Coursework management of own capital of the enterprise. Management of the company's own capital Management of the company's own capital
Equity capital consists of funds owned by an economic entity advanced by it in the creation of net assets. The value of this capital is one of the most significant indicators of economic potential and performance. Own funds are divided between current and non-current assets. Usually the total amount of these funds is greater than the value of non-current assets.
Calculation of own capital is carried out as the sum of authorized, reserve and as well as monetary funds belonging to the company. Own capital is organized from the date of foundation of the enterprise with its subsequent increase at the expense of external and internal, borrowed and own sources of funds. The main source is the profit of the enterprise, in addition to it, accounts payable, various loans, and an increase in stable liabilities can act as a source. Management of own capital can be carried out only after a thorough study of the effectiveness of this activity in the previous period. Here it is worth considering not only the capital itself, but also its structural elements.
Own capital management is associated both with ensuring the effective use of the part that has already been accumulated, and with the organization of one's own financial resources, intended to ensure the future development of the enterprise. During the formation of resources, they are classified by sources, which can be internal and external.
Among the former, the main place is given to profit, which remains at the disposal of the enterprise itself, it creates the predominant share of its own financing resources, which makes it possible to ensure an increase in own capital, respectively, and the market value of the company. As part of internal sources, a certain role is assigned, especially for enterprises with a high price of their own fixed assets and intangible assets. It should be taken into account that they do not increase the amount of equity capital of the organization, but only serve as a means of reinvesting it. Own capital management is carried out taking into account the fact that other internal sources are not assigned a significant role in the formation of the organization's resources.
If we talk about external sources of equity capital formation, then an additional share is of primary importance, or one of such sources of equity capital formation for some companies can be financial assistance provided on a gratuitous basis. Other external sources are tangible assets and intangible assets, which are included in the company's balance sheet.
The management of the organization's own capital is carried out on the basis of the management of the creation of its own resources. In order to ensure the effectiveness of this process, a special policy is being developed, which is focused on attracting own resources from various sources in accordance with the needs of its development in the future period.
Own management is carried out according to similar principles. The main tasks in this case are:
Identification of the appropriate amount of capital;
Increasing the capital of the organization through the issuance of additional shares and retained earnings;
Determination of the most rational structure of shares that are just being issued;
Definition of dividend policy and its implementation.
It turns out that the management of equity capital is carried out according to a well-thought-out plan, taking into account all the nuances of the current situation. Each enterprise in this case requires a certain approach.
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Introduction
Chapter 1. Own capital of the enterprise
1.1 The concept of equity capital and its structure
1.2 Sources of equity financing
Chapter 2. Equity management
2.1 Tasks and stages of equity management
2.2 Formation of the enterprise's own internal financial resources
2.3 Dividend and emission policy of the enterprise in the management of the enterprise's own capital
Conclusion
Bibliography
Introduction
The development of market relations in society has led to the emergence of a number of new economic objects of accounting and analysis. One of them is the capital of the enterprise as the most important economic category and, in particular, equity capital.
The significance of the latter for the viability and financial stability of the enterprise is so great that it has received legislative consolidation in the Civil Code of the Russian Federation in terms of the requirements for the minimum amount of the authorized capital, the ratio of the authorized capital and net assets; the possibility of paying dividends depending on the ratio of net assets and the amount of the authorized and reserve capital.
The financial policy of an enterprise is a key moment in increasing the pace of its economic potential in a market economy with its fierce competition.
Important indicators characterizing the financial condition of the enterprise. The assessment of equity capital serves as the basis for calculating most of them.
Accounting for equity capital is an important area in the accounting system. Here the main characteristics of the company's own sources of financing are formed.
The company needs to analyze its own capital, as this helps to identify its main components and determine the consequences of their changes for financial stability.
The dynamics of changes in equity capital determines the volume of attracted and borrowed capital. In recent years, there have been significant changes in the structure of money capital, as a result of an increase in the share of attracted and borrowed capital.
The main problem for each enterprise that needs to be identified is the sufficiency of monetary capital for financial activities, servicing money circulation, and creating conditions for economic growth. This problem remains unresolved for almost all enterprises, as evidenced by a significant lack of own working capital. Consequently, there is an objective need for a comprehensive study, analysis and improvement of the methodology and organization of accounting for the equity capital of business entities.
The aim of the course work is: to consider the concept and structure of equity, equity management: tasks, stages, mechanism, as well as the role of dividend and issue policies in equity management.
In connection with this goal, it is necessary to solve the following tasks:
Consider the company's equity.
Analyze your wealth management.
Chapter 1. Own capital of the enterprise
1.1 The concept of equity capital and its structure
Equity capital is a set of material assets and cash, financial investments and costs for acquiring the rights and privileges necessary for the implementation of its business activities.1
In Russian practice, the capital of an enterprise is often divided into active and passive capital. From a methodological point of view, this is incorrect. This approach causes underestimation of the place and role of capital in business and leads to a superficial consideration of the sources of capital formation. Capital cannot be passive, as it is a value that brings surplus value in motion, in constant circulation. Therefore, it is more reasonable to apply here the concepts of sources of capital formation and functioning capital.
The structure of sources of formation of assets (funds) is represented by the main components: equity capital and borrowed (attracted) funds.
The equity capital (SC) of an organization as a legal entity is generally determined by the value of the property owned by the organization. These are the so-called net assets of the organization. They are defined as the difference between the value of property (active capital) and borrowed capital. Of course, equity has a complex structure. Its composition depends on the organizational and legal form of the economic entity.
Own capital consists of authorized, additional and reserve capital, retained earnings and targeted (special) funds (Fig. 1). Commercial organizations operating on the principles of a market economy, as a rule, own collective or corporate property.
The owners are legal entities and individuals, a group of depositors-shareholders or a corporation of shareholders. The authorized capital, which has developed as part of the share capital, most fully reflects all aspects of the organizational and legal foundations for the formation of the authorized capital.
Rice. 1. Forms of functioning of the enterprise's own capital
Share capital is the equity capital of a joint-stock company (JSC). A joint stock company is an organization whose authorized capital is divided into a certain number of shares. JSC participants (shareholders) are not liable for the obligations of the company and bear the risk of losses associated with its activities, within the value of their shares.
In this case, the authorized capital is a set of contributions (calculated in monetary terms) of shareholders to the property during the creation of an enterprise to ensure its activities in the amounts determined by the constituent documents. Due to its stability, the authorized capital covers, as a rule, the most illiquid assets, such as land lease, the cost of buildings, structures, and equipment.
A special place in the implementation of the guarantee of protection of creditors is occupied by reserve capital, the main task of which is to cover possible losses and reduce the risk of creditors in the event of a deterioration in the economic situation. The reserve capital is formed in accordance with the procedure established by law and has a strictly designated purpose. In a market economy, it acts as an insurance fund created to compensate for losses and protect the interests of third parties in case of insufficient profit from the enterprise before the authorized capital is reduced.
The Civil Code of the Russian Federation provides for the requirement that, starting from the second year of the enterprise's activity, its authorized capital should not be less than net assets. If this requirement is violated, then the enterprise is obliged to reduce (re-register) the authorized capital, putting it in line with the value of net assets (but not less than the minimum value). The formation of a reserve capital is mandatory for joint-stock companies, its minimum amount should not be less than 5% of the authorized capital.2
Unlike the reserve capital formed in accordance with the requirements of the law, the reserve funds created voluntarily are formed exclusively in the manner established by the constituent documents or the accounting policy of the enterprise, regardless of the organizational and legal form of its ownership.
The next element of equity is additional capital, which shows the increase in the value of property as a result of revaluation of fixed assets and construction in progress of the organization, carried out by decision of the government, the money and property received in the amount of their excess over the value of the shares transferred for them, and more. The additional capital can be used to increase the authorized capital, pay off the balance sheet loss for the reporting year, and also be distributed among the founders of the enterprise and for other purposes. At the same time, the procedure for using additional capital is determined by the owners, as a rule, in accordance with the constituent documents when considering the results of the reporting year.
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In business entities, another type of equity arises - retained earnings. Retained earnings - net profit (or part of it), not distributed in the form of dividends between shareholders (founders) and not used for other purposes. Typically, these funds are used to accumulate the property of an economic entity or replenish its working capital in the form of free cash, that is, at any time ready for a new turnover. Retained earnings may increase from year to year, representing growth in equity based on domestic accumulation. In growing, developing joint-stock companies, retained earnings over the years take a leading place among the components of equity capital. Its amount often exceeds the size of the authorized capital by several times.
Target (special) funds are created from the net profit of an economic entity and must serve for certain purposes in accordance with the charter or decision of shareholders and owners. These funds are a type of retained earnings. In other words, this is retained earnings, which has a strictly designated purpose.
As part of equity capital, two main components can be distinguished: invested capital, that is, capital invested by the owners in the enterprise; and accumulated capital - the capital created in the enterprise in excess of what was originally advanced by the owners. Invested capital includes the par value of common and preference shares, as well as additionally paid-in (in excess of the par value of shares) capital. This group usually includes gratuitously received values. The first component of the invested capital is represented in the balance sheet of Russian enterprises by the authorized capital, the second - by additional capital (in terms of share premium received), the third - by additional capital or social fund (depending on the purpose of using the donated property).
The accumulated capital is reflected in the form of items arising from the distribution of net profit (reserve capital, accumulation fund, retained earnings, other similar items). Despite the fact that the source of formation of individual components of accumulated capital is net profit, the goals and procedure for the formation, directions and possibilities for using each of its items differ significantly. These articles are formed in accordance with the legislation, constituent documents and accounting policies.
1.2 Sources of equity financing
All sources of equity capital formation can be divided into internal and external (Fig. 2).
3. Ensuring the financial sustainability of the development of the enterprise, its solvency in the long term, and, accordingly, reducing the risk of bankruptcy.
However, it has the following disadvantages:
1. The limited volume of attraction, and, consequently, the possibility of a significant expansion of the operating and investment activities of the enterprise during periods of favorable market conditions at certain stages of its life cycle.
Rice. 2. Sources of equity capital formation
2. High cost compared to alternative borrowed sources of capital formation.
3. An unused opportunity to increase the return on equity ratio by attracting borrowed funds, since without such attraction it is impossible to ensure that the financial profitability ratio of the enterprise's activities exceeds the economic one.
Thus, an enterprise that uses only its own capital has the highest financial stability (its autonomy coefficient is equal to one), but limits the pace of its development (because it cannot ensure the formation of the necessary additional volume of assets during periods of favorable market conditions) and does not use financial opportunities for increasing returns on invested capital.
Based on the economic essence of equity capital, the economist Ukhina O.I. It is proposed to single out the following criteria for the optimal structure of equity capital:
1. To ensure the protective function inherent in equity capital, the amount of the authorized capital must meet the requirements laid down in legislative acts. First of all, this concerns the minimum possible amount at the time of formation, as well as the condition that in the course of the functioning of economic companies, the amount of their net assets must be kept in the amount less than the authorized capital. But already at this stage, contradictions arise in Russian practice.3
The share of the statutory fund in equity capital is so small that it cannot be a criterion for the stability of the enterprise, because. revaluation of fixed assets is reflected in additional capital, and in this situation it is more expedient to compare net assets not only with the amount of authorized capital, but also with additional capital.
2. Operating enterprises must have a sufficient amount of equity capital, which will ensure the financial stability of the enterprise. It is assumed that it should be sufficient to form not only the main, but also own working capital. This will ensure the protective and regulatory functions of capital, as well as the function of changing the direction of production, i.e. development opportunities.
3. For the implementation of the function of capital, expressed by the ability to generate income, the criterion may be the effectiveness of the use of equity capital.
Its most effective use is possible under the condition of attracting a loan, despite its payment. This is indicated by the effect of financial leverage. Accordingly, the ratio of own and borrowed capital should have an optimal value for each specific enterprise based on its strategy and capabilities.
4. The price of equity indicates the high price of the enterprise, its financial stability, and also allows you to realize the purchasing power of capital and its regulatory function.
5. Capital acts as an agent of production, serving future needs. Based on this, it is necessary to include retained earnings (or profit directed to special funds for the development of production) in the composition of equity capital. All this should be expressed in the dividend policy. Determining the proportions in the distribution of profits is one of the key issues. It is important for the enterprise both its own development and the payment of dividends to the founders, which contributes to the increase in the price of the enterprise. Achieving the optimal size in the distribution of profits is possible based on the internal growth rates of the enterprise.
6. Protective and regulatory functions can be fully implemented only when creating a minimum amount of reserve capital. This is especially important for agricultural enterprises, which are subject to both entrepreneurial and natural and economic risks. At the same time, one should take into account Russian practice and the contradictions that arise when determining the minimum amount of reserve capital, the amount of which is directly dependent on the amount of authorized capital, which is regulated in legislative acts. However, it is worth noting that at present, in most ACOs, the size of the authorized capital is very small, which means that in the event of unforeseen losses, the minimum level of reserve capital does not play the buffer value that is attributed to it.
Thus, considering the problem of forming a rational capital structure, it is advisable to conclude that by approaching this issue, taking into account the optimality criteria, many enterprises can achieve the required level of financial stability, ensure a high degree of development, reduce risk factors, increase the price of an enterprise and withdraw production. to a more efficient level. The ratio between own and borrowed sources of funds is one of the key analytical indicators characterizing the degree of risk of investing financial resources in a given enterprise. One of the most important characteristics of the financial condition of an enterprise is the stability of its activities in the light of a long-term perspective. It is related to the overall financial structure of the enterprise, the degree of its dependence on creditors and investors.
Chapter 2
2.1 Tasks and stages of equity management
The basis of the management of the enterprise's own capital is the management of the formation of its own financial resources. In order to ensure effective management of this process, the enterprise usually develops a special financial policy aimed at attracting its own financial resources from various sources in accordance with the needs of its development in the coming period.
1. Analysis of the formation of the company's own financial resources in the previous period. The purpose of this analysis is to identify the potential for the formation of its own financial resources and its compliance with the pace of development of the enterprise.
At the first stage of analysis the total volume of the formation of own financial resources, the correspondence of the growth rate of own capital to the growth rate of assets and the volume of sales of the enterprise, the dynamics of the share of own resources in the total volume of formation of financial resources in the preplanning period are studied.
At the second stage of the analysis sources of formation of own financial resources are considered. First of all, the ratio of external and internal sources of formation of own financial resources, as well as the cost of attracting own capital from various sources, is studied.
At the third stage of the analysis the sufficiency of own financial resources formed at the enterprise in the preplanning period is assessed.
2. Determining the total need for own financial resources. This need is determined by the following formula:
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Psfr \u003d (Pk * Usk) / 100 - SKn + Pr (1.1.)
where Psfr is the total need for the enterprise's own financial resources in the planning period;
PC - the total need for capital at the end of the planning period;
Usk - the planned share of equity capital in its total amount;
SKn - the amount of equity at the beginning of the planning period;
Pr - the amount of profit allocated for consumption in the planning period.
The calculated total need covers the required amount of own financial resources generated from both internal and external sources.
3. Estimation of the cost of raising equity capital from various sources. Such an assessment is carried out in the context of the main elements of equity capital formed from internal and external sources. The results of such an assessment serve as the basis for the development of management decisions regarding the choice of alternative sources for the formation of own financial resources that ensure the growth of the enterprise's own capital.
4. Ensuring the maximum volume of attraction of own financial resources from internal sources. Before turning to external sources for the formation of one's own financial resources, all the possibilities of their formation from internal sources must be realized. Since the sum of net profit and depreciation deductions are even planned internal sources for the formation of the enterprise's own financial resources, it is first of all necessary to provide for the possibility of their growth due to various reserves in the process of planning these indicators.
The method of accelerated depreciation of the active part of fixed assets increases the possibility of forming one's own financial resources from this source. However, it should be borne in mind that the increase in the amount of depreciation deductions in the process of accelerated depreciation of certain types of fixed assets leads to a certain decrease in the amount of net profit. Therefore, when looking for reserves for the growth of one's own financial resources from internal sources, one should proceed from the need to maximize their total amount.
5. Ensuring the necessary volume of attraction of own financial resources from external sources. The volume of attracting own financial resources from external sources is designed to provide that part of them that could not be formed from internal sources of financing. If the amount of own financial resources attracted from internal sources fully meets the total need for them in the planning period, then there is no need to attract these resources from external sources.
Doctor of Economic Sciences, Professor Blank I.A. the need to attract own financial resources from external sources suggests calculating according to the following formula:
SFRvnesh \u003d Psfr - SFRvnut, (1.2.)
where SFRext is the need to attract own financial resources from external sources;
Psfr - the total need for the enterprise's own financial resources in the planning period;
SFRint - the amount of own financial resources planned to be attracted from internal sources.
Ensuring the satisfaction of the need for own financial resources from external sources is planned for attracting additional share capital, additional issue of shares or from other sources.
6. Optimization of the ratio of internal and external sources of formation of own financial resources. This optimization process is based on the following criteria:
Ensuring the minimum total cost of attracting own financial resources. If the cost of attracting own financial resources from external sources significantly exceeds the planned cost of attracting borrowed funds, then such formation of own resources should be abandoned;
Ensuring the preservation of the management of the enterprise by its original founders. The growth of additional equity or share capital at the expense of third-party investors can lead to a loss of such control.
The effectiveness of the developed policy for the formation of own financial resources is assessed using the coefficient of self-financing of the development of the enterprise in the coming period. Its level should correspond to the goal.
The coefficient of self-financing of the enterprise development is calculated according to the following formula:
where Ksf is the coefficient of self-financing of the future development of the enterprise;
SFR - the planned volume of formation of own financial resources;
A - the planned increase in the assets of the enterprise;
PP - the planned volume of consumption of net profit.
Successful implementation of the developed policy for the formation of own financial resources is associated with the solution of the following main tasks:
Ensuring the maximization of the formation of the profit of the enterprise, taking into account the acceptable level of financial risk;
Formation of an effective profit distribution policy (dividend policy) of the enterprise;
Formation and effective implementation of the policy of additional issue of shares (issuance policy) or attraction of additional share capital.
2.2 Formation of the enterprise's own internal financial resources
The basis for the formation of the enterprise's own internal financial resources directed to production development is the balance sheet profit, which characterizes one of the most important results of the enterprise's financial activity.
It represents the sum of the following types of profit of the enterprise:
Profit from the sale of products (or operating profit);
Profit from the sale of property;
Profits from non-operating transactions.
Among these types, the main role belongs to operating profit, which currently accounts for 90-95% of the total balance sheet profit. At many enterprises, it is the only source of formation of balance sheet profit. Therefore, the management of the formation of the profit of the enterprise is usually considered as a process of formation of operating profit (profit from the sale of products).
The main goal of managing the formation of the operating profit of an enterprise is to identify the main factors that determine its final size, and to find reserves for a further increase in its amount.
The mechanism for managing the formation of operating profit is built taking into account the close relationship of this indicator with the volume of sales of products, income and costs of the enterprise. The system of this relationship, called "The relationship of costs, sales volume and profit" allows you to highlight the role of individual factors in the formation of operating profit and ensure effective management of this process at the enterprise.
In the process of managing the formation of operating profit on the basis of the CVP system, the enterprise solves the following tasks:
1. Determination of the volume of sales of products that ensures break-even operating activities for a short period.
2. Determining the volume of sales of products that ensures break-even operating activities in the long run.
3. Determination of the required volume of product sales, ensuring the achievement of the planned (target) amount of gross operating profit. This task can also be formulated in reverse: determining the planned amount of gross operating profit for a given planned volume of product sales.
4. Determining the sum of the "safety margin" (or "margin of safety") of the enterprise, i.e. the size of a possible decrease in the volume of sales of products.
5. Determination of the required volume of product sales, ensuring the achievement of the planned (target) amount of marginal operating profit of the enterprise. This problem can also be formulated in reverse: determining the planned amount of marginal operating profit for a given planned volume of product sales.
The division of the entire set of operating costs of the enterprise into fixed and variable allows the use of the operating profit management mechanism, known as "operating leverage".
The operation of this mechanism is based on the fact that the presence in the composition of operating costs of any amount of their constant types leads to the fact that when the volume of product sales changes, the amount of operating profit always changes even faster. In other words, fixed operating costs (costs), by the very fact of their existence, cause a disproportionately higher change in the amount of the operating profit of the enterprise with any change in the volume of sales of products, regardless of the size of the enterprise, industry specifics of its operating activities and other factors.
However, the degree of such sensitivity of operating profit to changes in the volume of sales is ambiguous at enterprises with a different ratio of fixed and variable operating costs. The higher the share of fixed costs in the total operating costs of the enterprise, the more the amount of operating profit changes in relation to the rate of change in the volume of sales.
The ratio of fixed and variable operating costs of the enterprise, which allows to include the operating leverage mechanism with different intensity of impact on the operating profit of the enterprise, is characterized by the operating leverage ratio, which is calculated by the following formula:
where Kol is the operating leverage ratio;
Ipost - the amount of fixed operating costs;
Io is the total amount of transaction costs.
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The higher the value of the operating leverage ratio at the enterprise, the more it is able to accelerate the growth rate of operating profit in relation to the growth rate of sales volume. In other words, at the same rate of growth in sales volume, an enterprise with a larger operating leverage ratio, ceteris paribus, will always increase the amount of its operating profit to a greater extent compared to an enterprise with a lower value of this ratio.
The specific ratio of the increase in the amount of operating profit and the amount of sales volume, achieved at a certain operating leverage ratio, is characterized by the “operational leverage effect” indicator. The principal formula for calculating this indicator is:
where Eol is the effect of operating leverage achieved at a specific value of its coefficient at the enterprise;
GOP is the growth rate of gross operating profit, in %;
RR - the growth rate of sales volume, in%.
By setting one or another rate of growth in the volume of sales of products, using the indicated formula, it is possible to determine the extent to which the amount of operating profit will increase with the existing operating leverage ratio at the enterprise.
Management of the company's own capital also includes determining the optimal ratio between own and borrowed financial resources.
In order to answer this question, it is necessary to familiarize yourself with the concept of financial leverage and consider the issue of its functioning.
Financial leverage ("financial leverage") is a financial mechanism for managing the return on equity by optimizing the ratio of used own and borrowed funds.
The effect of financial leverage is an increment to the return on equity obtained through the use of a loan, despite the payment of the latter.
The effect of financial leverage arises from the discrepancy between economic profitability and the "price" of borrowed funds. The economic return on assets is the ratio of the value of the production effect (i.e., earnings before paying interest on loans and income tax) to the total value of the total capital of the enterprise (i.e., all assets or liabilities).
In other words, the company must initially develop such economic profitability that the funds are sufficient, at least to pay interest on the loan.
The following formula can be used to calculate the effect of financial leverage:
EGF \u003d (Rk - Rzk) x ZS / SK, (1.6.)
where Рк is the return on total capital (the ratio of the amount of net profit and the price paid for borrowed funds and the amount of capital);
Rzk - return on borrowed capital (the ratio of the price paid for borrowed funds to the amount of borrowed funds);
ZK - borrowed capital (average value for the period);
SC - equity (average value for the period).
Thus, the effect of financial leverage determines the boundary of the economic feasibility of attracting borrowed funds.
A high positive value of the EGF indicator indicates that the company prefers to manage with its own funds, does not use investment opportunities enough and does not pursue the goal of maximizing profits. In this situation, shareholders, having received modest dividends, can begin to sell shares, reducing the market value of the company.
If the profitability of investments in the enterprise is higher than the price of borrowed funds, it is necessary to increase financing from borrowed sources, while the rate of profit growth will depend on the rate of change in the capital structure of the enterprise (the ratio of the amounts of borrowed and equity capital). However, the increase in the amount of debt in the structure of liabilities is accompanied by a decrease in the liquidity and solvency of the borrower, an increase in risks, and an increase in the price of loans. As a result, the profit from use and the price of borrowed sources are aligned, which leads to a zero value of the effect of financial leverage.
A further increase in the share of borrowed capital greatly increases the risk of bankruptcy of an economic entity and should be perceived by management as a signal to repay part of the debt or search for sources of profit growth.
According to (1.6.), the return on total capital varies depending on the dynamics of the individual components of the above formula. The influence is exerted by the following factors: profit from business operations, the price of attracted resources, the ratio of equity and borrowed capital.
Obviously, with an increase in the share of borrowed funds in the capital structure and a decrease in financial stability, the rate of profit growth decreases down to a negative value (i.e., to an absolute decrease in profit). Thus, in pursuit of the goal of maximizing profits, the enterprise must increase the share of borrowed capital in the sources of financing with a positive value of the EGF, while avoiding financial instability.
When analyzing the EGF, it is necessary to note the problem of ensuring the reliability of the information used in the calculation of the indicator. EGF is calculated on the basis of traditional accounting sources of information, which implies its adjustment taking into account the peculiarities of the analysis. For example, the replacement of the monetary form of settlements with the commodity one undermines the basis for determining the profitability and profitability of an enterprise, the financial result is distorted by barter transactions. In this situation, it is necessary to correct the original data using detailed information.
Thus, the effective management of the financial resources of an enterprise involves an active and targeted impact on the capital structure in order to obtain the maximum return on investment. It is possible to estimate the optimal amount of financing from borrowed sources using the EGF criterion. It allows you to decide in advance on the impact on the dynamics of funding sources in the right direction to prevent the growth of investment risk.
In our opinion, when solving the problem of forming a rational structure of enterprise funds, in addition to calculating quantitative indicators, it is necessary to take into account qualitative factors, including:
Stability of turnover dynamics. An enterprise with a stable turnover can afford a relatively larger share of borrowed funds and higher fixed costs.
Level and dynamics of profitability. The enterprise generates sufficient profits to finance development and manages to a greater extent with its own funds.
Asset structure. If an enterprise has significant general-purpose assets that can serve as collateral for loans, then an increase in the share of borrowed funds in the liability structure is fully justified.
The burden of taxation. The higher the income tax, the less tax incentives and opportunities to use accelerated depreciation, the more preferable debt financing looks because at least part of the interest on the loan is included in the cost. Moreover, the higher the taxes, the stronger the company feels the lack of funds and the more often it is forced to apply for a loan.
Attitude of creditors to the enterprise. Specific conditions for granting a loan may deviate from the average depending on the financial and economic situation of the enterprise. For a small and / or start-up enterprise, access to credit resources is especially difficult due to the risky financial position of the enterprise, insufficient loan collateral, and lack of credit history.
State of the capital market. In an unfavorable situation on the capital market, sometimes you just have to obey the circumstances, postponing until better times the formation of a rational structure of sources of funds.
2.3 Dividend and emission policy of the enterprise in the management of the enterprise's own capital
Dividend policy of the enterprise
The main goal of developing a dividend policy is to establish the necessary proportionality between the current consumption of profit by the owners and its future growth, maximizing the market value of the enterprise and ensuring its strategic development.
Based on this goal, the concept of dividend policy can be formulated as follows: dividend policy is an integral part of the overall profit management policy, which consists in optimizing the proportions between consumed and capitalized parts in order to maximize the market value of the enterprise.
The problems, the solution of which necessitates the development of a dividend policy, are the following: on the one hand, the payment of dividends should protect the interests of the owner and create prerequisites for the growth of the share price, and in this sense, their maximization is a positive trend; on the other hand, maximizing the payment of dividends reduces the share of profits reinvested in the development of production. When forming a dividend policy, it should be taken into account that the classic formula: “the share price is directly proportional to the dividend and inversely proportional to the interest rate on alternative investments” is not applicable in practice in all cases. Investors can appreciate the value of the company's shares even without paying dividends, if they are well informed about its development programs, the reasons for non-payment or reduction in dividend payments, and directions for reinvesting profits. The decision to pay dividends and their amounts is largely determined by the stage of the life cycle of the enterprise. For example, if the management of an enterprise intends to carry out a serious reconstruction program and plans to carry out an additional issue of shares for its implementation, then such an issue should be preceded by a sufficiently long period of steadily high dividend payments, which will lead to a significant increase in the share price and, accordingly, to an increase in the amount of borrowed funds, received as a result of the placement of additional shares.
The dividend policy of a joint-stock company is formed according to the following main stages:
1. Assessment of the main factors that determine the formation of the dividend policy.
2. The choice of the type of dividend policy is carried out in accordance with the financial strategy of the joint-stock company, taking into account the assessment of individual factors.
3. The mechanism for distributing the profit of a joint-stock company in accordance with the chosen type of dividend policy.
4. Determining the level of dividend payments per ordinary share.
5. Evaluation of the effectiveness of the dividend policy of the joint-stock company.
Emission policy of the enterprise
The main goal of the emission policy is to attract the necessary volume of own financial resources in the stock market in the shortest possible time. Taking into account the stated goal, the emission policy of the enterprise is part of the general policy of forming its own financial resources, which consists in ensuring the attraction of the required volume through the issuance and placement of its own shares on the stock market.
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The development of an effective emission policy of an enterprise covers the following stages
1. Study of the possibilities of effective placement of the proposed issue of shares. The decision on the proposed primary (when the enterprise is transformed into a joint-stock company) or additional (if the enterprise has already been established in the form of a joint-stock company and needs an additional inflow of its own capital) issue of shares can only be made on the basis of a comprehensive preliminary analysis of the stock market situation and an assessment of the investment attractiveness of its shares .
An analysis of the stock market situation (exchange and over-the-counter) includes a description of the state of demand and supply of shares, the dynamics of the price level of their quotation, sales volumes of shares of new issues and a number of other indicators. The result of such an analysis is the determination of the level of sensitivity of the stock market's response to the emergence of a new issue and the assessment of its potential to absorb the emitted volumes of shares.
The evaluation of the investment attractiveness of one's shares is carried out from the position of taking into account the prospects for the development of the industry (in comparison with other industries), the competitiveness of manufactured products, as well as the level of indicators of one's financial condition (in comparison with industry average indicators). The evaluation process determines the possible degree of investment preference for the shares of one's company in comparison with the outstanding shares of other companies.
2. Determining the purpose of the issue. Due to the high cost of raising equity from external sources, emissions should be quite significant from the standpoint of the strategic development of the enterprise and the possibility of a significant increase in its market value in the coming period. The main of these goals that the company is guided by, resorting to this source of equity capital formation, are:
Real investment related to sectoral and regional diversification of production activities (creation of a network of new branches, subsidiaries, new industries with a large output, etc.);
The need to significantly improve the structure of used capital (increasing the share of equity capital in order to increase the level of financial stability, ensuring a higher level of own creditworthiness and thereby reducing the cost of raising borrowed capital, increasing the effect of financial leverage, etc.);
The planned takeover of other enterprises in order to obtain a synergistic effect (participation in the privatization of third-party state-owned enterprises can also be considered as an option for their takeover, if this ensures the acquisition of a controlling stake or a predominant share in the authorized capital);
Other strategic goals that require the rapid accumulation of a significant amount of equity capital.
3. Determination of the issue volume. When determining the issue volume, it is necessary to proceed from the previously calculated need to attract own financial resources from external sources.
4. Determination of the par value, types and number of issued shares. The par value of shares is determined taking into account the main categories of their future buyers (the largest par values of shares are oriented towards their acquisition by institutional investors, and the smallest ones – towards the acquisition by the population). In the process of determining the types of shares, the expediency of issuing preferred shares is established, if such an issue is recognized as expedient, then the ratio of ordinary and preferred shares is established. The number of shares to be issued is determined on the basis of the volume of the issue and the face value of one share (in the process of one issue, only one option for the face value of shares can be set).
5. Estimation of the cost of the attracted share capital. In accordance with the principles of such an assessment, it is carried out according to the expected level of dividends and the costs of issuing shares and placing an issue. The estimated cost of capital raised is left with the actual weighted average cost of capital and the average level of the interest rate in the capital market. Only after that the final decision on the issue of shares is made.
6. Determination of effective forms of underwriting. In order to quickly and efficiently carry out an open placement of the issued volume of shares, it is necessary to determine the composition of the underwriters, agree with them on the prices of the initial share quotation and the amount of the commission fee, ensure the regulation of the volume of sale of shares in accordance with the needs in the flow of financial resources that ensure the maintenance of liquidity already placed shares at the initial stage of their circulation.
Taking into account the increased volume of own capital, the enterprise has the opportunity, using a constant financial leverage ratio, to increase the amount of borrowed funds, and, consequently, increase the return on equity.
Thus, it is the equity indicators that close the entire pyramid of performance indicators for the enterprise, all activities of which should be aimed at increasing the amount of equity capital and increasing its profitability.
Undoubtedly, the above methods and approaches to managing your own capital are fundamental. However, when assessing the investment attractiveness of an enterprise, the primary task in managing equity capital is its assessment.
Conclusion
Own capital is a set of material assets and cash, financial investments and costs for the acquisition of rights and privileges necessary for the implementation of its economic activities.
Equity capital is characterized by the following main positive features:
1. Ease of attraction, since decisions related to increasing equity capital (especially through internal sources of its formation) are made by the owners and managers of the enterprise without the need to obtain the consent of other business entities.
2. Higher ability to generate profits in all areas of activity, tk. when using it, the payment of loan interest in all its forms is not required.
Considering the problem of forming a rational capital structure, it is advisable to conclude that by approaching this issue, taking into account the optimality criteria, many enterprises can achieve the required level of financial stability, ensure a high degree of development, reduce risk factors, increase the price of an enterprise and bring production to a more efficient level. level. The ratio between own and borrowed sources of funds is one of the key analytical indicators characterizing the degree of risk of investing financial resources in a given enterprise. One of the most important characteristics of the financial condition of an enterprise is the stability of its activities in the light of a long-term perspective. It is related to the overall financial structure of the enterprise, the degree of its dependence on creditors and investors.
The main objectives of equity capital management are
Determining the appropriate amount of equity capital;
An increase, if required, in the amount of equity capital from retained earnings or an additional issue of shares;
Determining the rational structure of newly issued shares;
Definition and implementation of the dividend policy.
The development of a policy for the formation of the enterprise's own financial resources is carried out according to the following main stages.
1. Analysis of the formation of the company's own financial resources in the previous period.
2. Determining the total need for own financial resources.
3. Estimation of the cost of raising equity capital from various sources.
4. Ensuring the maximum volume of attraction of own financial resources from internal sources.
5. Ensuring the necessary volume of attraction of own financial resources from external sources.
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Send your good work in the knowledge base is simple. Use the form below
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FEDERAL AGENCY FOR EDUCATION
Rubtsovsk Industrial Institute (branch)
GOU VPO "Altai State Technical
university. I.I. Polzunov"
Faculty of Correspondence Education
Department of Economics and Management
COURSE WORK
In the discipline "FINANCIAL MANAGEMENT"
Topic "Management of the enterprise's own capital
on the example of PILOT LLC
Option - 10
Done: student
E&U groups - 72
Ternovaya A.N.
Checked:
Lecturer at the Department of E&M
Khorunzhin M.G.
Rubtsovsk 2010
Vconducting
1. Theoretical foundations of the study of the financial resources of the enterprise
1.1 The concept and structure of equity
1.2 Formation and use of equity capital
1.3 Equity management
2. Analysis and evaluation of the effectiveness of the use of financial resources on materialsPILOT LLC
2.1 Organizational and economic characteristics of the enterprise
2.2 Analysis of the equity of the enterprise
Conclusion
List of usedoh literature
Applications
Introduction
The need to study the nature, content, conditions and principles of the formation of financial resources directly follows from the ongoing, for several years, the reform of enterprises in Russia. The concept of reforming enterprises and other commercial organizations provides for the development of an enterprise development strategy, which cannot be done without the formation of financial resources.
Formation mechanisms, methods of using own capital and the results of the financial strategy of economic entities should be considered as one of the most pressing problems of financial relations in the period of development of market structures.
Fundamentally important in modern conditions are the analysis and planning of cash flows at enterprises, the search for effective sources of financing, as well as profitable investment decisions, competent monitoring of receivables and payables, the development of rational accounting, tax, and other policies related to various areas of activity of companies.
One of the main problems of modern Russian enterprises is the effective management of the state of equity capital. Experience shows that due to the lack of accurate and systematic knowledge of their finances, Russian companies lose up to a fifth of their income. For effective management, it is necessary to accurately understand how financial resources are formed, as well as what factors affect the components of financial resources. The head of the enterprise must accurately represent what the organization's resources are made up of and where they are spent. At the same time, it is important not only to know the directions of use, but the specific amount of funds allocated. The pace of economic development, the improvement of the budget system and finances of enterprises largely depend on the rational use of the sources of formation of financial resources both at the level of enterprises and at the state level, which is one of the main tasks in the field of proper organization of financial management.
The decisions made by the head of the enterprise on the use of resources in order to extract benefits cover three areas of the enterprise:
investment of resources
implementation of economic activities through the use of these resources
Providing various sources of financing for the needs of the enterprise.
All of the above is due to the relevance of the work.
The purpose of the work is to study the problem of equity capital management in the enterprise.
Work tasks:
Consider the concept and structure of equity
Investigate the formation and use of equity capital
Investigate the process of managing your own capital
Analyze the organizational and economic characteristics of the enterprise
Conduct an analysis of the equity of the enterprise
Develop measures to improve equity management
The object of the study is the equity capital of PILOT LLC.
The subject of the study is the search for measures to improve the management of equity capital of PILOT LLC.
1. Theoretical foundations of the study of the financial resources of the enterprise
1.1 The concept and structure of equity
In the structure of the financial interrelations of the national economy, the finances of enterprises (organizations, institutions) occupy the initial, determining position, as they serve the main link in social production, where material and intangible benefits are created and the predominant mass of the country's financial resources is formed.
Enterprise finance is not only an integral, but also a specific part of finance. They are characterized, on the one hand, by features that characterize the economic nature of finance in general, and on the other hand, by features due to the functioning of finance in various spheres of social production.
An enterprise is an independent economic entity created to conduct economic activities that are carried out in order to make a profit and meet social needs.
In the conditions of the formation and development of market relations, enterprises can and should independently generate their financial resources, the main sources of which are profit, funds received from the sale of securities, shares and other contributions of shareholders, legal entities and individuals, as well as loans and other income that do not contrary to the law.
Own capital is its own source of formation of financial resources.
The starting source of financial resources at the time of the establishment of the enterprise is the authorized (share) capital - property created from the contributions of the founders (or proceeds from the sale of shares).
The authorized capital is the main initial source of the company's own funds. It is a source of formation of fixed and working capital, which in turn are directed to the acquisition of fixed production assets, intangible assets, working capital. Equity capital is the difference between the total assets of the enterprise and its liabilities, i.e. debts. Own capital, in turn, is divided into a constant part - the authorized capital and a variable, the value of which depends on the financial results of the enterprise.
Variable capital includes: additional capital, reserve capital, retained earnings and special funds.
1.2 Formation and use of equity capital
The choice of sources of formation of financial resources is influenced by three factors: organizational and legal form of management, sectoral technical and economic features and the scope of the enterprise.
1) The organizational and legal form of management is determined by the Civil Code of the Russian Federation, according to which an organization that owns, manages or manages separate property and is liable for its obligations with this property is recognized as a legal entity. It has the right on its own behalf to acquire and exercise property and personal non-property rights, bear obligations, be a plaintiff and defendant in court. A legal entity must have an independent balance sheet or estimate. Legal entities can be organizations: 1) pursuing profit as the main goal of their activities - commercial organizations, 2) not having profit as such a goal and not distributing profits among participants - non-profit organizations.
2) Branch technical and economic features. Industry specificity affects the composition and structure of production assets, the duration of the production cycle, the features of the circulation of funds, the sources of financing for simple and expanded reproduction, the composition and structure of financial resources, the formation of financial reserves and other similar funds.
3) Field of activity. All social production, depending on the nature of the labor expended in it, is divided into 2 large areas: material production and non-material production. The peculiarity of the first sphere is that goods are produced here, the basis of the organizational structure is enterprises and firms. The specificity of the second sphere is the provision of various kinds of services. In the non-productive sphere, institutions, organizations and other structures operate.
The formation of financial resources comes from:
authorized capital,
reserve fund,
depreciation charges,
Arrived.
The authorized (share) capital is a set of contributions (shares, shares at par value) of the founders (participants) of the organization registered in the constituent documents. The procedure for the formation of the authorized (share) capital is determined by the norms of the Civil Code of the Russian Federation in relation to each type of organization. For example, the authorized capital of a company must be at least half paid by its participants at the time of registration. The remaining unpaid part of the authorized capital is subject to payment by its participants during the first year of the company's operation. In case of violation of this obligation, the company must either declare a decrease in its authorized capital and register its decrease in the prescribed manner, or terminate its activities through liquidation. The rules for the formation of the authorized capital are detailed by the norms of special legislation.
The authorized (share) capital is subdivided into shares corresponding to the contributions of the participants. Shares are taken into account when calculating the income of each participant.
So, for example, open and closed joint-stock companies form the authorized (share) capital based on the par value of the company's shares. The minimum amount of the authorized capital of an open joint-stock company, in accordance with the current legislation, is set at 1,000 minimum salaries on the day of registration of the company. The authorized capital is formed by placing ordinary and preferred shares. The share of preferred shares in the total authorized capital should not exceed 25%. An open subscription for shares of an open joint stock company is not allowed until the authorized capital is paid in full. This restriction is directed against the creation of fictitious joint-stock companies. When establishing a joint-stock company, all its shares must be distributed among the founders. At the end of the second and each subsequent financial year, if the value of net assets is less than the authorized capital, the joint-stock company is obliged to declare and register in the prescribed manner the reduction of its authorized capital. If the value of the specified assets of the company becomes less than the minimum authorized capital determined by law, the company is subject to liquidation (Article 99 of the Civil Code of the Russian Federation). An open joint stock company has the right to conduct an open subscription to the shares they issue and to carry out their free sale on the stock market. Shares of a closed joint stock company are distributed only among its founders. The authorized capital of a closed joint stock company cannot be less than 100 minimum salaries established at the time of its registration.
Separately, it is necessary to say about the formation of the authorized capital of a limited liability company.
An LLC, like any other legal entity, must have an authorized capital, which determines the minimum amount of the company's property that guarantees the interests of its creditors. Therefore, in the constituent documents of an LLC, in particular, conditions must be prescribed on the size of the authorized capital of the company, the shares of each of the participants, on the composition, timing and procedure for making their contributions. Constituent documents must also contain provisions on the liability of participants for violation of obligations to make contributions.
The authorized capital of an LLC is made up of the value of the contributions of its participants (clause 1, article 90 of the Civil Code of the Russian Federation). At the same time, citizens and legal entities can be participants in an LLC, but the total number of participants should not exceed fifty.
The authorized capital of an LLC cannot be less than 100 minimum wages (based on the minimum wage established on the date of submission of documents for registration of an LLC).
The main requirement imposed by the Civil Code of the Russian Federation (clause 3, article 90) on the authorized capital of an LLC at the time of registration is that it must be paid by its participants by at least half. The unpaid part of the company's charter capital must be repaid by the participants during the first year of the company's operation. In case of violation of this obligation, the company must either declare a decrease in its authorized capital, registering this decrease in the prescribed manner, or terminate its activities through liquidation.
It is impossible to release an LLC participant from the obligation to make a contribution to the authorized capital of the company, including by offsetting claims against the company, except as otherwise provided by law (clause 2, article 90 of the Civil Code of the Russian Federation and article 16 of law No. 14-FZ).
The reserve capital (fund) is created on a mandatory basis in accordance with the legislation of the Russian Federation or on a voluntary basis - by decision of the organization itself, in accordance with its constituent documents and accounting policies. For example, the obligation to create a reserve fund is provided for joint-stock companies. In accordance with Art. 35 of the Federal Law "On Joint Stock Companies", a reserve fund is created in the company in the amount provided for by the company's charter, but not less than 15 percent of its authorized capital. The reserve fund of the company is formed by mandatory annual deductions until it reaches the amount established by the charter of the company. The amount of annual deductions is also provided for by the charter of the company, but cannot be less than 5 percent of net profit until the amount established by the charter of the company is reached. If the reserve capital is created on a voluntary basis, then the decision on its formation is an element of the accounting policy of the organization.
The current legislation gives organizations the right to create reserves for doubtful debts. Doubtful debt is the accounts receivable of the organization, which is not repaid within the period established by the contracts, and is not secured by appropriate guarantees. The source of the formation of this reserve is the financial results of the organization, that is, profit calculated before tax. The reserve for doubtful debts is created based on the results of an inventory of receivables carried out at the end of the reporting year. The amount of the reserve is determined separately for each doubtful debt, depending on the financial condition (solvency) of the debtor and the assessment of the probability of repaying the debt in full or in part. Article 266 of the Tax Code of the Russian Federation regulates the procedure for calculating the amount of the formed reserve. It cannot exceed 10 percent of the revenue of the reporting period. The reserve can only be used to cover losses from bad debts. Bad debts are those debts for which the established limitation period has expired, as well as those for which, in accordance with civil law, the obligation has been terminated due to the impossibility of its execution, on the basis of an act of a state body or the liquidation of an organization.
The amount of the reserve for doubtful debts, not fully used in the reporting period, may be carried over to the next period in the manner set forth in the above article of the Tax Code.
A reserve for warranty repair and warranty service may be created in respect of those goods (works) for which, in accordance with the terms of the concluded contracts, service and repair are provided during the warranty period. The maximum amount of the reserve cannot exceed the amount determined as the share of expenses actually incurred by the entity for warranty repair and maintenance in the amount of proceeds from the sale of these goods for the previous three years. At the end of the tax period, the amount of the reserve is adjusted based on the actual expenses incurred. For goods for which the period of warranty service and repair has expired, the unspent amounts of the reserve for their intended purpose are included in non-operating income of the corresponding reporting period.
Directions for the use of reserve capital are set in a strict framework both by legislation and constituent documents. In any case, as a source of own funds at an arbitrary point in time, reserve capital can be considered only if the event under which it was created has occurred. At enterprises where its creation takes place on a voluntary basis, it is basically not created.
1.3 Equity management
Enterprise equity management is a set of purposeful methods, operations, levers, methods of influencing various types of finance to achieve a certain result.
Successful activity of the enterprise is not possible without reasonable management of own capital. It is not difficult to formulate goals, the achievement of which requires rational management of financial resources: the 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 firm; acceptable growth rates of the economic potential of the company; growth in production and sales volumes; profit maximization; cost minimization; ensuring cost-effective activities, etc.
The process of equity capital management should be considered from the point of view of financial analysis, planning, control.
Financial analysis includes five main stages.
1. Choosing a system of financial ratios. To assess the financial condition of the enterprise, its sustainability, a whole system of indicators is used. The number of financial ratios is very large, so it is advisable to choose only the main, most informative and significant ratios that reflect the following main aspects of the financial condition: property status; financial stability; solvency; business activity; profitability.
The recommended number of financial ratios is no more than three to seven for each aspect of the financial condition. The specific set of indicators may vary depending on the specifics of the industry, business objectives and other factors.
The following financial indicators are used for analytical work:
Solvency ratios reflect the ability of the enterprise to repay short-term debt at the expense of certain elements of working capital.
The absolute liquidity ratio Kla shows what part of short-term debt can be covered by the most liquid current assets - cash and short-term financial investments:
Cla=DS/KO, (1)
where DS - cash and short-term financial investments;
The quick liquidity ratio shows what part of the short-term debt the company can repay at the expense of cash, short-term financial investments and receivables:
Klp=LA / KO, (2)
where LA - liquid assets;
TO - short-term liabilities.
The normal level of the intermediate coverage ratio should not be lower than 1.
The current liquidity ratio Klo shows whether the company has enough funds that can be used by it to pay off its short-term obligations over the coming year:
Clo=TA / KO, (3)
where TA - current assets;
TO - short-term liabilities.
The higher the total coverage ratio, the more confidence the company has with creditors.
If this coefficient is less than 1, then such an enterprise is insolvent.
If the enterprise does not have cash and funds in settlements, it can repay part of its short-term obligations by selling inventory items.
The creditworthiness of an enterprise is the ability it has to repay loans on time.
It should be noted that creditworthiness is not only the ability of an enterprise to repay a loan, but also to pay interest on it.
Various methods are used to assess the creditworthiness of an enterprise.
The main indicators for assessing the creditworthiness of an enterprise are:
Ratio of sales volume to net current assets:
K1=Nr / Acht, (5)
Аcht - net current assets, thousand rubles.
Net current assets are current assets minus short-term debts of the enterprise.
The coefficient K1 shows the efficiency of the use of current assets. The high level of this indicator favorably characterizes the creditworthiness of the enterprise.
However, in the case when it is very high or increases very quickly, it can be assumed that the activity is carried out in volumes that do not correspond to the value of current assets.
This situation increases the likelihood of a slowdown in debt turnover or may cause a drop in sales and, as a result, difficulties in the company's settlements with its creditors.
The slowdown in the turnover of receivables may be caused by the unwillingness of debtors to pay for the increasing volumes of deliveries; there may also be overdue accounts receivable.
The decline in sales is the result of insufficient tangible current assets to continue uninterrupted operations on the same scale.
The ratio of sales volume to equity capital:
K2=Np / SK, (6)
where Nr - sales volume, thousand rubles;
This indicator characterizes the turnover of own sources of funds.
However, it is necessary to realistically assess the amount of equity capital. In the asset balance sheet, in particular, intangible assets and stocks correspond to their own source of coverage.
When assessing the value of equity capital, it is recommended to reduce it by the amount of intangible assets that would cost practically nothing, for example, in the event of a forced liquidation or reorganization of an enterprise.
In addition, inventories must be reduced in accordance with the difference in prices at which they are listed on the balance sheet and at which they could be sold or written off.
Equity capital, adjusted taking into account the real state of the named elements of non-current and current assets, reflects more accurately the value of the enterprise's property in the part provided by its own sources of coverage.
Sales proceeds, related to this value, shows the turnover of own sources more accurately, since neither tangible assets nor the excess of the book value of inventories over their real value are factors contributing to an increase in sales.
The ratio of short-term debt to equity:
K3=Dk / SK, (7)
where Dk - short-term debt, thousand rubles;
SC - equity, thousand rubles.
This ratio shows the share of short-term debt in the company's equity capital. If short-term debt is several times less than equity, then you can pay off all creditors in full.
In practice, there are priority creditors whose debts must be paid before other creditors make claims. Therefore, it is practically more correct to compare priority short-term debt with the amount of capital and reserves.
The ratio of receivables to sales revenue:
K4=DZ / Np, (8)
where DZ - accounts receivable, thousand rubles;
Nr - sales volume, thousand rubles;
This indicator gives an idea of the size of the average period of time spent on receiving money due from buyers.
For example, a ratio of 1:4 means a three-month receivables maturity. Whether this is a lot or a little depends on the field of activity, the state of settlements with creditors, the duration of the production cycle, etc.
The acceleration of the turnover of receivables, that is, the decrease in the K4 indicator, can be considered as a sign of an increase in the creditworthiness of the enterprise, since the debts of buyers turn into money faster.
The ratio of liquid assets to short-term debt of the enterprise:
K5=Al / Dk, (9)
where Al - liquid assets, thousand rubles;
Dk - short-term debt, thousand rubles.
Ideally, the best way to improve creditworthiness would be to increase sales while reducing net current assets, equity and receivables.
Financial stability is understood as such a state (economic and financial) of an enterprise in which the solvency is constant over time, and the ratio of equity and debt capital ensures this solvency.
In practice, an increase in the volume of sales causes an increase in current assets both in terms of stocks and in terms of receivables; the debts of the enterprise also increase, especially in the form of accounts payable, if the composition of creditors and the contractual terms of settlements with them do not change.
This means that a real increase in creditworthiness for the three named indicators will be achieved if the volume of sales increases to a greater extent than inventories and receivables, and accounts payable grows faster than receivables.
One of the most important characteristics of the financial condition is the stability of activity.
It is connected with the structure of the balance sheet of the enterprise, the degree of its dependence on creditors and investors, with the conditions under which external sources of funds are attracted and serviced.
The concept of the financial stability of the organization includes an assessment of various aspects of the enterprise.
It is characterized by the ratio of own and borrowed funds.
A system of coefficients is used to assess financial stability.
Equity concentration ratio (autonomy, independence):
Kks \u003d SK / Brace, (10)
where SC - equity, thousand rubles;
SCob. - the total amount of capital thousand rubles.
This indicator characterizes the share of the owners of the enterprise in the total amount of funds advanced in its activities.
It is believed that the higher the value of this coefficient, the more stable, stable and independent of external creditors the enterprise.
The addition to this indicator is the ratio of borrowed and own funds:
Kkp \u003d ZK / SK, (11)
where ZK - borrowed capital, thousand rubles;
This ratio shows the amount of borrowed funds attributable to each ruble of own funds invested in the assets of the enterprise.
Own funds maneuverability ratio:
Km = SOS / SK, (13)
where SOS - own working capital, thousand rubles;
SK - equity, thousand rubles.
This ratio shows what part of equity is used to finance current activities, that is, invested in working capital, and what part is capitalized.
The value of this indicator can vary significantly depending on the type of activity of the enterprise and the structure of assets, including current assets.
Long-term investment structure coefficient Ksv:
Ksv \u003d DP / VA, (15)
where DP - long-term liabilities, thousand rubles;
VA - non-current assets, thousand rubles.
The ratio shows what part of fixed assets and other non-current assets is financed from long-term borrowed sources.
Sustainable Funding Ratio:
Kuf = (SK + DP) / (VA + TA), (16)
where (SC + DP) - permanent capital, thousand rubles;
(VA + TA) - the amount of non-current and current assets, thousand rubles.
This ratio of the total value of own and long-term borrowed sources of funds to the total value of non-current and current assets shows what part of the assets is financed from sustainable sources.
In addition, Kuf reflects the degree of independence (or dependence) of the enterprise on short-term borrowed sources of coverage.
This is followed by the preparation of a base for assessing the performance of the enterprise. Along with the norms recognized in world and domestic practice, the average industry values of the coefficients for the region where the enterprise is located can be used as a base. It is desirable that the base values be determined on the same date as the estimated values of the coefficients.
2. Express - analysis. The purpose of express analysis is a clear and simple assessment of the financial well-being and development dynamics of an economic entity. In the process of analysis, it is possible to propose the calculation of various indicators and supplement it with methods based on the experience and qualifications of a specialist.
Express analysis should be performed in three stages: preparatory stage, preliminary review of financial statements, economic reading and analysis of statements.
3. Detailed analysis of the financial condition. Its purpose is a more detailed description of the property and financial position of an economic entity, the results of its activities in the past reporting period, as well as the possibilities for the development of the entity in the future. It concretizes, supplements and expands individual express analysis procedures. In this case, the degree of detail depends on the desire of the analyst.
4. Definition of the diagnosis. The results of the analysis allow you to accurately assess the current financial position and activities of the enterprise for previous years, identify vulnerabilities that require special attention, correctly diagnose in order to further improve the activities of the enterprise (if necessary).
5. Development of projects of management decisions. Depending on the comprehensive assessments of the financial condition and trends in its change, based on the financial diagnostics, it is necessary not only to draw conclusions about the current situation, but also to develop projects of management decisions in order to further develop the enterprise. Such work in enterprises is carried out using various methods of financial planning.
The next step in managing your own capital is financial planning.
Financial planning is the process of creating plans for raising and using funds, including capital, as a long-term financial source.
The goals of financial planning are:
fixing the source of receipt of funds;
assessment of fees for this source;
ensuring the use of funds, taking into account the possibility of payments for use. Financial planning contributes to the achievement of the main goal of the owners of the company's capital - to maximize profits and wealth.
The financial planning process includes the following five main stages:
Long term goal setting. Taking into account the specific stage of development of an economic entity and the degree of development of the economic system (transitional systems leave an imprint on goal setting), the main goal - maximizing the welfare of capital owners - is achieved using an extensive set of long-term and short-term targets: formation of the structure of capital owners (possible redistribution of property); formation of the target capital structure; ensuring the liquidity of the company's securities; optimizing the amount of capital; choice between external (mergers and acquisitions) and internal capital growth.
Drawing up long-term financial plans. Long-term plans describe not only the goals of the company, but also the methods for achieving them. A financial forecast (usually for a period of 2 to 10 years) at this stage is a necessary element of the financial plan. The main attention in long-term financial plans is given to justifying the choice of investment projects, planning investment costs by year, choosing sources for attracting additional external capital and programs to provide this source.
Drawing up short-term financial plans includes the formation of short-term financing programs (for 1-2 years), making decisions on working capital and planning the volume of current assets. The basis of short-term financial planning is the forecast of cash flows.
Justification of individual items of expenditure (or the so-called process of individual budgeting). Any action plan (any decision) must be accompanied by a cost estimate (budgeting). The budget defines the need for resources to achieve a specific result and serves as a benchmark for comparing and evaluating real costs.
Planning of financial indicators is carried out by means of certain methods. Planning methods are specific methods and techniques for calculating indicators.
Table 1.1 presents.
Table 1.1
Financial planning methods
|
Financial planning methods |
|||
|
economic analysis |
It consists in planning financial indicators on the basis of establishing their dynamics for a number of past years. |
||
|
normative |
on the basis of pre-established norms and technical and economic standards, the need of an economic entity for financial resources and their sources is calculated. Such standards are the rates of taxes and fees, depreciation rates and others. |
||
|
balance calculations |
the use of the method to determine the future need for funds is based on the forecast of receipts and expenses for the main items of the balance sheet at a certain date in the future. |
||
|
cash flows |
is universal in the preparation of financial plans and serves as a tool for predicting the size and timing of the receipt of the necessary financial resources. |
||
|
multivariance method |
consists in developing alternative options for planned calculations in order to choose the optimal one from them, while the selection criteria can be set different |
||
|
economic and mathematical modeling |
allows you to quantify the closeness of the relationship between financial indicators and the main factors that determine them |
The last step in the financial management process is the managerial control function. Control is the process of establishing deviations from the envisaged values and actions of people in economic activity. Thanks to control, the organization is able to eliminate obstacles to the implementation of planned targets, so control can be defined as the process by which the organization achieves its goals.
Through the control function, problems are identified, which allows you to adjust the activities of the enterprise to prevent a crisis situation. Control allows you to fix errors, conscious and unconscious violations and correct them before they occur on the way to achieving goals. At the same time, control makes it possible to determine which activities on the way to achieving the goal were most effective.
Control is a fundamental element of the management process. Neither planning, nor organization, nor motivation can be considered completely apart from control. Indeed, in fact, all of them are integral parts of the overall control system at the enterprise.
The control function at enterprises is often performed by the director, which is an integral part of his job responsibilities.
The following types of control are applied at the enterprise: preliminary, current, final.
Preliminary control is carried out before the actual start of work. Preliminary financial control is carried out by collecting and processing accounting data for internal financial management and for providing data to external users, drawing up cost estimates, balance sheet, income statement, cash flow statement, assessment of financial condition, assessment of the client's solvency at the input stage his order to the order accounting system, etc.
Current control is carried out directly in the course of work. It is based on measuring the actual results obtained after the work has been done.
The final control is carried out after the work is completed, it allows the management of the enterprise to obtain the information necessary for planning if similar work is expected to be carried out in the future.
Thus, one of the main problems of modern Russian enterprises is the effective management of the state and equity capital. Experience shows that due to the lack of accurate and systematic knowledge of their finances, Russian companies lose up to a fifth of their income. For effective management, it is necessary to accurately understand how financial resources and equity are formed, as well as what factors affect the components of financial resources.
2. Analysis and evaluation of the effectiveness of the use of financial resources on the materials of PILOT LLC
2.1 Organizational and economic characteristics of the enterprise
We will analyze financial resources using the example of PILOT LLC. Let's give the organizational and economic characteristics of the enterprise.
PILOT Limited Liability Company is a legal entity established in accordance with the Civil Code of the Russian Federation and the Federal Law of the Russian Federation "On Limited Liability Companies".
The Company was established to carry out trade, manufacturing, construction, commercial and procurement activities, as well as other types of activities in accordance with the current legislation of the Russian Federation in order to meet the needs of legal entities and individuals in goods and services, as well as to obtain profit and its most efficient use for economic and social development of society.
PILOT LLC is engaged in the production and sale of jewelry, including:
retail trade in jewelry, including commission (under contracts with legal entities and individuals);
wholesale trade in the regions;
buying activity (carried out in stores);
pawnshop activities (carried out in stores);
providing services to the public, including cleaning and examination of jewelry.
PILOT LLC is located at Gornyak, st. Factory 11-1.
The authorized capital of the company is 24,268 thousand rubles.
LLC "PILOT" is an independent business entity in the market, having the right to conduct its commercial activities on its own behalf.
The organizational structure of PILOT LLC is a linear functional structure.
Organizational structure is one of the main elements of organization management. It is characterized by the distribution of goals and objectives of management between departments and employees of the organization.
In the structure of PILOT LLC, the company is headed by a director. And the functional links are accounting, laboratory, sales department, jeweler-designer, shops.
The organizational structure of PILOT LLC is linear-functional. Its essence lies in the fact that the line manager (general director) directly manages the main activities and makes decisions, and the functional units subordinate to the line manager are engaged in consulting, preparing decisions, programs and plans within their functional areas. Functional managers exercise influence on the lower main divisions formally. They do not have the right to give them orders on their own, and they bring their decisions to life within their powers through their line manager.
In table 2.1, we present the main indicators of the production and financial activities of PILOT LLC.
Table 2.1
The main indicators of the production and financial activities of PILOT LLC for 2006-2008.
|
Indicators |
Absolute deviation |
Growth rate, % |
||||||||
|
Sales proceeds, thousand rubles |
||||||||||
|
The actual cost of goods, thousand rubles. |
||||||||||
|
Cost level per 1 rub. products, cop. |
||||||||||
|
Gross profit, thousand rubles |
||||||||||
|
Profit from sales, thousand rubles |
||||||||||
|
Net profit (loss), thousand rubles |
During the entire analyzed period - 2006-2008 - PILOT LLC has seen an increase in sales revenue, which is a favorable factor, as it indicates the expansion of the enterprise, an increase in production volumes.
For the entire analyzed period, the amount of proceeds from sales increased by 174,497 thousand rubles. from 302086 thousand rubles. in 2006 to 476,583 thousand rubles. in 2008, the growth rate is 58%.
The growth of prime cost can be regarded as a negative moment in the activity of the enterprise. However, in absolute terms, the increase in cost does not yet indicate a decrease in efficiency in ordinary activities.
In 2006, for 1 rub. sales revenue accounts for 89 kopecks. costs, i.e. from 1 ruble of revenue, the company receives 11 kopecks. sales profit. In 2008, for 1 rub. revenue accounts for 86 kopecks. costs, and 14 kopecks of profit.
An increase in the level of costs is undesirable, since the higher the level of costs, the more in the revenue structure the cost and the less profit. In PILOT LLC, during the entire analyzed period, there is a decrease in the level of costs in the structure of goods sold, which indicates an increase in the efficiency of the main activity of the enterprise.
Throughout the period, there is an increase in gross profit from 33461 thousand rubles. up to 67294 thousand rubles. in 2008. The increase is 101%, this is due to an increase in the number of buyers, as a result of the effective work of the marketing department.
Also, in general, for the period there is an increase in profit from sales in 2008 by 35,493 thousand rubles. compared to 2006, the increase is 227%.
In 2006, a loss was received in the amount of 367 thousand rubles, but during 2007-2008. - there is an increase in net profit from 6735 thousand rubles. in 2007 to 28500 thousand rubles. in 2008. Thus, the amount of net profit increased by more than 4 times.
Thus, in general, we can conclude that the company is operating efficiently, since its activities during 2007-2008 brought profit, losses were only in 2006.
2.2 Analysis of the equity of the enterprise
Analysis of the formation of financial resources of the enterprise will begin with the analysis of liabilities (table 2.2).
Table 2.2
Dynamics of the composition and structure of the liability of the balance sheet of PILOT LLC
|
Change 2007 to 2006 |
Change 2008 to 2007 |
|||||
|
Section 3. Capital and reserves |
||||||
|
The same, % of the total |
||||||
|
Section 4. Long-term liabilities |
||||||
|
The same, % of the total |
||||||
|
Section 5 Current Liabilities |
||||||
|
The same, % of the total |
||||||
|
Balance currency |
The sources of property formation also increased significantly, including: at the expense of own capital - by 34,055 thousand rubles, and at the expense of long-term borrowed capital - by 7,371 thousand rubles. or by 2.1 points, at the expense of short-term borrowed capital - by 22,645 thousand rubles.
However, it should be noted that by the end of the year, the share of equity capital in the total volume of sources of coverage was 41%, and borrowed capital (short-term) - 54.5%.
This to a greater extent testifies to the strengthening of the financial position of the organization. The main question here is for what purposes the equity capital will be used.
Thus, in replenishing its assets, the company manages mainly with its own funds.
Table 2.3
Analysis of capital and reserves of PILOT LLC
Thus, the analysis of capital and reserves showed that for three years the changes did not affect the authorized capital and additional capital.
The reserve capital of the enterprise appeared in 2007 in the amount of 10 thousand rubles.
Retained earnings of PILOT LLC tend to increase. In 2007 it increased by 6001 thousand rubles, in 2008 - by 19190 thousand rubles.
For a more complete assessment of the use of the company's own capital, it is necessary to consider profitability indicators.
Profitability is an important economic category that characterizes the efficiency of an enterprise, which determines the high importance of the analysis of profitability indicators. To this end, it is advisable to consider the main indicators of profitability and determine the degree of influence of the factors on which they depend.
Let's calculate the main profitability indicators of the enterprise, analyze their dynamics for 2006-2008. and the results will be entered in table 2.4.
Table 2.4
Dynamics of the main indicators of profitability of PILOT LLC for 2007-2008.
|
Indicator |
Absolute deviation |
|||
|
1. Profitability of products,% |
||||
|
2. Profitability of production,% |
||||
|
3. Profitability of property,% |
||||
|
4. Profitability of non-current assets,% |
||||
|
5. Return on current assets,% |
||||
|
6. Return on net working capital, % |
||||
|
7. Return on equity, % |
||||
|
8. Profitability of sales |
In 2006, the company made a loss, in 2006, therefore, profitability is not considered. In 2008, with the increase in profits, the profitability ratios also increased compared to 2007, which confirms the high efficiency of the company.
The profitability of net working capital increased especially significantly, which increased by 38% in 2008, the profitability of non-current assets by 37%, the profitability of production by 17.3%, and the profitability of sales by 5.8%. The increase in profitability indicators in 2008 is assessed positively.
In conclusion of the analysis, we will evaluate the main financial indicators, because the efficiency of the use of equity capital affects the financial stability of the enterprise, its liquidity, and solvency.
The ability of a company to pay its obligations is called liquidity. Balance sheet data is used to calculate liquidity.
An enterprise can be liquid to a greater or lesser extent, since current assets include easy-to-sell and hard-to-sell assets. The results of calculations of liquidity ratios are presented in table 2.5.
Table 2.5
Analysis of liquidity ratios of PILOT LLC for 2006-2008.
|
Name coefficients |
Values |
Deviation +,- |
||||||
|
1.Current liquidity ratio |
Kt.l = (A1+A2+A3) / P1+P2 |
|||||||
|
2.Ratio of quick liquidity |
X.c.l. \u003d (A1 + A2) / P1 + P2 |
|||||||
|
3. Absolute liquidity ratio |
C.l. = A1 / P1 + P2 |
A1 - fast-moving assets (line 250 + line 260 of the balance sheet)
A2 - easily marketable assets (line 240 of the balance sheet)
A3 - slow-moving assets (line 210 + line 220 + line 230 + line 270)
P1 - accounts payable (line 620 of the balance sheet)
P2 - short-term loans (line 610+line 660)
The current liquidity ratio shows what part of current liabilities on loans and settlements can be repaid by mobilizing all working capital. This ratio is most interesting for buyers and shareholders of the enterprise. The most liquid current assets in 2006 can cover 1.03, in 2007 1.14, in 2008 1.35 short-term debt with a minimum standard of 2.
The quick liquidity ratio shows what part of the debts the company can cover not only at the expense of cash, but also at the expense of receivables. This coefficient in the study period is very low, but there is a tendency to increase from 0.36 to 0.66 with a minimum standard of 1.0.
The absolute liquidity ratio shows what part of short-term liabilities can be repaid immediately at the expense of funds in various accounts, in short-term securities, as well as settlement proceeds. At the enterprise, this coefficient is at a low level (below the optimal value of 0.2-0.7) and amounted to 0.01 in 2006, 0.08 in 2007, and 0.024 in 2008.
The absolute liquidity ratio is the ratio of the funds that the company has in bank accounts and on hand to short-term liabilities. This is the most stringent solvency criterion, showing what part of short-term liabilities can be repaid immediately.
This ratio is most important for suppliers of inventory. The absolute liquidity ratio of our company is very low during 2006-2007. This suggests that the company is not. can repay short-term debt in the near future at the expense of cash. But there is a tendency to increase the absolute liquidity ratio in 2008 to 0.24.
PILOT LLC is in an unstable financial condition, in which the company is on the verge of bankruptcy, because in this situation, cash, receivables do not even cover its accounts payable.
Let's determine the financial stability of the enterprise using the coefficients (relative indicators) in table 2.6.
Designations in table 2.6 and the corresponding lines in the form No. 1 "Balance sheet":
TA - current assets (p. 290),
B - balance (p. 300 or 700),
SK - equity (lines 490+640+650),
SOS - own working capital (str.490-str.190)
PC - attracted capital (TO + TO),
TO - current liabilities (pp. 690-640-650),
DO - long-term liabilities (p. 590),
Table 2.6
Analysis of the financial stability of PILOT LLC for 2006-2008.
|
Indicator |
Calculation formula |
Normal value |
The change 2008 to 2006 (+;-) |
||||
|
1. Ratio of equity capital (IC) and attracted capital (PC), % |
|||||||
|
2. Coefficient of financial dependence |
|||||||
|
3. Equity flexibility ratio |
|||||||
|
4. Equity ratio |
(SK-VA)/TA |
||||||
|
5. Autonomy coefficient |
The coefficient of financial dependence in PILOT LLC has a value of more than 1, which means that obligations can be met at the expense of own funds. The increase in the coefficient in 2008 compared to 2006 by 0.39 indicates an increase in financial independence.
Equity ratio in 2006 and 2007 below the standard<0,1., но в 2008 году значение показателя превышают норматив и составляют 0,14.
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25. Equity management
Funds belonging to an economic entity, advanced by it in the creation of net assets of the enterprise, constitute equity capital. The amount of equity capital is also one of the main indicators of the efficiency and economic potential of the enterprise. Own funds are distributed between own non-current and own current assets. Usually the total amount of own funds exceeds the value of non-current assets. Equity includes equity, investments and retained earnings. Equity capital is calculated as the sum of authorized, additional, reserve capital and monetary funds belonging to the company. The formation of equity capital begins at the time of the establishment of the enterprise. In the future, the increase in equity capital is carried out at the expense of internal and external, own and borrowed, sources of funds. The main source is the profit of the enterprise, and in its composition - the accumulation fund of the enterprise. In addition to profit, the source of replenishment of own funds is the issue of shares, the increase in the stability of liabilities, borrowed funds, accounts payable, etc. Own capital management should be preceded by a study of the effectiveness of its management in the previous period. The analysis is necessary to determine the reserves for the formation of own funds. Own capital management involves managing the process of its formation, maintenance and effective use, i.e. management of already formed assets. This involves both the management of equity in general and the management of its structural elements.
Own capital management is connected not only with ensuring the effective use of its already accumulated part, but also with the formation of its own financial resources that ensure the future development of the enterprise. In the process of managing the formation of their own financial resources, they are classified according to the sources of this formation. The composition of the main sources of formation of the enterprise's own financial resources is shown in Figure 1.3.
Rice. 1.3. - The composition of the main sources of formation of the enterprise's own financial resources
As part of the internal sources of the formation of its own financial resources, the main place belongs to the profit remaining at the disposal of the enterprise, it forms the predominant part of its own financial resources, provides an increase in own capital, and, accordingly, an increase in the market value of the enterprise. Depreciation charges also play a certain role in the composition of internal sources, especially at enterprises with a high cost of their own fixed assets and intangible assets; however, they do not increase the amount of the company's own capital, but are only a means of reinvesting it. Other internal sources do not play a significant role in the formation of the enterprise's own financial resources.
As part of the external sources of the formation of its own financial resources, the main place belongs to the attraction by the enterprise of additional share (through additional contributions to the authorized fund) or equity (through additional emission and sale of shares) capital. For individual enterprises, one of the external sources of generating their own financial resources may be the gratuitous financial assistance provided to them (as a rule, such assistance is provided only to individual state enterprises of various levels). Other external sources include tangible and intangible assets transferred to the enterprise free of charge and included in its balance sheet.
The basis of the management of the enterprise's own capital is the management of the formation of its own financial resources. In order to ensure effective management of this process, the enterprise usually develops a special financial policy aimed at attracting its own financial resources from various sources in accordance with the needs of its development in the coming period.
The main objectives of equity capital management are:
Determining the appropriate amount of equity capital;
An increase, if required, in the amount of equity capital from retained earnings or an additional issue of shares;
Determining the rational structure of newly issued shares;
Definition and implementation of the dividend policy.
The development of a policy for the formation of the enterprise's own financial resources is carried out according to the following main stages.
1. Analysis of the formation of the company's own financial resources in the previous period. The purpose of this analysis is to identify the potential for the formation of its own financial resources and its compliance with the pace of development of the enterprise.
At the first stage of analysis the total volume of the formation of own financial resources, the correspondence of the growth rate of own capital to the growth rate of assets and the volume of sales of the enterprise, the dynamics of the share of own resources in the total volume of formation of financial resources in the preplanning period are studied.
At the second stage of the analysis sources of formation of own financial resources are considered. First of all, the ratio of external and internal sources of formation of own financial resources, as well as the cost of attracting own capital from various sources, is studied.
At the third stage of the analysis the sufficiency of own financial resources formed at the enterprise in the preplanning period is assessed.
Own capital management consists in the formation of targeted sources of financing from profits, contributions from founders and participants and other income, as well as their use.
The financial manager determines the composition and structures of the funds formed in the enterprise, and also sets the target directions for their spending.
A number of cash funds are formed by enterprises due to the requirements of laws, others depend on the decision of the founders and the accounting policy of the enterprise.
Authorized capital. It acts as the main and, as a rule, the only source of financing at the time of the creation of a joint-stock type commercial organization; it characterizes the share of owners in the assets of the enterprise. In the balance sheet, the authorized capital is reflected in the amount determined by the constituent documents. An increase (decrease) in the authorized capital is allowed by decision of the owners of the organization based on the results of the meeting for the year with a mandatory change in the constituent documents. For business companies, the legislation provides for the need for a forced change in the amount of the authorized capital (downward) in the event that its value exceeds the value of the company's net assets.
The authorized capital of the organization determines the minimum amount of its property that guarantees the interests of its creditors. For some organizational and legal forms of business, its value is limited from below; in particular, the minimum charter capital of an open company must be at least a thousand times the minimum wage (minimum wage) on the date of its registration, and for a closed company - at least a hundred times the minimum wage.
The authorized capital of a joint-stock company may consist of shares of two types - ordinary and preferred, and the nominal value of the placed preferred shares should not exceed 25%. The shares of the company distributed upon its establishment must be fully paid up within the period determined by the charter of the company, while at least 50% of the distributed shares must be paid within three months from the date of state registration of the company, and the remaining part - within a year from the date of its registration.
A share is a security that indicates the participation of its owner in the equity capital of the company. The purchase of shares is accompanied by the acquisition of a number of property and other rights for the investor:
- - the right to vote, i.e. the right to participate in the management of the company by, as a rule, voting at the meeting of shareholders when choosing its executive bodies, adopting the strategic directions of the company's activities, resolving issues related to the property interests of shareholders, in particular issues related to liquidation or sale of part of the property, issue of securities, etc.; we note that the share does not provide voting rights until the moment of its full payment, with the exception of shares acquired by the founders during the creation of the company;
- - the right to participate in the distribution of profits, and, consequently, to receive
a proportional part of the profit in the form of dividends;
- - the right to an appropriate share in the share capital of the company and the balance of assets in case of its liquidation;
- - the right to limited liability, according to which shareholders are liable for external obligations of the company only within the limits of the market value of their shares;
- - the right to sell or assign a share by its owner to any other person;
- - the right to receive information about the activities of the company, mainly that which is presented in the published annual report.
Ordinary shares are the main component of a company's share capital. From the perspective of potential investors, they are characterized by the following features:
- 1) can generate relatively more income, but are more risky compared to other investment options;
- 2) there is no guaranteed income;
- 3) there is no guarantee that when selling shares, their owner will not incur a loss;
- 4) upon liquidation of the company, the right to receive part of the property is exercised last.
An ordinary share gives the right to receive floating income, i.e. income that depends on the results of the company's activities, as well as the right to participate in management. The distribution of net profit among holders of ordinary shares is carried out after the payment of dividends on preferred shares and replenishment of the reserves provided for by the constituent documents and the decision of the shareholders' meeting. In other words, the payment of dividends on ordinary shares is not guaranteed in any way and depends solely on the results of current activities and the decision of the shareholders' meeting.
The owner of a preferred share, as a rule, has a preferential right, compared to the owner of an ordinary share, to receive dividends in the form of a guaranteed fixed percentage, as well as to a share in the balance of assets upon liquidation of the company. Dividends on such shares should in most cases be paid regardless of the performance of the company and before they are distributed to ordinary shareholders. This results in a relatively lower riskiness of preferred shares; at the same time, this is reflected in the amount of dividends, the level of which, on average, is usually lower than the level of dividends paid on ordinary shares. In addition, a preferred share does not give the right to participate in the management of the company, unless otherwise provided by the statutory documents. We emphasize that the meaning of the term “privileged”, expressed in privilege in dividends and privilege in liquidation of the company, is revealed only in the relationship between the owners of two fundamentally different types of shares. As for other individuals and legal entities related to this company, of course, there can be no talk of any privilege of shareholders.
In an ever-changing capital market environment, keeping interest rates constant for a long time, as is the case with preferred shares, is very problematic. That is why preferred shares most often have a limited life - they are either converted into ordinary shares or redeemed (in the latter case, the creation of a sinking fund is provided for in the emission prospectus). In this regard, these financial instruments are often treated as hybrid securities, since they simultaneously have the properties of ordinary shares (entitle to receive a share in current profits and property) and bonds (permanence and, as a rule, mandatory payment of constant dividends).
Additional capital is in fact an addition to the authorized capital and includes the amount before the assessment of fixed assets, capital construction projects and other tangible property of the organization with a useful life of more than 12 months, carried out in the prescribed manner, as well as the amount received in excess of the nominal value of the outstanding shares ( share premium of a joint-stock company). In terms of revaluation of non-current assets, additional capital can be formed very artificially. Directions for the use of this source of funds, regulated by accounting regulations, include:
- - repayment of the decrease in the value of non-current assets as a result of their revaluation;
- - increase the authorized capital;
- - distribution among the members of the organization.
Reserve capital. The sources reflected in this subsection may be created in the organization either on a mandatory basis, or if it is provided for in the constituent documents. The legislation of the Russian Federation provides for the mandatory creation of reserve funds in open joint-stock companies and organizations with the participation of foreign investments. According to the Federal Law “On Joint Stock Companies”, the size of the reserve fund (capital) is determined in the charter of the company and should not be less than 5% of the authorized capital. The formation of reserve capital is carried out through mandatory annual deductions until it reaches the established amount. The amount of these deductions is also determined in the charter, but cannot be less than 5% of net profit (profit remaining at the disposal of the owners of the company after settlements with the budget for taxes). This law provides that the funds of the reserve capital are intended to cover losses, as well as to redeem the company's bonds and buy back own shares in the absence of other funds.
Undestributed profits. The profit received by the enterprise at the end of the year is distributed by the decision of the competent authority (for example, the general meeting of shareholders in a joint-stock company or a meeting of participants in a limited liability company) for the payment of dividends, the formation of reserve and other funds, covering losses of previous years, etc. The remaining undistributed balance of profit for essentially represents the reinvestment of profits in the assets of the enterprise; it is reflected in the balance sheet as a source of equity and remains unchanged until the next meeting of shareholders. If the share of annually reinvested profit is consistently high in dynamics, i.e. shareholders are satisfied with the return on equity generated by the enterprise, then over the years this source can be very significant in the structure of sources of own funds.
Methods of financing the enterprise at its own expense. As it is easy to see from the above characteristics of the elements of equity capital, their role in financing the enterprise is quite diverse.
The source of financing investment activities, as well as ensuring and expanding current activities, of course, is the profit of the enterprise. For the implementation of strategically important projects, a one-time increase in the authorized capital through an additional issue of shares can serve as a source of financing.
In world practice, there are various ways of issuing shares:
- - sale directly to investors by subscription;
- - sale through investment institutions that buy the entire issue and then distribute the shares at a fixed price among individuals and legal entities;
- - tender sale (several investment institutions buy the entire issue from the borrower at a fixed price and then arrange an auction, based on the results of which they set the optimal share price);
- - placement of shares by a broker with a small number of its clients.
The issue of shares is an expensive and time-consuming process, in addition, it is regulated by law (in particular, the Federal Law "On Joint Stock Companies"). As the experience of economically developed countries shows, additional emission due to the so-called signaling effect is often accompanied by a decrease in the market price of shares, therefore, this method of mobilizing financial resources is rarely resorted to - in cases where there are clearly defined prospects for using the funds raised.
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