources- This .
Sources of formation of the enterprise's financial resources: profit; proceeds from the sale of disposed property; depreciation; increase in sustainable liabilities; loans; targeted revenues; share contributions. In addition, an enterprise can mobilize financial resources in various sectors: sale of shares, bonds; dividends, interest; loans; income from other financial transactions; income from the payment of insurance premiums, etc. (Fig. 57).
Rice. 57. Grouping of financial resources of an enterpriseSignificant financial resources of an enterprise can be mobilized for financial market.
The main direction of use of financial resources is investing in expanded reproduction.
The use of financial resources is carried out in the following areas:- investing in capital investments to expand production;
- investing in securities;
- payments to the budget, banking system, contributions to extra-budgetary funds;
- formation of monetary funds and reserves.
The main source of funds for an enterprise is its profit (Fig. 58). Profit is part of the gross income of an enterprise.
Rice. 58. Enterprise profit and formation of value added taxGross income of the enterprise— revenue from the sale of products minus costs.
Important component gross profit - profit from the sale of fixed assets (Fig. 59).
Rice. 59. Profit from the sale of fixed assets and other propertyAnother component gross profit - profit from non-operating activities (renting out property, income from securities, etc.).
Among the main sources of financing for the expanded reproduction of fixed assets is depreciation. This is the process of transferring the value of fixed assets and intangible assets to production and sold products as they wear out. Accumulated depreciation amounts should be used for long-term investing.
Depreciation- the main source of self-financing at enterprises.
Has a strong impact on corporate finances tax system. The three elements of the tax system are most important for the finances of an enterprise: tax rates; the tax base; deadlines for paying taxes to the budget.
Enterprise financial management
The formation and use of financial resources is impossible without a financial management system for enterprises.
Financial management (financial management) is an activity aimed at achieving the strategic and tactical goals of the functioning of a given enterprise.
Enterprise financial management includes:
- organization and management of the enterprise’s relations in the financial sector with other enterprises, banks, insurance companies, budgets of all levels, as well as financial relations within the enterprise;
- formation of financial resources and their optimization;
- placement of capital and management of the process of its functioning;
- analysis and management of cash flows in the enterprise.
Basic functions of a financial manager:
- financial planning, enterprise budgeting, pricing policy formation, sales forecasting;
- formation of the capital structure and calculation of its price;
- capital management (working with securities; control and regulation of monetary transactions; investment analysis; management of fixed and working capital);
- financial risk analysis;
- property protection;
- assessment and consultation.
The concept of financial resources of an enterprise. Capital.
Fixed assets of the enterprise. Main capital. Circulation of fixed assets.
Intangible assets of enterprises. Their circulation.
Working capital of the enterprise. Working capital. Circulation of fixed assets.
Authorized capital.
The material basis of finance is financial resources.
Financial resources of the enterprise- these are funds at his disposal and intended to cover expenses for expanded reproduction, maintenance and development of the non-productive sphere, consumption.
Financial resources are intended for the development of the production and trade process, i.e., funds for the purchase of raw materials, goods and other items of labor, for the acquisition of tools, for paying labor represent capital in monetary form.
Thus, capital- This is part of the financial resources of the enterprise.
Capital- this is money put into circulation and generating income from this circulation.
Capital is wealth used for its own increase.
The circulation of money can be carried out by investing it in business or transferring it as a loan.
Only investing money in economic activity, only investing can create profit and turn money into capital. At the same time, the money invested in the production and trading process is not completely spent, it is only advanced into this process in order to, having completed the circuit, return with additional income:
According to the form of investment, they are distinguished:
1 - entrepreneurial capital;
2 - loan capital.
Entrepreneurial capital- This is capital invested in various enterprises. Such investment of money is carried out with the aim of obtaining profit and rights to manage the enterprise.
Loan capital- this is money lent on the terms of repayment and payment. Unlike entrepreneurial loan capital, it does not give its owner any rights to manage the enterprise. The owner lends the money to another entrepreneur, and this entrepreneur becomes an investor. The price of loan capital, as a commodity, is the interest on the loan.
Structurally, the capital of an enterprise consists of monetary funds, i.e., funds invested in fixed assets, intangible assets, working capital of the enterprise, as well as funds in circulation.
The material and technical basis of the production process at any enterprise is the main production assets.
Fixed assets- these are funds invested in fixed assets for production and non-production purposes.
At the time of acquisition of fixed assets and their acceptance onto the balance sheet of the enterprise, the value of fixed assets quantitatively coincides with the value of fixed assets. Subsequently, as fixed assets participate in the production process, their value bifurcates:
one part, equal to wear and tear, is transferred to the cost of finished products in the form of depreciation;
the other part reflects the residual value of fixed assets.
The worn-out part of fixed assets, as finished products are sold, is accumulated by the enterprise in cash.
In this case, a so-called “depreciation fund” is formed. In accounting, this fund is not accounted for in a separate account. However, the Appendix to the balance sheet (Form No. 5) regularly reflects the accrual and use of depreciation.
The depreciation fund is used for simple and, partially, expanded reproduction of fixed assets.
The use of depreciation for the expanded reproduction of fixed assets is explained by the specifics of calculating depreciation charges. Depreciation is accrued monthly for all fixed assets, and the need to use it for its intended purpose, i.e. for the restoration of these fixed assets, occurs after their complete wear and tear. Until this moment, the company has free cash from its revenues, which it can use for other purposes.
Tax legislation encourages enterprises to expand their production base. The Law “On Profit Tax” provides for a profit tax benefit if an enterprise, using All accrued depreciation charges for the reconstruction and expansion of production, acquires fixed assets also at the expense of profits.
To reproduce fixed assets, very often an enterprise does not have enough accrued depreciation charges. In this case, to expand the production base, the enterprise can use other sources of financing capital investments.
Circulation of the value of fixed assets
Information on the residual value of fixed assets is contained in the first section of the enterprise's balance sheet. It should be taken into account that fixed assets are taken onto the balance sheet from the first day of the month following the date of acquisition, and are written off from the balance sheet from the first day of the month following the date of liquidation or sale or gratuitous transfer of the fixed asset item.
Depreciation is calculated in the same way. In this case, depreciation can be calculated by the enterprise using one of the following methods:
linear method;
reducing balance method;
proportional to the sum of the numbers of years of useful life;
proportional to the volume of production.
An enterprise has the right to independently choose one of the listed methods of calculating depreciation for different groups of fixed assets, be sure to record this choice in an order on accounting policies.
For tax purposes, an enterprise must charge depreciation to calculate costs only using the straight-line method.
Intangible assets- is an investment of an enterprise’s funds in intangible objects that are used for a long time in production and economic activities and generate income.
Such intangible objects include:
software products;
licenses;
certificates;
new technologies (“know-how”);
organizational expenses during the organization of the enterprise;
rights to use land plots;
By the nature of their use, intangible assets are similar to fixed assets. They are used in economic activities for a long time (more than 1 year) and transfer their value to the cost of the finished product gradually over the entire service life.
Acquired intangible assets are included in the enterprise's property at their original cost. In this case, the initial cost of intangible assets is determined by the enterprise itself based on:
The costs of their acquisition - when purchasing an object of intangible assets externally. At the same time, the initial cost of an intangible asset includes not only the costs of their acquisition, but also the costs associated with bringing these intangible assets to a usable state;
The actual costs of the enterprise for the creation of this object of intangible assets (for example, payment for various services of employees);
Possible effect from the use of this intangible asset.
Intangible assets are taken onto the balance sheet at their original cost. During service, this value circulates by transferring it to the cost of finished products through depreciation.
Amortization of intangible assets is calculated as follows:
C p NA - the initial cost of intangible assets;
On NA - the depreciation rate for intangible assets.
At the same time, the depreciation rate reflects the annual percentage of the value of intangible assets established by the enterprise, which is transferred to the cost of finished products, i.e., is included in its cost.
In this case, the enterprise can set the depreciation rate based on:
validity period (for licenses and rights to use land);
the expected useful life of this intangible asset.
It is legally established that this estimated period should not exceed 20 years.
Depreciation charges for intangible assets become a source of financing for simple reproduction. They can be used, first of all, to purchase other intangible assets. If during the entire depreciation period no other objects of intangible assets were acquired, this means that the accumulated depreciation of intangible assets is constantly in the turnover of the enterprise and is used for other purposes.
Thus, intangible assets, just like fixed assets, circulate, and this circulation is similar to the circulation of fixed assets.
Information on the availability of intangible assets by group is contained in the asset balance sheet of the enterprise. It reflects the residual value of intangible assets.
Information on the calculation and use of amortization of intangible assets is presented by the enterprise in the Appendix to the balance sheet, Form No. 5.
Any enterprise in the practice of economic activity has trading partners. The economic ties created are a consequence of the social division of labor.
With the social division of labor, the product of labor of one economic entity becomes an object or means of labor for others.
Therefore, to ensure the continuity of production and consumption of goods, almost every economic entity needs to have stocks of objects and products of labor, as well as the availability of such objects and products of labor in transit from one economic entity to another. In this case, a greater or lesser number of items and labor products in inventories may be caused by a combination of various factors.
Inventories of labor items are the material elements of working capital.
Wherein revolving funds They seem to consist of 2 parts.
The first part is objects of labor that are already at the disposal of an economic entity, but have not yet entered into the production process (raw materials; basic, auxiliary, additional materials; fuel; small-scale products; spare parts; containers). The formation of inventories of labor items requires the investment of certain funds in them. In this case, the business entity makes these costs in advance.
The other part is objects of labor that have already been put into production. As they are processed, they become finished products. Here, too, advances of certain funds occur. This part of the working capital located at the enterprise in the form of work in progress and its own semi-finished products is formed due to the fully transferred cost of objects of labor to them, the partially transferred cost of fixed assets in the form of depreciation and part of the income created in the production process in the form of wages and social contributions. needs. Thus, the monetary costs of production are added to the previously advanced cost of objects of labor.
The difference between these two parts of working capital is expressed in the fact that funds invested in production inventories are part of the (hidden) property of the enterprise, and funds invested in work in progress are intended to ensure rhythm and continuity of the labor process.
Consequently, the main purpose of funds allocated to circulating production assets is to ensure continuity and rhythm of production.
In the conditions of commodity-money relations, stocks of objects of labor act, on the one hand, as a set of material values, the property of a given production entity, and on the other hand, as the sum of the costs of a given enterprise in monetary form.
Working production assets take a one-time part in the production process, while changing their natural shape.
At the same time, their cost is completely transferred to the cost of the finished product. Some objects of labor (for example, fuel) are completely used in the production process and are not materially included in the product of labor. Others (for example, raw materials, basic materials) materially enter into the product of labor and acquire, during the production process, a form in which they can be used in the future.
Circulation funds are associated with servicing the process of circulation of goods, i.e., the trade process. They include 2 relatively independent groups:
1 - finished products in the process of sales;
2 - funds of enterprises in cash, in settlements and in the current account.
The main purpose of circulation funds is to provide funds for the rhythmic process of circulation of goods.
Circulation funds do not participate in the formation of new value. They are the bearer of this new value.
Information about the working capital of the enterprise is contained in the asset balance sheet of the enterprise.
At the same time, the information is located in the asset in such a way that it clearly reflects the current assets of the enterprise at various stages of the circulation: in the form of inventories, work in progress, finished products in the warehouse, shipped finished products (accounts receivable), cash in accounts and in the cash register.
Thus, the total asset of the enterprise’s balance sheet (in the balance sheet currency) reflects the amount of money invested in the enterprise’s turnover. It includes: the amount of funds invested in non-current assets, i.e., real estate (fixed assets, intangible assets, etc.), as well as the amount of funds invested in current assets, i.e. into current assets.
The balance sheet currency reflects the amount of financial resources of the enterprise.
The provision of an enterprise with working capital and the efficiency of their use influence the reproduction process, its uninterruption, rhythm and, ultimately, the financial results of the enterprise.
The following indicators characterize the working capital of an enterprise and the efficiency of their use are distinguished:
availability of own working capital,- since the working capital of an enterprise can be formed both from its own sources and from borrowed funds, then, as a rule, not all working capital at the disposal of the enterprise are its property. The higher the share of own working capital, the weaker the dependence of the enterprise on creditors, the greater the autonomy of the enterprise. But in world practice it is considered normal when the ratio between equity and borrowed funds is approximately 1/3 or ½;
ratio between borrowed and own working capital;
solvency of the enterprise- this indicator determines the ability of the enterprise to fully fulfill payment obligations arising from trade, credit and other business transactions. This indicator affects the forms and conditions of commercial contracts concluded, including the very possibility of obtaining a loan and the conditions for its presentation, i.e., determining the terms for which the loan is issued and interest on loans.
Thus, solvency is the ratio between the amount of upcoming payments to the enterprise and current cash receipts .
Solvency in the field of repayment of debt obligations of an enterprise expresses its liquidity.
Liquidity- this is the ability of an enterprise to make the necessary expenses at any time.
Liquidity depends on:
on the one hand, the amount of debt of the enterprise;
on the other hand, on the volume of liquid funds of the enterprise.
According to the degree of liquidity, assets, in turn, are divided into hard-to-liquid, medium-liquid and quick-liquid.
TO difficult to liquidate assets include non-current assets of the enterprise.
TO medium-liquid Assets include the enterprise's reserves in the form of raw materials, fuel, replacement equipment, supplies, finished products in the enterprise's warehouses and goods in warehouses.
TO highly liquid assets include accounts receivable from customers, the enterprise's investments in short-term financial investments (bills and other securities) and cash in accounts and on hand.
This division is quite arbitrary and depends on the conditions of economic activity of a particular enterprise.
working capital turnover- this indicator characterizes the efficiency of using working capital and is determined by the time during which funds complete the full cycle, starting from the acquisition of inventory and ending with the receipt of funds for finished products.
The concepts of “working capital of an enterprise” and “working capital” are almost identical.
Another thing is that the company’s own working capital is, as a rule, less than the amount of working capital by the amount of the company’s accounts payable.
Own working capital is equal to the amount of current assets minus accounts payable.
The economic organization of any business entity begins with the formation of fixed and working capital, intangible assets necessary to start economic activity.
Their value is reflected in the charter of the enterprise and is called Authorized capitalenterprises.
The authorized capital represents the sum of contributions of the founders of an economic entity to ensure its life. The amount of authorized capital is fixed in the constituent documents for any enterprise.
The authorized capital may be revised during business activities with the obligatory reflection of the new amount of the authorized capital in the constituent documents, which are subject to mandatory state re-registration.
Information on the size of the authorized capital is reflected in the liability side of the enterprise's balance sheet.
Thus, authorized capital is a specific, one-time source of financial resources of an enterprise.
While the term “financial resources” is widely used, its interpretation varies. In Russia, it was first used when drawing up the country's first five-year plan, which included a balance of financial resources.
In a more general sense, “resource” in dictionaries is considered as a reserve that serves as a source of satisfying needs and forming funds. Since finance is an economic relationship mediated by money, it is obvious that financial resources mean only those resources that have a monetary form, as opposed to material, labor, natural and other resources. Thus, we can conclude that financial resources exist only in monetary form.
Financial resources are not the entire amount of funds used by state authorities and local governments, as well as business entities. In addition to financial resources, credit resources, personal income of the population, etc. also function in monetary form. Therefore, it is important to identify such characteristics of financial resources that will allow them to be isolated from the total amount of funds.
In any society, financial resources do not exist on their own; they always have an owner or a person to whom the owner has delegated the rights to dispose of them. Financial resources cannot be outside of property relations.
And only that part of the funds that is owned or disposed of by business entities or state authorities and local governments and serves the process of social reproduction refers to financial resources. Their affiliation with a specific business entity or state and local government bodies makes it possible to separate them from the part of the population’s monetary income and savings that is not involved in the process of social reproduction.
However, not all funds of business entities can be classified as financial resources, but only those that mediate the processes of production of goods, provision of various types of services, or are used to finance the functions of state authorities and local self-government.
From this follows the next characteristic of financial resources - they are always used for the purposes of expanded reproduction, social needs, material incentives for workers, and satisfaction of other social needs.
Financial relations arise in the process of formation and movement (distribution, redistribution and use) of capital, income, funds, reserves and other monetary sources of the enterprise, i.e. its financial resources. It is cash flows and financial resources that are the direct objects of financial management of an enterprise.
Equity capital is a combination of material assets and cash, financial investments and costs for the acquisition of rights and privileges necessary for the implementation of its economic activities.
Own financial resources are funds owned by an enterprise, as well as those donated to the enterprise for carrying out business and other activities. Own financial resources include profit; special funds formed from profits (for example, an accumulation fund); depreciation deductions; insurance compensation.
The financial resources of an enterprise are, first of all, cash income and receipts that are at the disposal of a business entity and are intended to fulfill financial obligations, carry out expenses for expanded reproduction and economic stimulation of workers.
The most important dominant area of the overall financial strategy of an enterprise is the strategy for generating financial resources.
According to the definition of I. A. Blank, the financial resources of an enterprise are understood as the totality of its own and borrowed funds and their equivalents accumulated by it in the form of target funds intended to support its economic activities in the coming period.
The formation of financial resources is carried out at the expense of own and equivalent funds, the mobilization of resources in the financial market and the receipt of funds from the financial banking system in the order of redistribution.
The enterprise's own financial resources include initial contributions from the founders of the enterprise and savings from the results of economic activities. When creating an enterprise, the authorized capital is allocated for the acquisition of fixed assets and the formation of working capital in the amounts necessary to conduct normal production and economic activities. It is invested in the acquisition of licenses and patents, the use of which is an important income-generating factor. Thus, the initial capital is invested in production, during which a value is created, expressed by the price of sold products; any type of property can act as a contribution to the authorized capital.
On the basis of repayment, the enterprise attracts borrowed financial resources - long-term bank loans, funds from other enterprises, bond issues, the source of repayment of which is the profit of the enterprise. This is how borrowed financial resources are formed.
Borrowed financial resources are resources mobilized in the financial market: bank loans, loans from other creditors against bills of exchange and other debt obligations, and funds received from the placement of bond issues, income from the issue of securities of an enterprise (for example, shares when forming the authorized capital) . In addition, this includes so-called stable liabilities.
Attracted financial resources are formed through budgetary allocations, mobilization of own resources in construction, savings from economic construction, insurance compensation, equity funds, income from purchased securities and other financial assets, income from the sale of unused property. To obtain additional income, enterprises have the right to purchase securities of other enterprises and the state, invest funds in the authorized capital of newly formed enterprises and banks, and lend them to other enterprises on the terms of repayment, urgency and payment. Temporarily available funds of an enterprise can be separated from the total cash flow.
The formation and use of financial resources is carried out at two levels: nationwide and at each enterprise. The size and structure of sources for the formation of financial resources on a national scale determine the possibilities for expanded reproduction of the national economy, raising the level of members of society, and increasing state budget revenues. The size of financial resources generated at the enterprise level determines the possibility of making the necessary capital investments, increasing working capital, fulfilling all financial obligations, and meeting social needs.
The initial formation of financial resources occurs at the time of establishment of the enterprise, when the authorized capital is formed. Its sources, depending on the organizational and legal forms of management, are: share capital, share contributions of members of cooperatives, industry financial resources (while maintaining industry structures), long-term credit, budget funds. The size of the authorized capital shows the size of those funds - fixed and working capital - that are invested in the production process.
The main source of financial resources in operating enterprises is the cost of products sold (services provided), various parts of which, in the process of revenue distribution, take the form of cash income and savings. Financial resources are formed mainly from profits (from core and other activities) and depreciation charges.
Along with them, sources of financial resources also include:
Proceeds from the sale of disposed assets,
- stable liabilities,
- various targeted revenues,
- mobilization of internal resources in construction, etc.
Significant financial resources, especially for newly created and reconstructed enterprises, can be mobilized in the financial market. The forms of their mobilization are: sale of shares, bonds and other types of securities issued by a given enterprise, credit investments.
Before the transition to market economic conditions, significant financial resources of the enterprise were obtained on the basis of intra-industry redistribution of funds and budget financing. However, the principles of market management and the introduction of commercial principles into the activities of enterprises naturally required fundamentally different approaches to the formation of financial resources. Orientation towards initiative and entrepreneurship, full financial responsibility led to two major changes in the field of financial relations of enterprises with other structures: firstly, the development of insurance operations, and, secondly, a significant reduction in the scope of gratuitous appropriations. In this regard, during the transition to market principles of economic management, insurance compensation payments received from insurance companies will gradually play an increasingly greater role in the composition of financial resources formed in the order of redistribution, and budget and industry financial sources will gradually play a lesser role. Enterprises will be able to receive financial resources: from associations and concerns of which they belong (only if this is provided for by the mechanism for using the corresponding monetary funds); from higher organizations - while maintaining industry structures; from government bodies - in the form of budget subsidies for a strictly limited list of costs. But in the conditions of functioning of the securities market, such types of financial resources will appear as dividends and interest on securities of other issuers, as well as profit from financial transactions.
The use of financial resources is carried out by the enterprise in many areas, the main of which are:
Payments to bodies of the financial and banking system due to the fulfillment of financial obligations. These include; tax payments to the budget, payment of interest to banks for using loans, repayment of previously taken loans, insurance payments, etc.;
- investment of own funds in capital costs (reinvestment) associated with the expansion of production and its technical renewal, transition to new advanced technologies, etc.;
- investment of financial resources in securities purchased on the market: shares and bonds of other companies, usually closely associated with cooperative supplies with a given enterprise, in government loans, etc.;
- direction of financial resources for the formation of monetary funds of an incentive and social nature;
- use of financial resources for charitable purposes, sponsorship, etc.
Financial relations of enterprises are built on certain principles related to the fundamentals of economic activity: economic independence, self-financing, material interest, financial responsibility, provision of financial reserves.
The principle of economic independence cannot be realized without independence in the field of finance. Its implementation is ensured by the fact that business entities, regardless of their form of ownership, independently determine their expenses, sources of financing, and directions for investing funds in order to make a profit. In order to obtain additional profit, enterprises can make financial investments of a short-term and long-term nature in the form of purchasing securities of other organizations, the state, participation in the formation of the authorized capital of another business entity, and storing funds in deposit accounts of commercial banks. However, it is impossible to say about the complete financial independence of business entities in the process of generating financial resources and using the funds they own. The state regulates certain aspects of their activities (taxes, depreciation).
The principle of self-financing - the implementation of this principle - is one of the main conditions for entrepreneurial activity and ensures the competitiveness of an economic entity. Self-financing means full recoupment of the costs of production and sales of products, investing in the development of production at the expense of one’s own funds and, if necessary, bank and commercial loans. Currently, not all enterprises and organizations are able to fully implement this principle. These include individual enterprises of urban passenger transport, housing and communal services, agriculture, the defense industry, and mining industries. Such enterprises receive additional budget allocations under different conditions.
The principle of material interest - its objective necessity is dictated by the main goal of entrepreneurial activity - making a profit. The implementation of this principle can be ensured by decent wages, optimal tax policy of the state, and compliance with economically justified proportions in the distribution of net profit for consumption and accumulation.
The principle of financial responsibility means the presence of a certain system of responsibility for the results of financial and economic activities. Financial methods for implementing this principle are different for individual business entities, their managers and individual employees. In general, for an economic entity, this principle is implemented through penalties and penalties, fines levied in case of violation of contractual obligations (deadlines, quality of products), failure to repay short-term and long-term loans, repayment of bills, violation of tax laws, as well as in case of ineffective activity by applying to bankruptcy proceedings for this economic entity.
State extra-budgetary fund- a fund of funds formed outside the federal budget and the budgets of the constituent entities of the Russian Federation and intended to implement the constitutional rights of citizens to pensions, social insurance, health care and medical care. Expenses and income of the state extra-budgetary fund are formed in the manner established by the Budget Code of Russia, as well as other legislative acts, including laws on the budget of the Russian Federation for the corresponding year. The formation of extra-budgetary funds is carried out through mandatory target contributions. The amounts of contributions to extra-budgetary funds, as a rule, are included in the cost price and are set as a percentage of the wage fund. In Russia there are more than 30 extra-budgetary funds for social and economic purposes. Over 60% of state revenues are concentrated in these funds.
The main ones in size and importance are social extra-budgetary funds:
- Pension Fund of the Russian Federation;
- Social Insurance Fund of the Russian Federation;
- Federal Compulsory Medical Insurance Fund;
Previously, the State Employment Fund of the Russian Federation also functioned; Now part of its functions is performed by the Federal Service for Labor and Employment of the Russian Federation (Rostrud).
They are classified as economic.
Financial resources of business entities- this is a set of own and borrowed funds at the disposal of a business entity and intended for use for a wide range of its needs.
According to their origin, financial resources are divided:
Own financial resources;
Mobilized in the financial market;
Applicants in order of redistribution
Own financial resources of a commercial enterprise– these are funds belonging to an enterprise or its founders and intended for organizing business activities:
a) the own financial resources of the newly formed enterprise arise as a result of the pooling of investments of the founders and the formation of the authorized capital of the newly created enterprise. Start-up capital ensures the start of the enterprise’s activities and its achievement of its designed capacity;
b) the own financial resources of an operating enterprise are generated by it in the course of its business activities.
An important source of financial resources (as part of the first group) is profit from core and other activities. Part of it goes to the budget, and the other part, which remains at the disposal of enterprises, is used for their own needs. The share of profit in the total amount of sources of formation of financial resources of enterprises, unfortunately, is insignificant. This is explained by the fact that many enterprises have low profitability or are unprofitable.
Among the own sources of formation of financial resources of enterprises are savings from reducing the cost of construction and installation work performed in an economic way, mobilization of internal resources in construction, accounts payable, including sustainable liabilities, etc.
The role of own financial resources in the activity of the enterprise is great: their presence and sufficiency entirely determine the financial condition, solvency, creditworthiness of the enterprise, the reality of its investment intentions, the possibility of updating and modernizing equipment, the degree of satisfaction of the social needs of employees, that is, the financial support of all the activities of the enterprise.
In recent years, an important source of formation of financial resources of business entities has become funds mobilized in the financial market (second group), which includes: proceeds from the sale of own securities (shares, bonds, etc.); dividends and interest on securities of other issuers; commercial bank loans; income from transactions with foreign currency and precious metals. Among this group, commercial bank loans occupy a particularly important place.
Object of the credit transaction can be:
-cash, what causes the emergence of a monetary loan;
-inventory items, which gives rise to trade credit.
In practice, the most common forms of monetary (bank) credit are:
Investment;
Concurrent;
Onkolny;
Mortgage;
Lombard;
Consortial;
Credit line.
Investment loan is the main type of bank loan. It is provided for purposes related to the creation, reconstruction and acquisition of fixed assets by a business entity. Borrowers for lending for investment purposes can be legal entities and individuals, entrepreneurs without forming a legal entity.
An investment loan is issued for highly effective, currency-paying, socially significant investment projects.
Current credit is presented in the event of a gap in the client’s payment turnover when his current financial needs exceed his own resources.
On call loan– this is a short-term loan that is repaid on demand; issued, as a rule, secured by securities and goods.
Mortgage - a special type of credit relationship regarding the provision of loans secured by real estate.
Pawn loan issued on the security of securities (bonds, shares). Typically, the term of a pawn loan does not exceed three months, and the loan amount is 90% of the market value of the securities.
In banking practice, there are often cases when the size of the loan or other reasons (for example, risk) do not allow the bank to undertake repayment of the loan in full. In such circumstances, several banks often merge to the consortium.
Along with providing one-time loans, commercial banks resort to providing loans within a limit predetermined by the bank, which is used by the borrower as needed by paying the bank for payment documents presented to the client within a certain period. This form of loan provision is called opening a credit line.
Commercial (commodity) loan- This is the delivery of products by the seller to the buyer with deferred payment. The material basis for its occurrence is the presence of an excess of finished products, inventory, and other material assets from the seller and the presence of a potential buyer's need to purchase this product in the absence of funds for its purchase.
Based on the transformation of classical forms of credit (monetary and commodity), the following developed: specific forms of lending:
Tax credit;
Bond loan;
Factoring, leasing, etc.
Tax credit – This is a type of credit relationship in which the state exempts the taxpayer from paying taxes for a certain period of time with the prospect of using the released amounts to finance his reproductive needs.
Bond loan is a fairly common form of cash loan. At its core, this method of attracting borrowed funds is based on the issue by the enterprise - the borrower (issuer) of a special type of securities - bonds for the purpose of their sale.
Factoring – This is a specific form of lending in which there is a transfer to a bank or a specialized factoring company of unpaid debt claims (invoices, bills) arising in the process of selling goods to a third party.
An important source of formation of financial resources is cash , received by enterprises in the order of redistribution.
This (third) group includes: amounts of insurance compensation for incurred risks; financial resources coming from higher management structures; financial resources formed on a share basis; budget subsidies.
In the context of the development of market relations in the country, the use of insurance compensation payments, coming from insurance organizations. In the future, this source will increase; this is dictated by the need to ensure the safety of property due to the growing risk of unforeseen circumstances.
Financial resources received from the budget– these are funds from the state budget and target budget funds involved in the circulation of financial resources of the enterprise. The main ways to involve budget funds in the turnover of an enterprise:
· budget allocations– these are budget funds provided to the recipient of budget funds by the manager of budget funds;
· subsidy– this is a budget transfer provided to an organization or an individual on the terms of participation in financing (co-financing) for the production and (or) sale of goods (work, services) or partial reimbursement of targeted expenses;
· subsidy is an interbudgetary transfer provided from a higher budget to a lower budget in the event that own and regulatory revenues are not enough to balance the lower budget.
· grant- This an amount of money allocated by the state from the budget for financing in the field of production, science, etc. government order of high social significance
Priority areas financed from the budget are: high-tech industries, such as radio electronics, instrument making, as well as tractor and automotive manufacturing, which have prestige abroad; agricultural-industrial complex (AIC); - state target programs.
The general diagram of the sources of formation of financial resources of business entities is presented in Fig. 6.1.
Fig.6.1. Sources of formation of financial resources of business entities
Related information.