Sources of financing the organization’s activities as an object of accounting
Introduction
Financial resources (financial sources) play a major role for any enterprise. They are used in the process of production, investment and financial activities; at the expense of sources of financing, in due time, a company is created. Financial sources are constantly in motion and exist in monetary form only in the form of cash balances in bank accounts and in the company's cash register.
The relevance of this work lies in the fact that financial resources are necessary both for the formation and subsequent functioning of the company, its innovation activities, etc. Competent assessment and control of sources of financing allows an enterprise to pursue the most profitable and favorable policy for its growth. Reflection of sources of financing in accounting allows you to obtain the most complete information about the state of the financial resources of the enterprise.
The purpose of the work is to study the sources of financing the activities of the organization as one of the objects of accounting.
Objectives: consider the concept of sources of financing the organization’s activities, types of sources, reflection of sources of activity in accounting.
Research methods are: research, analysis, induction, deduction.
1.Sources of financing the organization’s activities as an object of accounting
financing accounting
1.1The concept and types of sources of financing the organization’s activities
Sources of financing (resources) are functioning channels for obtaining financial resources and economic entities that can provide these financial resources (Appendix 1). The basis for financing the activities of an enterprise is to develop financing schemes based on individual characteristics and the impact of external factors.
The following sources of funding are distinguished:
)Internal sources of the enterprise - authorized capital (funds from the sale of shares and share contributions of participants or founders), proceeds from sales; depreciation charges, net profit of the enterprise; reserves accumulated by the enterprise, other contributions from legal entities and individuals (targeted financing, donations, charitable contributions). For example, the rational use of profits and depreciation charges can allow the expansion of business activities.
2)Raised funds (foreign investment) - When choosing a foreign investor as a source of financing, an enterprise should take into account the fact that the investor is interested in high profits, the company itself and his share of ownership in it. The higher the share of foreign investment, the less control the owner of the enterprise has. It can also be an additional issue of securities, through which the company’s share capital is increased, as well as the attraction of additional share capital through additional contributions of funds to the authorized capital;
3) Borrowed funds (credit<#"justify">There is another option for dividing funding sources into:
.Internal sources - profit remaining at the disposal of the company, which is distributed by decision of the management bodies; depreciation charges, which represent the monetary expression of the cost of depreciation of fixed assets and intangible assets and are an internal source of financing for both simple and expanded reproduction.
2.Short-term funds are funds used to pay wages, pay for raw materials and various current expenses. The forms of implementation of funding sources in this case may be as follows:
· bank overdraft - an amount received from a bank in excess of the balance in the current account. Overdraft is payable upon request of the bank. This is usually the cheapest form of loan, the interest rate on it does not exceed 1-2% of the bank’s discount rate,
·bill of exchange<#"justify">3.Medium-term funds (from 2 to 5 years) are used to pay for machinery, equipment and research work. The purchase of machinery, equipment and vehicles by an enterprise on credit occurs on fixed terms, secured by the purchased goods, with regular repayment of the loan in installments. The group of medium-term financial resources includes the rental of machinery and equipment. Payment for the use of leased funds is made in regular installments, while ownership never passes to the debtor.
4.Long-term financial resources (over 5 years) are used for the acquisition of land, real estate and long-term investments. These could be:
· long-term (mortgage) loans - provision of funds by insurance companies or pension funds secured by land plots, buildings for a period of 25 years,
· Bonds are debt obligations with a set interest rate and maturity date. A significant part of the bonds has a face value,
· issue of shares - receipt of funds by selling various types of shares in the form of private or public subscription.
1.2. Sources of financing as an object of accounting
The organization's property is formed by raising funds from various sources. In accounting, sources of financing are:
)Authorized capital (fund) is the totality in monetary terms of contributions of founders (owners) to property (the cost of fixed assets, intangible assets, working capital and cash) when creating an enterprise to ensure its activities in the amounts determined by the constituent documents. Accounting is maintained in account 80 “Authorized capital”.
2)Additional capital - is formed due to the increase in the value of non-current assets: when revaluing fixed assets upward; upon receipt of various assets from legal entities and individuals (not subject to return), as well as at the expense of share premium. Accounting is maintained in account 82 “Additional capital”.
)Reserve capital - created through annual deductions from net profit, intended to cover losses, as well as for company bonds and repurchase of company shares in case of other means. The amount of reserve capital and the amount of mandatory contributions to it are determined by the charter or constituent documents. Accounting is maintained in account 82 “Reserve capital”.
)Retained profit is net profit or part of it, not distributed in the form of dividends among shareholders (founders), but aimed at accumulating the property of a trading organization or replenishing its working capital in the form of free cash, which at any time can be used for new turnover. Accounting is maintained in account 99 “Profit and Loss”.
)Targeted financing is funds received from other enterprises, state and municipal bodies and intended for the implementation of targeted activities. A feature of this type of financing may be that capital investments can be made within the framework of joint activities. Trust funds - the list and procedure for the formation of target funds (special purpose funds) are regulated by the constituent documents and adopted accounting policies. Special funds include: an accumulation fund, a consumption fund, a social sector fund and other similar funds formed by an organization from the profits remaining at the disposal of the organization after taxation. Accounting is kept under account 86 “Targeted financing” and depends on the types of financing.
)Bank loans - the amount of short-term and long-term bank loans received (outstanding). Accounting is maintained in account 66.67 “Settlements for short-term loans and borrowings”, “Settlements for long-term loans and borrowings”
)Borrowed funds - the amount of employee shares issued and sold by the enterprise, shares of the enterprise and bonds, short-term and long-term loans, etc. Accounting is carried out in account 66.67 “Settlements for short-term loans and borrowings”, “Settlements for long-term loans and borrowings”, and also under account 58 “Financial investments”.
)Settlements and other accounts payable - amounts owed to suppliers for goods and services on bills issued, on advances received, on wages, insurance, budget, etc. Accounting is kept under account 60 “Settlements with suppliers and contractors”, 62 “Settlements with buyers and customers”, 68 “Calculations for taxes and fees”, etc.
As an example, you can write down the entries in Account 86 “Targeted Financing”, which is intended to summarize information about the movement of funds intended for the implementation of targeted activities, funds received from other organizations and individuals, budget funds, etc.
Targeted funds received as sources of financing for certain activities are reflected in the credit of account 86 “Targeted financing” in correspondence with account 76 “Settlements with various debtors and creditors.”
The use of targeted financing is reflected in the debit of account 86 “Targeted financing” in correspondence with accounts: 20 “Main production” or 26 “General expenses” - when sending targeted financing funds for the maintenance of a non-profit organization; 83 “Additional capital” - when using targeted financing received in the form of investment funds; 98 “Future income” - when a commercial organization sends budget funds to finance expenses, etc.
Analytical accounting for account 86 “Targeted financing” is carried out according to the purpose of targeted funds and in the context of their sources of receipt.
Targeted funding is reflected not when funds are received, but when the legally formalized will of the body that undertakes to allocate these funds is expressed:
Debit 76 “Settlements with various debtors and creditors / Credit 86 “Targeted financing”
And only after the money is received, the accountant will make a posting:
Debit 51 "Current accounts" / Credit 76 "Settlements with various debtors and creditors"
Thus, the debit of account 51 “Current accounts” concentrates the money received, and the credit of account 86 “Targeted financing” indicates that this money can only be spent in accordance with a given purpose.
2. Practical part
1) Net profit refers to the following source of financing:
a) internal sources
b) borrowed sources
c) attracted sources
Answer: A)
) Receipt of funds from citizens is an example:
a) internal financing
b) external financing
c) own financing
Answer: A)
) The following can act as borrowed funds:
a) financing
b) foreign investment
c) loans
Answer: V)
) The absence of additional costs associated with attracting capital from external sources and maintaining control over the activities of the enterprise by the owner is an advantage...
a) raised funds
b) internal sources
c) foreign investment
Answer: b)
5) What type of funds raised allows you to minimize taxation?
a) loan
b) bill
c) leasing
Answer: V)
) Can an employee of an enterprise donate funds to form the capital of the company?
c) only if there is permission from the manager
Answer: A)
) The formation of authorized capital funds is carried out on the account...
Answer: V)
8) The state can finance with:
a) loans
c) subsidies
d) loans
Answer: b)
9) Funds from the sale of shares and share contributions of participants form:
a) additional capital
b) own shares
c) authorized capital
Answer: V)
) Account 58 “Financial investments” are reflected:
a) borrowed funds
b) own funds
c) invested funds
Answer: A)
) Sources of financing are:
a) constant
b) mixed
c) variables
Answer: b)
12) The organization’s property is formed from:
a) one source
b) several sources
c) all at the same time
Answer: b)
) What form of borrowing is most common:
a) loan
c) leasing
Answer: A)
2.2 Problem
Task. The enterprise must construct a capital construction project with funds provided by the investor.
Solution: Operations for the movement of sources of financing for capital construction are taken into account by investors and customers in the accounts of cash (51 "Settlement accounts", 52 "Currency accounts", 55 "Special accounts in banks"), settlements (76 "Settlements with various debtors and creditors ") and targeted sources (86 "Targeted financing").
At the same time, objects put into operation in the prescribed manner: are included by the developer on the balance sheet as part of his own property; transferred by the customer to investors who provided him with funds to finance these objects, or to persons specified in the agreement.
The customer keeps records of funds received to finance capital construction until its completion in account 76 “Settlements with various debtors and creditors.” Accounting for capital construction operations is carried out in the following order:
Dt sch. 51, 52, 55 Set count. 76 - sources of financing were received from an investor;
Dt sch. 08 Set count. 51, 52, 60, 76, etc. - construction costs are reflected;
Dt sch. 19 K-t count. 60, 76, etc. - VAT is reflected on invoices of suppliers and contractors;
Dt sch. 76 Set count. 08 - costs upon completion of construction are written off from funding sources;
Dt sch. 76 Set count. 19 - VAT is written off upon completion of construction at the expense of financing sources;
Dt sch. 76 Set count. 90 - the customer’s revenue (income) is reflected as the difference between the estimated amount (limit) of funds for its maintenance, actual maintenance costs and the amount of savings according to the estimate, if this is provided for in the agreement (contract) for capital construction with the investor;
Dt sch. 90 Set count. 68 - VAT is reflected on the amount of revenue;
Dt sch. 90 Set count. 99 - profit from investment activities is reflected
Dt sch. 76 Set count. 51 - savings were returned to the investor.
Conclusion
The financial results of an enterprise depend on the availability and efficient use of financial resources that ensure the life of the organization.
In a market economy, sources of financial resources are of great importance: in practice, an enterprise cannot do without attracting borrowed or own funds. Sources of financing in all types under normal economic conditions contribute to increasing production efficiency and are necessary for the implementation of expanded production. The variety of channels for attracting financial resources creates the opportunity to use them in various situations.
Therefore, control and organization of financial sources is a primary principle of activity of any business entity. In a market economy, these issues are of great importance. Each enterprise must carry out timely formation and competent organization of financial resources.
List of used literature
1) Federal Law of December 6, 2011 N 402-FZ (as amended on November 4, 2014) “On Accounting” (December 6, 2011)
2) Tests and control tasks on management accounting and controlling<#"justify">Applications
Appendix 1
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Based on the place of origin, the financial resources of an enterprise are classified into:
internal financing;
external financing.
Internal financing involves the use of those financial resources, the sources of which are generated in the process of the financial and economic activities of the organization. Examples of such sources include net profit, depreciation, accounts payable, reserves for future expenses and payments, and deferred income.
External financing uses funds that come into the organization from the outside world. Sources of external financing can be founders, citizens, the state, financial and credit organizations, and non-financial organizations.
An organization's financial resources, unlike material and labor resources, are interchangeable and susceptible to inflation and devaluation.
The following sources of funding are distinguished:
Internal sources of the enterprise (net profit, depreciation, sale or rental of unused assets).
Raised funds (foreign investments).
Borrowed funds (loan, leasing, bills).
Mixed (complex, combined) financing.
Internal sources of financing of the enterprise
In modern conditions, enterprises independently distribute the profits remaining at their disposal. Rational use of profits involves taking into account factors such as the implementation of plans for the further development of the enterprise, as well as respect for the interests of owners, investors and employees.
The advantages of internal financing of an enterprise include the absence of additional costs associated with attracting capital from external sources, and maintaining control over the activities of the enterprise by the owner. The disadvantage of this type of financing of an enterprise is that it is not always possible to use it in practice.
The second internal source of financing is the profit of the enterprise remaining after taxes. As practice shows, most enterprises do not have enough of their own internal resources to update fixed assets.
Raised funds
Credit is a loan in monetary or commodity form provided by the lender to the borrower on the terms of repayment, most often with the borrower paying interest for using the loan. This form of financing is the most common.
Advantages of the loan:
the credit form of financing is characterized by greater independence in the use of received funds without any special conditions;
Most often, a loan is offered by a bank that services a specific enterprise, so the process of obtaining a loan becomes very quick.
The disadvantages of the loan include the following:
the loan term in rare cases exceeds 3 years, which is prohibitive for enterprises aimed at long-term profit;
To obtain a loan, an enterprise must provide collateral, often equivalent to the amount of the loan itself;
in some cases, banks offer to open a current account as one of the conditions for bank lending, which is not always beneficial to the enterprise;
With this form of financing, an enterprise can use a standard depreciation scheme for purchased equipment, which obliges it to pay property taxes throughout the entire period of use.
Leasing is a special complex form of entrepreneurial activity that allows one party - the lessee - to effectively update fixed assets, and the other - the lessor - to expand the boundaries of activity on mutually beneficial terms for both parties.
Advantages of leasing:
Leasing involves 100% lending and does not require immediate payments. When using a conventional loan to purchase property, the company must pay about 15% of the cost from its own funds.
Leasing allows an enterprise that does not have significant financial resources to begin implementing a large project.
It is much easier for an enterprise to obtain a leasing contract than a loan - after all, the equipment itself serves as security for the transaction.
A leasing agreement is more flexible than a loan. A loan always involves limited amounts and repayment terms. When leasing, an enterprise can calculate its income and work out with the lessor an appropriate financing scheme that is convenient for it. Repayment can be made from funds received from the sale of products produced on leased equipment. The company has additional opportunities to expand production capacity: payments under the leasing agreement are distributed over the entire term of the agreement and, thus, additional funds are freed up for investment in other types of assets.
Leasing does not increase debt on the company’s balance sheet and does not affect the ratio of equity and borrowed funds, i.e. does not reduce the enterprise’s ability to obtain additional loans. It is very important that equipment purchased under a leasing agreement may not be listed on the lessee’s balance sheet during the entire term of the agreement, and therefore does not increase assets, which exempts the company from paying taxes on acquired fixed assets.
Leasing payments paid by the enterprise are entirely attributed to production costs. If the property received under leasing is accounted for on the balance sheet of the lessee, then the enterprise can receive benefits associated with the possibility of accelerated depreciation of the leased asset. Depreciation charges for such property can be calculated based on its cost and norms approved in the prescribed manner, increased by a factor not exceeding 3.
Leasing companies, unlike banks, do not need collateral if the property or equipment is liquid on the secondary market.
Leasing allows an enterprise to minimize taxation on completely legal grounds, as well as to attribute all costs of equipment maintenance to the lessor.
Sources of financing for an enterprise are divided into internal (equity capital) and external (borrowed and attracted capital).
Internal financing involves the use of own funds and, above all, net profit and depreciation charges.
Own capital includes:
Authorized capital (formed as a result of the contribution of the founders of the company upon its creation)
Additional capital (formed as a result of revaluation of the organization’s fixed assets)
Reserve capital (formed by deductions from the organization’s profits for subsequent unforeseen needs)
Financing from your own funds has a number of advantages:
By replenishing the enterprise's profits, its financial stability increases;
The formation and use of own funds is stable;
External financing costs (debt servicing to creditors) are minimized;
The process of making management decisions on the development of the enterprise is simplified, since the sources of covering additional costs are known in advance.
Disadvantages of using equity capital The sole source of financing for the enterprise's activities consists of:
The limited volume of attraction to expand the scale of entrepreneurial activity (for enterprises of various organizational and legal forms and sizes, the possibilities for increasing equity capital are different and often limited);
At a higher cost compared to alternative debt sources of capital;
In the unrealized possibility of increasing profitability through the use of borrowed funds using the effect of financial leverage.
External financing involves the use of funds from the state, financial and credit organizations, non-financial companies and citizens. In addition, it involves the use of financial resources of the founders of the enterprise. Such attraction of the necessary financial resources is often the most preferable, as it ensures the financial independence of the enterprise and facilitates the conditions for obtaining bank loans in the future.
Attracting borrowed funds allows the company to accelerate the turnover of working capital, increase the volume of business transactions, and reduce the volume of work in progress. However, the use of this source leads to certain problems associated with the need for subsequent servicing of debt obligations assumed.
Advantages of the loan:
The credit form of financing is characterized by greater independence in the use of received funds without any special conditions;
Most often, a loan is offered by a bank that services a specific enterprise, so the process of obtaining a loan becomes very quick.
The disadvantages of the loan include the following:
The loan term in rare cases exceeds 3 years, which is prohibitive for enterprises aimed at long-term profit;
To obtain a loan, a company must provide collateral, often equivalent to the amount of the loan itself;
In some cases, banks offer to open a current account as one of the conditions for bank lending, which is not always beneficial to the enterprise;
With this form of financing, an enterprise can use a standard depreciation scheme for purchased equipment, which obliges it to pay property taxes throughout the entire period of use.
Structure of funding sources
The concept of risk, its consideration in financial management. Classification of financial risks of an enterprise. The main ways to counteract risk (ignoring, avoiding, hedging, risk transfer).
Risk is a set of probable economic, political, moral and other positive and negative consequences of the implementation of selected decisions. In entrepreneurial activity, “risk” is usually understood as the probability (threat) of an enterprise losing part of its resources, losing income, or incurring additional expenses as a result of certain production and financial activities.
The management process is carried out based on a number of fundamental principles. Figure 1 shows a diagram characterizing the principles of risk management.
Classification of financial risks by type:
The risk of reducing the financial stability (the risk of disturbing the balance of the financial condition) of the enterprise. This risk is generated by the imperfection of the capital structure (excessive share of borrowed funds used), which creates an imbalance in the positive and negative cash flows of the enterprise in terms of volumes. In terms of the degree of danger, this type of risk plays a leading role in the composition of financial risks.
Insolvency risk (risk of unbalanced liquidity). This risk is generated by a decrease in the level of liquidity of current assets, which creates an imbalance in the positive and negative cash flows of the enterprise over time. In terms of its financial consequences, this type of risk is also among the most dangerous.
Investment risk. It characterizes the possibility of losses occurring in the process of carrying out the investment activities of an enterprise.
Inflation risk. This type of risk characterizes the possibility of depreciation of the real value of capital (in the form of financial assets), as well as expected income from financial transactions in conditions of inflation.
Interest rate risk. It consists of an unexpected change in the interest rate on the financial market (both deposit and credit). The reasons for this type of risk are: changes in financial market conditions under the influence of government regulation, an increase or decrease in the supply of free cash resources and other factors.
Currency risk. This type of risk is inherent in enterprises conducting foreign economic activity (importing raw materials, materials and semi-finished products and exporting finished products). It manifests itself in the shortfall in receipt of the intended income as a result of the direct impact of changes in the exchange rate of foreign currency used in the foreign economic operations of the enterprise on the expected cash flows from these operations.
Deposit risk. This risk reflects the possibility of non-repayment of deposits (non-repayment of certificates of deposit). It is relatively rare and is associated with an incorrect assessment and unsuccessful choice of a commercial bank to carry out deposit operations of the enterprise.
Credit risk. It takes place in the financial activities of an enterprise when it provides commodity (commercial) or consumer credit to customers.
Tax risk. This type of financial risk has a number of manifestations: the likelihood of introducing new types of taxes and fees, the possibility of increasing the level of rates of existing taxes and fees, changing the terms and conditions of individual tax payments, the possibility of canceling existing tax benefits.
Innovative financial risk. This type of risk is associated with the introduction of new financial technologies, the use of new financial instruments, etc.
Crime risk. In the sphere of financial activity of an enterprise, it manifests itself in the form of its partners declaring fictitious bankruptcy, forgery of documents, and theft of certain types of assets.
Other financial risks. This is a fairly broad group of risks, but in terms of the likelihood of occurrence or the level of financial losses, it is not so significant for enterprises. These include the risks of natural disasters
WAYS TO COUNTER RISKS
Ignoring risk means that the decision maker (DM) does not take any action regarding the possible risk. This behavior is possible in one of the following situations.
Risk avoidance. Risk-averse individuals follow this strategy. For example, an enterprise does not renew an agreement with a counterparty in relation to which doubts have arisen about its solvency, when the enterprise prefers to receive a loan in the currency in which it carries out its main export operations.
Risk hedging. Literally, this term means risk fencing and is a system of measures by which the negative consequences of risk can be reduced. Hedging is especially actively used in financial markets. For this purpose, various financial instruments have been developed: options, futures, forwards, etc.
Risk transfer means that the decision maker does not want to bear the risk and is ready to transfer it to another person under certain conditions. The most striking example of risk transfer is insurance. In a broad sense, insurance is a set of operations that reduce the risk of possible losses from some action or inaction. In a narrow sense, the term “insurance” is most often assigned to a complex of insurance transactions between the policyholder and the insurer.
NIZHNY NOVGOROD INSTITUTE OF MANAGEMENT AND BUSINESS
Department of Finance
Coursework
by discipline
Financial management
“Sources of financing of the organization, their structure and optimization”
Completed by: full-time student,
4 courses, specialty "Finance and Credit", FEF
Checked:
Nizhny Novgorod, 2010
Introduction………………………………………………………………………………….3
Chapter 1. Sources and methods of financing the organization’s activities..5
Chapter 2. Management of the organization’s own and borrowed capital…….16
Chapter 3. Optimization of the structure of sources of financing for entrepreneurial activities…………………………………………..27
Conclusion………………………………………………………………………………...32
List of sources and literature used………………………….34
Applications
Introduction
Sources of financing are functioning and expected channels for obtaining financial resources, as well as a list of economic entities that can provide these financial resources. The basis of the project financing strategy is to develop financing schemes based on the individual characteristics of the project and the factors influencing it.
When choosing sources of financing for an enterprise, it is necessary to solve five main problems:
· determine short- and long-term capital needs;
· identify possible changes in the composition of assets and capital in order to determine their optimal composition and structure;
· ensure constant solvency and, therefore, financial stability;
· use own and borrowed funds with maximum profit;
· reduce the cost of financing business activities.
The relevance of this work lies in the fact that business managers are currently faced with the problem of choosing a source of financing.
The main goal of the course work is to study the main sources of financing, their types, and features.
The object of research for writing this work is sources of funding.
When writing this course work, the following tasks were set:
1. Consider the main sources of financing, their essence and types;
2. Study the main methods of financing
3. Consider the financing process using the example of a real enterprise.
The work has a traditional structure and includes an introduction, a main part consisting of 3 chapters, a conclusion and a bibliography.
Chapter 1. Sources and methods of financing the organization’s activities.
Financing the economic activities of an enterprise is a set of forms and methods, principles and conditions for financial support for simple and expanded reproduction.
When choosing sources of financing for an enterprise, it is necessary to solve five main problems:
Determine short- and long-term capital needs;
Identify possible changes in the composition of assets and capital in order to determine their optimal composition and structure;
Ensure continued solvency and, therefore, financial stability;
Use your own and borrowed funds with maximum profit;
Reduce the cost of financing business activities.
Organizational forms of financing :
Self-financing (retained earnings, depreciation, reserve capital, additional capital, etc.).
Equity or equity financing (participation in the authorized capital, purchase of shares, etc.).
Debt financing (bank loans, bond placement, leasing, etc.).
Budgetary financing (loans on a repayable basis from the federal, regional and local budgets, appropriations from budgets of all levels on a gratuitous basis, targeted federal investment programs, government borrowing, etc.).
Special forms of financing (project financing, venture financing, financing by attracting foreign capital).
The initial source of financing for any enterprise is authorized (share) capital (fund), which is formed from the contributions of the founders. Specific methods of forming authorized capital depend on the organizational and legal form of the enterprise. The minimum amount of the authorized capital on the day of registration of the company is:
In a limited liability company (LLC) – 100 minimum wages (minimum wage). Federal Law of June 19, 2000 No. 82-FZ “On the Minimum Wage” sets the minimum wage at 100 rubles;
In a closed joint-stock company (CJSC) – 100 minimum wages;
In an open joint-stock company (OJSC) - at least 1000 minimum wages.
The founders of a joint-stock or other company are required to fully contribute the authorized capital during the first year of activity.
The sources of formation of the enterprise's own financial resources are divided into external and internal sources. Internal sources include profit remaining at the disposal of the enterprise, depreciation charges from its own fixed assets used , other internal sources of financial resources. External sources include attracting additional share or equity capital, and receiving gratuitous financial assistance by the enterprise.
Own capital structure
retained earnings is a reinvested source of own funds for replacing equipment and new investments.
The profit of an enterprise depends on the ratio of income received as a result of its activities with the expenses that provided these incomes. There are gross profit, profit from sales, operating profit, profit before tax (according to accounting data), taxable profit (according to tax accounting data), retained (net) profit of the reporting period, reinvested (capitalized undistributed) profit.
The profit remaining at the disposal of the organization is a multi-purpose source of financing its needs. However, the main directions of profit distribution are accumulation and consumption, the proportions between which determine the development prospects of the enterprise.
The formation of accumulation and consumption funds, as well as other monetary funds, may be provided for by the constituent documents and adopted accounting policies of the enterprise, then their creation is mandatory, or the decision to direct profits to these funds is made by a meeting of shareholders on the proposal of the board of directors (participants).
Profit is also the main source of formation of reserve capital (fund).
Reserve capital - part of the equity capital allocated from profits to cover possible losses. The source of reserve capital formation is net profit, that is, the profit remaining at the disposal of the organization.
Only joint-stock companies must create a reserve fund. The minimum size of the reserve fund is 5% of the authorized capital. In this case, the amount of annual mandatory contributions to the reserve fund cannot be less than 5% of net profit until the amount established by the company’s charter is reached.
The funds of the company's reserve fund are used:
To cover the company's losses;
Bond redemptions;
Redemption of shares of a joint stock company in the absence of other funds.
Reserve capital cannot be used for other purposes.
Depreciation charges. Depreciation is a method of reimbursing capital spent on the creation and acquisition of depreciable assets by gradually transferring the cost of fixed assets and intangible assets to manufactured products.
Depreciation functions are divided into economic And tax .
Tax depreciation is determined in accordance with the Tax Code of the Russian Federation and its role is to reduce taxable profit.
Accounting depreciation may be greater than tax depreciation depending on how it is determined under applicable accounting standards.
Depreciation charges fixed assets are included in the cost of production according to established standards to the book value of fixed assets. Fixed assets are grouped depending on their useful life, and depreciation rates are applied to the cost of each group.
For accounting purposes, there are four ways to calculate depreciation of fixed assets:
1. linear;
2. reducing balance;
3. write-off of cost based on the sum of the numbers of years of useful life;
4. write-off of cost in proportion to the volume of production.
The chosen method of calculating depreciation is fixed in the accounting policy of the organization and is applied throughout the entire service life of the fixed asset.
Additional issue of shares leads to a decrease in the property of existing shareholders, and therefore can only be done with their consent at a general meeting. If, when establishing a company, payment of shares in the amount of 50% is allowed at the time of registration, and the remaining amount - within a year, then when issuing additional shares, at least 25% of the par value of their acquisition is paid, and the remaining amount - no later than a year from the date of their placement . In accordance with the legislation of the Russian Federation, nominal
the cost of placed preferred shares should not exceed 25% of the authorized capital of the company.
Placement of securities(shares, bonds) on the primary securities market is carried out in two forms:
Through an intermediary,
By directly contacting investors, i.e. direct sale of enterprise securities to investment funds (firms) and individuals.
Disadvantages of equity financing:
An additional issue of shares is a very expensive and time-consuming process;
The issue may be accompanied by a decline in the market price of shares of the issuing company;
There is no tax shield.
Additional capital is a specific own source of financing for the organization's enterprise. Unlike the authorized capital, it is not divided into shares (shares) and shows the common ownership of all participants (shareholders).
The formation and increase of additional capital can be carried out in the following cases:
1. Upon receipt of share premium.
2. When revaluing fixed assets.
3. If exchange rate differences arise as a result of the formation of authorized capital expressed in foreign currency.
4. When receiving targeted investment funds from the budget to finance capital investments (for non-profit organizations).
Bank loans. The loan can be provided in cash or commodity form on the terms of urgency, payment, repayment and material security.
The principal amount of debt for a loan or credit received is taken into account by the borrowing organization in accordance with the terms of the loan agreement (or credit agreement) in the amount of funds actually received or in the valuation of other things provided for in the agreement.
When considering the option of raising funds using a long-term loan, an enterprise chooses a bank that offers a lower interest rate, all other things being equal. The terms of the loan agreement are optimal for both parties if the transaction is based on market interest rate level, which allows us to equate the market value of capital received in exchange for debt and the present value of future payments on it.
The interest on the loan is determined by adding a premium to the base rate. The base rate is set by each bank individually, based on the discount rate of the Central Bank of Russia. The premium depends on the term of the loan, the quality of the collateral and the degree of credit risk associated with its provision.
As loan collateral accepted:
Pledge of property,
Surety,
Bank guarantee,
State and municipal guarantees,
Assignment in favor of the bank of the borrower's claims and accounts to a third party.
Despite a number of disadvantages for the enterprise (on the one hand, the deterioration of the structure of the organization’s liabilities, the need for time and financial costs to prepare a qualified business plan, to process a loan application in a commercial bank), bank long-term lending is still one of the most effective ways of financing . For an enterprise, the presence of long-term borrowed funds among the sources of its property is a positive thing, since this allows it to have borrowed funds for a long time. Long-term loans by Russian enterprises can be obtained from both Russian and foreign banks.
A commercial loan is a deferment of payments from one business entity to another. Forms of commercial credit - advance, prepayment, deferment and installment payment for goods and services. Used by entrepreneurs engaged in certain related activities, for example, producers-sellers and consumers-buyers of the same product. The object of a commercial loan is funds in commodity form.
The credit document when applying for a commercial loan is a bill of exchange. Commercial loans can also be made through an open account. An open account is a “bill-free” form of commercial lending, a special form of settlement relations between entrepreneurs carrying out mutual deliveries, i.e. being permanent counterparties to various transactions. tactically, enterprises open credit lines to each other, within which mutual supplies are made. Investment tax credit is a deferment of tax payment provided by government authorities or tax authorities.
A bonded loan is a loan that involves the borrower issuing debt obligations in the form of bonds.
A bond is an issue-grade security that secures the right of its holder to receive from the issuer of the bond, within the period specified by it, its nominal value and the percentage of this value or other property equivalent fixed in it. Bondholders have no ownership or equity interest in the firm or institution that issued the bond.
Bonds are a constant (in value) claim on the issuer's profit (determined by the amount of periodically paid interest), as well as a fixed claim on the issuer's assets (equal to the repayment amount). Bonds typically pay interest every six months. However, there are exceptions to this rule: in some cases, the interest payment interval is reduced to one month, and very rarely the payment is made once a year. The amount of interest paid depends on the coupon.
The book value of a bond loan, as a rule, does not coincide with its market value. The assessment of the market value of bonds is based on a number of data indicated on the bond itself: official issue date, par value, maturity date, announced interest rate, interest payment date. Enterprises issuing loans strive to bring the announced interest rate on the bond as close as possible to the market rate in effect at the time the loan is issued. Changes in the market interest rate and the market value of the issuing company's loan are inversely related. If the market interest rate exceeds the announced value, then the placed bonds are sold at a discount ( discount), and in the opposite situation, it is added to their cost bonus. Joint stock companies and limited liability companies are allowed to issue bonds. According to Russian legislation, there are a number of restrictions on the issue of bonds. Depending on the volume of the issue and the preparedness of the enterprise for the issue, it is possible to use various methods of placing bonds.
Leasing is an extended lease agreement. The owner of the equipment (lessor) provides the user (lessee) with the opportunity to operate the equipment in exchange for regular rental payments. Leasing relationships essentially act as credit transactions, since the lessee receives for temporary use the value embodied in machinery and equipment on the terms of repayment and payment.
Chapter 2. Management of the organization’s own and borrowed capital
Managing equity capital involves managing the process of its formation, maintenance and effective use, that is, managing already formed assets. This involves both managing your own capital as a whole and managing its structural elements.
Own capital management should be preceded by a study of the effectiveness of its management in the previous period. Analysis is necessary to determine reserves for the formation of own funds.
The basis for managing an enterprise's own capital is managing the formation of its own financial resources. In order to ensure effective management of this process, the enterprise usually develops a special financial policy aimed at attracting its own financial resources from various sources in accordance with the needs of its development in the coming period.
The main objectives of equity capital management are:
Determining the appropriate amount of equity capital;
Increasing, if required, the amount of equity capital through retained earnings or additional issue of shares;
Determining the rational structure of newly issued shares;
Determination and implementation of dividend policy.
The development of a policy for the formation of an enterprise’s own financial resources is carried out according to the following main stages.
Analysis of the formation of the enterprise's own financial resources in the previous period. The purpose of this analysis is to identify the potential for the formation of own financial resources and its compliance with the pace of development of the enterprise.
2. Determination of the total need for own financial resources. The calculated total need covers the required amount of own financial resources generated from both internal and external sources.
3. Estimation of the cost of raising equity capital from various sources. This assessment is carried out in the context of the main elements of equity capital formed from internal and external sources. The results of such an assessment serve as the basis for the development of management decisions regarding the selection of alternative sources for the formation of its own financial resources, ensuring an increase in the enterprise’s own capital.
4. Ensuring the maximum volume of attraction of own financial resources from internal sources.
5. Ensuring the necessary volume of attracting own financial resources from external sources. The volume of attraction of own financial resources from external sources is intended to ensure that part of them that could not be formed through internal sources of financing. If the amount of own financial resources attracted from internal sources fully meets the total need for them in the planning period, then there is no need to attract these resources from external sources.
6. Optimization of the ratio of internal and external sources of formation of own financial resources. This optimization process is based on the following criteria:
Ensuring the minimum total cost of attracting own financial resources;
Ensuring that the original founders retain control of the enterprise.
Management of an enterprise's own capital also includes determining the optimal ratio between its own and borrowed financial resources.
Although the basis of any business is equity capital, in enterprises in a number of sectors of the economy the volume of borrowed funds used significantly exceeds the volume of equity capital. In this regard, managing the attraction and effective use of borrowed funds is one of the most important functions of financial management, aimed at ensuring the achievement of high final results of the enterprise's economic activity.
Borrowed capital used by an enterprise characterizes in aggregate the volume of its financial liabilities (total amount of debt). These financial obligations in modern economic practice are differentiated as follows:
1. Long-term financial liabilities (borrowed capital with a term of use of more than 1 year).
2. Short-term financial liabilities (all forms of borrowed capital with a period of up to 1 year).
In the process of development of an enterprise, as its financial obligations are repaid, the need arises to attract new borrowed funds. The sources and forms of raising borrowed funds by an enterprise are very diverse. Borrowed funds are classified by purpose, source, form and period of attraction, as well as by the form of security.
Taking into account the classification of borrowed funds, methods for managing their attraction are differentiated.
Managing the attraction of borrowed funds is a targeted process of their formation from various sources and in different forms in accordance with the needs of the enterprise for borrowed capital at various stages of its development.
Stages of developing a policy for attracting borrowed funds by an enterprise |
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Analysis of the attraction and use of borrowed funds in the previous period |
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Determining the goals of raising borrowed funds in the coming period |
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Determination of the maximum volume of borrowings |
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Estimation of the cost of raising borrowed capital from various sources |
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Determining the ratio of the volume of borrowed funds raised on a short-term and long-term basis |
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Determination of forms of raising borrowed funds |
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Determination of the composition of the main creditors |
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Formation of effective conditions for attracting loans |
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Ensuring the effective use of attracted loans |
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Ensuring timely payments for received loans |
The object of study of this course work is the open joint-stock company “Novator”.
The Novator experimental design bureau was created in December 1947 on the basis of the department of the Chief Designer of the Plant named after. M.I. Kalinin (plant No. 8) as OKB-8. The initial specialization was the development of large-caliber anti-aircraft guns. In addition to military orders, OKB Novator developed and commissioned land and sea meteorological missile systems. OKB "Novator" continues to actively work on the creation of new models of rocketry that meet the challenges of the time.
JSC Novator has an independent balance sheet, settlement and other accounts. The company has a round seal containing its full corporate name in Russian and an indication of its location. The Company has the right to have stamps and forms with its corporate name, its own emblem, as well as a trademark registered in the prescribed manner and other means of individualization.
Located at: 620017, Russia, Ekaterinburg, Kosmonavtov Ave., 18.
Analysis of the financial condition of JSC OKB Novator
The analysis of the financial condition of the enterprise is carried out according to the financial statements and the profit and loss report for 2008. (Appendix 1 and Appendix 2).
Relative indicators of financial stability.
Provision ratio of own current assets:
SOS=KR-VA, where (2.1)
SOS – own working capital;
OA - current assets;
KR – capital and reserves, the result of section 3;
VA – non-current assets.
The coefficient of provision with own working capital determines the degree of security of the organization with its own working capital necessary for its financial stability, and is calculated as the ratio of the difference between own funds and adjusted non-current assets to the value of current assets.
If the value of the coefficient is greater than or equal to one, the enterprise, at the expense of its own working capital, fully provides its current assets, and has absolute financial stability. The lower the ratio, the more unstable the financial condition of the enterprise. An enterprise reaches a critical financial condition when the ratio is 10% or lower.
We can say that at the beginning of the reporting year, the company had reached a critical financial condition, since the ratio was 2.6%. which is less than 10%. But by the end of the year, it is observed that the enterprise, using its own funds, fully provides its current assets and has almost absolute stability.
Inventory coverage ratio with own working capital:
- recommended value 0.5-0.8, where (2.2)
Z – reserves.
The ratio of the provision of inventories with own sources of financing shows what part of tangible current assets is financed from own capital.
If this ratio is greater than one, then the amount of own working capital exceeds the amount of inventories and costs, and the enterprise has absolute financial stability.
This coefficient shows. That at the end of the reporting year approximately 50% of tangible current assets are financed from equity capital.
Maneuverability coefficient:
(2.3)
The ratio shows what part of equity capital is used to finance current activities, i.e. invested in current assets, and what part is capitalized, i.e. invested in non-current assets.
Permanent Asset Index:
Characterizes the share of fixed assets and non-current assets in sources of equity.
Since the agility coefficient and the index of constant prices in the family give 1, therefore, the organization does not use long-term loans and borrowings.
Autonomy ratio:
, where (2.5)
VB – balance sheet currency.
The autonomy coefficient shows the share of own funds in the total amount of funding sources. This financial ratio allows you to assess the dependence of the enterprise on external sources of financing, i.e. the ability to carry out activities without additional borrowing capital. On the other hand, the autonomy coefficient shows how much the financial obligations of an enterprise can be covered by its own capital.
By the end of the reporting period, one can see a slight increase in this indicator, by 0.063 or 6.3%, which means that the dependence of own funds on borrowed funds has decreased, which means that there has been an increase in own funds.
Absolute independence coefficient:
, where (2.6)
DO – long-term obligations.
The ratio shows what part of the total value of the enterprise’s assets is formed from the most reliable sources of financing, i.e. does not depend on short-term borrowed funds. Essentially, this is a refined autonomy coefficient.
Financial dependency ratio (debt):
, where (2.7)
KO – short-term liabilities.
The financial dependence ratio of an enterprise means how much the assets of the enterprise are financed by borrowed funds. Too large a share of borrowed funds reduces the solvency of the enterprise, undermines its financial stability and, accordingly, reduces the confidence of counterparties in it and reduces the likelihood of obtaining a loan.
Both at the beginning and at the end of the reporting year, the enterprise has approximately the same dependence on borrowed funds. But we cannot say that the share of borrowed funds reduces the solvency of the organization.
Funding ratio:
(2.8)
The financing ratio provides the most general assessment of an organization's financial strength. It shows how much borrowed funds account for each ruble of equity capital invested in the assets of the enterprise. The growth of this indicator indicates the increasing dependence of the enterprise on borrowed capital, i.e. about some decrease in financial stability, and vice versa.
Leverage:
(2.9)
Financial leverage carries fundamental information for both the entrepreneur and the banker. Large leverage means significant risk for both participants in the economic process.
Investment Rate:
The investment ratio shows the extent to which non-current assets are covered by the enterprise's own capital.
By the end of the reporting year, this indicator increased by 0.172 or 17.2%, which means that equity capital began to cover non-current assets by 17.2%.
Return on equity:
, (2.11)
where Rsk is return on equity,
NPR – net profit
KR – loans and borrowings (in this case the average value is taken).
Return on equity characterizes the efficiency of using the company's own funds invested in the organization. Return on equity shows how much net profit is per ruble of equity.
For 1 ruble of own funds in 2008 there were 5.9 kopecks of net profit.
Impact of Return on Sales:
(2.12)
Driven by sales margins, return on equity decreased by 1.7%.
Chapter 3. Optimization of the structure of sources of financing for entrepreneurial activities
Optimal capital structure represents a ratio of the use of own and borrowed funds that ensures the most effective proportionality between the financial profitability ratio and the enterprise’s financial stability ratio, i.e. its market value is maximized.
The process of optimizing the capital structure of an enterprise is carried out in the following stages:
-Analysis of enterprise capital
-Assessment of the main factors determining the formation of the capital structure
-Optimization of the capital structure according to the criterion of maximizing the level of financial profitability;
-Optimization of the capital structure according to the criterion of minimizing the level of financial risks;
-Optimization of the capital structure according to the criterion of minimizing its cost.
One of the mechanisms for optimizing the capital structure of an enterprise is financial leverage, which allows you to determine the amount of borrowed funds raised by the enterprise per unit of equity capital. An indicator reflecting the level of additionally generated profit on equity capital at different shares of borrowed funds is called financial leverage effect. It is calculated using the following formula:
EGF = (1 - Sn) × (KR - Sk) × ZK/SK,
Where:
EGF- effect of financial leverage, %.
Sn- income tax rate, in decimal expression.
KR- return on assets ratio (ratio of gross profit to average asset value), %.
Sk- average interest rate for a loan, %.
ZK- the average amount of borrowed capital used.
SK- average amount of equity capital.
This formula opens up wide opportunities for the financial manager to determine the safe amount of borrowed funds, calculate acceptable lending conditions, ease the tax burden for the enterprise, determine the feasibility of purchasing shares of the enterprise with certain values of the differential, leverage and the level of the EFR as a whole.
The question arises: “What EGF value should we strive for?” Many Western economists believe that the golden mean is close to 30 - 50 percent, i.e. The EFR should optimally be equal to one third to half the level of the EFR of assets. Then the EDF is able to, as it were, compensate for tax withdrawals and provide its own funds with a decent return. Moreover, with such a ratio between EFR and ER, shareholder risk is significantly reduced.
When choosing sources of financing for an enterprise, you must:
determine short-term and long-term capital needs;
analyze possible changes in the composition of capital assets in order to determine their optimal structure in terms of volume and type;
ensure continued solvency and, therefore, financial stability;
use your own and borrowed funds as profitably as possible;
reduce the cost of financing business activities.
The calculated financial stability indicators for the period under review indicate that at the beginning of the reporting year, the company had reached a critical financial condition, since the working capital ratio was 2.6%, which is less than 10%. But by the end of the year, it is observed that the enterprise, using its own funds, fully provides its current assets and has almost absolute stability. At the end of the reporting year, approximately 50% of the organization's tangible current assets are financed from its own capital. At the beginning of the period, 2.3% of equity capital, and at the end, 16.4% was already invested in current assets. A low value of the agility indicator (below 50%) means that a significant part of the enterprise’s own funds is secured in immobile assets, which are less liquid, i.e. cannot be converted into cash quickly enough. Since the agility coefficient and the constant price index together give 1, therefore, the organization does not use long-term loans and borrowings. By the end of the reporting period, one can see a slight increase in the autonomy indicator, by 0.063 or 6.3%, which means that the dependence of own funds on borrowed funds has decreased, which means that there has been an increase in own funds. Both at the beginning and at the end of the reporting year, the enterprise has approximately the same dependence on borrowed funds. But we cannot say that the share of borrowed funds reduces the solvency of the organization. By the end of the reporting year, the investment indicator increased by 0.172 or 17.2%, which means that equity capital began to cover non-current assets by 17.2%.
Development using only one's own resources reduces some financial risks in business, but at the same time greatly reduces the rate of increase in the size of the business, especially revenue. On the contrary, attracting additional debt capital with the right financial strategy and quality financial management can dramatically increase the income of company owners on their invested capital. The reason is that an increase in financial resources, with proper management, leads to a proportional increase in sales and often net profit. This is especially true for small and medium-sized companies.
However, a capital structure overloaded with borrowed funds places excessively high demands on its profitability, since the probability of non-payments increases and the risks for the investor increase. In addition, the company's clients and suppliers, noticing a high share of borrowed funds, may begin to look for more reliable partners, which will lead to a drop in revenue. On the other hand, too low a share of debt capital means underutilization of a potentially cheaper source of financing than equity capital. This structure results in higher capital costs and higher return requirements for future investments.
The optimal capital structure is a ratio of own and borrowed sources that ensures the optimal ratio between the levels of..., i.e. The market value of the enterprise is maximized. When optimizing capital, every part of it must be taken into account.
Own capital is characterized by the following additional points:
1. Ease of attraction (you need a decision from the owner or without the consent of other business entities).
2. High rate of return on invested capital, because No interest is paid on funds raised.
3. Low risk of loss of financial stability and bankruptcy of the enterprise.
Disadvantages of own funds:
1. Limited volume of attraction, i.e. it is impossible to significantly expand economic activity.
2. The opportunity to increase the return on equity by attracting borrowed funds is not used.
Advantages of borrowed capital:
1. Wide possibilities for raising capital (with collateral or guarantee).
2. Increasing the financial potential of the enterprise if it is necessary to increase the volume of economic activity.
3. Ability to increase return on equity.
Disadvantages of debt capital:
1. Difficulty in attracting, because the decision depends on other economic entities.
The need for collateral or guarantees.
2. Low rate of return on assets.
3. Low financial stability of the enterprise.
Based on these features and after analyzing the enterprise JSC OKB Novator, we can conclude that if the management of the enterprise uses borrowed capital, it will have higher potential and the possibility of increasing the return on equity capital, but at the same time its financial stability will be lost. But if management decides to use equity capital as a source of financing, then financial stability, on the contrary, will be the highest, but the possibilities for profit growth will be limited.
Conclusion
Financing refers to the process of generating funds or, more broadly, the process of generating capital for an enterprise in all its forms.
Classification of funding sources is varied and can be produced according to the following characteristics:
According to property relations, own and borrowed sources of financing are distinguished.
By type of property, state resources, funds of legal entities and individuals, and foreign sources are distinguished.
According to time characteristics, sources of financing can be divided into short-term and long-term.
As part of internal sources of formation of own financial resources. The main place belongs to the profit remaining at the disposal of the enterprise - it forms the predominant part of its own financial resources.
Depreciation charges also play a certain role in the composition of internal sources; although they do not increase the amount of equity capital of the enterprise.
Other internal sources do not play a significant role in the formation of the enterprise's own financial resources.
Among the external sources of formation of its own financial resources, the main place belongs to the attraction by the enterprise of additional share or equity capital. For individual enterprises, one of the external sources of formation of their own financial resources may be the gratuitous financial assistance provided to them (as a rule, such assistance is provided only to individual state-owned enterprises of different levels).
In the context of the transition to a market economy, non-traditional instruments for financing the activities of Russian enterprises are also beginning to be used. These include commercial loans, options, collateral transactions, factoring transactions, leasing, etc.
Currently, the financing of enterprises is in an unsatisfactory state due to the lack of own funds for self-financing, the lack of sufficient government financial support, the high cost and riskiness of innovation, the long-term nature of the payback of innovative projects and the dominance of conservative investors instead of aggressive ones. For further successful development, Russian companies need to solve two problems: the first is to optimize sources of financing for the development of new projects; the second is to learn to select innovative projects that will bring real results even in times of crisis.
Chapter 2 of the study is devoted to the analysis of the capital structure of Novator OJSC. In general, the study is aimed at studying modern concepts of capital management and their application to determine the optimization of the structure of financing sources of Novator OJSC. The conducted research allows us to formulate the conclusion that the management of the enterprise needs to consider all possible options for obtaining long-term loans to improve production.
List of sources and literature used
1. Federal Law of June 19, 2000 No. 82-FZ “On the Minimum Wage” // Collection of Legislation of the Russian Federation - June 26, 2000, - No. 26, - Art. 2729.
2. Kovaleva A.M., Lapusta M.G., Skamai L.G. Company finances. – M.: INFRA – M, 2007. – P. 212.
3. Sheremet A.D. Enterprise finance: management and analysis - M. Finance 2006. - P. 156
4. Stock market: Textbook for higher educational institutions of economic profile N.I. Berzon, E.A. Buyanova, M.A. Kozhevnikov, A.V. Chalenko Moscow: Vita-Press, 2008
5. Lukasevich I.Ya. Analysis of financial transactions. Methods, models, computing techniques: – M.: Finance, UNITI, 2008. – P. 203
6. Blank I. A. Financial management: training course. – 2nd ed., revised. and additional – K..: Elga, Nika – Center, 2005. – 656 p.
7. Financial management: textbook / Ed. E.I. Shokhina. – M.: ID FBK-PRESS, 2008. – 408 p.
8. Economic analysis of financial and economic activity/Ed. M.V.Melnik. – M.: Economy, 2006. – 320 p.
10. Balance sheet of JSC OKB Novator for 2008 (form 1)
11. Profit and loss report of JSC OKB Novator for 2008 (form 2).
Kovaleva A.M., Lapusta M.G., Skamai L.G. Company finances. – M.: INFRA – M, 2007. – P. 212.
Federal Law of June 24, 2008 N 91-FZ “On Amendments to Article 1 of the Federal Law “On the Minimum Wage” [Text]// Collection of Legislation of the Russian Federation - 06/30/2008. - N 26. - Art. 3010.
Sheremet A.D. Enterprise finance: management and analysis - M. Finance 2006. - P. 156
Stock market: Textbook for higher educational institutions of economic profile N.I. Berzon, E.A. Buyanova, M.A. Kozhevnikov, A.V. Chalenko Moscow: Vita-Press, 2008
Lukasevich I.Ya. Analysis of financial transactions. Methods, models, computing techniques: – M.: Finance, UNITI, 2008. – P. 203
Coursework in enterprise economics
"External and internal sources
financing the activities of the enterprise"
Saint Petersburg
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
CHAPTER 1. Financial resources of the enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . .4
CHAPTER 2. Classification of sources of financing. . . . . . . . . . . . . . . . . . 7
2.1. Internal sources of financing of the enterprise. . . . . . . . . . . . . . . . 8
2.2. External sources of financing for the enterprise. . . . . . . . . . . . . . . . . .12
CHAPTER 3. Managing sources of financing. . . . . . . . . . . . . . . . . . .16
3.1. The ratio of external and internal sources
in the capital structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.2. The effect of financial leverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
List of used literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Introduction
Enterprise is a separate technical, economic and social complex designed to produce benefits useful to society in order to make a profit. During its creation, as well as in the process of managing it, various issues are resolved, one of which is financing the activities of the enterprise, that is, providing the necessary financial resources 1 for the costs of its implementation and development. Business entities receive these resources from various sources, without which no enterprise can exist and operate. And, therefore, it is not surprising that the issue of possible sources of financing is relevant today for many business entities and worries many entrepreneurs.
The purpose of the work is to study existing sources of funds, their role in the process of the enterprise’s activities and its development.
Setting priorities among sources of financing and selecting the most optimal sources is a problem for many organizations today. Therefore, this work will consider the classification of sources of financing the activities of an enterprise, the concept of financial resources, which is closely related to these sources, as well as the ratio in the capital structure of equity and borrowed funds, which has a significant impact on the financial and economic activities of the enterprise.
Consideration of these aspects will allow us to draw conclusions regarding a given topic.
CHAPTER 1. Financial resources of the enterprise
The concept of financial resources is closely related to the concept of sources of financing the activities of an economic entity. Financial resources of the enterprise- this is the totality of own funds and receipts of borrowed and raised funds intended to fulfill financial obligations, finance current costs and costs associated with the expansion of capital. They are the result of the interaction of receipt, expenditure and distribution of funds, their accumulation and use.
Financial resources play an important role in the reproduction process and its regulation, distribution of funds according to the areas of their use, stimulate the development of economic activity and increase its efficiency, and allow monitoring the financial condition of an economic entity.
Sources of financial resources are all cash income and receipts that an enterprise or other economic entity has at its disposal in a certain period (or as of a date) and which are used to make cash expenses and deductions necessary for production and social development.
Financial resources generated from various sources enable the enterprise to timely invest funds in new production, ensure, if necessary, expansion and technical re-equipment of the existing enterprise, finance scientific research, development, their implementation, etc.
The main areas of use of an enterprise’s financial resources in the process of its activities include:
financing the current needs of the production and trading process to ensure the normal functioning of production and trading activities of the enterprise through the planned allocation of funds for main production, production and auxiliary processes, supply, marketing and sales of products;
financing administrative and organizational measures to maintain a high level of functionality of the enterprise management system through its restructuring, allocation of new services or reduction of the management apparatus;
investing funds in the main production in the form of long-term and short-term investments for the purpose of its development (complete renewal and modernization of the production process), creating new production or reducing certain unprofitable areas;
financial investments - investment of financial resources for purposes that bring the enterprise higher income than the development of its own production: acquisition of securities and other assets in various segments of the financial market, investments in the authorized capital of other enterprises in order to generate income and obtain rights to participate in the management of these enterprises, venture financing 2, providing loans to other companies;
the formation of reserves, carried out both by the enterprise itself and by specialized insurance companies and state reserve funds at the expense of regulatory contributions to maintain a continuous circulation of financial resources, protecting the enterprise from unfavorable changes in market conditions.
Financial reserves are of great importance to ensure uninterrupted financing of the production process. In market conditions their role is significant. These reserves are capable of ensuring a continuous circulation of funds in the reproduction process even in the event of huge losses or the occurrence of unforeseen events. The enterprise creates financial reserves from its own resources.
Financial support for reproduction costs can be carried out in three forms: self-financing, lending and government financing.
Self-financing is based on the use of the enterprise's own financial resources. If its own funds are insufficient, it can either reduce some of its expenses or use funds mobilized in the financial market through transactions with securities.
Lending is a method of financial support for reproduction costs in which costs are covered by a bank loan provided on the basis of repayment, payment, and urgency.
State funding is provided on a non-repayable basis from budgetary and extra-budgetary funds. Through such financing, the state purposefully redistributes financial resources between production and non-production spheres, sectors of the economy, etc. In practice, all forms of cost financing can be applied simultaneously.
CHAPTER 2. Classification of sources of financing
The financial resources of the enterprise are transformed into capital through appropriate sources of funds 3. Today their various classifications are known.
Sources of financing can be divided into three groups: used, available, potential. The sources used represent a set of such sources of financing the activities of the enterprise that are already used to form its capital. The range of resources that are potentially real for use are called available. Potential sources are those that theoretically can be used for the functioning of commercial enterprises, in conditions of better financial, credit and legal relations.
One of the possible and most common groupings is the division of sources of funds by timing:
sources of short-term funds;
advanced capital (long-term).
Also in the literature there is a division of funding sources into the following groups:
own funds of enterprises;
borrowed funds;
raised funds;
budget allocations.
However, the main division of sources is their division into external and internal. In this version of the classification, own funds and budgetary allocations are combined into a group of internal (own) sources of financing, and external sources are understood as attracted and (or) borrowed funds.
The fundamental difference between the sources of own and borrowed funds lies in the legal reason - in the event of liquidation of an enterprise, its owners have the right to that part of the enterprise’s property that remains after settlements with third parties.
2.1. Internal sources of financing of the enterprise
The main sources of financing the enterprise's activities are its own funds. Internal sources include:
authorized capital;
funds accumulated by the enterprise in the course of its activities (reserve capital, additional capital, retained earnings);
other contributions from legal entities and individuals (targeted financing, charitable contributions, donations, etc.).
Equity capital begins to form at the time of creation of the enterprise, when its authorized capital is formed, that is, the totality in monetary terms of contributions (shares, shares at par value) of the founders (participants) to the property of the organization upon its creation to ensure activities in the amounts determined by the constituent documents. The formation of authorized capital is associated with the peculiarities of the organizational and legal forms of enterprises: for partnerships it is share capital 4 , for joint stock companies - share capital, for production cooperatives - a mutual fund 5 , for unitary enterprises - an authorized capital 6 . In any case, the authorized capital is the start-up capital necessary to start the activities of the enterprise.
The methods of forming the authorized capital are also determined by the organizational and legal form of the enterprise: by making contributions by the founders or by subscribing to shares, if it is a joint-stock company. Contributions to the authorized capital can be money, securities, other things or property rights that have a monetary value. At the moment of transfer of assets in the form of a contribution to the authorized capital, ownership of them passes to the economic entity, that is, investors lose property rights to these objects. Thus, in the event of liquidation of an enterprise or withdrawal of a participant from a company or partnership, he has the right only to compensation for his share within the residual property, but not to the return of objects transferred to him at one time in the form of a contribution to the authorized capital.
Since the authorized capital minimally guarantees the rights of the enterprise’s creditors, its lower limit is limited by law. For example, for LLCs and CJSCs it cannot be less than 100 times the minimum monthly wage (MMW), for OJSCs and unitary enterprises - less than 1000 times the minimum monthly wage.
Any adjustments to the size of the authorized capital (additional issue of shares, reduction of the par value of shares, making additional contributions, admitting a new participant, joining part of the profit, etc.) are allowed only in cases and in the manner provided for by the current legislation and constituent documents.
In the process of activity, an enterprise invests money in fixed assets, purchases materials, fuel, pays workers, as a result of which goods are produced, services are provided, and work is performed, which, in turn, are paid by customers. After this, the money spent is returned to the enterprise as part of the sales proceeds. After reimbursement of costs, the enterprise receives a profit, which goes to the formation of its various funds (reserve fund, accumulation funds, social development and consumption) or forms a single enterprise fund - retained earnings.
In a market economy, the amount of profit depends on many factors, the main one of which is the ratio of income and expenses. At the same time, the current regulatory documents provide for the possibility of certain regulation of profits by the management of the enterprise. These regulatory procedures include:
accelerated depreciation of fixed assets;
procedure for valuation and amortization of intangible assets;
the procedure for assessing participants' contributions to the authorized capital;
choosing a method for estimating inventories;
the procedure for accounting for interest on bank loans used to finance capital investments;
composition of overhead costs and method of their distribution;
Profit is the main source of formation of the reserve fund (capital). This fund is intended to compensate for unexpected losses and possible losses from business activities, that is, it is insurance in nature. The procedure for the formation of reserve capital is determined by regulatory documents regulating the activities of an enterprise of this type, as well as its statutory documents. For example, for a joint-stock company, the amount of reserve capital must be at least 15% of the authorized capital, and the procedure for the formation and use of the reserve fund is determined by the charter of the joint-stock company. The specific amounts of annual contributions to this fund are not determined by the charter, but they must be at least 5% of the net profit of the joint-stock company.
Accumulation funds and a social fund are created at enterprises at the expense of net profit and are spent on financing investments in fixed assets, replenishing working capital, bonuses for employees, paying wages to individual employees in excess of the wage fund, providing financial assistance, paying insurance premiums for additional medical programs insurance, paying for housing, purchasing apartments for employees, organizing meals, paying for transport travel and other purposes.
In addition to funds formed from profits, an integral part of the enterprise’s own capital is additional capital, which, according to its financial origin, has different sources of formation:
share premium, i.e. funds received by the joint stock company - issuer when selling shares in excess of their nominal value;
amounts of additional valuation of non-current assets arising as a result of an increase in the value of property during its revaluation at market value;
exchange rate difference associated with the formation of the authorized capital, i.e. the difference between the ruble valuation of the founder’s (participant’s) debt on the contribution to the authorized capital, assessed in the constituent documents in foreign currency, calculated at the rate of the Central Bank of the Russian Federation on the date of receipt of the amount of deposits, and the ruble valuation of this contribution in the constituent documents.
Additional capital funds can be used to increase the authorized capital; to repay losses identified based on the results of work for the year; for distribution among the founders. Regulatory documents prohibit the use of additional capital for consumption purposes.
In addition, enterprises can receive funds for the implementation of targeted activities from higher organizations and individuals, as well as from the budget. Budget assistance can be provided in the form of subventions and subsidies. Subvention– budget funds provided to a budget of another level or to an enterprise on a free and irrevocable basis for the implementation of certain targeted expenses. Subsidy– budget funds provided to another budget or enterprise on the basis of shared financing of targeted expenses.
Targeted funding and revenues are spent in accordance with approved estimates and cannot be used for other purposes. These funds are part of the organization’s equity capital, which expresses the residual rights of the owner to the property of the enterprise and its income.
2.2. External sources of financing for the enterprise
An enterprise cannot cover its needs only from its own sources. This is due to the peculiarities of cash flows, in which the moments of receipt of payments for goods, services and work for the enterprise do not coincide with the terms of repayment of the enterprise's obligations, and unexpected delays in payments may occur. An additional need for sources of financing may also be due to inflation, when the funds received by the enterprise in the form of sales proceeds depreciate and cannot satisfy the enterprise's increased need for funds due to rising prices for raw materials. In addition, expansion of the enterprise's activities requires the involvement of additional resources. Thus, borrowed sources of financing appear.
Borrowed capital, depending on the terms of the loan, is divided into long-term (long-term liabilities) and short-term (short-term liabilities). Long-term liabilities, in turn, are divided into bank loans (repayable in more than 12 months) and other long-term liabilities.
Short-term liabilities consist of borrowed funds (bank loans and other loans to be repaid within 12 months) and accounts payable of the enterprise to suppliers and contractors, to the budget, for wages, etc.
An important source of financing the activities of an enterprise is a bank loan. Previously, many enterprises (especially industry and agriculture) could not take advantage of loans from commercial banks, since the cost of loans (interest rates) was high. But now they have the opportunity to pursue a more active policy of attracting borrowed funds, since in 2002-2003. the level of interest rates fell sharply. Foreign loans poured into Russia. By offering businesses lower rates and longer loan terms than Russian commercial banks, foreign banks have seriously asserted themselves in the Russian credit market.
From 2001 to 2004 refinancing rates 7 have decreased by almost 2 times, but it’s not just the size of the rates; an important trend is the lengthening of the terms of lending to enterprises, which is predetermined by the long-term stabilization of the political and economic situation in the country and the improvement in the maturity of the banking system’s liabilities.
In accordance with the Civil Code of the Russian Federation, all loans are issued to borrowers subject to the conclusion of a written loan agreement. Lending is carried out in two ways. The essence of the first method is that the issue of granting a loan is decided each time on an individual basis. A loan is issued to meet a specific target need for funds. This method is used when providing loans for specific periods, i.e. term loans.
With the second method, loans are provided within the lending limit established by the bank for the borrower - by opening a line of credit. An open line of credit allows you to pay with a loan any settlement and monetary documents provided for in a loan agreement concluded between the client and the bank. The credit line is opened mainly for a period of one year, but can also be opened for a shorter period. During the term of the credit line, the client can receive a loan at any time without additional negotiations with the bank or any formalities. It is open to clients with a stable financial position and good credit reputation. At the request of the client, the credit limit may be revised. The credit line can be revolving and non-revolving, as well as targeted and non-targeted.
Enterprises receive loans on the terms of payment, urgency, repayment, intended use, secured (guarantees, pledge of real estate and other assets of the enterprise). The bank checks the loan application for legal creditworthiness (legal status of the borrower, size of the authorized capital, legal address, etc.) and financial creditworthiness (assessment of the company’s ability to repay the loan in a timely manner), after which a decision is made to grant or refuse the loan .
The disadvantages of the credit form of financing are:
the need to pay interest on the loan;
complexity of design;
need for provision;
deterioration of the balance sheet structure as a result of borrowing, which can lead to loss of financial stability, insolvency and, ultimately, bankruptcy of the enterprise.
Funds can be obtained not only by taking out loans, but also by issuing bonds and other securities. Bonds is a type of security issued as debt. Bonds can be short-term (for 1-3 years), medium-term (for 3-7 years), long-term (for 7-30 years). At the end of the circulation period, they are redeemed, that is, the owners are paid their nominal value. Bonds may be coupon bonds that pay periodic income. Coupon is a tear-off coupon on which the date of interest payment and its amount are indicated. There are also zero-coupon bonds that do not pay periodic income. They are placed at a price below par and are redeemed at par. The difference between the placement price and the par value forms a discount - the owner's income. The disadvantage of this method of financing is the presence of costs for issuing securities, the need to pay interest on them, and deterioration in the liquidity of the balance sheet.
In addition, the source of financing for the enterprise’s activities is accounts payable, i.e. deferment of payment, as a result of which funds are temporarily used in the economic turnover of the debtor enterprise. Accounts payable- this is the debt to the personnel of the enterprise for the period from the calculation of wages to its payment, to suppliers and contractors, debt to the budget and extra-budgetary funds, to participants (founders) for income payments, etc.
The golden rule of accounts payable management is to maximize the debt repayment period without possible financial consequences. In this case, the company uses “other people’s” funds as if for free.
Using accounts payable as a source of financing significantly increases the risk of loss of liquidity, since these are the most urgent obligations of the enterprise.
CHAPTER 3. Managing sources of funding
The financial policy strategy of an enterprise is a key point in assessing the acceptable, desired or predicted rates of increasing its economic potential.
To finance its activities, an enterprise can use three main sources of funds:
results of own financial and economic activities (reinvestment of profits);
increase in authorized capital (additional issue of shares);
attracting funds from third-party individuals and legal entities (issuing bonds, obtaining bank loans, etc.)
Of course, the first source is a priority - in this case, all earned profit, as well as potential profit, belongs to the real owners of the enterprise. In the case of attracting second and third sources, part of the profit has to be sacrificed. The practice of large Western companies shows that most of them are extremely reluctant to issue additional shares as a permanent part of their financial policy. They prefer to rely on their own capabilities, that is, on the development of the enterprise mainly through reinvestment of profits. There are several reasons for this:
Additional issue of shares is a very expensive and time-consuming process.
The issue may be accompanied by a decline in the market price of the issuing company's shares.
As for the relationship between own and attracted sources of funds, it is determined by various factors: national traditions in the financing of enterprises, industry, size of the enterprise, etc.
Various combinations of using sources of funds are possible. If an enterprise focuses on its own resources, then the main share in additional sources of financing will fall on reinvested profits, and the ratio between sources will change towards a decrease in funds attracted from outside. But such a strategy is hardly justified, therefore, if an enterprise has a well-established structure of sources of funds and considers it optimal for itself, it is advisable to maintain it at the same level, that is, with the growth of its own sources, increase in a certain proportion the size of attracted ones.
The pace of increasing the economic potential of an enterprise depends on two factors: return on equity and the profit reinvestment ratio. These factors provide a generalized and comprehensive description of various aspects of the financial and economic activities of an enterprise:
production (output of resources);
financial (structure of sources of funds);
relationships between owners and management personnel (dividend policy);
position of the enterprise in the market (product profitability).
Any enterprise that operates sustainably over a certain period has well-established values of the selected factors, as well as trends in their change.
3.1. The ratio of external and internal sources
financing in the capital structure
In the theory of financial management, two concepts are distinguished: “financial structure” and “capitalized structure” of the enterprise. The term “financial structure” means the method of financing the activities of the enterprise as a whole, that is, the structure of all sources of funds. The second term refers to a narrower part of financing sources - long-term liabilities (own sources of funds and long-term borrowed capital). Own and borrowed sources of funds differ in a number of parameters 8 .
The capital structure influences the results of the financial and economic activities of the enterprise. The ratio between sources of own and borrowed funds serves as one of the key analytical indicators characterizing the degree of risk of investing financial resources in a given enterprise, and also determines the organization’s prospects in the future.
The issues of the possibility and feasibility of managing the capital structure have long been debated among scientists and practitioners. There are two main approaches to this problem:
traditional;
Modigliani-Miller theory.
Followers of the first approach believe that: a) the price of capital depends on its structure; b) there is an “optimal capital structure”. The weighted price of capital depends on the price of its components (equity and borrowed funds). Depending on the capital structure, the price of each source changes, and the rate of change is different. Numerous studies have shown that with an increase in the share of borrowed funds in the total amount of sources of long-term capital, the price of equity capital is constantly increasing at an increasing pace, and the price of borrowed capital, remaining practically unchanged at first, then also begins to increase. Since the price of borrowed capital is on average lower than the price of equity capital, there is a capital structure called optimal, in which the weighted price of capital indicator has a minimum value, and, therefore, the price of the enterprise will be maximum.
The founders of the second approach, Modigliani and Miller (1958), argue the opposite - the price of capital does not depend on its structure, that is, it cannot be optimized. When justifying this approach, they introduce a number of restrictions: the presence of an efficient market; no taxes; the same interest rates for individuals and legal entities; rational economic behavior, etc. Under these conditions, they argue, the price of capital always equalizes.
In practice, all forms of cost financing can be applied simultaneously. The main thing is to achieve the optimal ratio between them for a given period. There is an opinion that the optimal ratio between equity and borrowed funds is a ratio of 2:1. In other words, one’s own financial resources must be twice as large as borrowed ones. In this case, the financial position of the enterprise is considered stable.
3.2. Financial leverage effect
Nowadays, large enterprises usually have a debt-to-equity ratio of 70:30. The greater the share of own funds, the higher the financial independence ratio. When the share of borrowed capital increases, the probability of bankruptcy of the organization increases, which forces lenders to increase interest rates for loans due to increased credit risks.
But at the same time, enterprises with a high share of borrowed funds have certain advantages over enterprises with a high share of equity capital in assets, since, having the same amount of profit, they have a higher return on equity capital.
This effect, which arises in connection with the appearance of borrowed funds in the amount of capital used and allows the enterprise to obtain additional profit on its own capital, is called the effect of financial leverage (financial leverage). This effect characterizes the effectiveness of the enterprise's use of borrowed funds.
In general, with the same economic profitability, the profitability of equity capital depends significantly on the structure of financial sources. If the organization has no debts to pay and no interest is paid on them, then the increase in economic profit leads to a proportional increase in net profit (provided that the amount of tax is directly proportional to the amount of profit).
If an enterprise with the same total amount of capital (assets) is financed from not only its own, but also borrowed funds, profit before tax is reduced due to the inclusion of interest in costs. Accordingly, the amount of income tax is reduced, and return on equity may increase. As a result, the use of borrowed funds, despite their cost, allows you to increase the profitability of your own funds. In this case, we talk about the effect of financial leverage.
Financial leverage effect- is the ability of debt capital to generate profit from investments of equity capital, or to increase the return on equity capital through the use of borrowed funds. It is calculated as follows:
E fr = (R e – i)*K s,
where R e is economic profitability, i is the interest for using the loan, K c is the ratio of the amount of borrowed funds to the amount of equity, (R e – i) is the differential, K c is the leverage.
The financial leverage differential is an important information impulse that allows you to determine the level of risk, for example, for granting loans. If economic profitability is higher than the level of interest on the loan, then the effect of financial leverage is positive. If these indicators are equal, the effect of financial leverage is zero. If the level of interest on a loan exceeds economic profitability, this effect becomes negative, that is, an increase in borrowed funds in the capital structure brings the enterprise closer to bankruptcy. Therefore, the larger the differential, the lower the risk and vice versa.
Leverage carries fundamental information. High leverage means significant risk.
The effect of financial leverage is higher, the lower the cost of borrowed funds (interest rate on loans), and the higher the income tax rate.
Thus, the effect of financial leverage allows us to determine the possibility of attracting borrowed funds to increase the profitability of our own and the associated financial risk.
Conclusion
Any enterprise needs sources of financing for its activities. There are various sources of funds. Internal sources include: authorized capital, funds accumulated by the enterprise, targeted financing, etc. External sources are bank loans, issues of bonds and other securities, accounts payable. It should be noted that internal and external sources of financing are interrelated, but not interchangeable.
Today, an important task of an enterprise’s financial policy is to optimize the structure of liabilities, that is, to rationalize sources of financing. The greater the share of equity capital, the higher the coefficient of financial independence of the enterprise, but business entities with a high share of borrowed funds also have certain advantages. Borrowed funds for an enterprise, although they are a paid source of financing. Practice shows that their use is more effective than our own.
Each enterprise independently determines the structure and methods of financing its activities, this depends on the industry characteristics of the enterprise, its size, the duration of the production cycle of products, etc. The main thing is to correctly prioritize among sources of financing, calculate the capabilities of the enterprise and predict possible consequences.
List of used literature
Large Economic Dictionary / ed. Azriliyan A.N. – M.: Institute of New Economics, 1999.
Ermasova N.B. Financial Management: Exam Guide. – M.: Yurayt-Izdat, 2006.
Karelin V.S. Corporate finance: Textbook. – M.: Publishing and trading corporation “Dashkov and K”, 2006.
Kovalev V.V. Financial analysis: Capital management. Choice of investments. Reporting analysis. – M.: Finance and Statistics, 1998.
Romanenko I.V. Enterprise finance: lecture notes. – St. Petersburg: Publishing house Mikhailov V.A., 2000.
Selezneva N.N., Ionova A.F. Financial analysis. Financial management: Textbook for universities. – M.: UNITY-DANA, 2006.
Modern economics: Textbook / Ed. prof. Mamedova O.Yu. – Rostov-on-Don: Phoenix Publishing House, 1995.
Chuev I.N., Chechevitsyna L.N. Enterprise Economics: Textbook. – M.: Publishing and trading corporation “Dashkov and K”, 2006.
Economics and management in SCS. Scientific notes of the Faculty of Economics. Issue 7. – St. Petersburg: St. Petersburg State Unitary Enterprise Publishing House, 2002.
Economics of an enterprise (firm): Textbook / Ed. prof. Volkova O.I. and Assoc. Devyatkina O.V. – M.: INFRA-M, 2004.
http://www.profigroup.by
Application
Table "Key differences"
between types of sources of funds"
Scheme “Sources and movement
financial resources of the enterprise"
1 Financial resources– funds in cash and non-cash form.
2 Venture funding– investing capital in projects with a high level of risk and at the same time high profitability.
3 See: Application, diagram “Sources and movement of financial resources of an enterprise.”
4 Share capital– the totality of contributions of participants in a general partnership or limited partnership made to the partnership for the implementation of its economic activities.
5 Mutual fund– the totality of share contributions of members of a production cooperative for joint business activities, as well as those acquired and created in the process of activity.
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