Own capital is a set of funds belonging to the owner of the enterprise on the basis of ownership, participating in the production process and making a profit.
Capital is the main economic basis for the creation and development of an enterprise (organization), as it characterizes total cost funds in monetary, tangible and intangible forms invested in the formation of its assets. In the process of its functioning, the capital ensures the interests of the owners and personnel of the enterprise (organization), as well as the state. This is what defines it as the main object financial management enterprise (organization), and ensuring its effective use is one of the most important tasks of financial management.
Equity capital characterizes the total value of the funds of the enterprise (organization) belonging to it on the right of ownership. It includes authorized (share), additional, reserve capital, retained earnings and other reserves.
The authorized capital of an enterprise (organization) determines the minimum amount of its property that guarantees the interests of its creditors. The capital is called authorized because its size is fixed in the charter of the enterprise, which is subject to registration in the prescribed manner.
During the life cycle of an organization, its authorized (share) capital can be split, decreased and increased, including at the expense of a part of the internal financial resources of the company.
Additional capital includes:
the amount of revaluation of fixed assets, facilities capital construction and other tangible objects of the company's property with a period beneficial use over 12 months, carried out in the prescribed manner;
values donated by the company;
the amount received in excess of the nominal value of the outstanding shares (share premium joint-stock company);
other similar amounts.
Additional capital accumulates cash flowing to the enterprise during the year through the above channels. The main channel here is the results of the revaluation of fixed assets.
The reserve capital is formed from deductions from profits in the amount determined by the charter, but not less than 15% of its authorized capital. At least 5% of net profit must be deducted to the reserve fund annually until the reserve capital reaches the amount established by the charter. Reserve capital is created to cover possible losses of the enterprise (organization), as well as to redeem bonds issued by the enterprise and buy back its own shares (the procedure for forming reserve capital will be discussed below).
In order to evenly include future expenses in production or circulation costs of the reporting period, an enterprise (organization) can create the following reserves:
doubtful debts in settlements with other organizations and citizens;
for the upcoming payment of vacations to employees;
for the payment of annual remuneration for the length of service;
for the payment of remuneration based on the results of work for the year;
for the repair of fixed assets;
for the upcoming costs of repairing items intended for rental under a rental agreement;
for warranty repairs and warranty service;
to cover other foreseen costs and other purposes provided for by law.
Profit is the final financial result of the enterprise (organization) and is an important component of equity.
In the process of activity, the owner of the enterprise can, on any conditions, attract additional capital from citizens of other enterprises, the state, both on a reimbursable and non-reimbursable basis.
Thus, the capital of the enterprise is formed both at the expense of its own (internal) and borrowed (external) sources. The main source of financing is equity. Its composition includes authorized capital, accumulated capital (reserve and additional capital, social fund, retained earnings) and other receipts (target financing, charitable donations, etc.).
Own capital is the assets of the entity minus the liabilities of the entity. Own capital in accounting is divided into subclasses: authorized capital, additionally paid-in capital, reserve capital, retained earnings. This division is necessary for users financial reporting, when analyzing economic activity. Higher specific gravity own capital in the structure of the balance sheet liabilities indicates a stable financial position of the subject.
The authorized capital is the amount of funds of the founders to ensure the statutory activities. At state enterprises, this is the value of property assigned by the state to the enterprise on the basis of full economic management; at joint-stock enterprises - the nominal value of shares; in limited liability companies - the sum of the shares of the owners; at a leased enterprise - the amount of contributions of its employees, etc.
The authorized capital is formed in the process of initial investment of funds. Contributions of founders to the authorized capital can be made in the form of Money, intangible assets, in property form. The value of the authorized capital is announced during the registration of the enterprise, and when adjusting its value, re-registration of the constituent documents is required.
As part of equity capital, two main components can be distinguished: invested capital, i.e. the capital invested by the owners in the enterprise, and the accumulated capital, i.e. created at the enterprise in excess of what was originally advanced by the owners.
Invested capital in joint-stock companies includes the par value of ordinary and preferred shares, as well as additionally paid-in (in excess of the par value of shares) capital. The first component of the invested capital is represented in the balance sheet of joint stock companies by authorized capital, the second - by additional capital (in terms of share premium).
Raised capital is credits, loans and accounts payable, i.e. obligations to individuals and legal entities.
Active capital is the value of all property in terms of composition and location, i.e. everything that the organization owns as a legally independent entity.
Passive capital - these are the sources of property (active capital) of the organization, it consists of equity and borrowed capital.
All these concepts can be expressed by the following equation:
A \u003d Fo + Sk,
where: A - assets; Fo - financial obligations; Sat - equity.
Sometimes equity acts as residual, because it reflects the totality of funds that remain at the disposal of the organization after the payment of financial obligations.
In this case, the equation looks like this:
Sk \u003d A - Fo
The amount of equity capital is not a constant value, it changes in accordance with the field of activity and development goals. Adjustment is made in accordance with the conditions of profit maximization. The total cost of capital at the disposal of the owner is called the balance sheet value of equity capital, however, the current estimate of the cost of capital, the future value and the market value of capital are also used, and these concepts are of a different nature.
Present value - present value - future cash flow, i.e. based on the principle that currency unit today is more expensive than tomorrow, the income received later is calculated, i.e. the cost is calculated taking into account deferred income.
Future value - the value in the future, emitted by production, i.e. the end value of the enterprise.
Market value is the future value, taking into account profitability, degree of risk, financial investments, etc.
Own capital is the basis for financing the activities of the corporation.
Equity management is not only about providing effective use already accumulated part of it, but also with the formation of its own financial resources that ensure the future development of the organization. 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 organization's own financial resources "F" is presented in Figure 1.
As part of internal sources the formation of its own financial resources, the main place belongs to the profit remaining at the disposal of the corporation - it forms the bulk of its own financial resources, providing an increase in equity capital, and, accordingly, growth market value companies.
Depreciation charges also play a certain role in the composition of internal sources, especially for organizations with a high cost of their own fixed assets and intangible assets; however, they do not increase the amount of the organization'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 organization's own financial resources.
Rice. one
As part of the external sources of formation of its own financial resources, the main place belongs to the attraction of additional capital by the organization through additional emission and sale of shares or through additional contributions to the authorized fund.
For individual organizations, one of the external sources of formation of their own financial resources may be the gratuitous financial aid. Other external sources include material and intangible assets included in its balance sheet.
Summing up, it should be noted that for a more detailed study of equity, factors affecting the financial stability of the organization, it should be analyzed.
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 invested capital is represented in the balance sheet of Russian enterprises by authorized capital, the second by additional capital (in terms of share premium received), and the third by additional capital or a social fund (depending on the purpose of using property received free of charge).
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 articles differ significantly. These articles are formed in accordance with the legislation, constituent documents and accounting policies.
As part of the internal sources of 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 an additional share (through additional contributions to the authorized fund or through additional emission and sale of shares). For individual enterprises, one of the external sources of the formation of their own financial resources may be the gratuitous financial assistance provided to them (as a rule, such assistance is provided only to certain state enterprises different levels). Other external sources include tangible and intangible assets transferred to the enterprise free of charge by individuals and legal entities as a charity.
The development of a policy for the formation of the enterprise's own financial resources is carried out in 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 the 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.
2. Determining the total need for own financial resources.
Ensuring the maximum volume of attracting own financial resources from internal sources. Ensuring the necessary volume of attracting own financial resources from external sources. Optimization of the ratio of internal and external sources of formation of own financial resources
At the second stage of the analysis, the sources of the 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. The criterion for such an assessment is the indicator "self-financing factor for the development of an enterprise." Its dynamics reflects the trend of providing the development of the enterprise with its own financial resources.
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 alternative sources formation of own financial resources, ensuring the growth of the company'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 main planned internal sources of the formation of the enterprise's own financial resources are the sum of net profit and depreciation charges, 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 certain types fixed assets leads to a corresponding decrease in the amount of net profit.
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 satisfies the total need for them in the planning period, then there is no need to attract these resources from external sources.
Ensuring the satisfaction of the need for own financial resources from external sources is planned by attracting additional share capital (owners or other investors), additional issue of shares or 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:
a) in ensuring the minimum total cost of attracting own financial resources. If the cost of attracting own financial resources from external sources exceeds the planned cost of attracting borrowed funds, then such formation of own resources should be abandoned;
b) in ensuring the preservation of the management of the enterprise by its original founders. The growth of additional share capital 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 one's own financial resources is assessed using the coefficient of self-financing of the enterprise's development in the coming period. Its level should correspond to the goal.
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.
3. Assurance financial stability development of the enterprise, its solvency in the long term, and, accordingly, a decrease in the risk of bankruptcy.
However, it has the following disadvantages:
1. The limited scope of attraction, and hence the possibility of a significant expansion of the operating and investment activity enterprises during periods of favorable market conditions at certain stages of its life cycle.
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, it concerns the minimum possible size at the time of formation, as well as the conditions that in the process of 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.
The share of the authorized capital in the equity 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 enough 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. Determination of 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. Achievement optimal sizes in the distribution of profits is possible based on the internal growth rate 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 the 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 the 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 the financial condition of the 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.
Send your good work in the knowledge base is simple. Use the form below
Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.
Hosted at http://www.allbest.ru
ToURSOVAWORK
by discipline: " Financial management"
on the topic: "Organization's own capital: composition, sources and formation procedures"
ATMANAGEMENT
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 these objects is the capital of an enterprise - the most important economic category and, in particular, equity, the importance of which for the viability and financial stability of an enterprise is so great that it has received legislative consolidation in the Civil Code of the Russian Federation (requirements for minimum value 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).
Important indicators characterizing the financial condition of the enterprise. The assessment of equity capital serves as the basis for calculating most of them. Equity Accounting - important site in system accounting(the main characteristics of the company's own sources of financing are formed).
The relevance of this topic is great importance in new economic conditions, since the company's own capital is the basis of its independence, and this is especially important in the current economic instability and increased competition. Any enterprise cannot exist without its own financial resources. As you know, one of the main components of these resources is the authorized capital, it determines the minimum size of the property of the enterprise and is the first and prerequisite normal operation of any enterprise.
The main purpose of the course work is to study the organization's own capital. I will try to understand this topic in detail by studying:
The concept of the company's own capital;
The composition and structure of the company's own capital;
Sources and procedures for the formation of the enterprise's own capital.
1. CONCEPT,COMPOUNDAND STRUCTUREOWNCAPITAL ORGANIZATION
1.1 Capital
Capital is the means that a business entity has to carry out its activities in order to make a profit.
Regardless of the organizational and legal forms of ownership, each organization must have economic resources - capital, for the implementation of financial and economic activities. The capital of an enterprise characterizes the total value of funds in monetary, tangible and intangible forms invested in the formation of its assets. This characterizes the direction of investment.
Capital is an opportunity and a set of forms of mobilization of financial resources for profit. It can be noted such characteristics as:
1. The capital of the enterprise is the main factor of production. In the system of factors of production, it has a priority role, because it combines all factors into a single production complex.
2. Capital characterizes the financial resources of the enterprise that generate income. In this case, it can act in isolation from production factor in the form of invested capital.
3. Capital is the main source of wealth formation for its owners. Part of the capital in the current period leaves its composition and falls into the "pocket" of the owner, and the accumulated part of the capital ensures the satisfaction of the needs of the owners in the future.
4. The capital of an enterprise is the main measure of its market value. First of all, this capacity is the equity capital of the enterprise, which determines the volume of its net assets. The amount of equity used in the enterprise characterizes at the same time the potential for attracting borrowed funds, which provide additional profit. Together with other factors, it forms the basis for assessing the market value of the enterprise.
5. The dynamics of the capital of the enterprise is the most important indicator the level of efficiency of its economic activity.
Basically, capital , being an economic resource, it is a combination of its own and loan capital required for the financial and economic activities of the organization.
Borrowed capital is cash or other property values attracted for the needs of the development of an enterprise on a returnable and paid basis (credits, loans and accounts payable).
Equity capital is the total value of the company's funds, owned by it, and used by it to form a certain part of the assets. The assets formed at the expense of the own capital invested in them act in the form of net assets of the enterprise. 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, like debt, cannot be directly attributed to certain objects property. Equity on the balance sheet may be in a specific or abstract form as a value or as a reminder item: on the one hand, the equivalent of equity was or should be directed to investments and, accordingly, is associated with any objects in the asset balance, on the other hand, the equity accounts reflected in the liability of the balance sheet remind of the funds provided in disposal of the organization by its founders who are no longer at the disposal of the organization as financial resources. These funds could be provided by the founders during the formation of the organization in cash or in the form of other objects of property, or they are based on the undistributed profit of the organization.
Consequently, the organization's own capital either comes from outside, or is formed by hoarding (accumulation of profits).
1.2 The concept of equity
We have already found out that any enterprise cannot exist without its own financial resources, and equity capital is one of the main components of these resources - it is a set of material values and money, financial investments and the cost of acquiring the rights and privileges necessary for its implementation. economic activity.
Equity capital characterizes the total value of the enterprise's funds owned by it and used by it to form a certain part of the assets. The part of the asset formed from the equity invested in them is the net assets of the enterprise. Own capital includes various sources of financial resources in terms of their economic content, principles of formation and use: authorized, additional, reserve capital. In addition, the composition of equity capital, which can be operated by an economic entity without reservations when making transactions, includes retained earnings; funds special purpose and other reserves.
Equity capital of the organization as a legal entity in general view determined by the value of 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 complex structure. Its composition depends on the organizational and legal form of the economic entity.
From a financial and economic point of view, on the basis of volatility, one can distinguish between fixed and variable components of equity. The fixed capital of an enterprise can be attributed to the authorized capital, which is always (even with its partial payment) determined by a constant value and remains unchanged until the general meeting of shareholders decides to increase or decrease it. It is precisely because of the variability of the authorized capital due to the decision of the meeting of shareholders that equity capital can be considered as "conditionally" constant.
In contrast to the "conditionally" constant authorized capital, the variable components of equity, as a rule, change from year to year. The variable components of equity include reserve funds and the financial performance of the organization. Their changes are determined by the received financial result, as well as relevant decisions on the distribution of profits and contributions to accumulation funds.
Equity performs five important functions:
1. Working function or continuity function;
2. Responsibility function;
3. Damage recovery function;
4. Profit sharing function;
5. Organization management function.
Continuity function consists in the fact that "conditionally" permanent own capital, in contrast to borrowed capital, is provided at the disposal of the enterprise without any time limits and ensures the continuity of its economic activity. Due to the unlimited term of provision, capital can be directed to long-term financing of the economic activity of the enterprise, which manifests its working function, which allows the enterprise to respond to emerging opportunities for risky investments for which it is impossible to obtain borrowed capital.
Responsibility function of the enterprise's own capital consists in the fact that it is liable for debts with all its property, while the founders are liable only within the limits of their own share in the authorized capital.
Indemnification function equity of the enterprise is related to the function of responsibility. The company's equity capital plays the role of a buffer, mitigating the impact of losses resulting from the excess of the reporting period's expenses over income. Losses can be compensated by using reserve funds or by reducing the authorized capital. Since the indemnification function and the liability function serve primarily to protect the interests of the enterprise's creditors, since there are a number of provisions and regulations describing the implementation of these functions. If the amount of accumulated losses exceeds the equity capital of the enterprise, then the signs of a formal excess of liabilities over assets are fulfilled. It is necessary to distinguish the legal excess of liabilities over assets, which serves as the beginning of the bankruptcy procedure of an enterprise, from the formal one. Legal grounds for initiating bankruptcy proceedings arise when such an excess occurs in the liquidation balance sheet. If the company has exhausted the possibility of using reserve funds and even authorized capital, then this is the beginning of the opening of its bankruptcy procedure.
The larger the equity capital of an enterprise, the greater the amount of losses it can cover and the more time the management gets to take appropriate measures to eliminate losses in the future. The indemnification function can lead to infringement of the rights of the founders. This risk is mitigated by the right to participate in the profits of the enterprise (profit sharing function) and the function of managing the enterprise.
Profit sharing function gives the shareholder or founder of the enterprise the right to receive part of the profit in proportion to his share in the authorized capital.
Control function joint-stock company is severely limited general meeting shareholders, that is, an individual shareholder can take part in decision-making only indirectly by appointing and recalling members of the supervisory board and using his right of approval for major decisions.
The ability of equity capital to self-increase at a high rate characterizes high level formation and effective distribution of profits of the enterprise, its ability to maintain financial balance through internal sources. At the same time, the decrease in equity capital is, as a rule, the result of inefficient, unprofitable activities of the enterprise.
1.3 Compoundandstructureequity
Own capital (the total amount of funds belonging to the enterprise) consists of the authorized capital (invested by the owners of the enterprise during its creation) and funds accumulated in the course of economic activity.
Own fixed capital is capital invested in fixed assets, intangible assets, construction in progress, long-term investments.
Own working capital is the capital invested in stocks of raw materials and materials, stocks finished products, current accounts receivable.
In the process of economic activity, there is a constant turnover of capital: successively it changes the monetary form to the material one, which in turn changes, taking various forms products, goods and others, in accordance with the conditions of the production and commercial activities of the organization, and, finally, the capital is again converted into cash, ready to start a new circuit.
The owners are legal and individuals, a collective of contributors-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 equity capital. Let's single out the forms of functioning of the enterprise's own capital.
Equity capital consists of authorized, additional, reserve capital; retained earnings and targeted (special) funds. Commercial organizations operating on the principles of a market economy, as a rule, own collective or corporate property.
Equity capital consists of:
1. Authorized capital characterizes the initial amount of the company's own capital invested in the formation of its assets to start economic activity. Its size is determined (declared) by the charter of the enterprise. For enterprises of certain fields of activity and organizational and legal forms (joint-stock company, limited liability company), the size of the authorized capital is regulated by law. 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.
The organization of the authorized capital, its effective use, management is one of the main and most important tasks financial services enterprises. The authorized capital is the main source of the company's own funds. The amount of the authorized capital of a joint-stock company reflects the amount of shares issued by it, and the state and municipal enterprise- the amount of the authorized capital. The authorized capital is changed by the enterprise, as a rule, according to the results of its work for the year after the introduction of changes in the constituent documents.
It is possible to increase (decrease) the authorized capital by issuing additional shares into circulation (or withdrawing from circulation some of their number), as well as by increasing (decreasing) the par value of old shares.
2. Reserve capital represents a reserved part of the company's own capital intended for internal insurance of its economic activity. The size of this reserve part of equity capital is determined by the constituent documents. The formation of the reserve fund (reserve capital) is carried out at the expense of the enterprise's profit (the minimum amount of profit deductions to the reserve fund is regulated by law).
The company creates a reserve fund in the amount provided for by the charter of the company, but not less than 15 percent of its authorized capital. The reserve capital 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 provided for by the charter of the company, but cannot be less than 5 percent of the net profit until the amount established by the charter of the company is reached. The reserve capital of the company is intended to cover losses, as well as to redeem the company's bonds and buy back the company's shares in the absence of other funds. Reserve capital cannot be used for other purposes.
3. Dadditional capital 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 funds 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.
Additional capital includes:
· the results of the revaluation of fixed assets;
share premium of a joint-stock company;
donated cash and material values for production purposes;
· appropriations from the budget for the financing of capital investments;
funds to replenish working capital.
4. Undestributed profits this is net profit (or part of it), not distributed in the form of dividends among shareholders (founders) and not used for other purposes. Typically, these funds are used to accumulate the property of an economic entity or replenish it. 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.
Retained earnings are intended for capitalization, that is, for reinvestment in production. According to its economic content, it is one of the forms of the reserve of the enterprise's own financial resources, which ensure its production development in the coming period.
5. Target (special) funds are created at the expense of the net profit of an economic entity and must serve for certain purposes in accordance with the charter or the 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.
Asking the question what own funds represent in the activities of a modern enterprise, it should be noted that along with the solution of purely financial matters it is necessary to simultaneously consider the reliability of the "controllability" of the enterprise in the hands of the owner. The fact is that with an additional issue of ordinary shares, you can simultaneously lose control over the activities of the enterprise - this applies to a joint-stock company, raising funds in the form of long-term bonds (for a period of more than 5 years) can significantly increase the risk of bankruptcy of the enterprise in the future.
In order for an enterprise to function normally, it is necessary to carefully analyze its financial activities, identify problems and find ways out of them. In fact, the basis of the finances of an enterprise should be its own resources, otherwise, based only on attracted (borrowed) funds, it is threatened with collapse and bankruptcy. After all, in this case, the company simply will not be able to repay its obligations and continue to freely engage in its production activities.
Unfortunately, at present, most enterprises exist mainly on borrowed funds, having their own financial resources of less than 30-40% of their total number. Gradually, these economic entities are subject to slow, and sometimes even very fast, "bogged down in debt" to creditors, suppliers, and so on.
2. SOURCESOWN CAPITAL ORGANIZATION
2.1 Sources of equity capital formation
Sources of formation of financial resources is a set of sources of satisfaction additional need in the capital for the coming period, ensuring the development of the enterprise.
The structure of sources of formation of assets (funds) is represented by the main components: equity capital and borrowed (attracted) funds.
All sources of financial resources of the enterprise can be represented as the following sequence:
· own financial resources and internal reserves;
borrowed funds;
attracted financial resources.
Own and borrowed sources of financing form the company's own capital. Amounts attracted from these sources from outside, as a rule, are non-refundable. Investors participate in income from the sale of investments on the basis of shared ownership.
Borrowed sources of financing form the borrowed capital of the enterprise. Borrowed capital is loans from banks and financial companies, loans, accounts payable, leasing, commercial paper, and so on. It is divided into long-term (more than a year) and short-term (up to a year).
Borrowed capital characterizes the part of the company's assets that are financed by its creditors of all kinds. Borrowed capital of the enterprise can be formed at the expense of external and internal sources.
The main external sources of the formation of borrowed capital of enterprises include:
bank (financial) loans;
funds raised as a result of the issue of bonds;
commercial loans.
AT modern conditions For the bulk of enterprises, the problem of choosing sources of financing for their activities is acute. total amount funds that must be paid for attracting and using a certain amount of financial resources, expressed as a percentage of this volume, is called the price of capital. The concept of such an assessment comes from the fact that capital, as one of the important factors of production, has, like its other factors, a certain value that forms the level of operating and investment costs of the enterprise.
Consider the main areas of use of the indicator of the cost of capital in the activities of the enterprise:
1. The cost of capital of an enterprise serves as a measure of the profitability of operating activities. Since the cost of capital characterizes the part of the profit that must be paid for the use of the generated or attracted new capital to ensure the release and sale of products, this indicator is the minimum norm for the formation of the operating profit of the enterprise, the lower limit when planning its size.
2. The indicator of the cost of capital is used as a critical one in the process of real investment. First of all, the level of the cost of capital of a particular enterprise acts as a discount rate at which the amount of net cash flow is reduced to the present value in the process of evaluating the effectiveness of individual real projects. It also serves as a basis for comparison with the internal rate of return for the investment project under consideration: if it is lower than the indicator of the cost of capital of the enterprise, such investment project must be rejected.
3. The cost of capital of an enterprise serves as a basic indicator of the effectiveness of financial investment.
4. The indicator of the cost of capital of an enterprise serves as a criterion for making managerial decisions regarding the use of rent (leasing) or the acquisition of ownership of production fixed assets.
5. The indicator of the cost of capital in the context of its individual elements is used in the process of managing the structure of this capital based on the mechanism financial leverage, the art of using which lies in the formation of its highest differential, one of the components of which is the cost of borrowed capital. The minimization of this component is ensured in the process of assessing the cost of capital attracted from various borrowed sources, and the formation of an appropriate structure of the sources of its use by the enterprise.
6. The level of cost of capital of an enterprise is the most important measure of the level of market value of this enterprise. A decrease in the level of the cost of capital leads to a corresponding increase in the market value of the enterprise and vice versa.
7. The indicator of the cost of capital is a criterion for evaluating and forming an appropriate type of policy for financing an enterprise's assets (primarily current ones). Based on the real cost of the capital used and the assessment of its forthcoming change, the enterprise forms an aggressive, moderate (compromise) or conservative type of asset financing policy.
The process of assessing the cost of capital is based on the following basic principles:
· The principle of a preliminary element-by-element assessment of the cost of capital. Since the used capital of the enterprise consists of heterogeneous elements in the evaluation process, it must be decomposed into separate constituent elements, each of which must be the object of evaluation calculations.
· The principle of a generalized assessment of the cost of capital. The element-by-element assessment of the cost of capital serves as a prerequisite for the generalized calculation of this indicator. Such a generalizing indicator is the weighted average cost of capital.
· The principle of comparability of valuation of equity and borrowed capital. In the process of assessing the cost of capital, it should be borne in mind that the amounts of used equity and borrowed capital, reflected in the liability of the enterprise's balance sheet, have a disparate quantitative value. If the loan capital provided for use by the enterprise in cash or commodity form estimated at the amount in prices close to the market, then the equity reflected in the balance sheet, in relation to the current market value, as a rule, is significantly underestimated. To ensure comparability and correctness of calculations of the weighted average cost of capital, the amount of its own part should be expressed in the current market valuation.
· The principle of dynamic assessment of the cost of capital. Factors affecting the weighted average cost of capital are very dynamic, therefore, with a change in cost individual elements capital, adjustments should also be made to its weighted average value. In addition, the principle of valuation dynamism suggests that it can be carried out both for the already formed and for the capital planned to be formed (attracted).
· The principle of interrelation of assessment of the current and forthcoming weighted average cost of capital of an enterprise. This relationship is ensured by using the indicator of the marginal cost of capital. It characterizes the level of cost of each new unit, additionally attracted by the enterprise. Attracting additional capital of an enterprise, both at the expense of its own and borrowed sources, has its own economic limits at each stage of the development of the enterprise and, as a rule, is associated with an increase in its weighted average cost. Therefore, the dynamics of the indicator of the marginal cost of capital must be taken into account in the process of managing the financial activities of the enterprise. Comparing the marginal cost of capital with the expected rate of return on individual business transactions that require additional capital raising, it is possible in each specific case to determine the measure of the effectiveness and expediency of such operations. First of all, this applies to the investment decisions made.
· The principle of determining the boundaries of the effective use of additionally attracted capital. The assessment of the cost of capital should be completed by the development of a critical indicator of the effectiveness of its additional attraction. This indicator is the marginal efficiency of capital. This indicator characterizes the ratio of the increase in the level of profitability of additionally attracted capital and the increase in the weighted average cost of capital.
The stated principles of evaluation make it possible to form a system of key indicators that determine the cost of capital and the boundaries of its effective use. Among the indicators considered, the main role belongs to the indicator of the weighted average cost of capital. It develops at the enterprise under the influence of many factors, the main of which are:
a) the average interest rate prevailing in the financial market, the availability of various sources of financing (bank loans, commercial loans, own issue of shares and bonds, and so on);
b) industry-specific operating activities that determine the duration of the operating cycle and the level of liquidity of the assets used;
c) the ratio of the volume of operating and investment activities;
G) life cycle enterprises;
e) the level of risk of ongoing operating, investment and financial activities.
These factors are taken into account in the process of purposeful management of the cost of equity and borrowed capital of the enterprise.
Distinguish between explicit and implicit price of capital. This is the price at which costs are determined exactly (interest rates on loans and borrowings, coupon income on bonds, and so on) and inaccurately (authorized fund, retained earnings, funds and reserves of the enterprise, that is, there is no fixed and direct payment for the use of capital). Suppose that the price of equity is an implicit price: for a joint-stock company, dividends are an outflow of cash (costs), and for shareholders, they are income. Dividends are the transaction costs of raising capital in the stock market. The calculation of the transaction costs of an enterprise minus the costs associated with attracting borrowed sources of financing (credits, loans, issuance of bonds, payment for leasing and factoring operations, tax credit, fines, and so on) makes it possible to determine the cost of the process of creating normal conditions for the functioning of the main production.
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 - capital created at the enterprise in excess of what was originally advanced by the owners.
Invested capital includes the par value of common and preferred 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 the social sphere fund (depending on the purpose of using the property received free of charge).
Accumulated capital 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.
equity cost
2.2 Division of form sourcesequity capital
All sources of equity capital formation can be divided into internal and external:
· As part of the internal sources of 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 contributions to the statutory fund or through additional emission and sale of shares. 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-owned enterprises of various levels). Other external sources include tangible and intangible assets transferred to the enterprise free of charge by individuals and legal entities as a charity.
3. FORMATION PROCEDURESOWNCAPITALORGANIZATIONS
The basis of the enterprise's own capital management is the management of the formation of its own financial resources. In order to ensure the efficiency of managing 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 formation of own financial resources is part of the overall financial strategy of the enterprise, which consists in ensuring the necessary level of self-financing of its production development.
The development of 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 own financial resources and its compliance with the pace of development of the enterprise:
First of all, 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 preplanned period are studied;
· at the next stage sources of formation of own financial resources are considered. First, 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 final stage of the analysis, the sufficiency of own financial resources formed at the enterprise in the preplanning period is assessed. The criterion for such an assessment is the indicator "self-financing factor for the development of an enterprise." Its dynamics reflects the trend of providing the development of the enterprise with its own financial resources.
2. Determining the total need for own financial resources can be calculated using the following formula:
POFR = - SKN - PR
where POFR - 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.
3. The assessment of the cost of attracting equity capital from various sources 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 underlie 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, it is necessary to realize all the possibilities of their formation from internal sources. The main planned internal sources of formation of the enterprise's own financial resources are: the amount of net profit and depreciation charges. First of all, in the process of planning these indicators, it is necessary to provide for the possibility of their growth due to various reserves. 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 remembered that the increase in the amount of depreciation in the process of accelerated depreciation of certain types of fixed assets leads to a corresponding decrease in the amount of net profit.
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 satisfies the total need for them in the planning period, then there is no need to attract these resources from external sources. Ensuring the satisfaction of the need for own financial resources from external sources is planned by attracting additional share capital (owners or other investors), additional issue of shares or 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:
· in ensuring the minimum total cost of attracting own financial resources. If the cost of attracting own financial resources from external sources exceeds the planned cost of attracting borrowed funds, then such formation of own resources should be abandoned;
· in ensuring the preservation of the management of the enterprise by its original founders. The growth of additional share capital 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 one's own financial resources is assessed using the coefficient of self-financing of the enterprise's development in the coming period. Its level should correspond to the goal.
Thus, the formation investment policy as part of the overall financial strategy of the enterprise is an important multi-stage process aimed at ensuring the necessary level of self-financing of its production
CONCLUSION
In the process of writing my term paper, I came to the following conclusion:
Own capital is the financial basis of the enterprise, and knowing how to manage it correctly is the key to the future development of the enterprise, its financial stability, and therefore, receiving the expected profit from the activities of the company.
We found out that equity is a set of economic relations, allowing to include in the economic circulation financial resources belonging either to the owners or to the economic entity itself.
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. A higher ability to generate profits in all areas of activity, since its use does not require the payment of loan interest in all its forms.
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.
At the enterprise, equity capital is represented by such forms as authorized capital, reserve capital, borrowed capital, special financial funds, retained earnings and other reserves. Each of these forms is characterized and each of them has its own characteristics and sources of formation.
To ensure the effectiveness of managing the process of forming its own financial resources, the enterprise 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, such a policy is the policy of forming its own financial resources.
The policy of forming own financial resources is part of the overall financial strategy of the enterprise, which consists in ensuring the necessary level of self-financing of its production development.
The development of a policy for the formation of the enterprise's own financial resources is carried out in stages. We have established the composition and structure of the main sources of formation of the enterprise's own financial resources.
In the new economic conditions of economic instability and increased competition, it is important for enterprises to monitor the state of their own capital, increasing it if possible, since the enterprise's own capital is the basis of its independence. Management needs to develop and implement a competent policy for the formation of its own financial resources, which will ensure sustainable financial position for the enterprise.
LITERATURE
1. Blank I.A. Capital Formation Management - Kyiv, Nika-Center, 2008
2. Blank I.A. Financial management - Kyiv, Nika - Center, 2008
3. Galitskaya S.V. Financial management. The financial analysis. Enterprise Finance: Textbook for Universities - Moscow, EKSMO, 2008
4. Tikhomirov E.F. Financial management. Enterprise Financial Management: Textbook for Universities, 2nd edition - Moscow, Academy, 2008
5. Grachev A.V. Growth of own capital, financial leverage and solvency of the enterprise, Financial management, 2009
Hosted on Allbest.ru
Similar Documents
Capital as the means that a business entity has to carry out its activities with the aim of making a profit. Characteristics of OJSC "TorVZ", analysis of activities and dynamics of assets. Methods for diagnosing the risk of bankruptcy of an enterprise.
term paper, added 02/06/2013
The essence of fixed assets and their importance in the business of the company. Financial analysis of JSC "GSOK Kazan". Composition of fixed assets, sources of their formation. Indicators of liquidity, business activity, return on equity.
term paper, added 08/07/2017
Principles of developing the financial policy of a modern enterprise. The essence of equity capital, sources and features of its formation in trade organization. The concept and sources of borrowed capital of an enterprise in this area, its specificity and significance.
term paper, added 11/10/2014
The concept of equity capital: sources of formation and main elements. Formation and use of the organization's reserves. The price of equity capital, ways to determine it. Analysis of profitability and evaluation of the effectiveness of the use of equity capital.
term paper, added 01/13/2010
The economic essence of the concepts of "capital" and "cost of capital". The main sources of formation of the property of the enterprise. Assessment of the cost of borrowed and equity capital of the organization. Problems of choosing a source of financing for their activities in Russia.
term paper, added 02/16/2015
Long-term sources of financing. The essence and composition of the company's own capital. Economic expediency formation and use of the company's own capital on the example of LLC "SPK Anit". Problems of equity capital management.
term paper, added 05/21/2015
The economic essence of the capital of the enterprise, the main characteristics and principles of formation. The concept and composition of equity capital. The procedure for increasing the authorized capital. The formation of additional funds. Calculation of proceeds from financial activities.
term paper, added 11/26/2009
Theoretical foundations of capital structure management in order to optimize it. Spheres of use of the indicator of its value in the activities of the enterprise. Factors that determine its price. Assessment and forecasting of the organization's weighted average cost of capital.
term paper, added 01/22/2015
The main stages of the formation of the enterprise's own capital, the characteristics of its value assessment. The choice of the best ratio of internal and external sources of formation of the equity capital of the company. Share capital and additional issue of shares.
presentation, added 06/05/2015
Economic essence, composition and structure of own capital. Sources of formation and assessment of the cost of equity capital. Concept and types of dividend policy of own capital. Stages of development of an effective issue policy of the enterprise.
The above list does not reflect the whole variety of types of capital used in scientific terminology and practice of financial management. It contains the main classification features.
1.2 Sources of formation of financial resources
Sources of formation of financial resources is a set of sources to meet additional capital needs for the coming period, ensuring the development of the enterprise.
In principle, all sources of financial resources of an enterprise can be represented as the following sequence:
own financial resources and on-farm reserves (profit, depreciation, cash savings and savings of citizens and legal entities, funds paid by insurance authorities in the form of compensation for losses from accidents, natural disasters, etc.);
borrowed funds (bank and budget loans, bonded loans and other funds);
attracted financial resources (funds received from the sale of shares, shares and other contributions of members of labor collectives, citizens, legal entities).
Own and attracted sources of financing form equity enterprises. Amounts attracted from these sources from outside, as a rule, are non-refundable. Investors participate in income from the sale of investments on the basis of shared ownership. Borrowed sources of financing form borrowed capital enterprises.
The financial basis of the enterprise is formed by its own capital.
First of all, the company focuses on the use internal funding sources.
Equity capital may consist of authorized, additional and reserve capital, accumulation of retained earnings and earmarked earnings.
Figure 1 - The composition of the equity capital of the enterprise
The organization of the authorized capital, its effective use, management is one of the main and most important tasks of the financial service of the enterprise. Authorized capital- the main source of own funds of the enterprise. The amount of the authorized capital of a joint-stock company reflects the amount of shares issued by it, and the amount of the authorized capital of a state and municipal enterprise. The authorized capital is changed by the enterprise, as a rule, according to the results of its work for the year after the introduction of changes in the constituent documents.
It is possible to increase (decrease) the authorized capital by issuing additional shares into circulation (or withdrawing from circulation some of their number), as well as by increasing (decreasing) the par value of old shares.
Reserve capital - includes the balances of the reserve and other similar funds created in accordance with the law or in accordance with the constituent documents.
To additional capital relate:
results of revaluation of fixed assets;
share premium of a joint-stock company;
gratuitously received monetary and material values for production purposes;
appropriations from the budget for financing capital investments;
funds to replenish working capital.
Undestributed profits this profit received in a certain period and not directed in the process of its distribution for consumption by owners and personnel. This part of the profit is intended for capitalization, i.e. to reinvest in production. According to its economic content, it is one of the forms of the reserve of the enterprise's own financial resources, which ensure its production development in the coming period.
Involved funds enterprises - funds provided on a permanent basis, which may be paid to the owners of these funds of income, and which may not be returned to the owners. These include: funds received from the placement of shares of a joint-stock company; share and other contributions of members of labor collectives, citizens, legal entities to the authorized capital of the enterprise; funds allocated by superior holding and joint-stock companies, public funds provided for targeted investment in the form of subsidies, grants and equity participation; funds of foreign investors in the form of participation in the authorized capital of joint ventures and direct investments of international organizations, states, individuals and legal entities.
The financial basis of the enterprise is formed by its own capital. At the operating enterprise, it is represented by the following main forms.
1.Statutory fund. It characterizes the initial amount of the company's own capital invested in the formation of its assets to start economic activity. Its size is determined (declared) by the charter of the enterprise. For enterprises of certain fields of activity and organizational and legal forms (JSC, LLC), the minimum size of the authorized capital is regulated by law.
2. Reserve fund (reserve capital). It represents a reserved part of the company's own capital, intended for internal insurance of its economic activities. The size of this reserve part of equity capital is determined by the constituent documents. The formation of the reserve fund (capital) is carried out at the expense of the enterprise's profit (the minimum amount of deductions of profit to the reserve fund is regulated by law).
3. Special (target) financial funds. These include purposefully formed funds of own financial resources for the purpose of their subsequent targeted spending. As part of these financial funds, they usually distinguish an amortization fund, a repair fund, a wage fund, a fund for special programs, a fund for the development of production, and others.
4. Undestributed profits. It characterizes the part of the enterprise's profit received in the previous period and not used for consumption by the owners (shareholders, shareholders) and staff. This part of the profit is intended for capitalization, i.e. for reinvestment in the development of production. According to its economic content, it is one of the forms of the reserve of the enterprise's own financial resources, which ensure its production development in the coming period.
5. Other forms of equity. These include settlements for property (when renting it out), settlements with participants (for the payment of income to them in the form of interest or dividends) and some others reflected in the first section of the balance sheet liability.
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 own financial resources is shown in Figure 2.
Internal sources
External sources
Profit remaining at the disposal of the enterprise
Raising additional share or equity capital
Depreciation deductions from used fixed assets and intangible assets
Other external sources of equity capital formation
Other internal sources of equity capital formation
Receipt by the enterprise of gratuitous financial assistance
Figure 2 - The composition of the main sources of formation of the enterprise's own financial resources.
As part of internal sources of formation of own financial resources the main place belongs to the profit remaining at the disposal of the enterprise - it forms the predominant part of its own financial resources, provides an increase in equity 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 external sources of equity capital formation 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.
1.3 Stages of equity capital formation policy
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 the efficiency of managing 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 policy of forming own financial resources is part of the overall financial strategy of the enterprise, which consists in ensuring the necessary level of self-financing of its production development. This policy includes the following main steps:
analysis of the formation and use of own financial resources in the base period;
determination of the total need for them for the upcoming (forecast) period (quarter, year);
assessment of the cost of raising equity capital from various sources;
ensuring the maximum volume of attraction of own financial resources from internal and external sources;
optimization of the ratio of internal and external sources of their formation.
Let's expand on the content of each stage in more detail:
1. The purpose of the analysis of the formation of own financial resources in the base period is to establish the financial potential for the future development of the corporation. At the first stage of the analysis, the following is studied: the correspondence of the growth rates of profit and equity to the growth rates of assets (property) and sales volume; dynamics of the share of own sources in the total volume of financial resources. It is advisable to compare these parameters for a number of periods. Profit should increase at a faster rate than other parameters. This means that production costs should be reduced, sales revenue should rise, and equity and assets should be used more efficiently by accelerating their turnover.
Sources of enterprise capital formation
Yudina Natalya Evgenievna,
undergraduate student of the Department of Enterprise Economics Kerch State Marine Technological University.
scientific adviser – Doctor of Economics, Associate Professor of the Department of Enterprise Economics
Demchuk Oleg Vladimirovich
The article considers the essence of the concept of "capital" of the enterprise. A classification of the sources of its formation is presented.
Keywords:equity, equity, borrowed capital, retained earnings, loans and borrowings, leasing.
The term "capital" in the literal sense means the main amount of funds necessary to start and carry out production (activity). As the main economic base for the creation and development of an enterprise, capital in the process of its functioning ensures the interests of the state, owners and personnel.
The economic dictionary gives the following definition of capital, which claims to be well-known generalizations: “Capital is the amount of funds owned by a person or group of persons, expressed in the cost of buildings, equipment, land (fixed capital), raw materials, fuel, wages of workers (working capital) ". In a broad sense, capital is the total resources used in business, among which the most important component is human capital.
The capital of an enterprise characterizes the total cost of funds in monetary, tangible and intangible forms invested in the formation of its assets.
The capital of the enterprise is formed both at the expense of its own (internal) and borrowed (external) sources.
Equity- this is the total value of the enterprise's funds owned by it and used to form a certain part of the assets. The composition of the company's own capital is shown in Figure 1.
Rice. 1. The composition of the equity capital of the enterprise (organization).
Borrowed capital is loans from banks and financial companies, loans, accounts payable, leasing, commercial paper, etc. It is divided into long-term (more than a year) and short-term (up to a year) (Figure 2) .
Rice. 2. The composition of the borrowed capital of the enterprise (organization).
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. Own financial resources are classified into internal and external.
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 a large 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 enterprise's own capital, but only serve as 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 formation of their own financial resources may be the gratuitous financial assistance provided to them, which, as a rule, is provided only to individual state-owned enterprises. Other external sources include tangible and intangible assets transferred to the enterprise free of charge and included in its balance sheet.
Borrowed capital of enterprises can be formed at the expense of two main groups of sources of borrowed funds.
The first group is external sources of borrowed funds. This group of sources consists of two subgroups - external long-term and external short-term sources of borrowed capital.
To form long-term borrowed financial capital, external long-term financial resources are used, and, first of all, long-term bonded loans, long-term bank loans and financial leasing. In world practice, both long-term tax credit and tax incentives are actively used.
External short-term borrowed financial resources are used in the formation of short-term borrowed capital, for which, first of all, short-term bank loans and commodity (commercial) credit are suitable.
The second group is internal sources of borrowed funds, which include borrowed financial resources generated from deferred and overdue external long-term and short-term liabilities. In a normal market economy, the amount of such borrowed resources is not significant enough. However, during the transition period, these borrowed funds are used quite actively to form long-term and short-term financial capital.
Thus, an enterprise in the course of its activities can use all the sources of financial resources formation available to it (own, borrowed), while ensuring its financial stability. When forming a significant share of capital at the expense of sources of attracted financial resources, there is a danger of the possibility of returning obligations through additional financial costs for the right to use them. However, the formation of assets at the expense of attracted financial resources is attractive, since the payment for their use has no direct connection with the future. net profit enterprises. Attracting financial resources is always effective if the percentage of payment for them is less than the return on assets of the enterprise. At the same time, if an enterprise forms its assets at the expense of its own capital, its financial condition is strengthened, and vice versa, when carrying out economic activities at the expense of attracted financial resources, it loses financial autonomy.
Literature
1. Big Economic Dictionary [Electronic resource]. Access mode: http://big_economic_dictionary.academic.ru/ .
2. Blank I. A. Financial management / I. A. Blank. - K .: Nika-Center, 2010. -456 p.
3. Comprehensive economic analysis: tutorial/ M. V. Melnik, A. I. Krivtsov, O. V. Gorlova. - M.: FORUM: INFRA-M, 2014. - 368 p.
4. Savitskaya GV Analysis of economic activity of the enterprise: Textbook / GV Savitskaya. – M.: Infra-M, 2010. – 336 p.
5. Enterprise Finance: Textbook / Kolchina N.V., Polyak G.B., Pavlova L.P. and etc.; Ed. Prof. N.V. Kolchina. - M.: UNITI, 2000. - 413 p.
6. Economic analysis: textbook / Yu. G. Ionova, I. V. Kosorukova, A. A. Keshokova, E. V. Panina, A. Yu. Usanov; under. total ed. I. V. Kosorukova. - M.: Moscow Financial and Industrial Academy, 2012. - 432 p.
