Getting the maximum amount of money is the main goal of any enterprise. To understand what you have and how you can use it, you need to conduct a competent financial policy. And for this you need to know theoretical basis such an approach.
What is finance?
This is the name of the system of monetary relations, which expresses the formation and use of trust funds during their circulation. The finances of firms occupy an important position in the economic system of the state, since at their level the bulk of the funds are formed that will be used in the future. They are divided into own and credit (attracted). The first are in the unconditional location of the enterprise and can be used for any purpose. The latter will need to be repaid over time, paying more and interest. So what are the features of enterprise finance? This is not an easy question, so the answer to it will be divided into several sub-points.
What is business finance?
It is an integral part of the national economic system. These include:
- Pricing.
- Tax system.
- The level of money circulation.
- Credits.
- Foreign economic activity.
- Licensing.
- Income.
Greatest Negative influence The following factors affect the finances of commercial enterprises:
- An undeveloped issuing and monetary policy that does not take into account the volume of the commodity mass and the real interests of the enterprise.
- Liberalization of prices without carrying out the required settlement beforehand.
- Wrong budget policy.
- Decrease in investment activity.
- Trends in the stock market and credit and banking policy.
- payments crisis.
- Wrong export/import policy.
enterprises
For their organization, it is necessary to adhere to the following postulates:
- Maintain interest in the final results of the work.
- Create financial reserves.
- A responsibility.
- The division of finance into own and credit.
- Fulfillment of assigned obligations to the budget.
- activities and use of funds.
- Independence.
- Self-financing.
The principles of enterprise finance are based on maintaining a balance between the interests of a private entrepreneur and the state. When deviating from them, levers of influence are provided that will allow the system to return to its original state.
Money turnover relations
Enterprise finance is such an economic element that is constantly in motion. Each direction of spending should have its own source of funding. There are usually the following relationships:
- with buyers.
- With employees of a company or enterprise.
- with banking institutions.
- With the state.
- FROM management structures who have leverage.
- When participating in other enterprises (such as the distribution of profits received from joint activities).
- Work with trust funds, which have an on-farm purpose.
financial mechanism
It consists of five elements that are interrelated:
- financial methods. This includes ways to influence economic processes when using funds through the creation of trust funds. The formation of the finances of the enterprise is the main purpose of using these methods. Their peculiarity lies in the fact that they determine the foundation on which everything else is built.
- financial leverage. These are actions aimed at achieving a desired goal.
- Legal support. Includes resolutions, orders, legislative acts and other similar documentation.
- Regulatory support. This includes instructions tariff rates, explanations, guidelines and similar data.
- Information Support. This includes economic, commercial, financial and other data that are of value in each specific case. Thus, information on solvency can act as objects, financial stability, exchange rates and so on.
As you can see, corporate finance is such a specific area where you have to act with an eye on a number of factors. Moreover, they can have both an informational basis and a legislative one. In case of choosing the wrong way of interaction, the entrepreneur may face ruin.
Functions
They allow you to understand the very content of this area of activity of the enterprise. There are three functions in total:
- Distribution (stimulating). By this it should be understood that the company decides where the received funds will go. With its help, funds are formed to fulfill all obligations that the organization has to the staff, budget, contractors and creditors. If everything is done with a reasonable approach, then there is a stimulation of the quality of work, this can be said about the finances of commercial enterprises and government organizations.
- Control. It consists in monitoring financial condition organizing and checking the effectiveness of its work. The most important is the control of profitability of the enterprise. This function is implemented in two ways:
- Tracking the indicators that are in operational, accounting and statistical reporting.
- Under the influence of financial influences (taxes, subsidies, benefits).
- Serving (reproducing). This function ensures that there is a constant renewal of consumed resources (as an example: the purchase of new materials, the hiring of new workers to replace those who have retired, and so on).
Structure
Financial resources by their origin can be conditionally divided into three components:
- Formed with their own funds. This includes profits received from the main activities, the sale of property, earmarked income, various contributions, and so on.
- were mobilized for financial market. This includes proceeds from the sale valuable papers, interest and dividends, loans, income received from transactions with foreign currencies.
- Received after redistribution. These are insurance claims financial resources(which came from other economic structures), resources (which were formed on a share basis) and budget subsidies.
Control
The formation, as well as the use of financial resources, is not possible if there is no system that organizes and coordinates everything. Management implies the achievement of strategic and / or tactical goals regarding the functioning of the enterprise itself. Features of the organization of enterprise finance include:
- Formation of financial resources, as well as their optimization.
- Placement of capital.
- Analysis of the company's finances and the direction that circulates through it.
- Management of the process of functioning of capital.
- Organization and management of relations with other enterprises, insurance companies, budgets, banks and other departments
Conclusion
As you can see, enterprise finance is a complex component of any commercial organization. They need to be handled and used rationally. Any manager should be aware that the finances of enterprises are the main guarantee of his functioning, and they should always be worked with from the point of view of optimality and efficiency.
Finances of enterprises, institutions, organizations
The finance of associations, enterprises and industries is a system of economic relations associated with the circulation of funds, education, use of cash income, control over production, distribution, and use of the national product. The functioning of the financial and credit system directly depends on the measure of the use of commodity-money relations in the management and organization of economic relations.
In terms of material content, finance is targeted funds of funds, which together represent the financial resources of enterprises.
This is mainly profit and depreciation, income from securities, share contributions, sponsors' funds. It should be understood that financial science does not study resources as such, but financial relations that arise on the basis of their formation, distribution, use, and is aimed at improving financial relations.
Financial relations arise:
between enterprises and organizations in the process of formation and distribution gross income, when paying for supplies, selling finished products;
when issuing and distributing shares of the enterprise, mutual lending, equity participation;
between enterprises and individual workers in the process of using income;
between legal individuals and the banking system;
between enterprises and foreign partners when using the currency fund.
At present, with the development market relations the sphere of financial relations of enterprises is growing sharply.
Enterprise Finance- the basis of the financial system of any state, since in the sphere material production the total social product and the national income are created and initially distributed.
Now they require a change in the concept of the essence and functions of finance, the very concept of finance. At the same time, the defining moment is that the state must provide enterprises, regardless of the form of ownership and management, type of activity, industry affiliation, equal legal and economic conditions economic activity.
- Maintenance of monetary resources of the circulation of material resources;
- Distribution;
- Control.
The economic content of the first function is to ensure full compliance between the movement of money and material resources. This manifests itself:
a) at the planned stage;
b) quickly.
In the second case, comparing the amount of planned income and expenses, it is determined to what extent the need for funds can be covered from own sources, bank loans, etc. This very complex issue is solved at different historical stages in different ways.
The third function of finance is based on the fact that the rate of expenditure of each element of production resources is planned and taken into account in monetary form, thereby controlling the consumption of materials in cost form. In addition, the control function covers all aspects of the activities of enterprises, relationships within the enterprise, the relationship between the enterprise and the bank, the relationship between the enterprise and the budget.
Various forms of ownership of enterprises and their impact on the organization of enterprise finance.
It is allowed to combine property located in private, state, municipal property and property of public associations (organizations), as well as property of foreign states, legal entities and citizens, unless otherwise provided by law.
The following principles underlie the organization of enterprise finance:
State regulation of production and economic activity enterprises through economic leverage primarily tax and monetary policy.
Independence of enterprises in all matters, except for those specifically provided for by law.
Self-financing and profitability of the enterprise.
Creation of a financial reserve (risk fund) at enterprises.
Each enterprise for normal functioning must have certain target funds of funds. The most important of them are: fixed assets fund, working capital fund, depreciation fund, repair fund, accumulation fund, consumption fund. The formation of these funds, their management and proper use is one of the most important aspects of financial work in the enterprise.
The enterprise has the right to open settlement and other accounts in any bank for the storage of funds and the implementation of all types of settlement, credit and cash transactions. The bank or its branch (department) at the place of registration of the enterprise is obliged to open a current account at the request of the enterprise. An enterprise that does not fulfill its settlement obligations may be declared bankrupt in a judicial proceeding in accordance with the law.
It should be noted that in January 2000 the mayor Yu. Luzhkov signed a decree on opening accounts for crediting Moscow budget revenues in cash. This step was taken in connection with the economic crisis, which worsens the financial situation of banks and financial institutions. As a result, cases of untimely transfer of funds written off from the accounts of taxpayers to the capital budget have become more frequent. A similar idea was suggested to the mayor by specialists from the State Tax Inspectorate for Moscow. According to the document, the following banking structures will be allowed to accept tax payments from taxpayers in cash without limiting the amount: JSC Moscow Municipal Bank, Bank of Moscow, Moscow Bank of Sberbank of Russia and JSCB Mosstroyekonombank. In the very near future, employees of the State Tax Inspectorate for Moscow will bring to the attention of all Moscow taxpayers the details of new income accounts, as well as the procedure for paying taxes in cash in banks.
The company has the right to carry out foreign economic activity in accordance with the law.
The forms, system and amount of remuneration of employees of the enterprise, as well as other types of their income, are established by the enterprise independently. Enterprises provide minimum size wages and social protection employees, regardless of the types of ownership and organizational and legal forms of the enterprise.
The enterprise independently plans its activities and determines development prospects based on the demand for manufactured products and the need for production and social development enterprises, increasing the personal income of its employees. The plans are based on contracts concluded with consumers of products.
Enterprises sell their products at prices and tariffs set independently or on a contractual basis, and in cases provided for by law, at prices regulated by the state.
An enterprise, regardless of its organizational and legal form, maintains accounting and statistical reporting in accordance with the procedure established by the legislation of the Russian Federation.
For violation of credit, contractual, settlement, tax obligations, as well as for violation of other rules entrepreneurial activity, the enterprise is responsible in accordance with the law. The enterprise is obliged to compensate for the damage caused by the irrational use of land and other natural resources, environmental pollution.
An enterprise may be established either by the decision of the owner of the property, or by the decision of the labor collective of the state or municipal enterprise in cases and in the manner prescribed by law. An enterprise can be established as a result of the separation of one or more structural divisions from an existing enterprise, retaining the structural unit existing obligations to the enterprise and partners. An enterprise may be established as a result of a forced division in accordance with antitrust laws.
The termination of an enterprise's activities may be carried out in the form of its liquidation or reorganization (merger, accession, division, spin-off, transformation into another organizational and legal form). An enterprise is liquidated in the following cases: a) it is declared bankrupt; b) making a decision to ban the activities of the enterprise due to non-compliance with the conditions established by law; c) invalidation by the court constituent documents and the decision to establish a business.
Enterprises can unite in unions, associations, concerns, etc. in order to coordinate activities, protect rights, establish a unified pricing policy etc.
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1. Financial work on large enterprise can and should be done:
exclusively by the director of the company
chief accountant and accountant
financial director and financial department.
2. What does not apply to financial work in the enterprise
financial planning
execution of contracts with contractors
organization of company settlements
3. The monetary funds and reserves of the enterprise include:
authorized capital, retained earnings, reserve for future payments, advances received from buyers
authorized capital, retained earnings, consumption and savings funds, current account balances
authorized capital, retained earnings, depreciation fund, consumption and accumulation funds
4. The sphere of monetary relations in comparison with the category of finance:
wider
already
identical
5. Own financial resources of the enterprise are:
target financing, funds raised by placing shares on the stock exchange, additional capital
authorized capital, insurance compensation for the risks that have occurred, funds received from a partner for joint activities (under a simple partnership agreement)
profit from the sale of fixed assets and other assets, depreciation, retained earnings of previous years
all of the above
6. The key functions of finance, according to most economists, are:
operational function; self-supporting function; control function
distributive function; production function; regulatory function
distributive function; control function
7. Specify which of the methods is not a financial method:
variance analysis method
object accounting method
peer review method
8. The principles of organizing finance do not include:
principle of interest in the results of economic activity
continuity principle
principle of economic independence
9. The fundamental link of the financial system is:
world finance
the state budget
enterprise finance
10. Finance should be understood as:
funds at the disposal of the state, companies, institutions, organizations and the population
monetary relations associated with the formation, distribution and use of monetary funds
cash funds
Organization finances(or corporate finance) - monetary relations associated with the formation and distribution of cash income and savings and their use for various purposes (for example, to fulfill obligations to the financial and banking system, finance costs, pay dividends on shares, rent, and so on). Organization finances: formation, distribution, use of monetary funds.
The reasons for generating finance are:
The existence of the state
Development of commodity-money relations
The appearance of taxes in their monetary form
The functions of an enterprise's finances are implemented at the level of microeconomics, they are directly related to the formation and use of the capital and monetary funds of an enterprise in the conditions of their economic isolation and the satisfaction of private needs on a reimbursable equivalent basis. It has to do with receiving money and spending money. Therefore, the functions of enterprise finance can be represented as:
regulation of cash flows of the organization;
formation of capital, cash income and funds;
use of capital, cash income and funds
Financial relations of enterprises
Distribution permeates the entire cash flow of the organization. Monetary relations, which fully or partially act as financial ones, naturally arise in organizations with the following subjects:
wages and payments from the consumption fund;
withholding income tax, contributions to the Pension Fund and other off-budget funds, as well as other deductions and payments;
formation of a base for the calculation of taxes and fees and the implementation of these payments;
payment of these taxes and fees to the state budget and deductions to off-budget funds;
funding from the budget and off-budget funds purposes provided for by applicable law.
investors (shareholders, participants, owners) - regarding the formation and effective use of equity capital, as well as the distribution of net profit, payment of dividends and interest;
suppliers and buyers - regarding the forms, methods and terms of settlements, as well as methods for securing obligations (payment of penalties, transfer of collateral);
recipients of investments - regarding short-term and long-term financial investments and payment of dividends and interest on them;
higher organizations, subsidiaries and parent enterprises, within financial and industrial groups, within the holding, unions and associations, of which the organization is a member - regarding the formation, distribution and use of targeted funds and reserves to finance targeted industry programs, conducting marketing research, scientific and research work, organization of exhibitions, provision of financial assistance on a reimbursable basis for the implementation of investment projects and replenishment of working capital, during reorganization, i.e. relations regarding intra-corporate redistribution of funds;
founders - regarding the formation of the authorized capital and trust management of property;
beneficiaries - regarding the property received in trust management, and the distribution of profits from such management;
right holders - regarding the payment of remuneration under a commercial concession agreement;
hired workers - about:
organizations of the banking system - regarding the storage of money in commercial banks, organization of non-cash payments, obtaining and repaying loans, paying interest on a loan, buying and selling foreign currency, providing other banking services;
insurance companies and organizations - regarding the insurance of property, individual categories of workers, commercial and entrepreneurial risks;
investment institutions - regarding the placement of investments, privatization and other business entities;
state ( tax inspectorates, treasuries, etc.) - about:
Each of the listed groups of financial relations has its own characteristics and scope. However, they are all bilateral in nature, and their material basis is the movement of funds.
The capital of the organization and its structure. Methods for calculating net working capital (own working capital).
capital of the organization- this is the cost (financial resources) advanced (s) into production (in business) in order to make a profit.
Classification capital of the organization can be carried out on the following grounds:
sources of formation : own and borrowed. Equity capital belongs to her on the right of ownership and is used to form a significant part of the assets. Borrowed capital reflects funds attracted to finance the corporation on a returnable and paid basis. All forms of borrowed capital represent its obligations to be repaid within a specified period. Short-term borrowed capital (including accounts payable) is used to cover working capital;
purposes of use : productive, loan, speculative. Productive capital is advanced into real (production assets) in order to extract profit and obtain the rights to manage it. Loan capital is money capital provided on credit on terms of repayment, payment, urgency and collateral. Unlike entrepreneurial, loan capital is not invested in the enterprise, but is transferred by the lender (bank) to the borrower for temporary use in order to receive interest. Loan capital appears on the credit market as a commodity, and interest is its price. A low-interest loan is "cheap money"; a loan at a high interest rate - "expensive money". A loan received for a period of less than 15 days is "short money" ( Balabanov I. T. Basics financial management. - M .: Finance and statistics, 2000. - P. 66). Speculative capital arises in the secondary stock market as a result of an overvaluation of the market value of shares in circulation. The main goal of speculative operations is to extract maximum income;
forms of investment : monetary, tangible, intangible. All these forms can be used to form the authorized (share) capital business partnerships and societies. However, for the purposes accounting capital receives a specific valuation;
investment objects : main and reverse. Fixed capital is invested in all types of non-current assets (tangible and intangible), and working capital is invested in current assets with varying degrees of liquidity (stocks, receivables, financial investments and cash)
forms of being in the process of circulation : monetary, productive, commodity;
forms of ownership : private (individual), mixed (collective, joint), state, etc. In Russia, as of January 1, 2000, the share of enterprises with private capital was 74.4%; co mixed capital- 14.4%, with state capital 11.2%; (Economics and Life, 2000. No. 34). It should be noted that the notion that exists even among economists that private property occupies leading place in a market economy is erroneous. The modern market economy is characterized mainly by joint, collective forms of ownership. So in a typical capitalist economy market type 10 - 15% of the means of production is privately owned; 60 - 70% - in collective-corporate and joint-stock; 15 - 25% - in the state.
nature of use by owners : consumed and accumulated (reinvested) capital. The last type includes retained earnings of the reporting year and previous years;
nature of participation in manufacturing process : functioning and non-functioning (for example, fixed assets in reserve, repair, conservation, etc.);
organizational- legal forms of activity: joint-stock, share (warehouse), individual (owned by family farms).
sources of attraction to the country's economy : domestic and foreign capital. Describing the possibility of increasing capital through the inflow of foreign investment, it should be noted that this path for Russia in the context of the emerging market economy very difficult and thorny. This is due to a number of reasons: high cost inflation, resource one-sidedness of the economy, the lack of long-term prospects for economic development, the reluctance of foreign investors to develop science-intensive industries in our country, etc. In addition, Russia's experience shows that focusing on a significant influx of foreign investment gives rise to the following problems:
foreign capital does not aspire to the real sector of the economy, its investments are short-term or enslaving long-term;
increasing dependence on foreign capital implies a constant and significant outflow of foreign exchange funds (in the form of exported profits);
foreign investors determine the direction of capital investment, guided by their own interests and benefits - in many cases, this is an unequal export of non-renewable natural resources from Russia.
It is no coincidence that the share of foreign investment in the 90s. last century did not exceed 3% of their total volume ( Bulatov A.S. Capital formation in Russia // Questions of Economics. 2001. No. 3. S. 54).
In practice, there are other classifications of capital (for example: legal, "shadow", etc.).
Sources of equity capital formation: Authorized capital, reserve capital, additional capital, retained earnings.
Working capital is the capital of the enterprise advanced into current assets. Working capital ensures the continuity of the production process.
In the process of circulation of funds, the advanced capital successively assumes various forms of value (monetary - commodity - productive - commodity - monetary).
The classification of working capital of MB enterprises is considered in the following areas:
Depending on the service of the sphere of production and the sphere of circulation, working capital is divided into funds advanced into working capital and working capital in circulation funds;
Taking into account the peculiarities of planning, they are divided into planned (normalized) and not planned (non-standardized);
According to the sources of formation - own, borrowed and attracted;
According to liquidity, they are divided into funds advanced in:
The most liquid assets are cash (cash, settlement, currency, current and other cash accounts)
Quickly - realizable assets - accounts receivable.
Slow-moving assets - inventories and costs
Difficult to sell and illiquid assets
The volume of own working capital (own working capital, capital in circulation) can be calculated according to the balance sheet (form No. 1) in two ways:
1) by summing equity and long-term liabilities and subtracting the amount of short-term liabilities from them: the result of section 3 of the balance sheet “Capital and reserves” + line 640 + line 650 + the result of section 4 “Long-term liabilities” - the result of section 1 “Non-current assets” . Lines 640, 650 5 of the balance sheet section "Current liabilities" essentially reflect the company's own sources: deferred income, reserves for future expenses;
The set of monetary relations aimed at the creation, use and distribution of enterprise income.
This is the movement of money inside and outside the organization, necessary for its smooth operation.
The main purpose of corporate finance is to provide an organization in cash to cover current and future costs. For this it is used:
- equity;
- profit;
- short-term or long-term loans;
- issue and sale of securities;
- share premium;
- government subsidies.
The organization's finances are affected by the ability of management to find the optimal balance between potential profit and possible losses in the course of investment activities. With proper investment management, the return on investment can match, and sometimes exceed, the income from the main activity.
Functions of corporate finance
According to Art. 50 of the Civil Code of the Russian Federation, the main goal of creating and operating commercial enterprise- Receiving a profit. The following functions of corporate finance play a major role in the process of achieving this:- distribution - the direction and distribution of cash flows (income) between business entities (suppliers, intermediaries, the state);
- control - ensuring the safety of the organization's property, the efficiency and expediency of using its resources, both monetary and material;
- accounting - registration of all goods or services produced;
- stimulating - the development of the most important and profitable activities of the organization.
- self-sufficiency;
- financial planning;
- separation of funds;
- self-financing;
- safety of property;
- responsibility for the final result;
- compliance with the order of payments;
- control.