Methodology for analyzing the efficiency of using financial resources. Anti-crisis financial management in the face of bankruptcy
Page
15
Based on the analysis of the efficiency of the enterprise, the following conclusions can be drawn:
· the enterprise suffers large losses due to the non-competitiveness of its products,
· there is a crisis expenditure of enterprise funds and equity capital
· there is a steady deterioration in the efficiency of the enterprise in which attempts by management to change the situation are not visible and no signs of the existence of a financial strategy and development strategy of the enterprise are detected
Analysis of the formation and use of financial resources at the enterprise.
Analysis of the formation and use of financial resources in an enterprise is last section comprehensive analysis and its purpose is to establish the main sources and direction of expenditure of the enterprise’s financial resources during the period under review. Such an analysis allows a more complete picture of the financial processes occurring in the enterprise.
Analysis of the expenditure and receipt of financial resources is a breakdown of the results of activities according to the following classification:
1) operational activities,
2) investment activities,
3) financial activities.
A breakdown of the items of receipt and expenditure of financial resources is presented in Table 2.12.
Form of expenditure and receipt of financial resources.
Continuation of Table 2.12
As can be seen from the form of analysis of the receipt and expenditure of financial resources, there is a crisis in the accumulation of financial resources in the enterprise.
The main indicator for assessing the ability of a manufacturing enterprise to generate financial resources is the indicator of net cash flow (Cash-flow) for operational activities.
In 1996-1997, net cash flow from operating activities was a negative value, the value of which doubled in 1997. From what has been said, it should be concluded that further current work of the enterprise in the production of products is impossible without serious changes in the organization of production, marketing, and cost reduction.
The total cash flow of the enterprise's activities in 1996 amounted to -64.7 thousand UAH, which is 4% of total assets and 5% of the enterprise's own assets. In 1997, the total negative cash flow was reduced to -8.8 thousand UAH. However, if we consider the sources of formation of financial resources, we note that in 1997 a long-term loan in the amount of 100 thousand UAH was received. Thus, the total cash flow was underestimated and actually amounted to -108.8 thousand UAH, and this is in a situation where, compared to In 1996, sales volumes fell by half.
At the end of the analysis of the financial condition, an analysis of the probability of bankruptcy according to the Altman model and “hard-to-sell assets” will be given (Table 2.13). The conclusion of Section 2 will be a generalized description of the signs of crisis development, the scale of the crisis state has been determined, the factors causing crisis development have been identified, and mechanisms for overcoming the crisis have been proposed.
Analysis of the probability of bankruptcy according to the Altman model and “hard-to-sell assets”.
Conclusions.
The Altman and “hard to sell assets” methods gave the same conclusion regarding the probability of bankruptcy - very high.
This assessment is fully consistent with the results of a comprehensive analysis of financial and economic activity carried out in the following areas:
Analysis of liquidity and solvency,
Assessment of property use,
Assessing the use of capital,
Analysis of cost and tax policy,
Property performance analysis,
Analysis of the formation and use of financial resources.
The activities of the enterprise were influenced by external and internal factors.
External factors:
¨ a nationwide decline in production, which caused the shutdown of many factories that were the main consumers of the enterprise’s products. Compared to 1995, there was a decline in production taking into account the inflation factor by 5 times and amounts to 10% of capacity.
¨ inflation, which became the reason for the outflow of working capital and necessitated the need to attract additional sources of formation of current assets. One of the sources of replenishment of working capital has become short-term accounts payable, most of which are overdue, and this in turn causes additional costs for paying accounts payable.
¨ instability and ineffectiveness of the state tax policy, in which enterprise costs are taxed at 40%; the share of tax payments in sales revenue is 62% (1997), 40% (1995-1996). The accumulation of funds in capital-intensive enterprises for the restoration of equipment is artificially reduced by the state, which introduced a reducing factor for depreciation charges.
¨ non-competitiveness of manufactured products due to the emergence and introduction of better technologies, materials, and new high-performance automated equipment on the Ukrainian market.
¨ a fall in the effective demand of the population, which became the cause and consequence of the general deterioration of the economic situation in Ukraine, which affected sales volumes in all sectors of the national economy.
Internal:
¨ high physical and moral wear and tear of fixed assets, which affect the quality characteristics of manufactured products and the cost of production, since their productivity is much lower than that of existing analogues. Equipment wear and tear of 64% leads to additional costs for routine equipment repairs.
¨ ineffective marketing strategy, which is poorly focused on finding new market segments, promoting the market, establishing incentives for consumers to purchase the products offered,
high level variable costs in the cost structure (81-83%), which is explained by the high costs of paying the main production workers. The solution is production automation.
¨ insufficiently differentiated range of products offered, which is also a consequence of the ineffectiveness of the marketing and sales service.
¨ ineffective financial strategy, or rather the absence of one, so during the analysis, one is surprised by the lack of measures by the management apparatus to normalize the situation in the enterprise, which, in the author’s opinion, is caused primarily by the inability of the apparatus to analyze and predict the development of the enterprise. The consequence of this statement is the lack of qualifications of management personnel in market economic conditions.
FORMATION AND USE OF FINANCIAL RESOURCES OF ECONOMIC ENTITIES IN MARKET CONDITIONS
Essay
The course work contains 61 pages, 1 figure, 7 tables, 36 sources used.
INVESTMENTS, INVESTMENT ACTIVITIES, SOURCES OF FINANCING INVESTMENT ACTIVITIES, LEASING, PAYBACK PERIOD, NET PRESENT VALUE
The object of the study is VIS LLC
The purpose of this course work is, based on a study of the theory of the formation and use of financial resources of business entities in modern conditions, to analyze them and develop recommendations for improving their formation and use.
In the process of work, scientific literature, articles on this topic by domestic and foreign economists, and Internet resources were used.
As a result of the study, the theoretical aspects of investment activity in enterprises were studied, investment project, measures are proposed to improve investment design at enterprises.
The degree of implementation is partial.
Scope of application – in educational process.
Efficiency - improving the quality of students' knowledge on a given topic.
Introduction
1 Theoretical aspects formation and use of financial
resources of economic entities
1.1 The essence of financial resources and sources of formation in modern conditions
1.2 The role of financial resources in ensuring reproductive
enterprise process
1.3 Indicators of the financial stability of the enterprise
2 Analysis of the formation and use of financial resources
LLC "Vis"
2.1 Analysis of the formation of financial resources of Vis LLC
2.2 Assessment of the financial stability of Vis LLC
2.3 Analysis of the efficiency of use of financial resources
LLC "Vis"
3 Main directions for improving the formation and use of financial resources of the enterprise
3.1 Measures to improve the formation of financial resources of business entities
3.2 Increasing the efficiency of using the enterprise’s financial resources
3.3 Use of alternative sources of financing
activities of the enterprise
Conclusion
List of sources used
Appendix A (mandatory)
Appendix B (mandatory)
Appendix B (mandatory)
Appendix D (mandatory)
Introduction
The main link of the economy in market economic conditions are enterprises that act as economic entities. To carry out economic activities, obtain products, income and savings, they use certain types of resources: material, labor, financial, as well as cash.
Financial resources are directed to the development of production, maintenance and development of non-production facilities, consumption, and may also remain in reserve. Financial resources used for the development of the production and trade process represent capital in its monetary form.
The availability of sufficient financial resources and their effective use predetermine the good financial position of the enterprise, solvency, financial stability, and liquidity. In this regard, the most important task of enterprises is to find reserves for increasing their own financial resources and their most effective use in order to improve the efficiency of the enterprise as a whole.
the main objective of this work - based on a study of the theory of formation and use of financial resources of business entities in modern conditions, analyze them and develop recommendations for improving their formation and use.
To achieve this goal, it is necessary to solve the following tasks:
Reveal the essence of financial resources and sources of formation in modern conditions;
Identify the role of financial resources in ensuring the reproduction process of the enterprise;
Characterize the indicators of the financial stability of the enterprise;
Assess the formation and use of financial resources of Vis LLC;
Analyze the financial stability of Vis LLC;
Suggest the main directions for improving the formation and use of financial resources of the enterprise;
Develop the use of alternative sources of financing the activities of the enterprise.
The object of the study is Vis LLC.
When analyzing the management of financial resources of the enterprise Vis LLC, such techniques and methods as horizontal analysis, vertical analysis, ratio analysis (relative indicators), and comparative analysis were used.
The information base for financial analysis was financial statements enterprises for 2005, 2006, 2007, namely: balance sheet, appendix to the balance sheet - profit and loss statement (formular No. 2), etc. When covering theoretical issues of financial resource management, various textbooks and articles from periodicals were used.
1 Theoretical aspects of the formation and use of financial resources of business entities
1.1 The essence of financial resources and sources of their formation in modern conditions
One of the most important financial categories is financial resources. Financial resources are generated from business entities in order to implement production activities. Stabilization not only at the enterprise level (micro level), but also at the state level (macro level) largely depends on the rationality of their formation and use. The effective work of commodity producers is the key to the financial strength and independence of any state.
Financial resources of enterprises are income, savings, receipts generated at the enterprise and intended for the purposes of simple and expanded reproduction. Any enterprise in a market economy inevitably faces the problem of rational formation and use of financial resources. By the formation of financial resources we understand the process of formation and mobilization of financial resources in an enterprise. The use of financial resources is, first of all, the use of financial resources for the purpose of carrying out the production activities of the enterprise.
The degree of independence of an enterprise in this area depends primarily on the degree of centralization, authoritarianism of the economy and the mission of this organization in the external environment. Of course, these determining factors do not limit the list of factors influencing the activities of the enterprise in the formation and use of financial resources. There are also obligations to partners, consumers, and other subjects of market relations; the chosen strategy of the company and the internal environment of the organization leave their mark. Thus, the process of formation and use of financial resources at an economic entity is influenced by many known and taken into account factors of the external and internal environment, as well as factors of uncertainty (risk). It is worth noting that in a planned economy the process of formation and use of financial resources is of a different nature, and can only be considered in the context and framework of strict planning and determination. In a market economy, this concept acquires a full depth of meaning, which allows the essence of financial resources to be revealed most fully.
In fact, the formation and use of financial resources are two interrelated processes that characterize and reveal the essence of the mechanism for the movement of financial resources in an enterprise. Formation is the initial phase in the movement of financial resources; it is here that the sources of funds, forms of receipt and proportions of their combination are determined. As a rule, at this stage, financial resources are in value form, which is favorable for their control and planning. Formation determines and predetermines the further movement of financial resources in the form of their use. At this stage of the circulation, it becomes possible to launch the production process directly at the enterprise. Here, the financial resources of an economic entity are materialized into fixed and working capital. In production assets, financial resources are in a hidden form, since their valuation is no longer decisive, but the indicators of the enterprise’s production activities acquire unconditional importance. Financial resources are in such a material form until the moment of sale of manufactured products on the market, when it becomes possible to express them in value and determine the effectiveness of their use. Thus, the process of using financial resources is associated with the implementation of planned plans and characterizes a progressive movement towards a different quality level. Of course, in the division between formation and use there is a considerable amount of convention, because these two processes mutually determine and complement each other, and each of them already has determinism regarding the future situation, be it the formation or use of financial resources. In addition, formation can conditionally be called a process with a “plus” sign because it involves the consolidation of financial resources. On the contrary, use is a “minus” because it assumes consumption, waste, temporary “decentralization” of generated resources, a point of “contact” or a conventional equal sign ( more precisely familiar“more” or “less”) can characterize the stage of assessing the effectiveness of the use of financial resources (for production activities), because here two differently directed processes can be compared with each other. The enterprise undergoes a continuous process of formation and use of financial resources, their circulation, the purpose of which is to service the production and economic activities of the enterprise.
To carry out production and economic activities, enterprises use a variety of sources of financial resources. The structure of attracted sources largely determines the financial stability of the enterprise and the profitability of its production and economic activities. Issues of generating financial resources at an enterprise are resolved within the framework of financial management, which is one of the most important subsystems of the overall management system of a modern enterprise. It is the function of the financial services of enterprises and in particular the financial manager to determine
sources of financial resources and provision of them to the enterprise. There are various structural schemes for classifying the sources of financial resources of enterprises. The most common is the division into own and borrowed financial resources. The fundamental difference between these types of resources is that upon liquidation of an enterprise, its owners have the right to part of the property remaining after settlements with third parties. In addition to dividing into own and borrowed funds, the classification of sources according to their urgency is also known: 1) sources of short-term financing; 2) sources of long-term financing.
The structure of the funds used, as a rule, depends on the goals pursued by the enterprise. Most often, the own funds of an economic entity are used to finance long-term decisions, and borrowed capital is used in the form of short-term sources. Own capital (internal source) in domestic practice is of priority importance, which has a positive effect on the financial stability and reputation of the enterprise. Own funds are the main sources of financing the activities of the enterprise because Operating in market conditions, enterprises must have a certain property and operational independence. Adequacy of own funds is the main condition for providing an enterprise with borrowed funds. The faster growth rate of equity capital compared to borrowed capital is an indicator of the rational relationship between these types of financial resources. If internal source resources are insufficient to finance financial decisions, borrowed capital (external source) is used. It should be noted that in a market economy, borrowed resources are provided on a paid basis, and therefore the increase and use of one’s own financial resources is of particular relevance. With the effective organization of production activities and expanded production, the need for borrowed funds is reduced, which leads to the independence of an economic entity and is a favorable condition for the further reproduction of its own resources. Thus, any stage of the movement of funds should be considered from the perspective of an increase in their value. There is some convention in the division into own and borrowed financial resources, because with the diversity of modern financial relations, it is quite difficult to strictly classify the most diverse sources of financing. The most appropriate in market conditions is classification based on payment, i.e. paid or free financial resources.
The financial resources of an enterprise formed at the expense of its own and equivalent funds include, first of all, various incomes and receipts.
The income of an economic entity is formed from the following sources: profit from core activities, profit from research work performed, profit from financial transactions, profit from construction and installation work carried out in an economic way, etc.
The income that forms the financial resources of enterprises includes: depreciation charges, sustainable liabilities, proceeds from the sale of retired property, targeted revenues(for the maintenance of children in preschool institutions, etc.), funds received through the mobilization of internal resources in construction, contributions from members labor collective, insurance compensation for risks that have occurred, resources coming from concerns, associations, industry structures, funds from budgets and extra-budgetary funds.
The most significant financial resources can be obtained in the form of profit from the production and economic activities of the enterprise. Being an economic category, profit characterizes the financial result of an enterprise. Profit reflects the net income received in the area material production. The profit indicator is the indicator that most fully reflects the efficiency of the production and economic activities of the enterprise. Receiving revenue by a business entity does not mean making a profit. To identify the results of activities, it is necessary to compare revenues with the costs of production and sales of products. The result showing the excess of revenue over the full cost indicates the profitable operation of the enterprise in producing products, i.e. in this case we can talk about profit.
The main factors influencing profit growth are: an increase in revenue from sales of products (services) and a decrease in the cost of manufactured products.
The total amount of profit received by an enterprise from all types of activities is called gross profit. This indicator is summary because includes the following components: profit from sales of marketable products, profit from other sales, income from non-sales operations (minus expenses from these operations). Profit from the sale of commercial products is the main and most significant part of the entire profit of the enterprise. Profit from the sale of products (works, services) is the result obtained from the main activities of the enterprise. It is calculated as the difference between revenue from sales of products (works, services) and value added tax, excise taxes, production and sales costs. The composition of costs that forms the cost of production includes: material costs, labor costs, social contributions, depreciation, etc.
The second component of gross profit is profit from other sales. The share of this profit is very insignificant in the total profit. Profit from other sales involves: profit from the sale of fixed assets and other property of the enterprise (raw materials, supplies, fuel, spare parts, waste, intangible assets). Profit from other sales is defined as the difference between the proceeds from sales and the costs of this sale. For example, when selling fixed assets, the result is considered to be the difference between the proceeds from the sale of this property (less VAT) and the residual value of the assets (adjusted for the inflation factor), taking into account the costs incurred for the sale.
The next structural component of gross profit is profit from non-operating operations. This article is formed by transactions of various nature not related to the main activity of the business entity and not related to the sale of products or property of the enterprise. Profit from non-operating operations includes: profit from long-term and short-term financial investments, profit from leasing property.
Financial investments mean the placement of enterprises’ own funds in order to generate income. Long-term financial investment means contributions to the authorized capital of other enterprises (partnerships, joint stock companies, joint ventures and subsidiaries), acquisition of shares and other securities, provision of loans, i.e. all kinds of financial investments lasting more than a year. The forms of short-term investments are: short-term treasury bills, bonds and other securities, loans. Non-operating profits also include various types of fines, penalties, penalties received by a given business entity, as well as profits from previous years identified in the reporting period, profits from the revaluation of inventories and finished products, from transactions with foreign currency, and receipts of debts previously written off as bad. , funds received free of charge from other enterprises in the absence joint activities(except for funds received in the form of founders' contributions to the authorized capital).
Of course, with the establishment of market relations, the role of profits received from financial transactions (interest received on securities other issuers, income from operations in financial markets). But it should be remembered that with the exception of profit received from the main activity, all other types of income are additional. They can be used to improve the financial condition of a business entity, and are rather temporary and impermanent in nature. If, as a result of production and economic activities, an enterprise has losses, then this is also reflected in the balance sheet profit indicator (the final financial result of the enterprise, reflected in the balance sheet). The procedure for distributing balance sheet profit depends on the legal form of the enterprise. After deduction of taxes and fees, the net profit of the enterprise is formed (from which payments and deductions are also possible) which is subject to distribution. The directions for distribution of profits remaining at the disposal of the enterprise are within the competence of the enterprise and are fixed in its charter and regulations being developed. The profit remaining at the disposal of an economic entity can be used to reconstruct existing production, modernize equipment, replenish its own working capital, finance R&D, improve technology and organization of production, satisfy consumer and social needs, etc. The listed activities are financed from funds formed at the enterprise, the number and name of which are determined by the economic entity independently, but, as a rule, the following funds can be allocated: consumption, savings, reserve, social sphere and etc.
Depreciation charges are the second largest source of financial resources for an enterprise after profit. Depreciation charges are the monetary expression of the amount of depreciation corresponding to the degree of depreciation of fixed assets and intangible assets. These deductions are included in the cost of production. The main purpose of depreciation is to ensure the reproduction of fixed production assets and intangible assets of the enterprise.
Significant financial resources, especially in newly created and reconstructed enterprises, can be mobilized in the financial market. Specific forms of their mobilization can be: the sale of shares, bonds and other types of securities issued by a separate enterprise, as well as credit investments.
Funds received through redistribution include insurance compensation for risks incurred, financial resources coming from concerns, associations, parent companies or other industry structures, resources coming on a shared basis, dividends and interest on securities of other issuers, budget subsidies and other types of resources.
Also, the financial resources of an existing commercial enterprise according to the main sources of their formation can be structured as follows:
Financial resources generated from proceeds from sales of products (profit, depreciation fund, wage fund, material cost reimbursement fund);
Financial resources received from other sales (property, services not related to core activities, etc.);
Financial resources generated in the financial market (credits and borrowings, sale of own shares and other types of securities, dividends and interest on securities of other issuers, insurance compensation, etc.);
Financial resources generated from accounts payable (suppliers and contractors, wages, social insurance, budget, etc.);
Financial resources generated through contributions and revenues of a targeted nature (coming from other organizations and individuals, budget subsidies, etc.).
So, the organization’s financial resources are divided into its own and borrowed. Own financial resources and equivalent funds include: profit, depreciation, stable liabilities, equity capital, targeted income, shares and other contributions of members of the workforce, and others. Borrowed funds include: attracted additional share capital, bank loans and credits, and provided gratuitous assistance.
1.2 The role of financial resources in ensuring the reproduction process of the enterprise
An indispensable condition for the existence and development of society at a specifically identified historical stage is, as is known, to ensure the continuity of the process of production of material goods and the system of corresponding production relations between people as socio-economic forms of its actual implementation. The constant repetition of the production process on a constant (quantitatively and qualitatively) or changing scale is defined by economic science as a reproduction process. IN economic literature There are two types of reproduction: simple and extended.
According to established scientific opinion, simple reproduction is characterized by the fact that the size of the produced product, as well as its quality, remain unchanged in each subsequent cycle. Accordingly, the factors of production do not undergo changes. The entire surplus product, if produced, is used by the producers themselves for personal consumption.
With expanded reproduction, the size of the produced product in each subsequent cycle increases, which is achieved, among other things, by improving the quality of the product. The factors of production do not remain unchanged. In order for reproduction to occur on an expanded scale, additional or better resources are needed at the beginning of each next cycle (year). The source of expansion or qualitative improvement of factors of production is the surplus product. Consequently, with expanded reproduction, it can no longer go entirely to satisfying personal needs.
The material and technical basis of the production process at any enterprise is the main production assets. In a market economy, the initial formation of fixed assets, their functioning and expanded reproduction are carried out with the direct participation of financial resources, with the help of which funds for special purposes are formed and used, mediating the acquisition, operation and restoration of means of labor.
The initial formation of fixed assets at newly created enterprises occurs at the expense of fixed assets that are part of the authorized capital. Fixed assets are funds invested in fixed assets for production and non-production purposes. At the time of acquisition of fixed assets and their acceptance on the balance sheet of the enterprise, the value of fixed assets quantitatively coincides with the value of fixed assets. Subsequently, as fixed assets participate in the production process, their value bifurcates: one part, equal to wear and tear, is transferred to finished products, the other expresses the residual value of existing fixed assets.
The worn-out part of the value of fixed assets transferred to finished products, as the latter is sold, is gradually accumulated in cash in a special depreciation fund. This fund is formed through annual depreciation charges and is used for simple and partially expanded reproduction of fixed assets. The direction of depreciation for the expanded reproduction of fixed assets is determined by the specifics of its accrual and expenditure: it is accrued throughout the entire standard service life of fixed assets, and the need for its expenditure occurs only after their actual disposal. Therefore, until the replacement of retired fixed assets, accrued depreciation is temporarily free and can be used as an additional source of expanded reproduction. In addition, the use of depreciation for expanded reproduction is facilitated by scientific and technological progress, as a result of which some types of fixed assets can become cheaper, and more advanced and more productive machines and equipment are introduced.
The amount of the depreciation fund is calculated annually by multiplying the book value of fixed assets by the depreciation rate. Economically justified depreciation rates have great importance. They allow, on the one hand, to provide full refund the cost of decommissioned fixed assets, and on the other hand, to establish the true cost of production, constituent element which are depreciation charges. From the point of view of commercial calculation, it is equally bad to underestimate depreciation rates (because it can lead to a lack of financial resources necessary for the simple reproduction of fixed assets) and their unreasonable overestimation, causing an artificial increase in the price of products and a decrease in production profitability. Depreciation rates are periodically revised as the service life of fixed assets changes, the process of transferring their value to the manufactured product accelerates under the influence of scientific and technological progress and other factors. Fixed assets are also periodically revalued; its purpose is to bring the book value of fixed assets into line with current prices and conditions of reproduction.
However, it should be noted that expanded reproduction cannot be ensured only through depreciation charges, since they are intended mainly for simple reproduction. Therefore, to a large extent, capital investments are provided from national income, and primarily the enterprise’s own financial resources are reinvested in capital expenses; Equity and share capital mobilized in the financial market are also sent here, credit resources are attracted, and in special cases specifically stipulated in government decisions - budgetary allocations and funds from extra-budgetary funds.
In the composition of the enterprise's own financial resources used for capital investments, profit occupies an important place. IN Lately There is a tendency to increase the absolute size and share of profit in the sources of financing capital investments. There is an opinion that this trend needs to be developed, since its progressiveness lies in the fact that the sources of reproduction of fixed assets are directly linked to the results of production activities. As a result, the material interest of enterprises in achieving better production results increases, since the timeliness and completeness of the formation depends on them. financial sources capital costs.
Along with profit, funds mobilized in production itself are also used to finance capital investments (profits and savings on construction and installation work carried out in an economic way, mobilization of internal resources, etc.), income from the sale of disposed property, and funds from social development funds.
The allocation of budget funds for capital expenditures ensures the implementation of a unified technical policy and creates financial prerequisites for regulating the structure of social reproduction and the development of priority sectors of the economy. With the transition to market economic principles, the procedure for providing budget funds for capital investments is gradually changing. Previously, budget funds were allocated in the form of direct non-repayable appropriations; now they can be obtained through targeted subsidies (investment allocations), subventions and investment tax credits.
The objective prerequisites for the targeted use of finance in the reproduction process of an organization lie in the main functions of finance - distribution, reproduction, stimulation and control.
The distribution function is implemented within the framework of the distribution of financial resources in the process of circulation of funds directly at enterprises. The entire circulation of enterprise resources is associated with the formation and distribution of funds of financial resources. This function allows the formation of financial resources and funds for special purposes that meet the development needs of the enterprise as a whole and its individual structural divisions.
The reproduction function is implemented through regulation of the reproduction process in the form of targeted management of funds of financial resources and the creation of a financial and economic environment in which it is possible for subjects to achieve designated business interests. This function is a necessary prerequisite for the effective organization of cash flow management, the possibility of successfully using bank loans, accounts payable, loans and other sources of financial resources.
The stimulating function of finance is of great importance for the development of the production of goods and services and the growth of profitability of enterprises. Implementation of this function through the system established by the organization for covering production costs and profit distribution by enterprises, through the tax system, effective system organizing financial relationships between market entities, as well as through budget financing of the most promising, priority sectors of the economy.
Control function Finance is an important factor in economic development and serves as a necessary prerequisite for increasing the efficiency of organizations and accelerating the turnover of their financial resources. By controlling the movement of financial flows, it is possible to exercise real control over the condition, dynamics and efficiency of use of the enterprise’s property.
Based on the above, we can say that finance plays an important role in the reproduction process. Financial resources are intended, first of all, to ensure the production process. Their use can be in the form of advances and investments in production activities. The role of financial resources can be seen most clearly through their functions: distribution, reproduction, stimulation and control.
1.3 Indicators of the financial stability of the enterprise
One of the main tasks of the financial and economic condition of an enterprise is the study of indicators characterizing its financial stability.
Financial stability is the state of the organization’s financial resources, their distribution and use, which ensures the development of the enterprise based on the growth of profits and capital while maintaining payment and creditworthiness under conditions of an acceptable level of risk. This is the result of the presence of a certain safety margin that protects the enterprise from accidents and sudden changes in external factors.
Financial stability in the long term is characterized by the ratio of equity and borrowed funds.
The need to have equity capital is due to the self-financing requirements of the enterprise. It is the basis for the autonomy and independence of the enterprise. However, it must be taken into account that financing the activities of an enterprise only from its own funds is not always beneficial for it, especially in cases where production is seasonal.
At the same time, if the enterprise’s funds are created mainly through short-term liabilities, then its financial position will be unstable, since short-term capital requires constant operational work aimed at monitoring timely repayment.
Consequently, the financial position of the enterprise largely depends on how optimal the ratio of equity and borrowed capital is. Developing the right financial strategy will help many businesses improve the efficiency of their activities.
Below is a description of the financial stability of the enterprise in absolute values, which allows you to identify the degree to which the company’s reserves and costs are covered by sources of funds and determine the type of its financial stability.
1. Sources of own funds (Capital and reserves).
2. Outside current assets.
3. Availability of own working capital (line 1-line 2).
4. Long-term borrowed funds.
5. Availability of own and long-term borrowed working capital (line 3 + line 4).
6. Short-term borrowed funds.
7. The total value of sources of reserve formation (line 5 + line 6).
8. Inventory and VAT.
9. Surplus (+) or shortage (-) of own working capital (page 3-page 8).
10. Excess (+) or shortage (-) of own and long-term borrowed working capital (page 5-page 8).
11. Excess (+) or deficiency (-) of the total amount of sources of reserve formation (own, long-term and short-term borrowed sources) (page 7-page 8).
Quantitatively, financial stability is characterized by a system of the following relative indicators – financial ratios.
Ratio of debt and equity capital (leverage, financial leverage), it is calculated by the formula:
Cl = , (1)
where ZS - borrowed funds, including long-term and short-term loans and borrowings (the sum of the results of sections IV and V of the balance sheet).
SS - the source of the enterprise's own funds - the result of section III of the balance sheet.
The maximum value of this ratio should not be more than 1. Its growth indicates an increased dependence on borrowed capital and a decrease in financial stability. Exceeding this limit means the organization's dependence on external sources and loss of financial stability.
Autonomy coefficient, which is calculated by the formula:
Kav = , (2)
where P is the total balance.
Characterizes dependence on borrowed funds. Shows the share of own funds in the total amount of all funds of the enterprise. The minimum threshold value is at the level of 0.5, i.e. Kav ≥0.5. The excess indicates an increase in financial independence, an increase in the possibility of attracting funds from outside. In an enterprise with a high share of its own funds, and therefore with a relatively large Kav, creditors and investors invest their funds more willingly, since it can easily pay off its debts at the expense of its own funds.
Financial agility coefficient is calculated using the formula:
Km = , (3)
where SOS is own working capital, defined as SOS = OS – KZ.
It shows the ability of the enterprise to maintain the level of its own working capital and replenish working capital from its own sources, or in other words, it shows the part of its own capital located in the mobile sphere, which allows relatively free maneuvering of capital. The higher the coefficient Km, the higher the maneuverability of own funds, which means the higher the financial stability of the enterprise.
The ratio of mobile and immobilized assets is calculated using the following formula:
Km/i =, (4)
where ОА – current assets;
VA – non-current assets.
An important characteristic of the structure of an enterprise’s funds is given by coefficient of property for industrial purposes, which is calculated by the formula :
Kp.im =, (5)
where PZ is production inventories.
Based on economic practice data, the following indicator limitation is considered normal: Kp.im.>0.5. If the value of the indicator decreases below the critical limit, it is advisable to attract long-term borrowed funds to increase property for production purposes, if financial results in the reporting period do not allow to significantly replenish the sources of own funds.
2 Analysis of the formation and use of financial resources
2.1 Analysis of the formation of financial resources of Vis LLC
The state of financial resources and the financial condition of the enterprise is characterized by the composition of the sources of formation of their funds. For analysis we will use a comparative analytical balance. This balance is obtained from the original balance by regrouping and arranging articles and sections. The comparative balance allows you to bring together, systematize and visually present the calculations necessary to assess the state of business entities (Table 2.1)
Table - 2.1 - Structure of sources of funds for Vis LLC, thousand rubles.
| Indicators | 2005 | 2006 | 2007 | Deviation | |||
In absolute amount, t.r. (+), (-) | |||||||
| 2006-2005 | 2007-2006 | 2006-2005 | 2007-2006 | ||||
Sources of funds for everything including | 1293 | 1297 | 2232 | +4 | +935 | ||
Equity, In % of the total amount of funds | -3 | - 637 | |||||
Borrowed funds, In % of the total amount of funds | +7 | +1572 | |||||
Long term duties, In % of borrowed funds | - | - | - | - | - | - | - |
Short-term liabilities, In % of borrowed funds | +7 | +1572 |
Looking at the table, you can see that the largest share in the structure of sources is borrowed funds. This situation does not entirely positively characterize the position of an economic entity, since it indicates dependence on borrowed sources.
The company's short-term liabilities exceed 50% of the total sources, and in 2007 this figure was 105.1%. Thus, the high value of this indicator indicates that working capital this subject formed largely through borrowed capital.
It should also be noted that the entire volume of borrowed capital is represented by accounts payable, that is, here we must talk about the financing of working capital through settlements with creditors, which may also indicate the high cost and inaccessibility of both short-term and long-term bank loans.
In general, judging by Table 2.1, we can say that the share of Vis LLC’s own funds by the end of 2007 sharply decreased by 637 thousand rubles, due to the uncovered loss received in this year in the amount of 122 thousand rubles. (Appendix B). And in the structure of borrowed funds, in the same year, the share of accounts payable increased sharply; this figure increased almost three times compared to previous years.
Thus, an economic entity is forced to use predominantly borrowed financial resources, especially due to the deterioration of its financial condition in 2007. Consequently, in these conditions, it is difficult to update the fixed assets of an enterprise (mainly targeted financing is used for these purposes).
To analyze the generation of income of Vis LLC, we present the calculation material in the form of table 2.2. Among the amounts of all income, the following are distinguished: revenue from sales, interest receivable, income from participation in other organizations, operating income, non-operating income.
Table 2.2 – Generation of income of Vis LLC, thousand rubles.
Throughout the entire analyzed period, there is a slight change in such an indicator as sales revenue. In 2006, revenue increased by 0.27%, and in 2007 compared to 2006, it decreased by 0.64%.
However, if we consider revenue from the other side, then, judging by Table 2.2, at this enterprise the share of revenue from sales of products accounts for more than 98% of total income. This value indicates that the plant seeks to generate funds by producing and selling core products.
You can also notice that this business entity has such a line in its profit and loss statement as non-operating income, but the value of this indicator fluctuates within 1% of all income of the enterprise, this fact suggests that this component of income is rather redistributive (previously created value) nature and little characterizes the production activities of Vis LLC.
Now you should pay attention to such an indicator as profit (loss) of the reporting period. In 2006, the company's profit amounted to 141 thousand. rub., which is only 10 thousand rubles. more than in the previous year, and in 2007 we can generally observe a loss of 237 thousand rubles, which indicates an incorrect production policy. A loss in the reporting period becomes possible if the total amount of expenses incurred by a business entity exceeds the total amount of its income.
Thus, the company has a lack of equity capital.
2.2 Assessment of the financial stability of Vis LLC
As part of the general analysis of the use of financial resources, it is advisable to conduct an analysis of financial stability. This type of analysis allows us to supplement and consider in more detail the results of the activities of Vis LLC.
Table 2.3 - Calculation of absolute indicators to determine the financial stability of Vis LLC, thousand rubles.
| Index | 2005 | 2006 | 2007 |
| 1 Sources of own funds (Capital and reserves) | 526 | 523 | -114 |
| 2 Non-current assets | 794 | 723 | 742 |
| 3 Availability of own working capital (line 1-line 2) | -268 | -200 | -856 |
| 4 Long-term borrowed funds | - | - | - |
| 5 Availability of own and long-term borrowed working capital (line 3 + line 4) | -268 | -200 | -856 |
| 6 Short-term borrowed funds | 767 | 774 | 2346 |
| 7 Total value of sources of reserve formation (line 5 + line 6) | 499 | 574 | -1490 |
| 8 Inventory and VAT | 231 | 180 | 1407 |
| 9 Surplus (+) or shortage (-) of own working capital (page 3-page 8) | -499 | -380 | -2263 |
| 10 Surplus (+) or deficiency (-) of own and long-term borrowed working capital (page 5-page 8) | -499 | -380 | -2263 |
| 11 Excess (+) or deficiency (-) of the total amount of sources of reserve formation (own, long-term and short-term borrowed sources) (page 7-page 8) | 268 | 394 | -2897 |
| Type of financial stability | Unstable | Unstable | Unstable |
From table 2.3 it can be seen that the financial condition of Vis LLC in 2005-2007. is unstable, since the analysis revealed a lack of own working capital (268 thousand rubles in 2005, in 2006 - 200 thousand rubles, and in 2007 - 850 thousand rubles), the indicators of own and long-term borrowed funds look similar sources of formation of reserves and costs, and also identified surpluses in the total amount of the main sources of formation of reserves and costs in 2005-2006. (268 thousand rubles in 2005, 390 thousand rubles in 2006) and their shortfall of 2897 thousand rubles in 2007. To change this financial condition of the enterprise, it is necessary to improve a number of financial indicators. Now let's calculate relative indicators - financial ratios that characterize the financial stability of the enterprise. Debt to equity ratio for Vis LLC:
at the end of 2005: Kl = = 1.46,
at the end of 2006: Kl = = 1.48,
at the end of 2007: Kl = -20.57.
The value of this coefficient in 2005 was 1.46, in 2006 and in 2007 it was 1.48 and -20.57, respectively, which does not correspond to the established standard. The growth of this indicator indicates an increased dependence on borrowed capital and a decrease in the financial stability of the analyzed enterprise.
Autonomy coefficient for Vis LLC
at the end of 2005: Kav = = 0.41,
at the end of 2006: Kav = = 0.40,
at the end of 2007: Kav = -0.05.
The autonomy coefficient decreased in 2005 from 0.41 to 0.40 in 2006 and decreased significantly in 2007 to - 0.05, this circumstance indicates an increase in financial dependence and a decrease in the ability of the enterprise to attract funds from outside .
Financial maneuverability coefficient of own funds for Vis LLC:
at the end of 2005: Km = = 0.05,
at the end of 2006: Km = = -0.1,
at the end of 2007: Km = = -14.07.
As calculations show, the coefficient of financial maneuverability of the enterprise has a lack of its own working capital to replenish its own working capital, therefore its financial condition is unstable.
Ratio of mobile and immobilized assets for Vis LLC:
at the end of 2005: km/i = = 0.63,
at the end of 2006: km/i = = 0.79,
at the end of 2007: km/i = = 2.
The increase in the coefficient in 2007 (2) by 1.37 compared to 2005 (0.63) indicates that the company is investing more and more funds in current assets every year.
Industrial property coefficient for Vis LLC:
at the end of 2005: Kp.im = = 0.75,
at the end of 2006: Kp.im = = 0.69,
at the end of 2007: Kp.im = =0.96.
The value of the coefficient of industrial property throughout the entire analyzed period corresponds to the standard.
Typically, financial problems are the result of a series of bad decisions. Only by realizing this can you approach the solution of financial difficulties, and through their successful solution allow the enterprise to operate successfully, regularly make all scheduled payments, pay wages to its employees on time, to expand its production using internal resources.
In general, based on an analysis of the financial stability indicators of Vis LLC for 2005-2007. we can conclude that this enterprise is in an unstable state, as evidenced by the value of the coefficients, the sizes of which do not correspond to the normal level.
2.3 Analysis of the efficiency of use of financial resources of Vis LLC
One of the most important characteristics of the financial condition of an enterprise and the effectiveness of managing its financial resources is the stability of activities in the light of a long-term perspective. It is related to the structure of the enterprise’s balance sheet, the degree of its dependence on creditors and investors. But the degree of dependence on creditors is assessed not only by the ratio of own and borrowed sources of financial resources. This is a more multifaceted concept, including the assessment of equity capital, the composition of current and non-current assets, and the presence or absence of losses, etc.
The value of the maximum limits for changing the sources of funds to cover capital investments in fixed assets or inventories allows you to generate such flows of business transactions that lead to an improvement in the financial condition of the enterprise.
The main indicators characterizing the efficiency of use of financial resources include the following:
Turnover ratio, which is calculated as the ratio of revenue from product sales to the average value of working capital for the period;
Load factor, which is calculated as the ratio of the average value of the cost of working capital for the period to revenue from product sales;
The duration of one turnover in days, which is calculated as the ratio of the product of the average value of the value of working capital for the period by the number of days in the period to revenue from sales of products;
The average duration of payment of receivables in days, which is calculated as the ratio of the average amount of receivables to the average daily sales revenue.
Also, the efficiency of using financial resources is characterized by profitability indicators. Profitability shows the profit received from each ruble of funds invested in an enterprise or other financial transactions. Key profitability indicators:
Return on property, calculated as the ratio of net profit to the average value of assets for the period;
Return on equity, calculated as the ratio of net profit to the average equity capital for the period;
Data characterizing the efficiency of use of financial resources are presented in Table 2.4.
Table 2.4 – Indicators of the efficiency of use of financial resources of Vis LLC
The turnover ratio reflects how many times during the period the capital invested in the current assets of the enterprise is turned over. This coefficient is for 2005-2007. decreased by 2.7 times. This decrease indicates a decrease in the efficiency of using current assets, so management efforts in any case should be aimed at accelerating turnover. The load factor, accordingly, has the opposite trend.
In 2007, the duration of one revolution was almost 100 days. This is faster than in 2005-2006. for 62 days. Consequently, there was a decrease in the efficiency of the enterprise in 2007 compared to previous years.
The average receivables payment duration in days reflects the speed with which customers pay their bills. In 2007, this indicator was not calculated, because At that time, the company no longer had accounts receivable. The value of this indicator in 2005-2006. was approximately 12.5, which indicates not very efficient work enterprises for collecting money from debtors.
The profitability of property throughout the analyzed period had low indicators, and in 2007 it had a negative value, because the enterprise this year operated at a loss. That is, if in 2005 the MP had a profit of 100 rubles, then in 2007 there was a loss of 110 rubles. per one ruble invested in the organization’s property.
Return on equity – in 2005-2006. amounted to 0.25 and 0.27 rubles similarly, and in 2007, due to the negative values of net profit and equity capital of the organization, its calculation is not appropriate. In 2005, the company had a profit of 250 rubles, in 2006 – 270 rubles. per one ruble of equity capital.
The management of Vis LLC urgently needs to take measures to increase profitability indicators, otherwise they may decline further, which could lead to bankruptcy of the plant.
So, Vis LLC worked most effectively in 2005-2006, and in 2007 the indicators were too low. Consequently, in the last year the enterprise used financial resources irrationally and uneconomically.
3 Main directions for improving the formation and use of financial resources
3.1 Measures to improve the formation of financial resources of business entities
The successful operation of an enterprise is not possible without sound management of financial resources. It is not difficult to formulate goals, the achievement of which requires rational management of financial resources:
Survival of the company in a competitive environment;
Avoiding bankruptcy and major financial failures;
Leadership in the fight against competitors;
Maximizing the market value of the company;
Acceptable growth rates of the company’s economic potential;
Increase in production and sales volumes;
Profit maximization;
Minimizing costs;
Ensuring profitable activities, etc.
The priority of a particular goal can be chosen by an enterprise depending on the industry, position in a given market segment and much more, but successful progress towards the chosen goal largely depends on the perfection of management of the enterprise’s financial resources.
Based on our analysis of the activities of Vis LLC in generating financial resources, it was revealed that in 2006 there was a lack of equity capital of the enterprise.
Thus, measures to reduce the deficit of equity capital in this case may include: reduction of the production and economic cycle, excess inventory balances, work in progress, construction time, etc.
In order to reduce costs and increase the efficiency of main production, in some cases it is advisable to abandon certain types of activities serving the main production (construction, repairs, transport, etc.) and switch to the services of specialized enterprises.
Great help Marketing analysis to study supply and demand, sales markets and, on this basis, form the optimal range and structure of product production can help identify reserves for improving the financial condition of an enterprise.
The main attention should be paid to issues of resource conservation: the introduction of progressive norms, standards and resource-saving technologies, the use of secondary raw materials, the organization of effective accounting and control over the use of resources, the study and implementation of best practices in the implementation of saving regimes, material and moral incentives for workers for saving resources and reduction of non-production costs and losses.
To systematically identify and summarize all types of losses at each enterprise, it is advisable to maintain a special register of losses, classifying them into certain groups:
From marriage;
Reduced product quality;
Unclaimed products;
Loss of profitable customers, profitable markets;
Not full use production capacity of the enterprise;
Downtime of labor, means of labor, objects of labor and monetary resources;
Overexpenditure of resources per unit of production compared to established standards;
Damage and shortages of materials and shortages of materials and finished products;
Write-off of unclaimed receivables;
Overdue receivables;
Attracting unprofitable sources of financing;
Natural disasters;
For industries that did not produce products, etc.
Analysis of the dynamics of these losses and the development of measures to eliminate them will significantly improve the financial condition of the business entity.
Based on our analysis of the processes of formation and use of financial resources, VIS LLC identified the following trends:
in the field of income generation:
Decrease in profit received by the organization;
Increase in the cost of products sold.
The volume of financial resources received depends mainly on the profit from sales. VIS LLC calculates profit from sales of products upon receipt of money in the bank account. The receipt of proceeds from sales to the current account largely depends on the use of non-cash forms of payment.
When choosing payment forms, an enterprise should be guided by specific situations. In our opinion, each form of non-cash payments should facilitate the movement of material assets from producer to consumer and eliminate issues that impede their movement, have a simple economic document flow using unified documents that can be used by all participants in payments and adapted for modern computers; create opportunities for mutual control of settlement participants; prevent the occurrence of redistribution of funds in the form of receivables; promote the appropriate use of credit in the form of payments.
Right choice forms of non-cash payments should ensure timely and rapid completion of the circulation of funds from the supplier, prevent non-payments and the occurrence of illegal redistribution of funds between enterprises.
The implementation of deep transformations in the economy necessitates the maximum mobilization of internal reserves. For the effective functioning of an enterprise in market conditions, identifying reserves for profit growth is of paramount importance.
Let's consider the profit growth reserves of VIS LLC. Profit from the sale of commercial products occupies the largest share in the balance sheet profit, and it, in turn, depends on the cost of products sold. Reducing production costs is possible by maintaining the right marketing policy and identifying suppliers with the most preferable prices for purchased products.
So, since the main reserve for profit growth is cost reduction, this requires the following:
Increase production volumes having high profitability and goods in demand;
Tighten economic discipline in order to eliminate cases of excessive consumption of raw materials; develop regulations on material incentives for enterprise employees for saving material and energy resources; establish close ties with manufacturing companies, which will allow you to purchase raw materials at competitive prices.
3.2 Increasing the efficiency of using the enterprise’s financial resources
The efficiency of using financial resources is characterized by asset turnover and profitability indicators. Consequently, management efficiency can be improved by reducing turnaround times and increasing profitability by reducing costs and increasing revenue.
Accelerating the turnover of working capital does not require capital expenditures and leads to an increase in production volumes and sales of products. However, inflation quickly depreciates working capital, enterprises use an increasing portion of them to purchase raw materials and fuel and energy resources, and non-payments from buyers distract significant part funds from circulation.
One of the ways to save working capital for VIS LLC, and therefore increase its turnover, is to improve inventory management. Since the enterprise invests in the formation of inventories, storage costs are associated not only with warehouse costs, but also with the risk of damage and obsolescence of goods, as well as with the time cost of capital, i.e. with the rate of return that could be obtained from other investment opportunities with an equivalent degree of risk.
The economic, organizational and production results from storing a certain type of current assets in one volume or another are specific to this type of asset. A large inventory of finished goods (related to expected sales volume) reduces the possibility of product shortages when unexpectedly high demand occurs.
Similarly, a sufficiently large stock of raw materials and materials saves the enterprise in the event of an unexpected shortage of appropriate stocks from stopping the production process or purchasing more expensive substitute materials. A large number of orders for the purchase of raw materials and materials, although it leads to the formation of large inventories, it nevertheless makes sense if the company can get price reductions from suppliers. For the same reasons, the company prefers to have a sufficient supply of finished products, which allows it to manage production more economically. As a result of this, the company itself, as a rule, provides a discount to its customers.
Increasing working capital turnover comes down to identifying the results and costs associated with storing inventories and establishing a reasonable balance between inventories and costs. To speed up the turnover of working capital at an enterprise, it is advisable to:
Planning the purchase of necessary materials;
Introduction of rigid production systems;
Use of modern warehouses;
Improving demand forecasting;
Fast delivery of raw materials and materials.
The second way to reduce working capital costs for VIS LLC is to better use cash. From the perspective of investment theory, cash represents one of the special cases of investing in inventory. Therefore they are applicable General requirements. First, you need a basic reserve of cash to carry out current calculations. Secondly, certain funds are needed to cover unforeseen expenses. Thirdly, it is advisable to have a certain amount of free cash to ensure possible or projected expansion of activities.
One more important tool increasing the efficiency of use of financial resources is the management of the enterprise's fixed production assets and intangible assets. The main issue in their management is the choice of depreciation method.
In a market economy, an enterprise independently determines rational options for all components of production and economic activity based on the balance of interests of producers and consumers of manufactured products. In this case, the economic assessment of the effectiveness of the action option is the profit of the enterprise remaining at its disposal. Therefore, the main task in market conditions is to increase the efficiency of the enterprise by optimizing the use of its resources, including financial ones, and building a promising production program.
The key issue when optimizing the activities of an enterprise is the construction of its production program, taking into account the most rational use of the enterprise's resources. To determine the volume of profit from the implementation of production program options, it is necessary to have data on the selling price of products and the cost of their manufacture, as well as data on the volume of output for each type of product.
The profit distribution mechanism at the enterprise should be structured in such a way as to facilitate the creation of conditions for the most rational use of funds for the development of the enterprise, taking into account the indicators of the levels of capital and energy levels, working capital turnover, labor productivity, etc.
Efficient use of profits is possible only if the actions of the system of economic levers are coordinated. At the same time, product sales are of paramount importance. Firstly, because in the process of selling goods on the market, reimbursement of spent means of production occurs. Secondly, product sales is the moment when the manufactured product receives recognition in the market. Since profit reflects the results of all types of activity of the enterprise: production, non-production, financial, this means that all aspects of the enterprise’s activity are reflected in the amount of profit. Thus, an increase in labor productivity means a reduction in labor costs per unit of output; accordingly, under normal operating conditions, labor costs per unit of output should be relatively reduced. Improving the use of fixed production assets means that the costs of their maintenance and operation are relatively reduced, and depreciation charges in the cost of individual products are reduced. This, as well as saving material costs, increases profits and the efficiency of its use.
The management of the enterprise should also increase its competence in the field of financial resource management, because a manager who understands the tasks and functions of the modern financial service of the company could quickly accept optimal solutions on these issues.
Develop a payment calendar. Monitor the status of settlements with buyers and customers.
Improving the use of working capital with the development of entrepreneurship is becoming increasingly important, since the material and monetary resources released in this case are an additional internal source of further investment, that is, it becomes possible to direct them to the development of entrepreneurial activity and do without attracting additional financial resources. The development of a payment calendar and timely control of accounts receivable would allow VIS LLC to reduce its financial dependence and increase financial stability.
Introduce into practice on an ongoing basis an economic analysis of an enterprise’s activities. Create an information and analytical base. Based on the existing information and analytical base of the enterprise, it is necessary to create a report that would show the efficiency of using the enterprise's resources as of a certain date, calculated on the basis of economic and financial indicators. Review and analyze it periodically to make tactical and strategic decisions.
Thus, the success of financial resource management directly depends on the capital structure of the enterprise. Capital structure can help or hinder a company's efforts to increase its assets. It also has a direct impact on profit margins because the fixed interest components of profits paid on debt obligations are independent of the company's projected level of activity.
3.3 Use of alternative sources of financing the enterprise’s activities
Based on our analysis in the second chapter of this course work, it was revealed that the largest share in the structure of sources of Vis LLC is occupied by borrowed funds, and the entire volume of borrowed capital is represented by accounts payable, while the share of equity of this enterprise is decreasing, so by the end of 2006, equity capital sharply decreased by 637 thousand rubles, due to the uncovered loss received in this year in the amount of 122 thousand rubles.
Thus, based on such information, we can suggest that Vis LLC use alternative sources financing its production activities, which in the future will help bring the enterprise out of the crisis.
So, at present, new forms and methods of obtaining funds are appearing on the financial market, which can be used as additional sources of financing the activities of the enterprise.
One of these forms is leasing - these are operations for the placement of movable and immovable property, which is specially purchased by a leasing company, remains its property, but is leased to entrepreneurs. Leasing is a form of not only rent, but also financing.
Financial leasing with full payback has become widespread in Russia. During the term of the contract, the property is almost completely depreciated and the lessor, through lease payments, returns its value or most of it.
Thus, Vis LLC, if it had used this method of financing its activities, would have, thanks to leasing, been able to quickly and with minimal investment risks replace outdated equipment.
The financial lease agreement stipulates the size and form of leasing payments, terms of payment, insurance conditions, etc. At the end of the leasing period, the lessee company has the opportunity to purchase equipment at a price determined by a certain cost of the equipment.
A common practice is to enter into leasing agreements for a period ranging from 70 to 80% of the depreciation period. Leasing provides benefits to all participants in the leasing transaction. The manufacturing enterprise expands the sales market for its products by establishing long-term relationships with leasing companies; The lessee enterprise simultaneously solves two problems: acquiring and financing equipment and using it without mobilizing large financial resources and without attracting loans, which allows maintaining the ratio of borrowed and own resources without the risk of compromising the financial stability of the enterprise. Therefore, leasing operations are most popular among small and medium-sized enterprises. When organizing new production facilities, leasing makes it possible to create the necessary equipment fleet without large initial investments.
However, in some cases, leasing can be more expensive than a bank loan. Therefore, when choosing a financing method, it is necessary to take into account the size of lease payments and the schedule for their payment. Leasing payments are included in the cost of products produced by the lessee, which can significantly reduce taxable profit and the amount of taxes paid. The property leased is on the balance sheet of the lessor, who retains ownership of it with all the ensuing responsibilities. He also calculates depreciation charges. If, by agreement of the parties, the leasing agreement provides for the use of accelerated depreciation, leasing companies have the opportunity to return the bulk of the funds spent on the purchase of equipment already in the first years of its operation. This actually means a reduction in the tax burden for the lessor.
To cover the need for fixed and working capital, in a number of cases, Vis LLC may resort to the need to attract a bank loan. Usually, borrowed capital for a period of up to one year refers to short-term, and more than a year - to long-term. The question of how to finance certain assets of an enterprise - through short-term or long-term capital - must be discussed in each specific case. The efficiency of investing borrowed capital is determined by the degree of return on fixed or working capital.
However, recently factoring operations carried out by banks have become increasingly popular. Factoring is an operation in which the supplier (client) cedes to the bank (factor) the rights of claim arising from contracts concluded with its buyers (debtors);
Depending on the type of factoring, the factor offers a number of the following services:
Accounting for assigned claims;
Supplier financing;
Working with debtors to receive payments;
Client protection from debtor insolvency.
Thus, taking into account the variety of services provided by a factor to a service provider, it is more correct to talk about factoring not as a certain transaction, but as a set of services - factoring services.
So, due to the lack of equity capital, we can suggest that Vis LLC take advantage of alternative sources of financing its production activities, which in the future will help bring the enterprise out of the crisis, such sources may be: bank lending, both short-term and long-term, leasing, factoring .
Conclusion
In accordance with the stated goal and objectives of the course research, the analysis of the theoretical and methodological foundations and applied aspects of considering the theory of the formation and use of financial resources of business entities in modern conditions allowed us to draw a number of the following conclusions.
The organization's financial resources are divided into its own and borrowed. Own financial resources and equivalent funds include: profit, depreciation, stable liabilities, equity capital, targeted income, shares and other contributions of members of the workforce, and others. Borrowed funds include: attracted additional share capital, bank loans and credits, and provided gratuitous assistance.
Finance plays an important role in the reproduction process. Financial resources are intended, first of all, to ensure the production process. Their use can be in the form of advances and investments in production activities. The role of financial resources can be seen most clearly through their functions: distribution, reproduction, stimulation and control.
Based on the analysis of the formation of financial resources of Vis LLC, it was revealed that the largest share in the structure of sources is occupied by borrowed funds, and the entire volume of borrowed capital is represented by accounts payable, that is, here we must say about the financing of working capital through settlements with creditors . The share of Vis LLC's own funds by the end of 2006 sharply decreased by 637 thousand rubles, due to the uncovered loss received in this year in the amount of 122 thousand rubles. And in the structure of borrowed funds, in the same year, the share of accounts payable increased sharply; this figure increased almost three times compared to previous years.
In 2005, the company's profit amounted to 141 thousand. rub., which is only 10 thousand rubles. more than in the previous year, and in 2006 we can generally observe a loss of 237 thousand rubles, which indicates an incorrect production policy. A loss in the reporting period becomes possible if the total amount of expenses incurred by a business entity exceeds the total amount of its income.
Based on an assessment of the financial stability indicators of the enterprise, it was revealed that the financial condition of Vis LLC in 2004-2006. is unstable, since the analysis revealed a lack of own working capital (268 thousand rubles in 2004, in 2005 - 200 thousand rubles, and in 2006 - 850 thousand rubles), the indicators of own and long-term borrowed funds look similar sources of formation of reserves and costs, and also identified surpluses in the total amount of the main sources of formation of reserves and costs in 2004-2005. (268 thousand rubles in 2004, 390 thousand rubles in 2005) and their shortfall of 2897 thousand rubles in 2006. Also, when calculating relative indicators characterizing the financial stability of an enterprise, we can say that this enterprise is in an unstable state, as evidenced by the value of the coefficients, the sizes of which do not correspond to the normal level.
An analysis of the efficiency of using financial resources of Vis LLC showed that Vis LLC worked most efficiently in 2004-2005, and in 2006 the indicators were too low. Consequently, in the last year the enterprise used financial resources irrationally and uneconomically.
One of the main and most radical directions for the financial recovery of Vis LLC is the search for internal reserves to increase the profitability of production and achieve break-even work through more complete use of the enterprise’s production capacity, improving the quality and competitiveness of products, reducing its cost, rational use of material, labor and financial resources, reducing non-production costs and losses.
One of the ways to save working capital for VIS LLC, and therefore increase its turnover, is to improve inventory management.
The second way to reduce working capital costs for VIS LLC is to better use cash.
Another important tool for increasing the efficiency of using financial resources is the management of the enterprise's fixed production assets and intangible assets.
Due to the lack of equity capital, it is possible to suggest that Vis LLC use alternative sources of financing its production activities, which in the future will help bring the enterprise out of the crisis, such sources may be: bank lending, both short-term and long-term, leasing, factoring.
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Appendix A
(required)
| Assets | At the beginning of the reporting year | At the end of the reporting year |
| I. Non-current assets | ||
| Intangible assets | ||
| Fixed assets | 794 | 723 |
| Construction in progress | ||
| Deferred tax assets | ||
| Other noncurrent assets | ||
| Total for Section I | 794 | 723 |
| II. Current assets | ||
| Reserves | 183 | 180 |
| including: | ||
| 181 | 7 | |
| 2 | 2 | |
| goods shipped | - | 10 |
| Future expenses | - | 4 |
| other inventories and costs | - | 157 |
| 48 | - | |
| 163 | 191 | |
| including buyers and customers | 163 | 191 |
| Cash | 105 | 203 |
| Other current assets | ||
| Total for Section II | ||
| Balance | 1293 | 1297 |
| Passive | ||
| III. Capital and reserves | ||
| Authorized capital | 8 | 8 |
| Extra capital | ||
| Reserve capital | ||
| including: | ||
| reserves formed in accordance with | ||
| 518 | 515 | |
| Total for Section III | 526 | 523 |
| Loans and credits | ||
| Total for Section IV | ||
| Loans and credits | ||
| Accounts payable | 767 | 774 |
| including: | ||
| suppliers and contractors | 29 | 129 |
| 58 | 72 | |
| (9) | (13) | |
| (33) | 9 | |
| other creditors | 722 | 577 |
| revenue of the future periods | ||
| Reserves for future expenses | ||
| Total for Section V | 767 | 774 |
| Balance | 1293 | 1297 |
Appendix B
(required)
Profit and loss report for 2006, thousand rubles
| Name | During the reporting period | |
| 5525 | 4829 | |
| (5327) | (4696) | |
| Gross profit | 198 | 133 |
| Business expenses | ||
| Administrative expenses | ||
| Profit (loss) from sales | 198 | 133 |
| Other income and expenses | ||
| Interest receivable | ||
| Percentage to be paid | ||
| Other income | ||
| other expenses | (17) | (28) |
| Non-operating income | 5 | 67 |
| Non-operating expenses | ||
| 186 | 172 | |
| Deferred tax assets | ||
| Deferred tax liabilities | ||
| Current income tax | (45) | (41) |
| 141 | 131 | |
| FOR REFERENCE. | ||
Appendix B
(required)
| Assets | At the beginning of the reporting year | At the end of the reporting year |
| I. Non-current assets | ||
| Intangible assets | 44 | |
| Fixed assets | 723 | 665 |
| Construction in progress | ||
| Profitable investments in material assets | ||
| Long-term financial investments | ||
| Deferred tax assets | ||
| Other noncurrent assets | - | 33 |
| Total for Section I | 723 | 742 |
| II. Current assets | ||
| Reserves | 180 | 1407 |
| including: | ||
| raw materials, supplies and other similar assets | 7 | 1395 |
| animals for growing and fattening | ||
| costs in work in progress | ||
| finished products and goods for resale | 2 | 2 |
| goods shipped | 10 | - |
| Future expenses | 4 | - |
| other inventories and costs | 157 | 10 |
| Value added tax on purchased assets | ||
| Accounts receivable (payments for which are expected more than 12 months after the reporting date) | ||
| including buyers and customers | ||
| Accounts receivable (payments for which are expected within 12 months after the reporting date) | 191 | - |
| including buyers and customers | 191 | - |
| Short-term financial investments | ||
| Cash | 203 | 83 |
| Other current assets | ||
| Total for Section II | 574 | 1490 |
| Balance | 1297 | 2232 |
| Passive | ||
| III. Capital and reserves | ||
| Authorized capital | 8 | 8 |
| Own shares purchased from shareholders | ||
| Extra capital | ||
| Reserve capital | ||
| including: | ||
| reserves formed in accordance with | ||
| reserves formed in accordance with | ||
| Retained earnings (uncovered loss) | 515 | (122) |
| Total for Section III | 523 | (114) |
| IV. long term duties | ||
| Loans and credits | ||
| Deferred tax liabilities | ||
| Other long-term liabilities | ||
| Total for Section IV | ||
| V. Current liabilities | ||
| Loans and credits | ||
| Accounts payable | 774 | 2346 |
| including: | ||
| suppliers and contractors | 129 | 1566 |
| debt to staff | 72 | 112 |
| debt to state extra-budgetary funds | (13) | 30 |
| debt on taxes and fees | 9 | 181 |
| other creditors | 577 | 457 |
| Debt to participants for payment of income | ||
| revenue of the future periods | ||
| Reserves for future expenses | ||
| Other current liabilities | ||
| Total for Section V | 774 | 2346 |
| Balance | 1297 | 2232 |
Appendix D
(required)
Profit and loss report for 2007, thousand rubles
| Name | During the reporting period | For the same period of the previous year |
| Income and expenses by usual types | ||
| Revenue (net) from the sale of goods, products, works, services (less value added tax, excise taxes and similar mandatory payments) | 5437 | 5525 |
| Cost of goods sold, products | (5684) | (5327) |
| Gross profit | (247) | 198 |
| Business expenses | ||
| Administrative expenses | ||
| Profit (loss) from sales | (247) | 198 |
| Other income and expenses | ||
| Interest receivable | ||
| Percentage to be paid | ||
| Income from participation in other organizations | ||
| Other income | 25 | 5 |
| other expenses | (15) | (17) |
| Non-operating income | ||
| Non-operating expenses | ||
| Profit (loss) before tax | (237) | 186 |
| Deferred tax assets | ||
| Deferred tax liabilities | ||
| Current income tax | - | (45) |
| Net profit (loss) of the reporting period | (237) | 141 |
| FOR REFERENCE. | ||
| Permanent tax liabilities (assets) | ||
| Basic earnings (loss) per share | ||
| Diluted earnings (loss) per share |
Appendix D
(informative)
REVIEW
FOR COURSE WORK
students of group 412
specialty "Finance and Credit"
Kiushkina Olesya Vladimirovna
Topic Formation and use of financial resources of business entities in market conditions (using the example of VIS LLC)
1 Positive points_________________________________________
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
2 Negative points________________________________
__________________________________________________________________________________________________________________________________________________________________________________________________________________
3 Defense of the course work__________________________________________
________________________________________________________________________________________________________________________________________________________________________________________________________________
Course work supervisor P.A. Levchaev
INTRODUCTION 1
1 THEORETICAL ASPECTS OF FORMATION AND USE OF FINANCIAL RESOURCES OF ENTERPRISES 5
1.1 The essence of financial resources and sources of their formation in modern conditions 5
1.2 Characteristics of internal and external sources of funds 14
1.3 The role of financial resources in ensuring the reproduction process of the enterprise 22
2 ANALYSIS OF FORMATION AND USE 28
FINANCIAL RESOURCES ON THE EXAMPLE OF METUR LLC 28
2.1 Composition and structure of financial resources of Metur LLC 28
2.2 Analysis of financial stability of Metur LLC 32
2.3 Efficiency of formation and use of financial resources in the organization 39
3 MAIN DIRECTIONS FOR IMPROVING THE FORMATION OF FINANCIAL RESOURCES 45
3.1 Increasing the efficiency of using the enterprise’s financial resources 45
CONCLUSION 53
INTRODUCTION
The main link of the economy in market economic conditions are enterprises that act as economic entities. To carry out economic activities, obtain products, income and savings, they use certain types of resources: material, labor, financial, and cash.
Financial resources are directed to the development of production, maintenance and development of non-production facilities, consumption, and may also remain in reserve. Financial resources used for the development of the production and trade process represent capital in its monetary form.
The availability of sufficient financial resources and their effective use predetermine the good financial position of the enterprise, solvency, financial stability, and liquidity. In this regard, the most important task of enterprises is to find reserves for increasing their own financial resources and their most effective use in order to improve the efficiency of the enterprise as a whole.
The role of an organization's financial resources cannot be overestimated. In fact, these are funds at the disposal of the company, which take different forms in the process of business activity, embodied in fixed assets, inventories, accounts receivable and other assets. And it is necessary to understand that the success of an enterprise’s commercial activities depends not only on the demand for the goods it produces, but also on how effectively its financial resources are distributed. The correct balance of assets allows you to avoid “stagnation” of resources in materials, finished products or fixed assets.
Every ruble invested in production should work as efficiently as possible. That is why the organization must be in a constant state of search for that “golden mean” in the balance sheet structure that will allow it to achieve the best results.
Speaking about the financial resources of an organization, we must not forget about the sources of their formation, among which are own and borrowed funds. Their correct ratio also has a certain significance for the financial condition of the enterprise. Excessive dependence on external (borrowed) funds makes the company less stable financially, and vice versa, if the enterprise does not attract financial resources from outside, then this is reason to assume the absence of serious investment projects. That is why the issue of the formation and use of financial resources is relevant.
Business entities are included in complex process financial and economic relations both among themselves and with the state. Enterprise finance is not an independent category. Together they form a complex system of redistribution of financial resources. At the same time, the state, being a participant in financial relations, receives tax payments into its budget, thereby forming a system of public finance. And the well-being of the entire country depends on how efficiently the finances of enterprises are organized. All this also indicates the relevance of the topic of this course work.
The purpose of the course work is to analyze the formation and use of financial resources using the example of the limited liability company (hereinafter LLC) "Metur" and develop recommendations for improving their formation and use.
To achieve this goal, it is necessary to solve the following tasks:
1) Determine the role of financial resources of organizations, their essence, composition and structure;
2) Consider the features of the formation and use of financial resources using the example of a specific enterprise;
3) Make proposals aimed at increasing the level of efficiency in the use of financial resources of Metur LLC.
The object of the study is the commercial enterprise Metur LLC.
The subject of the study is the process of formation and use of financial resources of a commercial enterprise (using the example of Metur LLC).
When writing the course work, such techniques and methods as horizontal analysis, vertical analysis, analysis of coefficients (relative indicators), and comparative analysis were used.
The problem of the formation and use of an organization's financial resources is discussed in some detail in educational and scientific literature.
Among the sources used, one can highlight the works of such authors as N.V. Kolchina, G.V. Shadrina, A.D. Sheremet et al. The work takes into account changes and new approaches to the analysis of economic activity.
The information base for the financial analysis was the enterprise's financial statements for 2008, 2009, namely: balance sheet, profit and loss statement.
The first chapter discusses theoretical issues of analyzing the financial condition of a commercial enterprise. Here concepts such as “finance”, “capital” are defined, characteristics of own and borrowed funds are given, as well as the role of financial resources in ensuring the reproduction process of the enterprise
The second chapter is devoted to an analysis of the financial condition of Metur LLC for two years. Here a small description of the enterprise is given and an assessment is made of the formation and use of financial resources of Metur LLC.
In the third chapter, specific proposals are given aimed at increasing the efficiency of the use of financial resources of the enterprise under study.
1 THEORETICAL ASPECTS OF FORMATION AND USE OF FINANCIAL RESOURCES OF ENTERPRISES
1.1 The essence of financial resources and sources of their formation in modern conditions
Organization is difficult economic system. The main groups of functional processes that cover its activities and are the object of management include production, marketing, finance, human resources, etc. The level of management of functional subsystems has a direct impact on the efficiency of management of the economic system as a whole.
The viability of an organization, the success of its functioning and the stability of development are largely determined by the quality of management of one of its most important functional subsystems - the financial support system. The role of this system intensified with the transition to market relations, as economic entities gained independence in terms of planning and managing resource potential. As a result, financial resources have acquired paramount importance, since this is the only type of resource that can be transformed into any other type (for example, raw materials, fixed capital, etc.) directly and with minimal time.
Speaking about resources, it should be noted that they are the sources of any production. “Resources are the availability of means of labor, objects of labor, money, goods or people for use now or in the future.”
Thus, resources are the main factors of production. Factors of production are a set of those natural, material, social and spiritual forces (resources) that can be used in the process of creating goods, services and other values. In other words, factors of production are those things that have a certain influence on production itself.
Financial resources of the organization- this is the totality of its own cash income in cash and non-cash form and income from outside (attracted and borrowed), accumulated by the organization and intended to fulfill financial obligations, finance current costs and costs associated with the development of production.
It is worth highlighting the concept of “capital” - part of the financial resources invested in production and generating income upon completion of the turnover. In other words, capital– transformed form of financial resources.
The financial resources of an organization, on the one hand, are part of its capital. Capital consists of durable goods created by the economic system for the production of other goods. Another view of capital is related to its monetary form. Capital, when embodied in finances not yet invested, is a sum of money. All these definitions have a common idea, namely, capital is characterized by the ability to generate income.
There are fixed and working capital. Fixed capital is capital materialized in buildings, machines and equipment that functions in the production process for several years. Another type of capital, including raw materials, supplies, and energy resources, is consumed in one production cycle. It is called working capital. Money spent on working capital is fully returned to the entrepreneur after the sale of products. Fixed capital costs cannot be recovered so quickly.
On the other hand, the financial resources included in the financial support system are the basis for the existence of the entire organization, and the formation of an effective financial support system for the organization implies a reasonable combination of all production factors aimed at maximizing profits.
In other words, you can use two units of labor, one unit of natural resources and 4 units of capital and get 10 units of profit, or you can select such a reasonable combination of factors for a specific production that the result will be a profit of 20 units. And this requires an effective financial support system, thanks to which financial flows in the organization will be directed exactly where they are needed in the first place, in labor, capital or natural resources.
The organization's financial support system must meet the following principles:
1) As much autonomy and independence from external sources as possible;
2) Profit maximization;
3) Planning of financial resources;
4) Formation of financial reserves in the organization;
5) Maintaining financial discipline;
6) Ensuring the profitability of the financial and economic activities of the organization.
The state of financial flows becomes the most important factor determining the economic results of an organization. The financial well-being of the business entity as a whole, as well as its owners and employees, depends on how efficiently and expediently financial resources are transformed into fixed and working capital, as well as into means of stimulating personnel. Thus, in modern economic conditions, the formation of an effective financial support system in the organization and its proper management is of paramount importance for the organization.
In order for the management of the financial system to be effective and contribute to the achievement of the priority goals of a particular organization, it is necessary to carry out work aimed at its improvement. But before making any improvements or enhancements, it is necessary to assess the existing state of the process or phenomenon in question. Consequently, the issues of assessing the effectiveness of financial system management become relevant.
To solve a number of pressing problems in the field of managing an organization, a comprehensive study of its financial system is necessary, which would include both an assessment of the state of the management object, that is, financial flows and results of financial and economic activities, and an assessment of the management system, including the structure of the financial service in organizations. Research and development in this area should help improve the quality and effectiveness of financial system management, which, in turn, should be reflected in increasing the viability and efficiency of organizations.
In fact, financial resources are the funds at the disposal of the organization. But you need to understand that money itself does not bring profit. They must be invested or used in speculative transactions. Therefore, when they talk about the financial resources of an organization (production), they mainly mean the process of attracting them. Attracted financial resources are immediately converted into other types of resources (main or working capital, labor, etc.), or are directed to other needs of the organization, as a result of which the production process is activated in order to make a profit.
So, speaking about the financial resources of an organization, it is necessary to consider not only cash, but also other assets that, to one degree or another, can be converted into cash. It is necessary to understand that the process of converting financial resources into another type of resource is reversed, that is, any resources of the organization can be converted into financial resources and used in the future in a more effective way. In other words, if an organization has buildings and structures that are not used in the production process, it can sell them and receive money, which can then be used to replace old equipment.
The composition of financial resources (see Fig. 1.1) is presented in the assets of the organization’s balance sheet (Form 1 of the financial statements):
Financial resources of the enterprise
Fixed assets
Current assets
Figure 1.1 – Composition of the enterprise’s financial resources
Let us reveal in more detail the essence and content of the assets listed above, which are also the financial resources of the organization.
Intangible assets are assets that do not have a physical, tangible form: managerial, organizational, technical resources, reputation in the financial world, capitalized rights, privileges, competitive advantages, control over the distribution network, protection provided by insurance, patents and trademarks, brand names, “know-how”, other types of intellectual property, right to use.
Fixed assets include property used for a long time as a means of production. When accepting assets for accounting as fixed assets, the following conditions must be simultaneously met:
a) use in the production of products when performing work or providing services or for the management needs of the organization;
b) use for a long time, that is, a useful life exceeding 12 months or a normal operating cycle if it exceeds 12 months;
c) the organization does not intend to subsequently resell these assets;
d) the ability to bring economic benefits (income) to the organization in the future.
The useful life is the period during which the use of an item of fixed assets brings economic benefits (income) to the organization. For certain groups of fixed assets, the useful life is determined based on the quantity of products (volume of work in physical terms) expected to be received as a result of the use of this object.
Fixed assets include funds invested in: buildings, structures, working and power machines and equipment, measuring and control instruments and devices, computer equipment, vehicles, tools, production and household equipment and accessories, working, productive and breeding livestock, perennial plantings, on-farm roads and other relevant facilities.
The following are also taken into account as part of fixed assets: capital investments for radical improvement of land (drainage, irrigation and other reclamation works); capital investments in leased fixed assets; land plots, environmental management objects (water, subsoil and other natural resources).
Unfinished construction refers to the developer’s costs for the construction of construction projects from the beginning of construction until the objects are put into operation.
Profitable investments in material assets are investments of an organization in part of the property, buildings, premises, equipment and other assets that have a tangible form, provided by the organization for a fee for temporary possession (temporary possession and use) for the purpose of generating income.
Long-term financial investments - investments of an organization in government securities, bonds and other securities of other organizations, in the authorized (share) capital of other organizations, as well as loans provided to other organizations for a period of more than 12 months.
A deferred tax asset is understood as that part of deferred income tax that should lead to a reduction in income tax payable to the budget in the next reporting period or in subsequent reporting periods. An entity recognizes deferred tax assets in the reporting period in which deductible temporary differences arise to the extent that it is probable that it will generate taxable profit in subsequent reporting periods.
An indispensable condition for an organization to carry out business activities is the availability of working capital (working capital). Working capital (current assets) are funds advanced to current production assets and circulation funds.
One of the elements of working capital is inventory.
Inventories are economic variables (indicators) that can only be measured at a specific point in time. In other words, the amount of reserves has no temporal extent. Inventories include: raw materials, materials and other similar values; animals for growing and fattening; costs in work in progress; finished products and goods for resale; goods shipped; Future expenses; other inventories and costs.
Value added tax on acquired assets also applies to the assets of the organization. This is due to the specifics of its calculation and payment to the budget. When used in production or resale of material assets, the value added tax paid on them to suppliers is reimbursed from the budget by offset and remains at the disposal of the organization.
Accounts receivable are divided into short-term (payments for which are expected within 12 months) and long-term (payments for which are expected in more than 12 months). Accounts receivable arise as a result of the shipment of goods (performance of work, services) without payment, or for other reasons. The fact is that the process of selling goods is “on stream” and cannot be interrupted by demanding immediate payment for the shipped goods. As a rule, under the contract, goods are shipped with further payment within a specified period. As a result, accounts receivable are formed. The debtor is a debtor of the organization. Accounts receivable do not include the debt of participants (founders) for contributions to the authorized capital.
Cash - accumulated in cash in bank accounts or at the cash desk of an organization, various kinds income and receipts that are in constant economic circulation for organizations and are used by them for their own purposes or placed as bank resources.
Speaking about financial resources, it is also necessary to note that a normally functioning system of financial support for an organization is characterized by their constant circulation.
One of the elements of the organization management process is the analysis of the effective use of financial resources. Taking into account the constantly changing market conditions, external and internal environment, the organization’s management makes management decisions to reduce some assets and increase others. For example, in order to stay in the market, an organization can resort to a strategy of reducing production, and the funds received from this (disposal of fixed assets, sale of part of the buildings, reduction of personnel, etc.) can be used to purchase new, more productive production equipment and receive greater profits in the future.
The process of converting an organization's assets into cash is directly related to the concept of liquidity. Liquidity is the ease of implementation, sale, transformation of material or other assets into cash to cover current financial obligations.
The financial resources of an organization, on the one hand, are part of its capital, and on the other hand, they are included in the financial support system and are the basis for the existence of the entire enterprise. The formation of an effective financial support system for an organization implies a reasonable combination of all production factors aimed at maximizing profits. The financial well-being of the business entity as a whole, as well as its owners and employees, depends on how efficiently and expediently financial resources are transformed into fixed and working capital, as well as into means of stimulating personnel.
In fact, financial resources are the funds at the disposal of the organization. But you need to understand that money itself does not bring profit. They must be invested or used in speculative transactions. That is why the tangible and intangible embodiment of the financial resources of an enterprise are presented in the assets of its balance sheet (Form 1 of the financial statements).
Speaking about financial resources, it is also necessary to understand that the financial support system of an enterprise includes such mandatory elements as an assessment of the structure of financial resources and their effective redistribution taking into account the constantly changing market conditions.
1.2 Characteristics of internal and external sources of funds
The organization's financial resources are generated from certain sources. Thus, it is impossible to purchase production equipment, raw materials or materials without having the funds for this.
The sources of formation of the organization's financial resources are a set of sources to satisfy the need for capital for the coming period, ensuring the development of the organization. These sources are divided into internal (own) and external (borrowed and attracted) (see Fig. 1.2).
Sources of formation of financial resources
Own funds
Involved funds
authorized capital
Extra capital
bank loans
borrowed funds from other organizations
Borrowed funds
Retained earnings
financing from the budget on a repayable basis
financing from extra-budgetary funds on a repayable basis
Figure 1.2 – Composition of sources for the formation of financial resources
Own funds include:
1) authorized capital;
2) additional capital;
3) retained earnings.
First of all, the organization focuses on the use of internal (own) sources of financing.
Formation authorized capital, its effective use and management is one of the main and most important tasks of the financial service of the organization. Authorized capital is the main source of the organization's own funds. The amount of the authorized capital of a joint-stock company reflects the amount of shares issued by it, and state and municipal enterprise- the amount of authorized capital. The authorized capital is changed by the organization, as a rule, based on the results of its work for the year after amendments were made to the constituent documents.
You can increase (decrease) the authorized capital by issuing additional shares (or withdrawing a certain number of them from circulation), as well as by increasing (decreasing) the par value of old shares.
Additional capital includes:
1) results of revaluation of fixed assets;
2) share premium of the joint-stock company;
3) monetary and material assets received free of charge for production purposes;
4) budget allocations to finance capital investments;
5) funds to replenish working capital.
Retained profit is profit received in a certain period and not directed during its distribution for consumption by owners and staff. This part of the profit is intended for capitalization, that is, for reinvestment in production. In terms of its economic content, it is one of the forms of reserve of the organization’s own financial resources, ensuring its production development in the coming period.
To cover the need for fixed and working capital, in some cases it becomes necessary for an organization to attract borrowed capital. Such a need may arise for reasons beyond the organization's control. They may be the optionality of partners, emergency circumstances, reconstruction and technical re-equipment of production, lack of sufficient start-up capital, seasonality in production, procurement, processing, supply and sales of products and other reasons.
Thus, borrowed capital, borrowed financial resources are funds and other property raised to finance the development of an organization on a repayable basis. The main types of borrowed capital are: bank loan, financial leasing, commodity (commercial) loan, bond issue and others.
Borrowed capital is divided into:
1) short-term.
2) long-term.
Borrowed capital for a period of up to one year is classified as short-term, and borrowed capital for more than a year is classified as long-term. The question of how to finance certain assets of an organization - through short-term or long-term capital - must be discussed in each specific case. The efficiency of investing borrowed capital is determined by the degree of return on fixed or working capital.
The process of reproduction prompts the constant search for new sources of financial resources for the organization. Reproduction has two forms:
1) simple reproduction, when the cost of compensating for the depreciation of fixed assets corresponds to the amount of accrued depreciation;
2) expanded reproduction, when the cost of compensating for the depreciation of fixed assets exceeds the amount of accrued depreciation.
In modern conditions, situations arise when depreciation charges are sufficient for the expanded reproduction of fixed assets. This is most characteristically manifested when the structure of fixed assets contains a certain proportion of computer and organizational equipment. This is due to the constant reduction in prices for this equipment by several times and the simultaneous increase in its productivity.
Capital expenditures for the reproduction of fixed assets are long-term in nature and are carried out in the form of long-term investments (capital investments) for new construction, for the expansion and reconstruction of production, for technical re-equipment and for supporting the capacities of existing organizations.
Sources of the organization's own funds to finance the reproduction of fixed assets include:
Depreciation deductions;
Depreciation of intangible assets;
Profit remaining at the disposal of the organization;
Budgetary earmarks;
Funds from the issue of shares.
The Chart of Accounts does not provide for the creation of a special depreciation fund. Depreciation funds are the first source of the enterprise's own funds; they are received as part of sales proceeds to the enterprise's current account, and all expenses for various areas of capital investments are paid directly from the current account.
Through the mechanism of accelerated depreciation, organizations have the opportunity to regulate the amount and timing of financing the reproduction of funds from this source. The actual amounts of depreciation charges, entering the organization's current account along with the proceeds from sales, are included in its working capital and begin to move independently, without connection with the depreciable property. They can remain free, be used for capital investments or invested in other types of working capital. However, the fact that in the circulation of an organization’s funds the sources of funds practically do not differ does not mean that the nature of the formation of these funds does not affect the speed and efficiency of their use.
The sufficiency of sources of funds for the reproduction of fixed capital (as well as working capital) is crucial for the financial condition of the enterprise. Therefore, this controlled parameter of financial condition is always in the field of view of management.
The second source of an organization's own funds to finance the reproduction of fixed assets is depreciation on intangible assets. Intangible assets come to the organization through the following channels:
When purchased for a fee;
As a contribution to the authorized capital;
Free upon receipt.
The characteristic features of intangible assets are:
Lack of material structure;
Ability to make a profit;
Uncertainty regarding the amount of profit generated.
Depreciation on intangible assets is accrued at rates determined by the organization itself. The basis for calculating the standards is the initial cost and the planned period of use of intangible assets.
The actual amount of depreciation is transferred to the organization's current account along with the proceeds from the sale of products (works, services) and is in circulation.
The third source of the organization's own funds for financing the reproduction of fixed assets is the profit remaining at its disposal (net profit). Organizations independently determine the directions for using net profit in their financial plans.
The fourth source of an organization's own funds to finance the reproduction of fixed assets is budgetary targeted allocations. If an organization fulfills a targeted state order, which is provided for in the state development budget, then the latter allocates targeted funding to the enterprise.
External sources of financing the reproduction of fixed assets include:
Bank loans;
Borrowed funds (bonded loans) from other organizations;
Funding from the budget on a repayable basis;
Financing from extra-budgetary funds on a repayable basis.
Bank loans are provided to an organization on the basis of a loan agreement, the loan is provided on the terms of payment, urgency, repayment against collateral: guarantees, real estate pledge, pledge of other assets of the organization.
Many organizations, regardless of their form of ownership, are created with very limited capital. This practically does not allow them to fully carry out statutory activities at their own expense and leads to their involvement in the turnover of significant credit resources.
Not only large investment projects are credited, but also costs for current activities: reconstruction, expansion, reorganization of production facilities, purchase of leased property by the team and other events.
The source of financing for the reproduction of fixed assets is also borrowed funds from other organizations, which are provided to the organization on a reimbursable or gratuitous basis with strategic interest. Loans to organizations can also be provided by individual investors ( individuals).
Other sources of financing the reproduction of fixed assets are budgetary allocations on a repayable basis from federal and local budgets, as well as from industry and intersectoral trust funds.
The issue of choosing sources of financing for capital investments must be decided taking into account many factors:
1) the cost of attracted capital;
2) the efficiency of its return;
3) the ratio of equity and borrowed capital, which determines the financial condition of the organization;
4) degree of risk various sources financing;
5) economic interests of investors and lenders.
Market conditions are constantly changing, so the organization's needs for working capital are not stable.
The structure of sources of working capital also covers own and borrowed ones. As a rule, the organization's minimum need for working capital is covered from its own sources, namely, retained earnings, authorized capital, reserve capital, accumulation fund and targeted financing. However, due to a number of objective reasons (inflation, growth in production volumes, delays in paying customer bills, etc.), the organization has temporary additional needs for working capital, as well as for fixed assets. In these cases, financial support for economic activity is accompanied by the attraction of borrowed sources: bank and commercial loans, loans, investment tax credit, investment contributions from employees of the organization, bond issues.
Thus, any organization has the opportunity to generate financial resources from both internal and external sources. Of course, it is more expedient for the organization itself to use internal sources and not depend on anyone, but the modern highly competitive market forces business entities to constantly improve the production process, which requires a constant injection of financial resources with limited own sources. There is only one way out - attracting them from outside in the form of short-term and long-term bank loans, temporary use of funds intended for settlements with creditors, including the budget, and the like.
But at the same time, the organization’s management must control the relationship between internal and external sources of financial resources. Excessive use of external sources indicates the complete financial dependence of the organization on outsiders, and the predominance of its own indicates an ineffective financial policy and the lack of investment projects, which in the future may lead to obsolescence of production technology and a drop in demand for the manufactured product.
1.3 The role of financial resources in ensuring the reproduction process of the enterprise
An indispensable condition for the existence and development of society at a specifically identified historical stage is, as is known, to ensure the continuity of the process of production of material goods and the system of corresponding production relations between people as socio-economic forms of its actual implementation. The constant repetition of the production process on a constant (quantitatively and qualitatively) or changing scale is defined by economic science as a reproduction process. In the economic literature, two types of reproduction are distinguished: simple and expanded.
According to established scientific opinion, simple reproduction is characterized by the fact that the size of the produced product, as well as its quality, remain unchanged in each subsequent cycle. Accordingly, the factors of production do not undergo changes. The entire surplus product, if produced, is used by the producers themselves for personal consumption.
With expanded reproduction, the size of the produced product in each subsequent cycle increases, which is achieved, among other things, by improving the quality of the product. The factors of production do not remain unchanged. In order for reproduction to occur on an expanded scale, additional or better resources are needed at the beginning of each next cycle (year). The source of expansion or qualitative improvement of factors of production is the surplus product. Consequently, with expanded reproduction, it can no longer go entirely to satisfying personal needs.
The material and technical basis of the production process at any enterprise is the main production assets. In a market economy, the initial formation of fixed assets, their functioning and expanded reproduction are carried out with the direct participation of financial resources, with the help of which funds for special purposes are formed and used, mediating the acquisition, operation and restoration of means of labor.
The initial formation of fixed assets at newly created enterprises occurs at the expense of fixed assets that are part of the authorized capital. Fixed assets are funds invested in fixed assets for production and non-production purposes. At the time of acquisition of fixed assets and their acceptance on the balance sheet of the enterprise, the value of fixed assets quantitatively coincides with the value of fixed assets. Subsequently, as fixed assets participate in the production process, their value bifurcates: one part, equal to wear and tear, is transferred to finished products, the other expresses the residual value of existing fixed assets.
The worn-out part of the value of fixed assets transferred to finished products, as the latter is sold, is gradually accumulated in cash in a special depreciation fund. This fund is formed through annual depreciation charges and is used for simple and partially expanded reproduction of fixed assets. The direction of depreciation for the expanded reproduction of fixed assets is determined by the specifics of its accrual and expenditure: it is accrued throughout the entire standard service life of fixed assets, and the need for its expenditure occurs only after their actual disposal. Therefore, until the replacement of retired fixed assets, accrued depreciation is temporarily free and can be used as an additional source of expanded reproduction. In addition, the use of depreciation for expanded reproduction is facilitated by scientific and technological progress, as a result of which some types of fixed assets can become cheaper, and more advanced and more productive machines and equipment are introduced.
The amount of the depreciation fund is calculated annually by multiplying the book value of fixed assets by the depreciation rate. Economically sound depreciation rates are of great importance. They make it possible, on the one hand, to ensure full reimbursement of the cost of decommissioned fixed assets, and on the other hand, to establish the true cost of production, an integral element of which is depreciation charges. From the point of view of commercial calculation, it is equally bad to underestimate depreciation rates (because it can lead to a lack of financial resources necessary for the simple reproduction of fixed assets) and their unreasonable overestimation, causing an artificial increase in the price of products and a decrease in production profitability. Depreciation rates are periodically revised as the service life of fixed assets changes, the process of transferring their value to the manufactured product accelerates under the influence of scientific and technological progress and other factors. Fixed assets are also periodically revalued; its goal is to bring the book value of fixed assets into line with current prices and reproduction conditions.
However, it should be noted that expanded reproduction cannot be ensured only through depreciation charges, since they are intended mainly for simple reproduction. Therefore, to a large extent, capital investments are provided from national income, and primarily the enterprise’s own financial resources are reinvested in capital expenses; Equity and share capital mobilized in the financial market are also sent here, credit resources are attracted, and in special cases specifically stipulated in government decisions - budgetary allocations and funds from extra-budgetary funds.
In the composition of the enterprise's own financial resources used for capital investments, profit occupies an important place. Recently, there has been a tendency to increase the absolute size and share of profit in the sources of financing capital investments. There is an opinion that this trend needs to be developed, since its progressiveness lies in the fact that the sources of reproduction of fixed assets are directly linked to the results of production activities. As a result, the material interest of enterprises in achieving better production results increases, since the timeliness and completeness of the formation of financial sources of capital costs depends on them.
Along with profit, funds mobilized in production itself are also used to finance capital investments (profits and savings on construction and installation work carried out in an economic way, mobilization of internal resources, etc.), income from the sale of disposed property, and funds from social development funds.
The allocation of budget funds for capital expenditures ensures the implementation of a unified technical policy and creates financial prerequisites for regulating the structure of social reproduction and the development of priority sectors of the economy. With the transition to market economic principles, the procedure for providing budget funds for capital investments is gradually changing. Previously, budget funds were allocated in the form of direct non-repayable appropriations; now they can be obtained through targeted subsidies (investment allocations), subventions and investment tax credits.
The objective prerequisites for the targeted use of finance in the reproduction process of an organization lie in the main functions of finance - distribution, reproduction, stimulation and control.
The distribution function is implemented within the framework of the distribution of financial resources in the process of circulation of funds directly at enterprises. The entire circulation of enterprise resources is associated with the formation and distribution of funds of financial resources. This function allows you to generate financial resources and funds for special purposes that meet the development needs of the enterprise as a whole and its individual structural divisions.
The reproduction function is implemented through regulation of the reproduction process in the form of targeted management of funds of financial resources and the creation of a financial and economic environment in which it is possible for subjects to achieve designated business interests. This function is a necessary prerequisite for the effective organization of cash flow management, the possibility of successfully using bank loans, accounts payable, loans and other sources of financial resources.
The stimulating function of finance is of great importance for the development of the production of goods and services and the growth of profitability of enterprises. Implementation of this function through the system established by the organization for enterprises to cover production costs and distribution of profits, through the tax system, an effective system for organizing financial relationships between market entities, as well as through budget financing of the most promising, priority sectors of the economy.
The control function of finance is an important factor in economic development and serves as a necessary prerequisite for increasing the efficiency of organizations and accelerating the turnover of their financial resources. By controlling the movement of financial flows, it is possible to exercise real control over the condition, dynamics and efficiency of use of the enterprise’s property.
So, the financial resources of an organization can be considered as part of its capital and as a system of its financial support. The formation of an effective financial support system for an organization implies a reasonable combination of all production factors aimed at maximizing profits. The financial well-being of the business entity as a whole, as well as its owners and employees, depends on how efficiently and expediently financial resources are transformed into fixed and working capital, as well as into means of stimulating personnel.
The organization's financial resources are generated from certain sources. The sources of formation of the organization's financial resources are a set of sources to satisfy the need for capital for the coming period, ensuring the development of the organization. These sources are divided into own (internal) and borrowed (external).
We can say that finance plays an important role in the reproduction process. Financial resources are intended, first of all, to ensure the production process. Their use can be in the form of advances and investments in production activities. The role of financial resources can be seen most clearly through their functions: distribution, reproduction, stimulation and control.
2 ANALYSIS OF FORMATION AND USE
FINANCIAL RESOURCES ON THE EXAMPLE OF METUR LLC
2.1 Composition and structure of financial resources of Metur LLC
The enterprise under study has the organizational and legal form of “Limited Liability Company”. Full name of the enterprise: Limited Liability Company "Metur".
Metur LLC is one of the largest independent companies supplying rolled metal products to the markets of Russia and the CIS countries. The company is engaged in wholesale and retail trade in rolled metal, and is also developing a production line: processing metal and producing various profiles.
Branches and representative offices of the Company operate in almost all subjects of the federation, in 46 cities in Russia and abroad. Since 2001, the company has been a member of the Russian Union of Suppliers of Metal Products (RSPM) and, according to Forbes magazine, is one of the 200 largest companies in Russia.
The total number of employees of the Company is 2,380 people.
The company's share accounts for 5% of the metal consumption market in Russia. A total of 150,000 tons of metal products, more than 10,000 items and standard sizes, are constantly in the warehouses of the Metur company.
The company has 248,600 sq. m of warehouse space, of which 108,000 sq. m. - covered warehouse complexes; 136 industrial real estate objects; 40 land plots.
A significant part of warehouse and office premises is owned by the Company.
The Company's main suppliers are the largest metallurgical plants in Russia and the CIS countries, including: MMK, NLMK, NTMK, ZSMK, NSMMZ, Severstal, MECHEL, PNTZ, STZ, ChMZ, Mital Steel. Relative independence from suppliers allows the Company to optimize supply logistics and combine the delivery of orders to different regions into pools to minimize costs.
Financial resources are funds at the disposal of an organization. But you need to understand that money itself does not bring profit. They must be invested or used in speculative transactions. Therefore, when they talk about the financial resources of an organization, they mainly mean the process of attracting them. Attracted financial resources are immediately converted into other types of resources (fixed or working capital, labor, etc.), or directed to other needs of the organization, as a result of which the production process is activated in order to make a profit.
An analysis of the financial resources of Metur LLC is presented in Table 2.1.
Table 2.1 – Analysis of financial resources of Metur LLC for 2008 – 2009 thousand rubles.
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Financial resources |
Deviation |
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Non-current assets, including: |
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Fixed assets |
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Current assets, including: |
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Future expenses |
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Total reserves |
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Value added tax on purchased assets |
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Accounts receivable (payments for which are expected within 12 months after the reporting date) |
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Cash |
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TOTAL |
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As follows from the results of the analysis, the balance sheet decreases annually. In 2009, compared to 2008, the balance sheet currency decreased by 1.5%. The main reason is a decrease in the level of non-current assets, which occurred due to a decrease in the volume of unfinished construction and long-term financial investments.
As for current assets, there is also a decline in indicators for many positions. Thus, the level of funds invested in raw materials and materials has decreased, which is associated with the rationalization of production. As a consequence, there is a reduction in the level of value added tax on purchased assets. For other positions, there is an increase in indicators, but not significantly. The level of short-term accounts receivable has increased significantly.
In order to determine which financial resources predominate at the enterprise, consider their structure in the reporting year (see Table 2.2).
Table 2.2 – Structure of financial resources of Metur LLC in 2009,
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Financial resources |
For the beginning of the year |
At the end of the year |
Structure, % |
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For the beginning of the year |
At the end of the year |
Dynamics |
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Non-current assets, including: |
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Fixed assets |
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Construction in progress |
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Long-term financial investments |
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Deferred tax assets |
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Current assets, including: |
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raw materials, supplies and other similar assets |
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costs in work in progress |
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finished products and goods for resale |
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Future expenses |
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Value added tax on purchased assets |
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Accounts receivable (payments for which are expected within 12 months after the reporting date) |
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Cash |
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TOTAL |
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As can be seen in Table 2.2, the main share of financial resources falls on current assets, and this share increased by 2.59% in 2009. As for non-current assets, their share in the total structure of financial resources decreased accordingly in 2009 by 2.59%.
The changes that occurred in the structure of financial resources in 2009 were due to higher growth rates (compared to other financial resources) of short-term accounts receivable, inventories of finished goods and goods for resale, deferred income and cash.
It cannot be said unequivocally that the changes that have occurred in the structure of financial resources play a positive role for the organization under study. Thus, the growth of the money supply has a beneficial effect on the solvency of the organization. An increase in the level of inventories of finished products and goods for resale may indicate negative trends associated with the withdrawal of financial resources from circulation or the existence of a problem with the sale of products. An increase in short-term accounts receivable may indicate a lack of targeted work to pay off accounts receivable, or an increase in the number of new customers to whom products have been shipped.
Thus, the analysis of the composition and structure of financial resources of Metur LLC, presented in tables 2.1 and 2.2, cannot serve as a basis for specific conclusions, but only provides general information. Further in the work, a more detailed assessment of the effectiveness of the use of financial resources in the organization under study will be given.
2.2 Analysis of financial stability of Metur LLC
As part of the general analysis of the use of financial resources, it is advisable to conduct an analysis of financial stability. This type of analysis allows us to supplement and consider in more detail the results of the activities of Metur LLC.
Financial stability is a certain state of the company’s accounts, guaranteeing its constant solvency.
Knowledge of the limiting limits of changes in the sources of funds to cover capital investments in fixed assets or inventories makes it possible to generate such areas of business operations that lead to an improvement in the financial condition of the enterprise and an increase in its stability.
Table 2.4 – Determination of the level of financial stability of Metur LLC 2008 - 2009
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Index |
Sources of financing for inventories |
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Availability of own working capital |
SOS = SK - VOA = p.490 – p. 190 |
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Availability of own and long-term borrowed working capital |
SDI = SOS + DKZ (p.510) |
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The total value of sources of reserve formation |
OIZ = SDI + KKZ (p.610) |
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9 Surplus (+) or deficiency (-) of own working capital |
ΔSOS = SOS - W |
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10 Excess (+) or deficiency (-) of own and long-term borrowed working capital |
ΔSDI = SDI - W |
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11 Excess (+) or deficiency (-) of the total amount of sources of reserve formation (own, long-term and short-term borrowed sources) |
ΔOIZ = OIZ - Z |
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Type of financial stability |
Unstable F state |
Absolute FU |
So, Metur LLC has absolute financial stability in 2009 compared to 2008.
It should be noted that absolute stability is rare in practice. Compliance with it indicates the possibility of immediate repayment of obligations, but the occurrence of obligations is associated with the need to use funds, and not with their availability in the organization’s accounts. Therefore, absolute sustainability is an extreme type of financial sustainability.
Normal stability guarantees optimal solvency when the timing of receipts and the size of cash, financial investments and expected urgent receipts approximately correspond to the maturity dates and sizes of urgent obligations.
An unstable financial condition is associated with a violation of current solvency, in which it is possible to restore balance in the event of replenishing sources of own funds, increasing own working capital, or selling part of the assets to pay off debts.
A financial crisis occurs when the current assets of an enterprise are not enough to cover its accounts payable and overdue obligations. In such a situation, the company is on the verge of bankruptcy. To restore the financial mechanism, it is necessary to search for opportunities and take organizational measures to ensure increased business activity and profitability of the enterprise, etc. This requires optimization of the structure of liabilities, a reasonable reduction in inventories and costs that are not used in circulation or are not used effectively.
To more fully assess the financial stability of the enterprise, we will calculate the corresponding ratios and track their dynamics for 2008 – 2009:
1) Financial independence ratio:
2) Financial stress ratio:
K fnapr = ZK/VB ((p.590 + p.690)/p.700);
No more than 0.5 excess of the upper limit indicates a greater dependence of the enterprise on external sources.
3) Self-financing ratio:
K sf = SK/ZK (p.490/(p.590 + p.690))
A value above 1.0 indicates the possibility of equity covering borrowed funds
4) Debt ratio:
K z = ZK/SK ((p.590 + p.690)/p.490)
5) Maneuverability coefficient:
K m = SOS/SC ((p.490-p.190)/p.490)
High values of the agility coefficient positively characterize the financial condition. In the absence of strictly established restrictions on this coefficient, it is sometimes recommended to use its value of 0.5 as optimal.
The calculation results are presented in Table 2.5.
Table 2.5 – Analysis of the dynamics of financial stability coefficients of Metur LLC in 2008 – 2009.
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Coefficient name |
Period (year) |
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Independence coefficient F |
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Tension factor F |
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Self-financing ratio |
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Debt ratio |
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Maneuverability coefficient |
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Thus, an analysis of the dynamics of the financial stability coefficients of Metur LLC also indicates the financial stability of the enterprise. But it should be noted that the organization under study has a certain dependence on external sources of financial resources, as evidenced by the high level of debt ratio.
We can conclude that in 2008 the company experienced a financial crisis, which led to losses. The financial stability of the enterprise was under threat, but the measures taken to optimize the use of financial resources made it possible to stabilize the situation, but nevertheless, the organization still depends on external sources for the formation of financial resources.
A high level of the ratio of supply of reserves with its own sources of funds indicates the presence of hidden reserves. It turns out that the enterprise is dependent on external sources for the formation of financial resources, but at the same time, it has enough of its own funds to provide its activities with reserves (in 2009, the level of the independence coefficient was approximately 2 times higher than the norm). The question arises: where do funds received from external sources go? If you look closely at the asset structure of the enterprise's balance sheet (see Table 2.2). The level of accounts receivable (payments for which are expected within 12 months after the reporting date) at the end of 2009 occupied 57% of the total structure of the balance sheet asset and amounted to 471,047 thousand rubles, which is comparable to the value of sources of raised funds (470,291 thousand rubles).
Thus, a large share of the enterprise’s assets has been withdrawn from circulation, which is typical for many modern organizations. The lack of proper control over the repayment of accounts receivable is the main reason for its high level. The structure of accounts receivable requires a more thorough analysis, which will make it possible to identify hidden reserves for improving the financial condition of the organization, or more precisely, for ensuring its financial independence from external sources of funds.
One of the most important criteria for assessing the financial position of an enterprise is its solvency. To assess solvency, we will divide the assets and liabilities of the enterprise into 4 groups depending on the degree of liquidity of the assets and the urgency of paying for the liabilities and compare them (see Appendix A).
A favorable balance sheet structure presupposes approximate equality of assets of groups 1-4 with the liabilities of these groups, but quickly realizable assets should exceed the most urgent liabilities. Average realizable assets can be formed at the expense of the authorized capital, but if necessary, long-term loans can be attracted.
In our case A1
Thus, the balance sheet structure of Metur LLC can be called satisfactory. The main source of funds in the enterprise are the liabilities of group P1 (the most urgent obligations are accounts payable, debt to participants for the payment of income and other short-term obligations), which makes the enterprise financially dependent. Creditors can demand repayment of the debt at any time, but this should not lead to financial collapse, since the company has a fairly high level of group A2 assets (quickly realizable assets - short-term receivables and other current assets minus the debt of participants for contributions to the authorized capital) , and it will be able to pay off creditors through the sale of assets of this group (submission of claims to debtors).
For a more in-depth analysis of the solvency of the enterprise, we will calculate liquidity ratios for each analyzed year and consider them in dynamics.
To calculate the coefficients we use the following formulas.
Absolute liquidity ratio:
The current liquidity ratio characterizes the company's ability to pay off short-term obligations using its cash, short-term financial investments and funds in settlements with debtors. The minimum value of the indicator is from 0.8 to 1. Its rational value is 1.0 and above. If the indicator is less than one, then this indicates the tense financial condition of the enterprise, the lack of sufficient liquid funds for timely settlements with creditors. The enterprise's lack of its own working capital and especially liquid funds leads to so-called non-payments, which have a detrimental effect on the development of the country's economy.
Total liquidity ratio:
The coverage ratio shows what part of all liabilities (short-term and long-term) can be repaid by mobilizing all working capital (section 2 of the balance sheet assets). The minimum acceptable value of this coefficient must be greater than one. Optimal - 2.0.
The calculation results and their analysis are presented in Table 2.7.
Table 2.7 – Analysis of liquidity ratios of Metur LLC for 2008-2009
So, the company has a very low level of absolute liquidity ratio. In 2009, the absolute liquidity ratio exceeded the 2008 level by 4.9%, but in quantitative terms this is not a significant change. In 2008, there was a strong drop in the level of the absolute liquidity ratio. Thus, the enterprise is not able to repay all or part of the short-term debt using cash and short-term financial investments (the most liquid assets). In principle, this is a typical situation for the modern Russian economy.
The level of the current liquidity ratio in 2008 and 2009 was within the normal range. In 2009, it exceeded the norm by 0.3 units. There is no clearly expressed tendency to change it. The company is able to pay off short-term obligations using its own cash, short-term financial investments and funds in settlements with debtors.
The level of the total liquidity ratio is normal. There is also no clearly expressed tendency to change it. The company is able to pay off short-term and long-term obligations using working capital, while the company still has financial resources at its disposal.
Thus, we can conclude about the solvency of Metur LLC. The fact that the absolute liquidity ratio is below the acceptable level should not be a cause for concern. It is also not advisable to accumulate money in short-term financial investments, since this work must be done purposefully, otherwise the investment may bring losses. The current account should accumulate as much money as is necessary for the next settlements. The enterprise's cash desk must contain funds for the urgent needs of the enterprise.
2.3 Efficiency of formation and use of financial resources in the organization
One of the most important characteristics of the financial condition of an enterprise and the effectiveness of managing its financial resources is the stability of activities in the light of a long-term perspective. It is related to the structure of the enterprise’s balance sheet, the degree of its dependence on creditors and investors. But the degree of dependence on creditors is assessed not only by the ratio of own and borrowed sources of financial resources. This is a more multifaceted concept, including the assessment of equity capital, the composition of current and non-current assets, and the presence or absence of losses, etc.
The value of the maximum limits for changing the sources of funds to cover capital investments in fixed assets or inventories allows you to generate such flows of business transactions that lead to an improvement in the financial condition of the enterprise.
The main indicators characterizing the efficiency of use of financial resources include the following:
Turnover ratio, which is calculated as the ratio of revenue from product sales to the average value of working capital for the period;
Load factor, which is calculated as the ratio of the average value of the cost of working capital for the period to revenue from product sales;
The duration of one turnover in days, which is calculated as the ratio of the product of the average value of the value of working capital for the period by the number of days in the period to revenue from sales of products;
The average duration of payment of receivables in days, which is calculated as the ratio of the average amount of receivables to the average daily sales revenue.
Also, the efficiency of using financial resources is characterized by profitability indicators. Profitability shows the profit received from each ruble of funds invested in an enterprise or other financial transactions. Key profitability indicators:
Return on property, calculated as the ratio of net profit to the average value of assets for the period;
Return on equity, calculated as the ratio of net profit to the average equity capital for the period.
Let us assess the effectiveness of the formation and use of financial resources of Metur LLC.
Data characterizing the efficiency of use of financial resources are presented in Table 2.8.
Table 2.8 – Indicators of the efficiency of use of financial resources of Metur LLC
The turnover ratio reflects how many times during the period the capital invested in the current assets of the enterprise is turned over. This coefficient is for 2008-2009. increased by 0.98. This increase indicates a decrease in the efficiency of using current assets, so management efforts in any case should be aimed at accelerating turnover. The load factor, accordingly, has the opposite trend.
In 2009, the duration of one revolution was 148 days. Consequently, there is an increase in the efficiency of the enterprise in 2009 compared to the previous year.
The average receivables payment duration in days reflects the speed with which customers pay their bills. In 2009, this figure was 4.29, which is 1.59 higher than in 2008. This indicates that the enterprise is not very effective in collecting money from debtors.
The profitability of property throughout the analyzed period had low indicators, and in 2008 it had a negative value, because the enterprise this year operated at a loss. That is, if in 2007 the MP had a profit of 100 rubles, then in 2008 there was a loss of 110 rubles. per one ruble invested in the organization’s property. In 2009, this figure increased.
Return on equity in 2008, due to the negative values of net profit, has a negative profitability. In 2009, the company had a profit of 60 rubles. per one ruble of equity capital.
The management of Metur LLC urgently needs to take measures to increase profitability indicators, otherwise they may decline.
So, Metur LLC worked most effectively in 2009, and in 2008 the indicators were too low. Consequently, in the last year the company used financial resources rationally and more economically.
Summarizing the study of the peculiarities of the formation and use of financial resources of Metur LLC, the following conclusions can be drawn.
Metur LLC is one of the largest enterprises in the industry in terms of its size. Moreover, the enterprise annually increases its production assets, which indicates the presence of a strategic perspective for this enterprise.
Financial and economic activity in 2008 is characterized by a negative result. The loss amounted to 69 million 336 thousand rubles. The main reason is the excess of the cost of sales of goods over revenue. But nevertheless, we can conclude that the enterprise is currently profitable. In 2009, a positive financial result was obtained. Profit from ordinary activities amounted to 182,839.1 thousand rubles and 106,535.4 thousand rubles, respectively, which is much higher than the amount of losses incurred in 2008.
The main share of financial resources falls on current assets. The level of the company's balance sheet is declining annually, but this is not a cause for alarm. The company adopted a reduction policy in 2008, since that year the company began to incur large losses. This measure made it possible to rationally redistribute financial resources and already in 2009 the financial result was positive.
The company as a whole is solvent. The analysis of the financial condition of Metur LLC indicates the solvency of the enterprise, the normal level of its financial stability, as well as the presence of hidden internal reserves for the development of the enterprise, which can be obtained through the rational use of financial resources.
3 MAIN DIRECTIONS FOR IMPROVING THE FORMATION OF FINANCIAL RESOURCES
3.1 Increasing the efficiency of using the enterprise’s financial resources
The successful operation of an enterprise is not possible without sound management of financial resources. It is not difficult to formulate goals, the achievement of which requires rational management of financial resources:
Survival of the company in a competitive environment;
Avoiding bankruptcy and major financial failures;
Leadership in the fight against competitors;
Maximizing the market value of the company;
Acceptable growth rates of the company’s economic potential;
Increase in production and sales volumes;
Profit maximization;
Minimizing costs;
Ensuring profitable activities, etc.
The priority of a particular goal can be chosen by an enterprise depending on the industry, position in a given market segment and much more, but successful progress towards the chosen goal largely depends on the perfection of management of the enterprise’s financial resources.
To systematically identify and summarize all types of losses at each enterprise, it is advisable to maintain a special register of losses, classifying them into certain groups:
From marriage;
Reduced product quality;
Unclaimed products;
Loss of profitable customers, profitable markets;
Incomplete use of the enterprise's production capacity;
Downtime of labor, means of labor, objects of labor and monetary resources;
Overexpenditure of resources per unit of production compared to established standards;
Damage and shortages of materials and shortages of materials and finished products;
Write-off of unclaimed receivables;
Overdue receivables;
Attracting unprofitable sources of financing;
Natural disasters;
For industries that did not produce products, etc.
Analysis of the dynamics of these losses and the development of measures to eliminate them will significantly improve the financial condition of the business entity.
The efficiency of using financial resources is characterized by asset turnover and profitability indicators. Consequently, management efficiency can be improved by reducing turnaround times and increasing profitability by reducing costs and increasing revenue.
Accelerating the turnover of working capital does not require capital expenditures and leads to an increase in production volumes and sales of products. However, inflation quickly depreciates working capital; enterprises use an increasing portion of them to purchase raw materials and fuel and energy resources; non-payments from buyers divert a significant portion of funds from turnover.
One of the ways to save working capital for Metur LLC, and therefore increase its turnover, is to improve inventory management. Since the enterprise invests in the formation of inventories, storage costs are associated not only with warehouse costs, but also with the risk of damage and obsolescence of goods, as well as with the time cost of capital, i.e. with the rate of return that could be obtained from other investment opportunities with an equivalent degree of risk.
The economic, organizational and production results from storing a certain type of current assets in one volume or another are specific to this type of asset. A large inventory of finished goods (related to expected sales volume) reduces the possibility of product shortages when unexpectedly high demand occurs. Similarly, a sufficiently large stock of raw materials and materials saves the enterprise in the event of an unexpected shortage of appropriate stocks from stopping the production process or purchasing more expensive substitute materials. A large number of orders for the purchase of raw materials and supplies, although it leads to the formation of large inventories, nevertheless makes sense if the company can get price reductions from suppliers. For the same reasons, the company prefers to have a sufficient supply of finished products, which allows it to manage production more economically. As a result of this, the company itself, as a rule, provides a discount to its customers.
Increasing working capital turnover comes down to identifying the results and costs associated with storing inventories and establishing a reasonable balance between inventories and costs. To speed up the turnover of working capital at an enterprise, it is advisable to:
Planning the purchase of necessary materials;
Introduction of rigid production systems;
Use of modern warehouses;
Improving demand forecasting;
Fast delivery of raw materials and materials.
The second way to reduce working capital costs for Metur LLC is to better use cash. From the perspective of investment theory, cash represents one of the special cases of investing in inventory. Therefore, general requirements apply to them. First, you need a basic reserve of cash to carry out current calculations. Secondly, certain funds are needed to cover unforeseen expenses. Thirdly, it is advisable to have a certain amount of free cash to ensure possible or projected expansion of activities.
Another important tool for increasing the efficiency of using financial resources is the management of the enterprise's fixed production assets and intangible assets. The main issue in their management is the choice of depreciation method.
In a market economy, an enterprise independently determines rational options for all components of production and economic activity based on the balance of interests of producers and consumers of manufactured products. In this case, the economic assessment of the effectiveness of the action option is the profit of the enterprise remaining at its disposal. Therefore, the main task in market conditions is to increase the efficiency of the enterprise by optimizing the use of its resources, including financial ones, and building a promising production program.
The key issue when optimizing the activities of an enterprise is the construction of its production program, taking into account the most rational use of the enterprise's resources. To determine the volume of profit from the implementation of production program options, it is necessary to have data on the selling price of products and the cost of their manufacture, as well as data on the volume of output for each type of product.
The profit distribution mechanism at the enterprise should be structured in such a way as to facilitate the creation of conditions for the most rational use of funds for the development of the enterprise, taking into account the indicators of the levels of capital and energy levels, working capital turnover, labor productivity, etc.
Efficient use of profits is possible only if the actions of the system of economic levers are coordinated. At the same time, product sales are of paramount importance. Firstly, because in the process of selling goods on the market, reimbursement of spent means of production occurs. Secondly, product sales is the moment when the manufactured product receives recognition in the market. Since profit reflects the results of all types of activity of the enterprise: production, non-production, financial, this means that all aspects of the enterprise’s activity are reflected in the amount of profit. Thus, an increase in labor productivity means a reduction in labor costs per unit of output; accordingly, under normal operating conditions, labor costs per unit of output should be relatively reduced. Improving the use of fixed production assets means that the costs of their maintenance and operation are relatively reduced, and depreciation charges in the cost of individual products are reduced. This, as well as saving material costs, increases profits and the efficiency of its use.
The management of the enterprise should also improve its competence in the field of financial resource management, because a manager who understands the tasks and functions of the company’s modern financial service would be able to quickly make optimal decisions on these issues.
Develop a payment calendar. Monitor the status of settlements with buyers and customers.
Improving the use of working capital with the development of entrepreneurship is becoming increasingly important, since the material and monetary resources released in this case are an additional internal source of further investment, that is, it becomes possible to direct them to the development of entrepreneurial activity and do without attracting additional financial resources. The development of a payment calendar and timely control of accounts receivable would allow Metur LLC to reduce its financial dependence and increase financial stability.
Introduce into practice on an ongoing basis an economic analysis of an enterprise’s activities. Create an information and analytical base. Based on the existing information and analytical base of the enterprise, it is necessary to create a report that would show the efficiency of using the enterprise's resources as of a certain date, calculated on the basis of economic and financial indicators. Review and analyze it periodically to make tactical and strategic decisions.
As additional measures aimed at increasing the level of financial condition of the enterprise, it is possible to propose the transfer of part of irrationally used assets into long-term financial investments. This will allow you to receive additional profit from the use of your own funds and save financial resources in case market conditions change and the need for additional investments arises.
As an experiment, we can propose the creation of a joint venture on the basis of Metur LLC, involving technology and labor from the PRC. The products of this enterprise will have a low cost and therefore be highly competitive.
As studies have shown, the enterprise has its own hidden investment reserves, which can be obtained through rational redistribution of financial resources.
Offered:
a) make calculations of the real needs for reserves and begin the process of releasing financial resources unnecessarily invested in them;
b) intensify work with debtors to return debts for shipped products;
c) allocate the released financial resources to purchase securities.
It is necessary to intensify efforts to repay the debt for work performed but not paid for, which as of December 31, 2009 amounted to 471,047 thousand rubles. This is a very high level of short-term receivables. It is believed that accounts receivable from buyers and customers should approximately correspond to accounts payable to suppliers and contractors, which as of December 31, 2009 amounted to 98,561 thousand rubles. Consequently, the level of accounts receivable must be reduced to 100,000 thousand rubles by presenting demands for its return.
Thus, the success of financial resource management directly depends on the capital structure of the enterprise. Capital structure can help or hinder a company's efforts to increase its assets. It also has a direct impact on profit margins because the fixed interest components of profits paid on debt obligations are independent of the company's projected level of activity.
As studies have shown, Metur LLC has hidden investment potential. This is evidenced by the financial stability coefficients calculated in Table 2.9. Consequently, the company has the opportunity to expand its production base, both at its own expense and through long-term loans. But it is necessary to understand that there is one main and intractable problem - the problem of repaying short-term receivables. This is evidenced by its high level. Therefore, we can conclude that the financial stability of the enterprise is due to the low investment and business activity of the enterprise, which leads to the ineffective accumulation of financial resources. On the one hand, the enterprise maintains a high level of financial stability, and on the other, more than half of the financial resources have been withdrawn from the enterprise’s circulation. That is why, as the main way to improve the level of financial condition of an enterprise, it is necessary to propose an increase in the investment and business activity of the enterprise, as well as to intensify work on the return of receivables.
CONCLUSION
In accordance with the stated goal and objectives of the course research, the analysis of the theoretical and methodological foundations and applied aspects of considering the theory of the formation and use of financial resources of business entities allowed us to draw a number of the following conclusions.
The viability of an organization, the success of its functioning and the stability of development are largely determined by the quality of management of one of its most important functional subsystems - the financial support system.
Speaking about financial resources, it is necessary to understand that they are the sources of any production.
The organization's financial resources are divided into its own and borrowed. Own financial resources and equivalent funds include: profit, depreciation, stable liabilities, equity capital, targeted income, shares and other contributions of members of the workforce, and others. Borrowed funds include: attracted additional share capital, bank loans and credits, and provided gratuitous assistance.
Finance plays an important role in the reproduction process. Financial resources are intended, first of all, to ensure the production process. Their use can be in the form of advances and investments in production activities. The role of financial resources can be seen most clearly through their functions: distribution, reproduction, stimulation and control.
IN course work The features of the formation and use of financial resources were studied using the example of the limited liability company "Metur", which supplies rolled metal products to the markets of Russia and the CIS countries. The company is engaged in wholesale and retail trade in rolled metal, and is also developing a production line: processing metal and producing various profiles.
An analysis of the organization's financial stability showed that it has an absolute level. Absolute stability guarantees optimal solvency when the timing of receipts and the size of cash, financial investments and expected urgent receipts correspond to the maturity dates and sizes of urgent obligations. But nevertheless, the organization under study has a certain dependence on external sources of financial resources.
As a negative point, it should be noted the growth of the organization’s obligations that are not repaid on time. This includes debt to the organization’s personnel, debt to taxes and fees, debt to state extra-budgetary funds.
The main share of financial resources falls on current assets. The level of the company's balance sheet is declining annually, but this is not a cause for alarm. The company may have adopted a reduction policy in 2008. This measure made it possible to rationally redistribute financial resources and already in 2009 the financial result was positive.
It was also established that most of the company’s assets were withdrawn from circulation. This is due to the lack of control over the repayment of short-term receivables. This situation is present in many enterprises of modern Russia and it is associated exclusively with the human factor, when part of the assets is transferred to subsidiaries and used to make a profit.
The organization under study is dependent on external sources for the formation of financial resources, but at the same time, it has enough of its own funds to cover the reserves needed in the main production. It turns out that funds received from external sources are transferred to accounts receivable, that is, they are withdrawn from circulation.
The company as a whole is solvent. It is advisable to attract borrowed funds, since the profit from investment projects is enough to cover interest on loans and own costs.
As studies have shown, Metur LLC has hidden investment potential. The company has the opportunity to expand its production base, both at the expense of its own funds and through long-term loans. But it is necessary to understand that there is one main and intractable problem - the problem of repaying short-term receivables. This is evidenced by its high level. Therefore, we can conclude that the financial stability of the enterprise is due to the low investment and business activity of the enterprise, which leads to the ineffective accumulation of financial resources. On the one hand, the enterprise maintains a high level of financial stability, and on the other, more than half of the financial resources have been withdrawn from the enterprise’s circulation. That is why, as the main way to improve the level of financial condition of an enterprise, it is necessary to propose an increase in the investment and business activity of the enterprise, as well as to intensify work on the return of receivables.
As additional measures aimed at increasing the level of financial condition of the enterprise, it can be proposed to intensify efforts to repay debt for work performed but not paid for.
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Development of an effective financing option for Star CJSC
1.1 Analysis of the volume and structure of sources of formation and directions of use of the enterprise’s financial resources
financial resource enterprise
Financial condition refers to the ability of an enterprise to finance its activities. It is characterized by the provision of financial resources necessary for the normal functioning of the enterprise, their appropriate placement and effective use, financial relationships with other legal entities and individuals, solvency and financial stability.
The financial condition of the enterprise can be stable. Unstable and in crisis. The ability of an enterprise to make timely payments and finance its activities on an expanded basis indicates its good (stable) financial condition.
The main goal of the analysis is to promptly identify and eliminate shortcomings in financial activities and find reserves for improving the financial condition of the enterprise and its solvency.
Financial resources are formed at the disposal of the enterprise during the formation of the authorized capital in accordance with the organizational and legal form of its organization, are in constant motion, changing their purpose, accumulated or distributed through funds. Target-oriented.
To analyze the sources of financial resources, we will draw up a table that shows the total value of each element of the sources. This analysis is carried out on the basis of financial statements.
Table 1 - Volume and structure of sources of formation of financial resources of the enterprise
|
Sources of financial resources of the organization |
Deviation (+,-) |
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|
Amount, thousand rubles |
Amount, thousand rubles |
Amount, thousand rubles |
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|
1. Own |
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Revenues from sales |
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retained earnings |
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Depreciation |
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Capital and reserves |
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Profit |
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2. Attracted |
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Accounts payable |
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|
3. Borrowed |
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|
Borrowed long-term liabilities |
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|
Borrowed short-term liabilities |
Analyzing the table data, we can come to the following conclusion that by 2011 there was a decrease in both own and borrowed resources. Own resources decreased by 12,311 thousand rubles. The decrease was mainly due to a decrease in capital and reserves; it, in turn, was reduced by 5,967 thousand rubles, and amounted to 16,360 thousand rubles in 2011. Borrowed resources were reduced due to long-term liabilities by 3,100 thousand rubles. Compared to own and borrowed resources, borrowed resources were increased due to an increase in accounts payable by 2,083 thousand rubles, and amounted to 11,251 thousand rubles in 2011.
For a more visual representation, you can look at the structure of sources of financial resources, presented in Figure 1.
Figure 1 - Dynamics of sources of formation of financial resources, thousand rubles.
By examining the structure of the sources of formation of financial resources, we can draw a conclusion based on the fact that its own resources exceed both borrowed and attracted ones; the enterprise used long-term loans in its activities from 2009 to 2011.
Analyzing the composition and dynamics of the financial resources of Star CJSC for 2099-2011, we can conclude that there is mainly a decrease in the enterprise’s own, borrowed and attracted resources. In turn, in 2011 there are no borrowed resources, and the organization has a small amount of its own and borrowed resources.
The increase in own resources in 2009 is mainly due to the largest share in such an indicator as sales revenue, it amounted to 21,037 thousand rubles. and the second indicator, due to which own resources increased, is capital and reserves; they amounted to 22,327 thousand rubles. this is 48.9% of all own resources. The total amount of own resources in 2009 amounted to 46,103 thousand rubles. this, in turn, is 11,790 thousand rubles more. than in 2010, and more by 12,311 thousand rubles. than in 2011. From this we can conclude that own resources tend to decrease. Similar to 2099, in 2010 and 2011 the largest share of the total amount of own resources is revenue from sales and capital and reserves. If in 2009 and 2010 the largest share was accounted for by sales revenue, then in 2011, on the contrary, it was sales revenue, so in 2011 58.5% was sales revenue and 48.4% was capital and reserves.
Analyzing the attracted resources, in this case there is an increase and already in 2011 the amount of attracted resources amounted to 11,251 thousand rubles. The attracted resources consist of 100% of accounts payable.
Financial resources are monetary incomes, receipts and savings at the disposal of organizations and the state, intended for the implementation of costs of simple and expanded reproduction, and the fulfillment of obligations to the financial and credit system. Based on this definition, the main source of financial resources at the macro level is the value of the gross national product, which is used to compensate for the factors of production spent in the process of circulation. To determine the degree of saturation of real production with financial resources, the ratio of capitalization to gross domestic product is used. In conditions of economic crises, part of the national wealth can also act as financial resources.
Thus, the purpose of using financial resources, from the point of view of purpose, financial resources at the macro level can be divided into two groups:
1. to expand reproduction;
2. to fulfill financial obligations.
The directions for using financial resources of Star CJSC are presented in Table 2.
|
Directions for using the financial resources of the enterprise |
Deviation |
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|
Amount thousand rubles |
Amount thousand rubles |
Amount thousand rubles |
Amount thousand rubles |
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|
1. expanded reproduction |
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|
1.1 costs of main production, incl. |
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|
Material costs |
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|
Labor costs |
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Contributions for social needs |
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|
Depreciation |
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|
Other costs |
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|
2. fulfillment of financial obligations |
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|
2.1 long-term liabilities |
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|
Loans and credits |
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Analyzing the table data, we can conclude that the main direction of use of financial resources for the analyzed period is the financing of expanded reproduction. The share of this area in the overall structure of resources in 2009 was 99.5%, in 2010 95.8%, and in 2011 100.0%. The remaining small part of financial resources goes to fulfill financial obligations, namely long-term obligations. Basically, funds aimed at expanding reproduction go to finance the costs of basic production. However, by 2011 there was a decrease of 26,196 thousand rubles. The majority of the main production costs are material costs, their share in 2009 was 78.5%, in 2010 - 73.2%, and in 2011 - 63.2%. In this regard, we can talk about expanding the production and economic activities of the enterprise. The level of profitability of Star CJSC requires adjustments since the financing system and the strategy for using financial resources are not fully developed.
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