Working capital is the assets of an enterprise that are renewed with a certain regularity to ensure current activities, investments in which are turned over at least once during a year or one production cycle.
Working capital is the mobile part of the company's assets. Current assets include: inventories and costs, finished products, receivables, cash. Being in constant motion, current assets ensure the continuity of the production process. At the same time, there is a constant and regular change in the forms of value: from monetary to commodity, then to production, again to commodity and monetary.
Current assets make up a significant proportion of all assets of the enterprise. The successful entrepreneurial activity of an economic entity largely depends on their skillful management. Current asset management is a constant, daily and continuous process in the work of a financial manager.
The objects of management of current assets are: the degree of their liquidity, composition, structure, value, sources of coverage and their structure. According to the degree of liquidity, slow-moving, fast-selling and absolutely liquid current assets are distinguished.
Slowly realizable current assets include stocks of raw materials, materials, work in progress, finished products. Stocks of finished goods are the more liquid part of slow-moving assets. Determining the amount of working capital required for the formation of stocks of finished products in the warehouse is closely related to the forecasts of sales volumes of manufactured products. With a well-established volume of finished products, its accumulation in the warehouse can be minimal.
The financial manager, based on an analysis of the market situation, must develop a forecast of expected sales for the coming period. Otherwise, the products may end up in the warehouse, as a result of which a significant part of the funds will be diverted from circulation, which may affect the financial condition of the enterprise.
Stocks of raw materials and supplies are less liquid, so the task of the financial manager is to determine the optimal amount of stocks necessary to ensure an uninterrupted production process and product sales.
The amount of money invested in work in progress depends on the duration of the production cycle, which is determined by the production technology, products, their technical and economic characteristics and consumer properties.
Quickly realizable current assets include: accounts receivable, as it is able to quickly transform into cash. Accounts receivable is formed during the sale of products and represents the money that buyers owe to the enterprise. Current assets include accounts receivable, the maturity of which does not exceed one year.
The level of accounts receivable is influenced by many factors, both objective and subjective. Objective factors include the economic conditions in which entrepreneurial activity is carried out. The subjective factors include the professional level of the financial manager, the credit policy of the enterprise, which affects the implementation.
When managing receivables, it should be borne in mind that part of it may not be paid. For a supplier enterprise, this means a reduction in sales revenue and profit margins. It is necessary to estimate the amount of bad debts. It can be calculated based on the amount of outstanding receivables for the previous period, taking into account changes in the economic situation. Two methods are used for evaluation.
In the first method, the percentage ratio of repaid receivables to the volume of sales is taken as a basis. The second method determines the percentage of unpaid bills and bills to their total volume. The financial manager must control the level of receivables, its structure, determine the amount of the reserve for doubtful debts.
The most liquid part of current assets are securities, which are short-term financial investments in securities of other enterprises, government bonds, etc.
Absolutely liquid assets include cash on hand, in bank accounts. The composition of working capital includes cash intended for current payments. The task of the financial manager is to determine the relationship between cash and securities. When solving this problem, one should evaluate the benefits of creating a stock of funds, the costs associated with their storage, or the costs of short-term investment of funds in securities with a certain income.
The composition and structure, the amount of working capital is affected by: the nature and complexity of production, the duration of the production cycle, the cost of raw materials, the procedure for payments, industry specifics and market conditions. The amount of working capital is not constant, it depends on the volume of production, its seasonality, uneven supply, untimely receipt of funds for shipped products, therefore it is customary to divide working capital into fixed and variable.
Permanent working capital is the portion of current assets that is relatively constant throughout the production cycle. This part may be the average or minimum value of the current assets required for production activities. The value of the variable capital determines the additional need for working capital associated with deviations that arise in certain periods of the enterprise's production activities (the need for additional costs for the seasonal nature of the work, the uniqueness of the sale of finished products, the growth of receivables, etc.).
The financial manager is faced with the task of determining the optimal level of working capital. If the amount of working capital is underestimated, then the company will constantly experience a lack of funds, have a low level of liquidity and, as a result, an interruption in the production process, loss of profit. Conversely, the greater the excess of current assets over current liabilities, the higher the liquidity of the enterprise. But an increase in working capital in comparison with the optimal need for them leads to a slowdown in their turnover and also reduces the amount of profit.
Thus, the working capital management strategy is based on ensuring the solvency of the enterprise and determining the optimal volume and structure of working capital. A comprehensive working capital management policy includes the management of current assets and current liabilities.
Under the management of current assets, one should understand the definition of the size, composition and structure. The strategy for financing current assets is determined depending on what decision the financial manager makes regarding the sources of covering temporary needs, i.e. coverage of the variable part of working capital.
In financial management, four models of working capital management are distinguished: ideal, aggressive, conservative, moderate. The ideal model assumes that current assets - net working capital - are the same size as current liabilities. This model is extremely rare in practice.
Current assets Short-term
financing
Fixed assets Long-term
financing
Figure 5 - Ideal working capital management model
It follows from the graph that current assets are fully covered by short-term liabilities. This model is risky in terms of liquidity. If full settlement with the majority of creditors is necessary, the enterprise will be forced to sell a part of fixed assets to cover current accounts payable.
Aggressive model characterized by the fact that it has a high share of current assets in all assets and a long period of their turnover, as well as a relatively high share of short-term loans in all liabilities.
BUT 
assets
Short term financing
working capital
Fixed assets Long-term financing
Figure 6 - Aggressive working capital management model
As you can see, the share of working capital is much higher than the share of fixed assets. The company has large stocks of raw materials, materials, finished products, significant accounts receivable. A short-term loan finances not only a variable part of current assets, but also a part of permanent current assets. Therefore, the larger the share of short-term credit in financing permanent working capital, the more aggressive financial policy. With an aggressive working capital management model, the cost of the enterprise to pay interest on a loan increases, which reduces profitability and creates a risk of losing liquidity.
conservative model assumes that current assets have a low share in the company's assets, a short asset turnover period, and current liabilities have a low share of a short-term loan or its absence.
Short term financing
working capital
Fixed assets Long-term financing
Figure 7 - Conservative model of working capital management
It follows from the graph that the share of current assets is relatively low, so the share of short-term financing in the total value of all liabilities of the enterprise is small. Only a part of the company's variable current assets is covered by a short-term loan. The rest of the need for working capital is covered by permanent liabilities.
The financial manager chooses such a policy precisely, subject to a deep study of sales volumes, a clear organization of mutual settlements, and established relationships with suppliers. Conservative policy contributes to the growth of return on assets. However, it contains elements of risk in case of unforeseen situations.
moderate model is applied when current assets make up half of all assets, when there is an average turnover period of working capital and an average level of short-term credit in liabilities.
BUT 
assets
Short term financing
working capital
Fixed assets Long-term financing
Figure 8 - Moderate working capital management model
Moderate financial policy of working capital management is a compromise between aggressive and conservative models. In this case, the indicators: profitability, turnover, liquidity will be averaged. The financial manager must evaluate the profitability of working capital management. Based on a comparison of various current asset management models.
Working capital and asset management policy are important, first of all, from the standpoint of ensuring the continuity and efficiency of the current activities of the enterprise.
Working capital management implies optimization of its size, structure and values of its components. As for the total amount of working capital, it is usually; its reasonable growth is regarded as a positive trend; however, there may be exceptions, for example, its growth due to an increase in bad debtors.
The target setting of the working capital management policy is to determine the volume and structure of current assets sufficient to ensure long-term production and efficient financial activities of the enterprise.
The formulated target setting is of a strategic nature; no less important is the maintenance of working capital in the amount that optimizes the management of current activities. From the standpoint of daily activities, the most important financial and economic characteristics of an enterprise are its liquidity and solvency, i.e. the ability to pay off short-term accounts payable on time. For any enterprise, a sufficient level of liquidity is one of the most important characteristics of the stability of economic activity. The loss of liquidity is fraught not only with additional costs, but also with periodic stops in the production process.
The working capital management policy should provide a compromise between the risk of loss of liquidity and operational efficiency. This boils down to two important issues.
1. Ensuring solvency.
2. Ensuring an acceptable volume, structure and profitability of assets.
Working capital (current assets) are assets that can be converted into cash during one production cycle. Under net current assets, it is customary to understand the difference between current assets and current liabilities.
Essence, structure, sources of formation of working capital of the enterprise. Theoretical foundations of the analysis of the effectiveness of the use of working capital. a brief description of LLC "Rainbow-Service". Recommendations for the management of working capital of the firm.
FROMcontent
INTRODUCTION
Chapter 1. Current assets of the enterprise and their management
1.1 The essence and structure of the working capital of the enterprise
1.2 Sources of formation of working capital of the enterprise
1.3 Circulation and turnover of working capital of the enterprise
Chapter 2. Theoretical foundations for analyzing the effectiveness of the use of working capital
2.1 Working capital management
2.2 Indicators of the effectiveness of the use of working capital
2.3 Information for analysis
Chapter 3. Analysis of working capital LLC "Rainbow - Service"
3.1 Brief description of Raduga-Service LLC
3.2 Analysis of the structure and dynamics of working capital LLC "Raduga - Service"
3.3 Analysis of the effectiveness of the use of working capital LLC "Raduga - Service"
Conclusion
List of sources used
ATconducting
The transition of the economy to market economic conditions strengthens the responsibility of enterprises and associations for the use of financial resources. Enterprises operating in a competitive environment as independent producers are interested in expanding their market segments and earning additional profit, so each of them seeks to clearly navigate the complex interweaving of the market mechanism, correctly assess the production and economic potential, development prospects, and financial stability.
It becomes especially important effective use resources available to the enterprise. And it is very important to implement a thoughtful and competent policy in the field of formation and use of both own and borrowed funds and other assets of the enterprise.
In the conditions of market relations, working capital acquires especially importance. For they are part of the productive capital which transfers its value entirely to the newly created product and returns to the entrepreneur in the form of money at the end of each cycle of capital. Thus, working capital is important criterion in determining the profit of the enterprise.
Currently, enterprises, regardless of their form of ownership and sectoral affiliation, are experiencing great difficulties in managing their property complexes. The existing property management system at enterprises does not provide optimization of the volume and structure of resources and, as a result, does not create conditions for sustainable production and economic activity. Working capital is one of constituent parts enterprise property. The condition and efficiency of their use is one of the main conditions successful activity enterprises. The development of market relations determines the new conditions for their organization. High inflation, non-payments and other crisis phenomena are forcing enterprises to change their policy in relation to working capital, to look for new sources of replenishment, to study the problem of the effectiveness of their use.
In this regard, the requirements for improving methods for assessing the level of resource use are becoming increasingly relevant.
Working capital management is of great importance both for large companies, where working capital makes up more than half of all its assets, and for medium and small companies, in which short-term liabilities are the main source of financing. All this determines the relevance of the topic of this final qualifying work.
In general, the relevance of this study is determined by the needs of developing a theory and improving the practice of managing the working capital of an enterprise.
Object of study - Raduga - Service LLC
The subject of the study is the efficiency of using the working capital of Raduga-Service LLC.
The purpose of this graduation qualification work is to identify the features of the organizational and methodological foundations for the formation of working capital and their management.
In accordance with the goal, the following tasks were set:
reveal the essence of the concept of "working capital" and consider the structure of working capital;
identify sources of formation of working capital of the enterprise;
show circuit features revolving funds enterprises;
show the complexity of managing inventory, receivables and cash of the enterprise;
analyze the financial condition of Raduga-Service LLC;
evaluate the efficiency of using the working capital of Raduga-Service LLC; develop recommendations for improving the management of working capital of the enterprise.
The theoretical and methodological basis of the work is the analysis of theoretical works devoted to the problems of the formation and use of working capital.
The problems are considered taking into account the application of methods of induction and deduction.
The sources of the study are documents regulating the processes of formation of working capital, financial reporting and financial analysis of the enterprise.
Glava 1 . working capitalenterprisesand management
1.1 The essence and structure of the working capital of the enterprise
Each enterprise, starting its production and economic activity, must have a certain amount of money. With these financial resources, the enterprise purchases raw materials, materials, fuel on the market or from other enterprises under contracts, pays electricity bills, pays wages to its employees, incurs the costs of developing new products, all this is one of the most important parameters of management, which received the name "current assets of the enterprise".
By their economic nature, working capital is money invested (advanced) in working capital and circulation funds, i.e. working capital - these are the means serving the process of economic activity, participating simultaneously in the production process and in the process of selling products. "Working capital is called constantly in motion the totality of circulating production assets and circulation funds. This means that working capital is designed to serve both the sphere of production and the sphere of circulation.
In other words, working capital - this is a set of funds of the enterprise, "necessary for the formation and maintenance of the circulation of production working capital and circulation funds." Therefore, working capital can be classified into working capital and circulation funds, that is, according to the spheres of turnover.
Production circulating assets are objects of labor that are consumed during one production cycle and fully transfer their value to finished products.
Circulation funds are the funds of an enterprise that are “associated with servicing the process of circulation of goods” (for example, finished products). The circulation funds do not directly participate in the production process. Their purpose is to provide resources for the circulation process, to serve the circulation of enterprise funds and to achieve unity of production and circulation.
According to the purpose in the production process (by elements), working capital can be divided into the following groups:
productive reserves;
funds in production costs;
finished products;
cash and settlements (means of calculation).
The term "reserves" includes:
inventories (raw materials and supplies);
unfinished production;
finished products in stock.
Industrial stocks are a set of objects of labor used in the production process. They participate in the production process once and fully transfer their value to the manufactured products, work performed or services rendered. Inventories are grouped by:
1) functional role and purpose in the production process;
2) technical properties (grade, size, brand, profile and other features).
According to the functional role and purpose in the production process, inventories are conditionally divided into main and auxiliary. The main ones are the objects of labor that make up the basis of manufactured products. These include: raw materials and basic materials, purchased semi-finished products and components. For example, for the mining industry, the raw materials are: wood, coal, oil, and the materials are products of the manufacturing industry (metal, paper).
Auxiliary - these are objects of labor that give the basic materials certain properties and qualities (varnishes, paints) or are used for the maintenance of means of labor (lubricants, cleaning materials) and other household purposes (cleaning the premises). As auxiliary materials fuel, containers and container materials, spare parts are allocated separately.
Fuel are distinguished depending on its use for technological purposes (technological), as fuel (motor) and for heating (household).
To container and container materials refers to items used to package and transport other items and finished products.
spare parts are items used to repair and replace individual parts of machinery and equipment.
All elements of inventories come in three forms:
transport stock - from the date of payment of the supplier's invoice until the arrival of the goods at the warehouse;
warehouse stock, which is divided into preparatory and current.
A provisional stock is created when this species raw materials or materials need to be matured (the time of natural processes, for example, drying of lumber, aging of large castings, fermentation of tobacco, etc.).
A running stock is created to meet the demand for materials and raw materials between two deliveries. The safety stock is created in cases where there are frequent changes in the delivery interval, and depends on the specific conditions of the enterprise.
Funds in production costs are divided into:
work in progress - these are products (works) that have not passed all the stages provided for by the technological process, as well as products that are incomplete or have not passed testing and technical acceptance;
semi-finished products of own production;
deferred expenses are expenses incurred in the reporting period, but relating to subsequent reporting periods.
Finished products are finished and manufactured products that have passed tests and acceptance, are fully completed in accordance with contracts with customers and comply with specifications and requirements. Varies:
finished products in the warehouse of the enterprise;
shipped but not paid for products.
Cash and settlements (means of settlement) are divided into:
settlements with debtors (funds in settlements with debtors). Debtors are legal and individuals who have debts to this enterprise (this debt is called accounts receivable). “Accounts receivable are money that is physical or legal entities owed for the supply of goods, services or raw materials”;
earning assets are short-term (for a period not exceeding 1 year) investments of the enterprise in securities (highly liquid market securities), as well as loans provided to other business entities;
cash means funds in current accounts and in the cash desk of the enterprise.
The composition and structure of working capital are shown in Table 1.1.
Table 1.1 - Composition and structure of working capital
working capital | ||||
Industrial working capital | circulation funds | |||
Productive reserves | Funds in production costs | products | Cash and settlements | |
1. Raw materials 2. Basic materials 3. Purchased semi-finished products 4. Component parts 5. Auxiliary materials 6. Fuel 7. Packaging 8. Spare parts | 9. Work in progress 10. Semi-finished products own production 11.Deferred expenses | 12. Finished products in the warehouse of the enterprise 13. Shipped (but unpaid) products | 114. Settlements with debtors 15. Income assets (investments in securities) 16. Cash: - on current accounts - on hand |
The ratio between individual groups, elements of revolving funds and their total volume, expressed in shares or percentages, is called the structure of revolving funds. The structure of working capital "is characterized by the proportion of individual elements of working capital in total population and is expressed as a percentage.
The structure of working capital depends "on the sectoral affiliation of the enterprise, the nature and characteristics of the organization of production activities, the conditions for supplying sales, settlements with consumers and suppliers."
At each particular enterprise, the amount of working capital, their composition and structure “is formed under the influence of a number of factors: the nature and form of organization of production, type of production, duration of the technological cycle, conditions for the supply of fuel and raw materials”, i.e. depend on many factors, industrial, organizational and economic nature.
In contrast to other sectors of the economy, in the composition and structure of working capital trade, the largest share is occupied by commodity stocks - about 90 percent of the total value of working capital. This is due to the peculiarity of trade services: the uniformity of circulation processes, the seasonality of production and consumption, unforeseen fluctuations in demand and the rhythm of production, the need to form insurance reserves.
1.2 Sources of formation of working capitalenterprises
The amount of working capital is not constant and depends on such factors as: seasonality of production/sales, uneven supply, untimely receipt of funds. It is customary to divide working capital into fixed working capital and variable:
permanent working capital can be thought of as the portion of current assets that is relatively constant throughout the business cycle. It can be either the average or the minimum amount of current assets required for the operation of the enterprise, depending on the decision of the financial manager;
the amount of variable capital determines additional need in working capital associated with deviations arising in certain periods of the economic activity of the enterprise. In accordance with this, the sources of formation of working capital of the enterprise can be own and borrowed.
Own source of financing at the initial stage is the authorized capital. “The formation of working capital occurs at the time of the organization of the enterprise, when its authorized capital is created. The source of formation in this case is the investment funds of the founders of the enterprise. In the future, the replenishment of working capital occurs at the expense of the profit received, minus contributions to the budget and other abstract funds from it. A special accumulation fund is being created to accumulate funds directed to replenish working capital. In addition to profit, each enterprise has funds equivalent to its own, stable liabilities that do not belong to the enterprise, but are constantly in circulation. Sustainable liabilities include:
minimum carry-over arrears for wages, deductions to off-budget social funds, which is due to a natural discrepancy between the accrual period and the date of payment of wages, transfer of mandatory payments;
minimum debt on reserves to cover future expenses and payments;
debts to suppliers for uninvoiced deliveries and accepted settlement documents, the payment deadline for which has not come;
debts to customers for advance payments and partial payment (prepayment) for products;
arrears to the budget for certain types of taxes.
Sustainable liabilities are a source of coverage of own working capital only in the amount of growth, i.e. the difference between their values at the end and beginning of the period. This source is essentially planned accounts payable.
The next source of formation of working capital may be other own funds, namely, temporarily unused balances of the reserve fund, special purpose funds. "The disadvantage of own funds as a source of working capital formation is the limited volume of raising funds."
Violation of the principle of intended use is the attraction of depreciation deductions as a source of financing for working capital. At the same time, in conditions of high inflation and economic instability, this path helps to solve the problem of stabilizing the volume equity invested in the current turnover. Since these sources are formed from net profit, and all profit, as a rule, goes into circulation, the manager must analyze whether the enterprise has enough own funds or not.
The minimum amount of equity participation of own working capital is normalized depending on the type trade organization, source of credit resources (own resources or credit lines of international financial institutions) and type of collateral.
Borrowed sources for replenishment of working capital traditionally include a bank short-term loan, as well as accounts payable, which are essentially free credit (both due in the forthcoming period and not repaid at the due date). "Exist various forms accounts payable of the enterprise (for goods, works and services, for promissory notes issued, for advances received, for settlements with the budget and extra-budgetary funds; for wages; with subsidiaries; with other creditors) and other short-term financial liabilities.
At the same time, "if accounts payable arise as a result of a violation of settlement and payment discipline, then this characterizes the enterprise not from the best side."
To assess the effectiveness of the use of borrowed funds, the model of "financial leverage" is used. The effect of financial leverage (EFF) is a possible increment to the return on equity due to the use of a loan, despite the payment of the latter. The use of borrowed funds will only then provide additional benefits in the form of an increase in the profitability of own funds, and hence in the growth of own working capital, when the economic profitability of the entire amount of invested funds is higher than the average calculated interest rate. Credit is the most important source of the formation of working capital in trade. It contributes to "the expansion of trade turnover, the normalization of commodity stocks, the identification of on-farm reserves, the reduction of distribution costs and the increase in income, and makes it possible to fill the deficit of the missing financial resources in the course of the current activities of the enterprise. Thus, with the help of a loan, the amount of working capital is brought into line with the need for them.
The need for a bank loan from enterprises depends on the procedure for the formation of working capital, the rhythm of the receipt and sale of goods. When deciding whether to raise funds, “the financial director should take into account what the bulk of the company's fixed expenses are connected with and what is the situation with interest payments. Otherwise, there is a risk of seriously undermining the financial stability and profitability of the business.”
In addition to bank credit, commercial credit is also widely used in trade.
A commercial loan is a loan provided by one functioning entrepreneur to another in the form of the sale of goods with a deferred payment. A commercial loan is issued by a bill of exchange, its object is commodity capital. A feature of commercial credit is that loan capital is merged with industrial capital. The purpose of a commercial loan is to accelerate the sale of goods and profit.
The size of this credit is limited by the amount of reserve credits of industrial and commercial capital. It should be noted that a commercial loan has limited opportunities, since it can not be obtained from any lender, but only from the one who produces the goods themselves. It is limited in size (temporary free capital), has a short-term character.
Undesirable sources of the formation of working capital are: the growth of accounts payable, the funds of the depreciation fund and special funds used for other purposes, overdue loans of the bank.
1.3 Circuitand turnovernegotiablefundsenterprises
One of the conditions for the continuity of production is the constant renewal of its material basis - the means of production. In turn, this predetermines the continuity of the movement of the means of production themselves, which occurs in the form of their circulation.
In their turnover, the working capital "consistently takes on a monetary, productive and commodity form, which corresponds to their division into production assets and circulation funds."
The material carrier of production assets are the means of production, which are divided into objects of labor and tools of labor. Finished products, together with cash and funds in settlements, form circulation funds.
The circulation of enterprise funds begins with the advance of value in monetary form for the purchase of raw materials, supplies, fuel and other means of production—the first stage of the circuit. As a result, cash takes the form of inventories, expressing the transition from the sphere of circulation to the sphere of production. In all this, value is not expended, but advanced, since after the completion of the circuit it is returned. The completion of the first stage interrupts commodity circulation, but not circulation.
The second stage of the circuit takes place in the process of production, where the labor power carries out the productive consumption of the means of production, creating a new product that carries in itself the transferred and newly created value. The advanced value again changes its form—from productive to commodity.
The third stage of the circulation is the sale of finished products (works, services) and the receipt of funds. At this stage, working capital again moves from the sphere of production to the sphere of circulation. The interrupted circulation of commodities is resumed, and value passes from the commodity form into the monetary form. The difference between the amount of money spent on the manufacture and sale of products (works, services) and received from the sale of manufactured products (works, services) is the cash savings of the enterprise.
Having completed one circuit, working capital enters a new one, thereby carrying out their continuous circulation. It is the constant movement of working capital that is the basis for an uninterrupted process of production and circulation. An analysis of the circulation of enterprise funds shows that the value advanced not only successively assumes various forms, but also constantly remains in these forms to a certain extent. In other words, "the value advanced at any given moment in the circuit
various parts are simultaneously in monetary, productive, commodity forms. The circulation of funds of enterprises can only be carried out if there is a certain advanced value in the form of money. Entering the circuit, it no longer leaves it, successively changing its functional forms. The specified cost in monetary form and represents the current assets of the enterprise.
Current assets act, first of all, as a cost category. In the literal sense, they are not material values, since they cannot be used to produce finished products. Being value in monetary form, working capital already in the process of circulation takes the form of inventories, work in progress, finished products. Unlike inventory items, working capital is not spent, not expended, not consumed, but advanced, returning after the end of one circuit and entering the next. The moment of advance payment is one of the essential and distinguishing features working capital, as it plays an important role in establishing their economic boundaries. The temporary criterion for advancing working capital should not be the quarterly or annual volume of funds, but one cycle, after which they are reimbursed and enter the next.
The study of the essence of working capital involves the consideration of working capital and circulation funds. Working capital, working capital and circulation funds exist in unity and interconnection, but there are significant differences between them, which boil down to the following. Working capital is constantly in all stages of the enterprise, while working capital goes through the production process, being replaced by new batches of raw materials, fuel, basic and auxiliary materials. Inventories, being part of working capital, go into the production process, turn into finished products and leave the enterprise. Working capital is completely consumed in the production process, transferring its value to the finished product. Their sum per year can be dozens of times greater than the amount of working capital, which, during each circuit, ensures the processing or consumption of a new batch of objects of labor and remaining in the economy, making a closed circuit.
Revolving funds are directly involved in the creation of new value, and working capital -- indirectly, through revolving funds. In the process of circulation, working capital embodies its value in working capital and therefore, through the latter, they function in the production process and participate in the formation of production costs. If working capital directly and directly participated in the creation of a new product, then they would gradually decrease and by the time the cycle ends, they would have to disappear.
Revolving funds, representing use value, act in a single form - productive. Circulating assets, as noted, not only consistently take on various forms, but also constantly in certain parts remain in these forms.
These circumstances create an objective need to distinguish between the turnover of working capital and working capital.
Comparison of working capital with circulation funds, which are a functional form of working capital at the stage of circulation, leads to the following results. The circulation of funds of enterprises ends with the process of selling products (works, services). For the normal implementation of this process, they, along with fixed and circulating funds, must also have circulation funds.
The turnover of circulation funds is inextricably linked with the turnover of circulating production assets and is its continuation and completion. Making a circuit, these funds "are intertwined, forming a common turnover, in the process of which the value of circulating funds, transferred to the product of labor, passes from the sphere of production to the sphere of circulation, and the value of the circulation funds in the amount of the advanced value - from the sphere of circulation to the sphere of production." This is how a single turnover of advanced funds is carried out, passing through different functional forms and returning to the original monetary form.
For profitable enterprises, after the completion of the circulation of funds, the amount of advanced working capital increases by a certain amount of profit received. For unprofitable enterprises, "the amount of advanced working capital at the end of the circulation of funds decreases due to the losses incurred." Working capital is often identified with cash. Meanwhile, it is impossible in the literal sense to call them money. The funds employed in production and circulation should not be identified with money. The total value is advanced in the form of money, and, having gone through the process of production and circulation, it assumes that form again. Cash is an intermediary in the movement of funds. The total value, expressed in money, turns into real money only at times and in parts.
So, we see that, by their economic nature, working capital is money invested (advanced) in working capital and circulation funds.
Working capital includes inventories (raw materials, work in progress, finished products, goods), accounts receivable, advance payments, cash, short-term financial investments.
By appointment in the production process, working capital is divided into inventories, funds in production costs, finished products, cash and settlements (means of calculation).
The amount of working capital, their composition and structure at each enterprise are different, so in the composition and structure of working capital of trade, the largest share is occupied by commodity stocks.
Sources of formation of working capital of the enterprise can be own and borrowed.
Own source of financing at the initial stage is the authorized capital. In the future, the replenishment of working capital occurs at the expense of the profit received.
Borrowed sources for replenishment of working capital include a short-term bank loan, as well as accounts payable.
The essence of working capital is determined by their economic role, the need to ensure the reproduction process, which includes both the production process and the circulation process.
Circulating assets function only in one production cycle and, regardless of the method of production consumption, fully transfer their value to the finished product.
The main features of the circulation of value, revealing the economic nature of working capital, are:
the advance nature of raising funds;
the unification of the value advanced into circulating production assets and circulation funds into a single economic category.
Working capital, making a circuit, from the sphere of production, where they function as working capital, pass into the sphere of circulation, where they function as circulation funds.
In its turnover, working capital consistently takes on a monetary, productive and commodity form.
Having completed one circuit, working capital enters a new one, thereby carrying out their continuous circulation. It is the constant movement of working capital that is the basis for an uninterrupted process of production and circulation.
Glava 2 . Theoretical Foundations of Performance Analysisuse of working capital
2.1 Working capital management
Working capital management "is to ensure a continuous process of production and sale of products with the smallest amount of working capital."
Working capital management includes the following main tasks:
calculation of the total need for working capital. Working capital should be minimal, but sufficient for the successful and uninterrupted operation of the enterprise. This problem is solved by rationing working capital;
inventory, receivables and cash management;
acceleration of the turnover of working capital at each stage of capital turnover.
The need for own working capital for each enterprise is determined when drawing up a financial plan. Thus, “the value of the standard is not a constant value. The amount of working capital depends on the volume of production, conditions of supply and marketing, the range of products, the forms of payment used.
Rationing of working capital is carried out in monetary terms. The basis for determining the need for them is the cost estimate for the production of products (works, services) for the planned period.
Three main methods of normalization of working capital are used: 1) analytical - provides for a thorough analysis of cash inventory items with the subsequent extraction of excess ones from them;
2) coefficient - consists "in clarifying the current standards of own working capital in accordance with changes in production indicators";
3) direct counting method - scientifically based calculation of standards for each element of normalized working capital.
In practice, it is most expedient to use the method of direct counting. The advantage of this method is the reliability that allows you to make the most accurate calculations private and aggregate standards.
The purpose of the inventory management system is to ensure the uninterrupted production of products in the right amount and within the stipulated time minimum expenses for the maintenance of stocks. "The lack of production stocks at the enterprise leads to a violation of the rhythm of its production, a decrease in labor productivity, overspending of material resources due to forced irrational replacements and an increase in the cost of products." Determining the stock rate is the most time-consuming and important part of rationing. The stock rate is set for each type or group of materials. If many types of raw materials and materials are used, then the norm is set for the main types, which occupy at least 70-80% of the total cost.
The standard of working capital advanced in raw materials, basic materials and purchased semi-finished products is determined by the formula (2.1).
where, H - the standard of working capital in stocks of raw materials, basic materials and purchased semi-finished products;
P - average daily consumption of raw materials, materials and purchased semi-finished products;
D - stock rate in days.
The average daily consumption for the range of consumed raw materials, basic materials and purchased semi-finished products is calculated by dividing the sum of their costs for the corresponding quarter by the number of days in the quarter. The stock rate in days for certain types of raw materials, materials and semi-finished products is set based on the time required to create transport, preparatory, technological, current warehouse and insurance stocks.
The transport reserve is necessary in cases where the time of movement of goods in transit exceeds the time of movement of documents for its payment. The transport stock in days is defined as the difference between the number of days of cargo run and the number of days of movement and payment of documents for this cargo.
Preparatory stock. Provided in connection with the costs of acceptance, unloading and storage of raw materials. It is determined on the basis of established norms or actual time spent.
Technological reserve. This reserve is taken into account only for those types of raw materials and materials for which, in accordance with the production technology, preliminary preparation of production is necessary (drying, aging of raw materials, heating, settling, etc.). preparatory operations). Its value is calculated according to established technological standards.
Current warehouse stock. It is recognized to ensure the continuity of the production process between the supply of materials, so in the industry it is the main one.
The size of the maximum current stock is determined by the formula (2.2).
Q max \u003d Q t *T p (2.2)
where, Q max - the maximum current stock of the relevant material; Q t - the volume of average daily calendar consumption; Tp - the value of the interval of deliveries of this type of materials.
Safety stock . It is created as a reserve that guarantees an uninterrupted production process in case of violation of the contractual conditions for the supply of materials (incomplete receipt of the batch, violation of the delivery time, inadequate quality of the materials received). The value of the safety stock is accepted within the limits of up to 50% of the current warehouse stock.
In this way, general norm stock in days for raw materials, basic materials and purchased semi-finished products as a whole consists of the five listed stocks. When analyzing and planning the size of commodity stocks, the correlation of commodity stocks with commodity circulation is of great importance. “The size of commodity stocks is directly related to the speed of circulation of goods. With a constant volume of turnover, an acceleration in the turnover of goods leads to a decrease in inventories and, conversely, a slowdown in turnover requires a greater mass of inventories.
The working capital ratio in work in progress expresses the value of products that have been started but not finished by production and are at various stages of the production process. As a result of normalization, the value of the minimum reserve sufficient for the normal operation of production should be calculated.
The standard of working capital in work in progress is determined by the formula:
where, P is the one-day cost of production;
T is the duration of the production cycle in days;
K is the coefficient of increase in costs.
One-day costs are determined by dividing the costs for the output of gross (marketable) output of the corresponding quarter by 90. The duration of the production cycle reflects the time spent by products in work in progress from the first technological operation to the complete manufacture of products and transfer to the warehouse.
The cost escalation coefficient reflects the nature of the increase in costs in work in progress by days of the production cycle.
The standard for the article "Expenses of future periods" is calculated according to the formula.
H \u003d Po + Pn-Rs,
where, Ro - the amount of deferred expenses at the beginning of the planning period;
Pn - expenses incurred in the planning period according to the estimate;
Рс - expenses included in the cost of production of the planned period.
Finished products manufactured at the enterprise “characterize the transition of working capital from the sphere of production to the sphere of circulation. This is the only standardized element of circulation funds.
The standard of working capital for finished products is determined by the formula.
where, P is the one-day output of marketable products at the production cost;
D is the stock rate in days.
The norm for finished products in the warehouse is determined by the time of picking and accumulation of products up to required sizes.
2. 2 Performance indicators for the use of working capitalfunds
Since working capital includes both material and monetary resources, both the process of material production and the financial stability of the enterprise depend on their organization and efficiency of use.
The financial position of the enterprise, "its indicators of liquidity and solvency directly depend on the speed of turnover of working capital."
Financially sustainable is such an economic entity that, at its own expense, covers the funds invested in assets (fixed assets, intangible assets, working capital), does not allow unjustified receivables and payables and pays off its obligations on time. The main financial activities are proper organization and use of working capital. Therefore, during the analysis financial condition Much attention is paid to the issues of rational use of working capital.
Consider the main coefficients of business activity of the enterprise.
The main two indicators of turnover: the turnover ratio of working capital and the duration of one turnover per day. Accelerating the time of circulation of goods is of great importance: it increases the economic efficiency of commodity circulation, affects the reproduction processes in trade, and is at the same time an important condition for increasing profits and profitability of the production and financial activities of a commercial enterprise.
The duration of funds in circulation is determined by the combined influence of a number of differently directed external and internal factors. The turnover ratio is "the number of turnovers that working capital makes in a certain period."
The next indicator is the duration of one turnover of working capital turnover. It is calculated as the ratio of the duration of the analyzed period to the turnover ratio of working capital formula (2.7). For analysis, it is convenient to use a derived indicator:
Turnover period (Days) \u003d Number of days in the period / K about (2.7)
Changes in the turnover ratio are most affected by changes in the volume of sales of products and changes in the size of working capital.
The acceleration of the turnover of working capital leads to a reduction in the duration of one turnover, which in turn indicates savings in the working capital of the enterprise. Those. acceleration of turnover "is tantamount to additional involvement of funds in economic turnover."
The shorter the duration of one revolution ( more quantity turnovers), with the same volume of production, the less working capital is required by the enterprise.
The slowdown in turnover is accompanied by the diversion of funds from economic turnover and their relatively longer deadening in inventories, work in progress and finished products. The turnover ratio "can be calculated both for the entire set of working capital, and for individual elements of working capital."
The following indicators in the analysis of the turnover of current assets are the turnover of receivables (formula 2.8).
Accounts receivable turnover = Sales proceeds / Average accounts receivable (2.8)
The average accounts receivable is the arithmetic mean of accounts receivable at the beginning and end of the analyzed period (formula 2.9).
Average accounts receivable for 1 quarter =
(Accounts receivable at the beginning of the quarter + accounts receivable at the end of the quarter) / 2 (2.9)
This indicator indicates how many times, on average, receivables turned into cash during the reporting period.
Thus, "internal financial analysis, supplementing the external one, explores in more depth the causes of the current financial condition of the enterprise, the efficiency of the use of fixed assets and current assets, the relationship between the company's performance indicators."
2.3 Information for analysis
Financial decisions are only as accurate as the information base is good and objective. “The ideal database consists of numerous detailed micro-sets of information that can be used to support a variety of tasks. Accountants process information taking into account the practical needs of various external and internal users.
In accordance with paragraph IV of PBU - 5/01 "Inventory and production reserves are reflected in the financial statements in accordance with their classification (distribution into groups (types)) based on the method of use in the production of products, performance of work, provision of services or for the management needs of the organization" . Thus, according to Article 13 of the Law on Accounting, the sources of information for analyzing and assessing the financial condition of an enterprise are the balance sheet and official financial statements. It includes the following main documents:
1. Balance sheet (form 1).
2. Report on financial results (form 2).
3. Cash flow statement (Form 3).
4. Statement of equity (form 4).
5. Appendix to the balance sheet (form No. 5).
Forms of annual financial statements are drawn up in accordance with the instructions on the procedure for their completion, approved by the Ministry of Finance of the Russian Federation.
These official financial statements contain sufficient background information, analyzing which you can get an idea of the strength of the financial position of the enterprise and detect symptoms of economic complications in its activities.
In relation to enterprises “in the form of open joint-stock companies, there is another source of information. This is information about the quotation of shares of these enterprises in the securities markets. The market price of shares is an indicator of the financial position of the enterprise. An insolvent enterprise cannot count on a high price of its shares, since in the event of the insolvency of the enterprise - the issuer, the demand for its shares drops sharply and, accordingly, their market price falls.
The main purpose of financial statements is to provide its users with complete, truthful and unbiased information about the state, performance and cash flows of the enterprise. The information that is reflected in the financial statements must be clear and designed for unambiguous interpretation. Its relevance, intelligibility and reliability should contribute to the correct decision-making by legal entities and individuals on this or that issue of the financial activity of the enterprise. “Financial reports may be intended for both external users and for use within the organization itself. Therefore, special accounting methods may be different.
Let's take a closer look at the above financial statements. The balance sheet of an enterprise (Form 1) is a report on the financial condition of an enterprise that records its assets, liabilities and equity as of a certain date. The norms of standard No. 2 apply to the balance sheets of enterprises of all forms of ownership, except for banks and budget institutions. The balance sheet is compiled solely on the basis of verified turnovers and balances at the end of the period for all synthetic accounts. At the same time, accounting records for completed transactions should be given, all operating accounts should be closed, financial results should be revealed, and tax entries should be drawn up.
The statement of financial results (form 2) contains information about the income, expenses and profits (losses) of the enterprise that have developed on a certain date. Main Feature of the report under consideration is that in it the financial results are formed by types of activity - operating (main) and ordinary. The main activity reflects operations related to the production and sale of products, works, services. Ordinary activities combine operating and equity income, dividends, interest and other proceeds from financial investments and their sale, income from the sale of non-current assets and property complexes, as well as other income not related to the operating activities of the enterprise. The statement of financial results “also includes extraordinary expenses and income, which respectively show losses from aftermath events (natural disasters, fires, man-made accidents, etc.), including expenses for their prevention and income from other operations that meet the definition of extraordinary events ". Standard 3 treats an extraordinary event as one that is clearly distinct from the normal activities of the entity and is not expected to recur periodically or in every forthcoming period. Extraordinary income and expenses naturally adjust the financial results of the enterprise.
2. Organization of working capital management
The organization of working capital management is fundamental in the general complex of problems of increasing their efficiency, it includes:
- determination of the composition and structure of working capital;
- establishment of the planned need of the enterprise in working capital for the enterprise as a whole and for individual elements;
- determination of sources of working capital formation;
- disposal and maneuvering of working capital;
- control over the actual state and efficiency of the use of funds (Fig. 7.4).
Rice. 7.4. Organization of working capital management
The composition of working capital is understood as a set of elements that form working capital assets and circulation funds, that is, their placement in certain elements.
The structure of working capital is the ratio of individual elements of working capital and circulation funds, that is, it shows the share of each element in total amount working capital.
In the practice of planning, accounting and analysis, working capital is grouped according to the following criteria:
1. depending on the functional role in the production process (circulating production assets and circulation funds);
2. depending on the practice of control, planning and management - standardized working capital and non-standardized working capital (Fig. 7.5).
Rice. 7.5. Working capital depending on the practice of control. planning and accounting
3. depending on the source of working capital formation - own working capital, borrowed working capital (Fig. 7.6).
Rice. 7.6. Working capital by sources of formation
4. depending on liquidity (speed of conversion into cash) - absolutely liquid funds, quickly realizable working capital, slowly realizable working capital (Fig. 7.7).
Rice. 7.7. Working capital depending on the degree of liquidity
5. depending on the degree of risk of investing capital - working capital with a minimum investment risk, working capital with a low investment risk, working capital with an average investment risk, working capital with a high investment risk (Fig. 7.8).
Rice. 7.8. Working capital depending on the degree of risk of capital investment
6. depending on the standards of accounting and reflection in the balance sheet of the enterprise - working capital in stocks, cash, settlements and other assets (Fig. 7.9).
Rice. 7.9. The composition of working capital according to the balance of the enterprise
7. depending on the material content - objects of labor (raw materials, materials, fuel, work in progress), finished products and goods, cash and funds in the calculations (Fig. 7.10).
Rice. 7.10. Working capital by material content
The division of working capital according to its functional purpose into working capital and circulation funds is necessary for separate accounting and analysis of the time spent by working capital in the process of production and circulation.
Let's take a closer look at the individual elements of working capital.
Working capital in inventories constitute the vast majority of working capital assets. They include material elements of production used as objects of labor and partly tools in the form of low-value consumable items (IBE) that have not yet entered the production process and are in the form of stocks.
The items of work include:
- Raw materials and basic materials from which the product is made. They form the material (material) basis of the product.
- Auxiliary materials - fuel, containers, packaging materials for packaging, spare parts.
- Purchased semi-finished products and components.
In a special group of revolving funds, allocate MBP, which, according to their economic purpose, are means of labor and must be calculated as part of fixed assets, since they participate in the production process many times and do not immediately lose their material and material form.
Along with inventories, working capital includes funds in production, including unfinished products and deferred expenses.
Unfinished products or products of partial readiness are objects of labor that have already entered the production process, but have not passed all the processing operations provided for by the technological process.
The only intangible element of circulating production assets are deferred expenses. They include the costs of preparation and development of finished products, new technology, which are produced in the current year, but are related to the products of the next year.
Funds of circulation, that is, working capital serving the process of circulation, are formed under the influence of the nature of the enterprise, the conditions for the sale of products, the level of organization of marketing of finished products, the forms of calculation used and their condition, and other factors.
The composition of circulation funds is not homogeneous. The main part of it is finished products. It is divided into finished products in the warehouse of the enterprise and goods shipped. Goods shipped can be viewed in the following areas:
- due date that has not yet arrived;
- payment due date, which is overdue;
- in the custody of the buyer.
The last two groups of shipped goods are negative when assessing the results of the financial and economic activities of the enterprise, since they arise as a result of a violation of settlement and contractual discipline and are associated with a lack of funds from the buyer and a violation of the assortment, the identification of defects. The growth of this group of treatment should be restrained in every possible way, since it worsens the financial position of the enterprise.
This is due to an increase in non-payments for shipped products, requires additional redistribution of working capital, leads to the attraction of short-term loans due to late receipt of sales proceeds and loss of funds from the production cycle.
Another component of circulation funds is cash and receivables. Cash can be, firstly, in financial instruments - on accounts with credit and banking institutions, in securities issued by letters of credit, and, secondly, in the company's cash desk and in settlements. Competent cash management, leading to an increase in the solvency of the enterprise, obtaining additional income is the most important task of financial work. Cash management includes determining the time of circulation of funds and their optimal level, analysis of cash flows and their forecasting.
Accounts receivable include the debt of accountable persons, suppliers after the expiration of the payment period, tax authorities in case of overpayment of taxes and other obligatory payments made in the form of an advance. Accounts receivable management is the control of financial services over the turnover of funds in settlements.
2) Depending on the practice of control, planning and management, working capital is divided into standardized and non-standardized.
Normalized funds include, as a rule, all circulating production assets, as well as that part of the circulation funds that is in the form of balances of unsold finished products in the warehouses of the enterprise.
Non-standardized funds include the remaining elements of circulation funds, that is, products sent to consumers, but not yet paid for, and all types of cash and settlements. The absence of norms does not mean, however, that the size of these elements of working capital can change arbitrarily and indefinitely and that there is no control over them.
Normalized working capital is reflected in the financial plans (business plan) of the enterprise, while non-standardized working capital is not an object of planning.
3) Depending on the sources of formation and financing, working capital is divided into own and borrowed. This classification determines the sources of origin and forms of provision of working capital to enterprises for permanent or temporary use.
Own funds are constantly at the disposal of the enterprise. They ensure the property and operational independence of enterprises, financial stability and position in the financial market.
Own current assets are formed at the expense of the company's own capital. Own working capital is in permanent use.
The company's need for its own working capital is an object of planning and is reflected in its financial plan.
Borrowed funds cover the temporary additional need for financial resources. Their involvement is due to the nature of production and settlement and payment discipline.
Borrowed funds include: bank and commercial loans, tax credit, temporary deferral of tax payments, loans, accounts payable, as well as alternative forms of borrowing such as factoring, franchising, collection of taxes from debtors.
They are provided to the enterprise for temporary use. One part is paid (credits and loans), the other is free (accounts payable). The enterprise's need for borrowed working capital is also an object of planning and is reflected in the business plan.
All forms of equity and debt capital have their own price, which must be taken into account when choosing sources of financing for working capital.
Therefore, an important task of organizing working capital at an enterprise is the implementation of multivariate calculations for determining the sources of their financing in terms of the profitability of attracting equity and borrowed capital.
4) Classification of working capital according to the degree of their liquidity (rate of conversion into cash):
- absolutely liquid;
– quickly realizable assets;
- slow-moving assets.
The classification of working capital according to the degree of their liquidity characterizes the quality of the funds of enterprises in circulation, and ensures the identification of those current assets, the sale of which seems unlikely.
5) by degree financial risk capital investments distinguish working capital:
1. Working capital with minimal investment risk.
2. Working capital with low investment risk.
3. Working capital with an average investment risk.
4. Working capital with a high investment risk.
The main factor determining the degree of risk of investing capital in working capital is the liquidity of current assets. The accumulated estimates of the feasibility of certain types of current assets allows you to determine the risk of investing in them.
6) Grouping of working capital according to the method of reflection in the balance sheet of the enterprise allows us to distinguish the following groups:
1. Inventory in stocks.
2. Accounts receivable.
3. Cash.
At each particular enterprise, the amount of working capital, their composition and structure depends on many factors of an industrial, organizational and economic nature, such as:
- industry specifics of production and the nature of activities;
- the complexity of the production cycle and its duration;
- the cost of stocks and their role in the production process;
- terms of delivery and its rhythm;
- the procedure for settlements and settlement and payment discipline;
- fulfillment of mutual contractual obligations.
Accounting for these factors to determine and maintain at an optimal level the volume and structure of working capital is the most important goal of working capital management.
Organization of working capital includes:
- their correct placement by spheres of circulation, individual elements and divisions of the enterprise;
- annual adjustment of the calculated standards, taking into account the changed business conditions, inflation rate and other factors;
– rational system of working capital financing;
– control over the rational use of working capital; analysis of the efficiency of their circulation and development of measures to accelerate turnover.
Optimization of the composition of working capital, more efficient use of individual elements, acceleration of their turnover make it possible to reveal significant reserves for increasing the profitability of the enterprise.
Current assets management- this is:
Accounting for all components of current assets at each reporting date;
Analysis of the turnover of working capital, the reasons for its acceleration or deceleration;
Planning the annual need of the enterprise in working capital, etc.;
Monitoring the current state of the most important elements of the company's current assets in the process of production activities;
Liquidity management of current assets of the enterprise and their structure;
Development and implementation in practice financial service enterprises of modern methods of managing current assets, etc.
Particular attention in the management of working capital should be given to the planning of non-standard working capital, in the first place, cash as the most liquid assets of the enterprise.
3. A task
The working capital ratio for the whole enterprise for the reporting year amounted to 131.0 million rubles. For the planned year, the standard of working capital is determined: for raw materials - 43.5 million rubles; spare parts - 5.5 million rubles; work in progress - 18.6 million rubles; for finished products - 65.0 million rubles. Determine the total standard of current assets for the enterprise for the planned year and the increase in the standard compared to the reporting year.
Solution:
1) The total standard of working capital for the whole enterprise for the planned year = 43.5 + 5.5 + 18.6 + 65.0 = 132.6 million rubles.
2) The increase in the standard compared to the reporting year = 132.6- 131.0 = 1.6 million rubles.
4. What are the performance indicators for the use of working capital.
The efficiency of the use of working capital is characterized by the following interrelated indicators of turnover: the turnover ratio (K0), the duration of one turnover in days (Od), the working capital utilization factor (K 3).
1. The turnover ratio is defined as the ratio of the amount of proceeds from the sale of products, works, services to the average balance of working capital according to the formula: Ko \u003d P / OS
where K O - turnover ratio; P - proceeds (net) from the sale of products, works, services for the analyzed period, p.1; OS - the average balance of working capital, r.
2. The duration of one inventory turnover in days (Od) is the ratio of the sum of the average balance of working capital to the sum of one-day sales volume for the analyzed period. The calculation is made according to the formula: Od = OS x D
where Od - turnover of working capital, days; OS - the average balance of working capital, r.; D - number of days of the analyzed period (360, 180, 90); P - proceeds (net) from the sale of products, works, services for the analyzed period, p.
3. The working capital utilization factor (K3) shows the amount of working capital advanced for 1 p. implementation. At its core, this indicator represents the capital intensity of working capital and is calculated as the ratio of the average balance of working capital to the volume of sales for the analyzed period. K3 = OS / R
where K 3 - the load factor of working capital; OS - the average balance of working capital, r.; P - proceeds (net) from the sale of products, works, services, r.
Exercise 23
1. What is the essence of financial planning?
financial planning- this is the process of developing a system of financial plans and targets (standards) to ensure the development of the organization with the necessary financial resources and improve the efficiency of its financial activities in the future.
The financial planning process includes several stages.At the first stage financial indicators for the previous period are analyzed. Second phase provides for the preparation of basic forecast documents that relate to long-term financial plans and are included in the structure of a scientifically based business plan of the organization. At the third stage there is a refinement and concretization of the indicators of forecast financial documents through the preparation of current financial plans. At the fourth stage operational financial planning is carried out. The financial planning process is being completed practical implementation of plans and control over their implementation.
Financial plans are the final product of financial planning. A financial plan is a special form of a plan, the indicators of which are always reflected in monetary terms and justify the movement of financial resources for a certain period.
- What are the main information sources used in the development of the organization's financial plans.
The initial base, information sources for the development of plans are:
Agreements (contracts) concluded with consumers of products and suppliers of material resources;
Accounting policy of the organization;
Assessment of material and financial resources, as well as the state of production assets at the beginning of the forecast period;
The results of the analysis of the state of production, the need and possibility of its expansion, the competitiveness of products, its implementation based on market conditions to predict cash receipts for the corresponding period;
Economic standards approved legislative acts, i.e. tax rates, rates of mandatory contributions to special funds, discount rate of bank interest, minimum monthly wages, etc.
- A task
Draw up the revenue and expenditure parts of the annual plan, draw conclusions about their relationship. Initial information (million rubles):
1. Profit from the sale of products -18800
2. Expenses for other operations - 2500
3. Depreciation charges-560
4. Long-term loans for capital investments -120
5. The volume of capital investments for the reconstruction of the main production - 250
6. Increase in working capital-650
7. Growth of sustainable liabilities-150
8. Deductions to reserve funds-566
9. Repayment of long-term loans and interest on them-500
10. Repayment of loans for replenishment of working capital-80
11. Formation of reserve funds by decision of the organization:
–reserve for future expenses and payments-12
12.Payment of dividends-55
14. Remuneration at the end of the year-218
15. Income tax-19
Solution:
Profitable part of the annual plan=1+3+4+5+6+7
DC=18800+560+120+250+650+150=20530 million rubles
Expenditure=2+8+9+10+11+12+13+14+15
RF=2500+566+500+80+12+55+158+218+19=4108
The revenue side of the budget exceeds the expenditure side by 16,422 million rubles.
4.Name the main tasks of financial planning and its purpose.
The main objectives of financial planning are:providing the necessary financial resources for the production, investment and financial activities of the organization; determination of ways of effective investment of capital; identification of on-farm reserves for increasing profits: establishing rational financial relations with the budget, servicing banks and counterparties.
aim financial planning is to provide the production process with financial resources and fulfill obligations to the financial and credit system.
Exercise 24
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1.2 Sources of formation of working capital of enterprises .............................. 11
1.3 Working capital management model .............................................................. 13
1.4 Calculation and evaluation of the main indicators of working capital .............................. 27
1.5 Calculation and evaluation of the effectiveness of the use of working capital ... 30
Chapter 2 Diagnosis of indicators of working capital management of the enterprise Mebel-Pro LLC.................................................................. ................................................. .......... 34
2.1 Calculation of indicators for managing the acceleration of working capital .............................. 34
2.2 Analysis of the dynamics of indicators of management of the acceleration of working capital 41
Conclusion................................................. ................................................. ..49
List of used sources and literature .............................................. 51
Introduction
Current assets make up a significant proportion of all assets of the enterprise. The successful entrepreneurial activity of an economic object largely depends on their skillful management. Current assets management takes special place in the work of a financial manager, because it is a constant, daily and continuous process. The development of market relations determines the new conditions for their organization. High inflation, non-payments and other crisis phenomena inherent in Russian economy, force enterprises to change their policy in relation to working capital, to look for new sources of replenishment, to study the problem of the effectiveness of their use.
As with other management objects that are within the scope of interests of a financial manager, this is not about the subject-material composition of current assets, but about the policy of optimal management of investments in these assets. Understating the amount of working capital entails an unstable financial condition, interruptions in the production process and, as a result, a decrease in production and profits. In turn, overestimation of the size of working capital reduces the ability of the enterprise to make capital expenditures to expand production. Freezing funds (own and borrowed) in any form, whether it is stock of finished products or suspended production, excess raw materials and materials, is very expensive for the enterprise, since free cash can be used more rationally to generate additional income.
At the enterprise, the determination of the need for working capital should be linked to the cost estimate for production and production plan enterprises. It should justify the release of specific types of products in the right quantity and within a certain time frame.
Despite the instability of economic relations, the unreliability of suppliers, the difficulties in acquiring high-quality raw materials and components, the production plan should work out issues that affect production support and the need for working capital. Tasks are greatly simplified if strong economic ties have already been established with suppliers. And, as a result, it will be easy to take into account the conditions, the frequency of supplies of inventory items, their payment when calculating the need for working capital.
Simultaneously with the definition of the range of suppliers, a complete list of types of raw materials, basic and auxiliary materials, fuel, MBP, spare parts and others is compiled.
The final part of the production plan reflects the possible production costs for the release of products, which determine the total production cost of the product. It is the value of production costs that underlies the determination of the need for working capital.
The relevance of this topic is due to the fact that optimization and the state of working capital are directly related to the efficient operation of the enterprise and whether the enterprise will receive a profit. In order to effectively manage current assets, you need to consider them as a whole and, most importantly, in the context of individual items.
The purpose of this course work is to develop specific proposals for improving the use of working capital in the enterprise.
This term paper are: consideration of the structure, composition and dynamics of working capital in the enterprise; defining them optimal size and needs; determination of optimal methods for the analysis of working capital; finding the most profitable way to use them; identifying the relationship between working capital income and cash flow.
The object of study of this course work was a specific commercial enterprise Mebel-Pro LLC, engaged in the production and distribution of goods for the home (furniture, household goods, products for repairs, etc.).
The subject of the work is the study of the methodology for managing the working capital of an enterprise and indicators (methods of analysis) of the turnover of working capital.
The information base is accounting documents and reports commercial enterprise OOO "Mebel-Pro" and articles taken from the magazine "Financial Director". Information was also found on Internet sites; www1.minfin.ru; ;
The methodological basis of the course work is the works of Sheremet A.D., Saifulin R.S. and Kolchina N.V. and other authors.
Chapter 1 Management of working capital of enterprises
1.1 Current assets of the enterprise. Their composition and structure. Circulation of working capital
Any organization conducting production or commercial activities must have certain real, that is, functioning property or active capital in the form of fixed and working capital.
Working capital should be understood as a balance sheet asset that reveals the subject matter of the enterprise’s property, in particular its current or current assets (working capital, receivables, free cash), and working capital is a balance sheet liability showing what amount of funds (capital) invested in the economic activity of the enterprise (own and borrowed capital). Working capital is the means that serve the process of economic activity, participating simultaneously in the production process and in the process of selling products.
Or: working capital is assets that are used in the production process once and change their natural-material form. Their cost is fully included in the cost of products made from them and services rendered.
According to their role in the process of production and circulation, working capital is divided into working capital and circulation funds.
Revolving production assets serve the sphere of production. They materialize in the objects of labor (raw materials, materials, fuel, etc.), are embodied in production stocks, work in progress, in semi-finished products of their own manufacture. Along with these elements, there are also deferred expenses required for the installation of new equipment, etc.
Production assets are the material basis of production, they serve the sphere of production, fully transfer their value to the newly created product, while changing their original form.
Circulation funds are not directly involved in the production process, their purpose is to provide resources for the circulation process.
Funds circulation consist of finished products and cash.
Combining circulating production assets and circulation funds into a single category - working capital - is due to the fact that: firstly, the reproduction process is the unity of the production process and the process of product sales. Elements of circulating capital continuously move from the sphere of production to the sphere of circulation and again return to production. Secondly, the elements of circulating funds and circulation funds have the same nature of movement, circulation, which is a continuous process.
Consider the composition of working capital.
a) Production stocks - the actual cost of stocks of raw materials, materials, purchased semi-finished products, components, fuel, spare parts, containers and other material assets.
b) Work in progress - products that have not passed all stages of processing provided for by the technological process, as well as incomplete products that have not passed testing and technical acceptance.
c) Prepaid expenses - the cost of developing new products, subscription fees, payment rent forward, etc. These costs are written off to the cost of production in future periods.
d) Finished products - the actual production cost of finished products intended for sale to customers.
e) Goods - the value of the remaining goods intended for sale.
f) Goods shipped - data on the movement of shipped products (goods), in which the supply contract provides for a moment of ownership that differs from the general procedure.
g) Accounts receivable - a complex item that includes settlements: with buyers and customers, with participants for contributions to the authorized capital, for advanced payments, with other debtors.
h) Short-term financial investments - short-term financial investments (for a period not exceeding 1 year) in own shares bought back from shareholders.
i) Cash - funds on accounts in credit and banking institutions, in securities, in the cash desk of the enterprise.
The totality of the components of the working capital of the enterprise, presented in the form of shares and percentages, will reflect the structure of working capital.
As the authors write Sheremet A.D. and Saifulin R.S. According to the degree of manageability, working capital is divided into standardized and non-standardized. Normalized funds include all circulating production assets, as well as that part of the circulation funds, which is in the form of balances of unsold finished products.
Non-standardized funds include the remaining elements of circulation funds, that is, products sent to consumers, but not yet paid for, and all types of cash and settlements. The absence of norms does not mean, however, that the size of these elements of working capital can change arbitrarily and indefinitely and that there is no control over them.
The composition of working capital can be considered from the standpoint of their liquidity (see table 1).
The most liquid funds are the amounts for all items of funds that can be used to perform current settlements immediately.
Table 1
Composition and structure of working capital by degree of liquidity
|
Working capital group |
Balance asset items |
|
1. The most liquid assets |
1. Cash: cash desk, current accounts, foreign currency accounts, special bank accounts 2. Short-term financial investments |
|
2. Marketable assets |
1. Goods shipped 2. Accounts receivable: for goods, work, services, with the budget, with personnel for other operations, with other debtors 3. Other current assets |
|
3. Slow selling assets |
1. Inventories - the result of section 2 of the asset balance, net of deferred expenses and VAT on acquired valuables |
|
Total: total working capital |
Item 1 + Item 2 + Item 3 |
Slowly realizable working capital are semi-finished products, work in progress, stale goods in the warehouse, doubtful debts.
Circulation of working capital
Being in constant motion, working capital makes a continuous cycle, which is reflected in the constant renewal of the production process.
The movement of working capital can be represented in the form:
D - T ... - T - P - T "... - T" - D "
The circulation of capital covers 3 stages: procurement (purchases), production and marketing.
At the first stage (D-T) - working capital from the form of cash goes into production (objects of labor, goods).
The second stage (T-P-T ") takes place in the production process. It consists in the transfer to production (P) of purchased material assets, inventories. At this stage, production value passes into commodity value, and according to material composition from inventories, it first turns into unfinished products, and then into finished products (PZ-P-GP).
The third stage (T "- D") (sales) - consists in the sale of manufactured products and the receipt of funds. At this stage, circulating capital passes from the stage of production into the stage of circulation and again assumes the form of money. The difference between D "and D is the amount of cash income or the financial result of economic activity. The monetary form that circulating capital takes at the final stage of the circulation is at the same time the initial stage of capital turnover.
The circuit is constantly made, and after its completion, a new one begins. The period of turnover of inventories from the moment they enter production, work in progress and finished products until the moment they are shipped form the production cycle. The financial cycle covers the processes of production and sales of products. It starts with paying for raw materials and materials and ends with receiving money from buyers.
Thus, we can conclude that the working capital of an enterprise consists of working capital assets that serve the production sector; and circulation funds, the purpose of which is to provide resources for the circulation process. Working capital carries out a continuous circulation, starting from the stage of purchasing materials for production and ending with the stage of selling goods.
1.2. Sources of formation of working capital of enterprises
In the process of circulation of working capital, the sources of their formation, as a rule, do not differ. However, the system of formation of working capital has an impact on the speed of turnover and the efficiency of the use of working capital. An excess of working capital will mean that part of the company's capital is idle and does not generate income. The lack of working capital will slow down the course of the production process, slowing down the rate of economic turnover of the enterprise's funds.
Consider the sources of working capital formation:
Own sources (information is presented in the main section 3 of the balance sheet liabilities of the enterprise).
Borrowed sources (information is presented in sections 4, 5 of the liabilities side of the balance sheet, as well as in sections 1, 2 of form No. 5 of the appendix to the annual balance sheet).
Additional attracted sources
Appendix No. 3 provides the composition and structure of sources for the formation of working capital.
An important role in the organization of the circulation of funds of the enterprise is played by its own working capital, it determines the financial stability of the enterprise. Initially, its formation is carried out at the time of the establishment of the enterprise. It is provided with fixed and working capital necessary for commercial activities in the amount determined by the constituent documents. For these purposes, the authorized capital is formed at unitary and federal state-owned enterprises.
Part of the funds invested by the founders is directed to the acquisition of inventories intended for the manufacture of products, the performance of work, and the purchase of goods.
In the future, the replenishment of working capital can be carried out at the expense of its own sources received by the enterprise in the course of its activities, mainly due to the profits received.
In addition to profit, as its own source of replenishment of working capital, the enterprise has funds equivalent to its own. These are stable liabilities that do not belong to the enterprise, but are constantly in circulation. The enterprise uses them without looking for special additional sources to finance economic activities.
Sustainable liabilities include:
The minimum carry-over wage arrears, which is due to a natural discrepancy between the accrual period and the date of payment of wages, transfer of mandatory payments;
Debts to suppliers for uninvoiced deliveries and accepted settlement documents, the payment deadline for which has not come;
Indebtedness to buyers and customers for advance payments and partial payment (prepayment) for products, goods, works, services;
Debt to the budget for certain types of taxes, the accrual of which occurs ahead of time payment.
The amount of stable liabilities may change upwards or downwards. This source of funds is essentially a planned payable.
In conditions of complete economic independence, other own funds may be in the turnover of the enterprise. These are temporarily unused balances of reserve capital and other funds created by the enterprise.
In the turnover of the enterprise, in addition to its own resources, borrowed funds can be used, the basis of which is short-term loans from banks and other creditors.
Among the funds attracted by the enterprise in the economic circulation is accounts payable, which is essentially a free loan provided by other enterprises. Unlike stable liabilities, accounts payable are not a planned source of working capital formation. Often the debt is natural, as it arises in connection with the peculiarities of the calculations. However, in most cases, accounts payable arise as a result of violation of settlement and payment discipline and are the result of non-compliance by the enterprise with the terms of payment for products.
Thus, the sources of formation of working capital are: own sources, borrowed sources and additionally attracted sources. The most important of them are own sources, namely the received profit and stable liabilities. Borrowed funds are also an important element in the process of forming the working capital of an enterprise.
1.3. Working capital management model
Working capital management is the most extensive part of financial management in the entire enterprise capital management system. This is due to the existence of a large number of asset elements, formed at the expense of working capital, required by the individualization of management. The importance is also manifested by the high dynamics of the transformation of the types of working capital; a high role in ensuring the solvency, profitability and other target results of the financial activity of the enterprise.
There is a specially developed list of stages of working capital management.
I stage. First of all, it is necessary to analyze the use of working capital in the operating process of the enterprise in the previous period. For this, the dynamics of the total volume of working capital, the dynamics of the composition of the company's current assets formed at the expense of working capital are considered. Analysis of the composition of the company's current assets by their individual types allows us to assess the level of their liquidity.
The results allow us to determine general level efficiency of working capital management of the enterprise and identify the main directions of its increase in the coming period.
II stage. At the next stage, the fundamental approaches to the formation of current assets at the expense of the operating capital of the enterprise are determined. The theory of financial management considers three fundamental approaches to the formation of current assets of an enterprise:
1) Conservative approach - involves the creation of high working capital reserves in case of unforeseen difficulties in providing the enterprise with raw materials and materials, deterioration in production conditions, delays in the collection of receivables, etc.;
2) Moderate - aimed at ensuring complete satisfaction current need in all types of current assets and the creation of normalized insurance amounts;
3) Aggressive - is to minimize all forms of insurance reserves for certain types of these assets.
Ultimately, all these approaches determine the amount of this capital and the level of its capital intensity in relation to the volume of operating activities.
At stage III, the volume of working capital is optimized. Such optimization should proceed from the chosen type of policy for the formation of current assets, providing a given level of the ratio of efficiency and risk of using working capital.
Optimization of the ratio of the constant and variable parts of working capital used in the operating process refers to stage IV. This is the basis for managing its turnover during use.
V stage. There is a provision of the necessary liquidity of the assets used, formed at the expense of working capital.
At the final stage (stage VI), an increase in the profitability of working capital is ensured. Its size must generate a certain profit when it is used in production and marketing activities.
An integral part of the working capital management process is to ensure the timely use of the temporarily free balance of cash assets to form an effective portfolio of short-term financial investments. The goals and nature of the management of certain types of current assets, formed at the expense of operating capital, have their own distinctive features.
Therefore, an enterprise with a large amount of used working capital develops an independent policy for managing certain types of working capital (stocks of goods and materials, accounts receivable and monetary assets).
For a more detailed study of the problem, it is necessary to consider the features of management models for certain types of current assets.
a) Inventory management model.
Managing the inventories necessary for the production process (inventory, work in progress, prepaid expenses and finished goods) means determining the need for these inventories to ensure an uninterrupted production process and the realization of a certain need for financial resources for the company to create specific types of stocks and rationing.
There are various economic and mathematical models of inventory management. In general, they can be divided into four groups: deterministic, stochastic, statistical and dynamic models.
Deterministic models include parameters that are set fairly accurately. These are the cost, prices, the need for materials, storage costs, etc. The model expresses the dependence of the size of the batch on the ratio of well-defined elements.
The class of stochastic models includes those in which the need is an uncertain, probabilistic value. In such models, the demand changes at the beginning of each given period and the distribution of demand over periods is independent.
In the stochastic model, not one period can be considered, but several, and purchases are made at the beginning of each of them. The task is to determine the batch size, that is, the quantity of goods purchased in each period. This value depends on the level of stocks of this product at the beginning of each period.
With a static model, the choice of the optimal strategy is not a determining condition for inventory management. For mass flows of material values that have a small value, one can usually limit oneself to approximate calculations, which allows the use of static models. If the size of the stock at the beginning of the first period is a certain value, then due to the presence of random demand, the sizes of stocks at the beginning of subsequent periods form a sequence of random variables X1, X2, etc., since it is assumed that the distribution of demand is single in all periods.
The above inventory management schemes are mostly applicable to solving problems related to mass flows of predominantly low-value goods. For expensive goods with relatively little demand, more complex calculations are carried out. If there is no procurement and restocking problem with consumer goods, then for high-value goods, the requested material may not be in stock at the right time. At the same time, this product can be requested by several consumers. In these cases, the scarcity problem arises, which is solved using dynamic programming methods.
When using a dynamic model, the optimal replenishment strategy is determined under the following conditions: transportation costs for moving from one stage to another are determined in proportion to the amount of material moved; the costs of maintaining inventories and losses due to shortages, calculated for each enterprise during each separate period. They are a function of the amount of stock at this stage.
An important indicator is the definition of the standard.
The working capital ratio is the minimum required amount of funds to support entrepreneurial activities, which is determined taking into account the need for funds, both for the main activity and for major repairs. Rationing of working capital should ensure the optimal value of all constituent elements of current assets. It is known that the validity of the policy of forming inventories largely determines the financial position of the enterprise, in the first place - its liquidity and current solvency. Methods of normalization of individual elements of inventories are not the same.
The standard for stocks of raw materials (H), basic materials and purchased semi-finished products is calculated on the basis of their average daily consumption (P) and the average stock rate in days. The time spent in the current (T), insurance (C), transport (M), technological (A) stocks, as well as in the preparation of the stock necessary for unloading, delivery, acceptance and storage of materials (D) is also taken into account. In this way:
H \u003d P * (T + C + M + A + D) (1)
In turn, the current stock is the main type of stock, therefore the working capital rate in the current stock is the main determined value of the entire stock rate in days. A safety stock is necessary for each enterprise to guarantee the continuity of the production process in case of violation of the terms and conditions of delivery. The transport stock is created for the period of the gap between the period of cargo turnover and document circulation. Technological stock is created for a period of time to prepare materials for production, including time for analysis and laboratory testing.
Rationing of working capital in fuel reserves is established similarly to the standard for raw materials, materials and semi-finished products, i.e. based on the stock rate in days of one-day consumption. The standard of working capital in the stocks of containers is determined depending on the sources of receipt and the method of using containers.
Identification of excess and scarce resources allows you to avoid excessive investment in materials, the need for which is reduced or cannot be determined.
The working capital ratio for the balance of finished products is determined as the product of the working capital norm in days and the one-day output of marketable products in the coming year at the production cost. The rate of working capital for finished products is calculated separately for finished products in the warehouse and goods shipped, for which settlement documents have not been submitted to the bank for collection.
The rate of working capital for the stock of finished products in the warehouse is determined for the period of time necessary for the acquisition and accumulation of products to the required size, for the mandatory storage of products in the warehouse until shipment, for packaging and labeling of products, for their delivery to the station of departure and loading.
With a large range of manufactured products, the main types of products are distinguished, accounting for 70–80% of the total output. For these leading types of products, the weighted average rate of working capital is calculated, which is then applied to all finished products in stock.
Work-in-progress costs include all costs of manufactured products. They consist of the cost of unfinished products, semi-finished products of our own production, as well as finished products that have not yet been accepted by the technical control department.
The value of the standard of working capital allocated for backlogs of work in progress depends on four factors: the volume and composition of products, the duration of the production cycle, production cost and the nature of the increase in costs in the production process. Rationing in work in progress is carried out according to the formula:
where K is the coefficient of increase in costs in production.
The product of the average duration of the production cycle (T) and the cost escalation factor (K) forms the rate of working capital in work in progress in days. Consequently, the standard of working capital in work in progress will be the result of the product of the norms of working capital and the amount of one-day output.
Unlike work in progress, deferred expenses are written off to the cost of production in subsequent periods. These include the costs of developing new types of products, improving production technology, the cost of subscription to periodicals, rent, etc.
The standard of working capital in deferred expenses (N) is determined by the formula:
where P is the carry-over amount of deferred expenses at the beginning of the coming year;
P - deferred expenses in the coming year, provided for by the relevant estimates;
C - deferred expenses to be written off to the cost of production in the coming year in accordance with the production estimate.
If in the process of preparing, developing and manufacturing new types of products, the company uses a targeted bank loan, then when calculating the working capital ratio in deferred expenses, the amounts of bank loans are excluded.
Such a detailed consideration of inventory management models with the help of norms and standards helps to minimize the cost of maintaining inventory, reduce their surplus, and therefore release cash and accelerate the turnover of working capital of the company.
b) Accounts receivable management model.
Funds in receivables indicate a temporary diversion of funds from the company's turnover, which causes an additional need for resources, and can lead to a tense financial condition. Accounts receivable may be admissible, i.e. due to the current settlement system, and unacceptable, indicating shortcomings in financial and economic activities.
Consider the item shipped goods. The funds in it make up a significant proportion of all receivables in firms that manufacture products. They are formed inevitably, since the finished products in the warehouse are shipped to consumers within the established contractual terms.
To manage receivables to firms in the Russian economic environment, you can use the following techniques.
1. Exclusion from the number of partners of the enterprise of debtors with a high level of risk. This measure of acceptance is intended both for developed market relations and for the period of formation and development of the market. It should be noted that in the latter case, this method is especially effective.
2. Periodic review of the loan limit. The determination of the maximum amount of loans provided should be based on the financial capabilities of the enterprise, the predicted number of loan recipients and an assessment of the level of credit risk. The fixed maximum amount of debt can be differentiated by groups of future debtors, based on the financial condition of individual clients.
3. Using the possibility of paying accounts receivable with promissory notes, securities. Since waiting for payment with "live money" can be much more expensive.
4. Formation of the principles of the company's settlements with counterparties for the coming period. When forming acceptable forms of settlement, it should be taken into account that when purchasing products, settlements using promissory notes are the most effective, and when selling products, settlements by means of a letter of credit.
5. Identification of financial opportunities for the provision of commodity (commercial) or consumer credit by the company.
6. Determination of the possible amount of current assets diverted into receivables for commodity and consumer credit, as well as for advanced payments.
7. Formation of conditions for ensuring the collection of receivables. In the process of forming these conditions, the firm must determine a system of measures that guarantee the receipt of debt. Such measures include: issuance of a commodity loan with a secured promissory note; the requirement of insurance by debtors of loans provided for a long period, etc.
8. Formation of a system of penalties for delay in fulfilling obligations by counterparties - debtors.
9. Determination of the procedure for collecting receivables. This procedure should provide for the timing and form of preliminary and subsequent reminders of the counterparty - debtors about the date of payment, the possibility of prolonging the debt, the term and procedure for collecting the debt, and other actions.
When assessing the total debt of an enterprise of its counterparties, one should not lose sight of the cases of hidden receivables that arise when the enterprise settles with suppliers on a prepaid basis.
c) Cash management model.
Management of monetary assets or cash balance is constantly at the disposal of the enterprise and is an integral part of the functions general use working capital. The size of the balance of monetary assets operated by the enterprise determines the level of its absolute solvency, affects the duration of the operating cycle, and also characterizes to a certain extent the investment potential of the enterprise's short-term financial investments at the expense of working capital.
The main goal of financial management in the process of managing monetary assets is to ensure the constant solvency of the enterprise. In this, the function of monetary assets as a means of payment, which ensures the implementation of the goals of forming their operating, insurance and compensatory balances, gets its implementation. The priority of this goal is determined by the fact that neither big size current assets and equity, nor high level profitability of economic activity cannot insure an enterprise against initiating a bankruptcy claim against it, if it cannot pay off its urgent financial obligations within the stipulated time due to a lack of cash assets. Therefore, in the practice of financial management, the management of monetary assets as part of working capital is often identified with solvency management.
Along with this main goal, an important task in the process of managing monetary assets is to ensure the effective use of temporarily free cash, as well as the formed investment balance.
Taking into account the main goal of using working capital in the process of managing monetary assets, an appropriate financial policy is formed. In the process of its formation, it should be taken into account that the requirements for ensuring the constant solvency of the enterprise determine the need to create a high asset of monetary assets, i.e. pursues the goal of maximizing their average balance within the financial capabilities of the enterprise. On the other hand, when storing monetary assets in the national currency, they are largely subject to the loss of real value due to inflation, which determines the need to minimize their average balance.
The monetary asset management model consists of the following stages. The first stage allows assessing the state of the average balance of monetary assets from the standpoint of ensuring the solvency of the enterprise, as well as determining the effectiveness of their use:
The degree of participation of monetary assets in working capital and its dynamics in the previous period are assessed;
The average period of turnover for assets in the period under review is determined, which makes it possible to characterize the role of monetary assets in the total duration of the operating cycle;
The level of absolute solvency of the enterprise for individual months of the previous period is determined;
The level of diverting the free balance of monetary assets into short-term financial investments is determined.
Second stage: calculations are made of the required size of certain types of this balance in the previous period:
The need for the operating balance of monetary assets is determined, which characterizes the minimum amount necessary for the implementation of economic activities;
The need for an insurance balance is determined based on the calculated amount of the operating balance and the coefficient of uneven receipt of funds by the enterprise for individual months of the previous period;
The need for a compensatory balance of monetary assets is determined in the amount determined by the agreement on banking services;
The need is determined in the investment balance based on financial capabilities.
The third stage is carried out only at those enterprises that conduct foreign economic activity. It consists in the allocation of their currency part from the general optimized need for monetary assets in order to ensure the formation of the currency fund necessary for the enterprise.
The fourth stage is carried out in order to ensure the constant solvency of the enterprise, as well as to reduce the average need for the balance of monetary assets. The main method of regulating the average balances of monetary assets is to adjust the flow of future payments:
The range of residual fluctuations in the context of individual decades is studied;
Ten-day periods of cash expenditures are regulated, which allows minimizing the balance of cash assets within each month and for the quarter as a whole;
The results obtained are optimized taking into account the envisaged size of the insurance balance of these assets;
Carry out a reduction in cash payments;
There is an acceleration of the collection of receivables:
Open a "credit line" in the bank;
There is an acceleration of the collection of cash received.
Fifth stage: a system of measures is being developed to minimize the level of losses of alternative income in the process of storage and anti-inflationary protection.
At the final stage, the total level of the balance of monetary assets that ensure the current solvency of the enterprise is controlled.
The monetary asset control system should be integrated into common system controlling the use of the company's capital.
Consider also the following generalized methods of working capital management:
1) Analytical method;
2) Coefficient method;
3) Method of direct counting.
The analytical method involves determining the need for working capital in the amount of their average actual balances, taking into account the growth in production volumes. In order not to fix the shortcomings of past periods in the organization of working capital, it is necessary to analyze the actual balances of inventories in order to identify unnecessary, redundant, illiquid, as well as all stages of work in progress to identify reserves to reduce the duration of the production cycle. To study the reasons for the accumulation of finished products in the warehouse and determine the actual need for working capital. At the same time, it is necessary to take into account specific conditions work of the enterprise in the previous year (price change).
With the coefficient method, inventories and costs are divided into those that depend directly on changes in production volumes (raw materials, materials, costs of work in progress, finished products in stock) and those that do not depend on it (stocks, IBE, deferred expenses). For the first group, the need for working capital is determined based on the size in the base year and the growth rate of production in the coming year. If the enterprise analyzes the turnover of working capital and seeks ways to accelerate it, then the real acceleration of turnover in the planned year must be taken into account when determining the need for working capital. For the second group of working capital, which does not have a proportional dependence on the growth of production volumes, the need is planned at the level of their average actual balances over a number of years.
If necessary, you can use analytical and coefficient methods in combination. First, using the analytical method, determine the need for working capital, depending on the volume of production, and then, using the coefficient method, take into account the change in the volume of production.
The direct account method provides for a reasonable calculation of reserves for each element of working capital, taking into account all changes in the level of organizational and technical development of the enterprise, transportation of goods and materials, and the practice of settlements between enterprises. This method is very time-consuming and requires highly qualified economists, involving employees of many enterprise services (supply, legal, product marketing, production department, accounting, etc.) in the rationing. But this allows you to most accurately calculate the company's need for working capital.
The direct account method is used when organizing a new enterprise and periodically clarifying the need for working capital of existing enterprises. The main condition for its use is a thorough study of supply issues and the production plan of the enterprise. It is important to have the stability of economic ties, since the frequency and security of supply underlies the calculation of stock rates.
1.4 Calculation and evaluation of working capital turnover indicators
To assess the turnover of working capital, the following indicators are used.
1. Working capital turnover in days.
where About ok - the duration of the period of circulation of working capital (in days);
C about - working capital (funds);
D - reporting period (days);
RP - the volume of sales of products.
The turnover in days allows you to establish how long working capital goes through all stages of the circulation at a given enterprise. The higher the turnover in days, the more economically the financial resources are used. However, with a high turnover, the risk of non-payments and failures in the supply of raw materials, materials, goods, etc. increases.
2. Direct turnover ratio (number of turns):
Where: RP - the volume of sales of products;
C about - working capital (funds).
Comparison of turnover ratios in dynamics by years reveals trends in the efficiency of the use of working capital. If the number of turnovers made by working capital increases or remains stable, then the enterprise works rhythmically and uses financial resources rationally. The decrease in the number of turnovers made in the period under review indicates a decrease in the pace of development of the enterprise, its unfavorable financial condition.
3. The inverse of the turnover ratio is the loading (fixing) factor of working capital.
Characterizes the amount of working capital attributable to 1 rub. sold products. This indicator is also called the working capital ratio:
The lower the utilization rate of working capital, the more efficiently they are used.
Comparison of turnover and load ratios in dynamics allows you to identify trends in these indicators and determine how efficiently and effectively the company's working capital is used. Turnover rates can be calculated for all working capital and for individual items, such as inventories, work in progress, finished and sold products, receivables.
4. Inventory turnover is calculated as the ratio of production costs to average stocks; turnover of work in progress - as the ratio of goods received at the warehouse to the average annual volume of work in progress; turnover of finished products - as the ratio of shipped or sold products to the average value of finished products; the turnover of funds in the calculations is the ratio of sales proceeds to the average receivables.
The general formula for calculating the standard for a separate element of working capital can be expressed as follows:
where - the standard of own working capital for the element;
- the rate of working capital for this element;
- one-day consumption of this element (turnover by element / duration of turnover in days)
So, the turnover of working capital is characterized by a number of interrelated indicators: the duration of one turnover in days, the turnover ratio and the load factor. Comparison of these coefficients will allow to determine how efficiently and effectively the company's working capital is used.
1.5 Calculation and evaluation of the effectiveness of the use of working capital
Efficient use of working capital plays an important role in ensuring the normal operation of the enterprise, increasing the level of profitability of production and depends on many factors. In today's environment, huge Negative influence the efficiency of the use of working capital and the slowdown in their turnover are affected by the factors of the crisis state of the economy:
Decrease in production volumes and consumer demand;
High inflation rates;
Breaking economic ties;
Violation of contractual and payment discipline;
High level of tax burden;
Reduced access to credit due to high bank interest rates.
All of these factors affect the use of working capital, regardless of the interests of the enterprise.
A generalizing indicator of the efficiency of working capital use is the profitability indicator (R ok), calculated as the ratio of profit from product sales (P rp) or other financial result to the amount of working capital (C ok):
This indicator characterizes the amount of profit received for each ruble of working capital, and reflects the financial efficiency of the enterprise, since it is the working capital that ensures the turnover of all resources in the enterprise.
The turnover of working capital can accelerate or slow down. When the turnover slows down, additional funds are involved in the turnover. The effect of accelerated turnover is expressed in a reduction in the need for working capital in connection with the improvement of their use, their savings, which contributes to the growth of production volumes and, ultimately, an increase in profits. The acceleration of turnover leads to the release of part of working capital (material resources, cash), which are used either for the needs of production or for accumulation in the current account. Ultimately, the solvency and financial condition of the enterprise improves.
The release of working capital as a result of accelerating their turnover can be absolute or relative. Absolute release is a direct decrease in the need for working capital, which occurs when the planned production volume is completed with a smaller amount of working capital compared to the planned need.
Absolute release is defined as follows:
where. - the average balance of working capital in the base and planning period, rub.
The relative release of working capital occurs in those cases when, in the presence of working capital, within the planned needs, an overfulfillment of the production plan is ensured. At the same time, the growth rate of production reflects the growth rate of working capital balances. Relative release can be calculated using the formula:
where is the amount of released working capital,
- the difference between the turnover time of the reporting year with the base
– one-day actual implementation
- the difference between the coefficients of consolidation for the reporting and base year.
The calculation of savings in working capital (E about) can be done in various ways:
1st way. With this approach, the value is found as the difference between the amount of working capital that actually took place in the reporting period and its value for the period preceding the reporting period, reduced to the production volumes that took place in the reporting period:
where. - average balances of working capital in the base and planning period, rub.;
K growth - the growth rate of production.
2nd way. With this method of calculating the relative savings of working capital, they proceed from a comparison of the turnover of working capital in different reporting periods.
where RP is the volume of products sold (sales proceeds)
- the difference in the turnover of working capital in the planning period and base periods
360 is the number of days in a calendar year.
3rd way.
where. - turnover ratio in the planned period
. - turnover ratio in the base period.
Now let's look at one of the most modern ways to effectively use the working capital of an enterprise - the banking product cash management. Instead of centralizing treasury functions on its own, introducing total control over all processes and operations related to managing financial flows, which inevitably leads to an increase in operating costs, an enterprise can transfer part of the treasury powers to a bank that has a cash management product. This will significantly speed up the process of turnover of the company's funds. Depending on the degree of centralization of treasury functions and its own needs, a company may limit itself to simpler cash management products (management of interest rates, account balances) or choose more complex ones (centralization of cash flow management, documentary operations, all work with debtors and creditors, etc. .).
Thus, the assessment of the effectiveness of the use of working capital is carried out through indicators of its turnover, which can accelerate or slow down. An increase in turnover leads to capital savings, an increase in production volumes and an increase in profits. Also, for a more efficient use of the company's working capital, you can use the services of banks, namely the cash management product, which will significantly reduce operating income.
Chapter 2 Diagnosis of indicators of working capital management of the enterprise LLC "Furniture-Pro»
2.1 Calculation of acceleration control indicators working capital
Mebel-Pro LLC was registered in 1993. The form of ownership of the enterprise is private. The founders of the enterprise are individuals. The authorized capital of the enterprise is 8000 rubles. Since 1997 the enterprise has been engaged in the production and wholesale of paving slabs. The average number of employees at the enterprise is 50 people, of which the main workers - 36 people, engineers - 8 people, AUP - 6 people.
The enterprise produces about 10,000 m2 of six types of paving slabs and curbstones in a one-shift operation. The company leases fixed assets from another organization. Sales of products are mainly seasonal. The main buyers of the company's products are organizations and individuals in the city of Chelyabinsk and the Chelyabinsk region, as well as other subjects of the Russian Federation. The main competitors of the enterprise in the market are: concrete goods plant 1, Palmira LLC, Entos LLC.
In 2008, the sales proceeds amounted to 198,758 thousand rubles, the cost of sales of products amounted to 157,454 thousand rubles, and the net profit was 107 thousand rubles. The Company is a legal entity from the moment of its state registration, has settlement and other accounts in credit institutions, including those in foreign currency. The company owns property (material values and financial resources) accounted for on its independent balance sheet. The property of the company is formed at the expense of the funds of the founders (participants) invested in the authorized capital, from additional contributions to the property of the company, sponsorship funds, income from production and economic activities, short-term loans, as well as other income.
Find the total amount of current assets
OAP beginning \u003d 16454 + 6500 + 52044 \u003d 74998 thousand rubles.
OAP end \u003d 25247 + 6106 + 93069 \u003d 124460 thousand rubles.
Calculate the turnover ratio of all assets, according to formula 5.
K a1kv \u003d 49689.5 / 75002 \u003d 0.66251 revolutions
K a2kv \u003d 55689.5 / 106558 \u003d 0.52262 revolutions
K a3kv \u003d 43689.5 / 105689 \u003d 0.41338 revolutions
K a4kv \u003d 49689.5 / 124456 \u003d 0.39925 revolutions
Calculate the turnover ratio of current assets, according to formula 5.
K ob1kv \u003d 49689.5 / 74998 \u003d 0.66254 revolutions
K ob2kv \u003d 55689.5 / 106554 \u003d 0.52264 revolutions
K ob3kv \u003d 43689.5 / 105678 \u003d 0.41342 revolutions
K ob4kv \u003d 49689.5 / 124423 \u003d 0.39936 revolutions
Calculate the duration of one turnover of all assets, according to formula 4.
D a1kv \u003d 360 / 0.66251 \u003d 543.39 days
D a2kv \u003d 360 / 0.52262 \u003d 688.84 days
D a3kv \u003d 360 / 0.41338 \u003d 870.87 days
D a4kv \u003d 360 / 0.39925 \u003d 901.68 days
We calculate the duration of one turnover of current assets, according to formula 4.
D ob1kv \u003d 360 / 0.66254 \u003d 543.36 days
D ob2q = 360 / 0.52264 = 688.81 days
D ob3q = 360 / 0.41342 = 870.78 days
D ob4q = 360 / 0.39936 = 901.44 days
The absolute savings of current assets is equal to
ΔOA 1st half year = OA 2kv - OA 1kv x Kv p = 106554 - 74998 * (55689.5 / 49689.5) = + 22500 thousand rubles.
ΔOA 2nd half year = OA 4kv - OA 3kv x Kv p = 124423 - 105678 * (49689.5 / 43689.5) = +18745 thousand rubles.
Calculate the inventory turnover ratio, according to formula 7.
Kz 1kv \u003d 49689.5 / 5049.4 \u003d 9.841 revolutions
Kz 2kv \u003d 55689.5 / 6311.75 \u003d 8.823 revolutions
Kz 3kv \u003d 43689.5 / 6311.75 \u003d 6.922 revolutions
Kz 4kv \u003d 49689.5 / 7574.1 \u003d 6.560 revolutions
Calculate the duration of one turnover of stocks, according to formula 4.
D s 1kv \u003d 360 / 9.841 \u003d 36.583 days
Dz 2kv \u003d 360 / 8.823 \u003d 40.802 days
Dz 3kv \u003d 360 / 6.922 \u003d 52.009 days
Dz 4kv \u003d 360 / 6.560 \u003d 54.874 days
Calculate the share of stocks in total working capital.
Uz 1kv \u003d 5049.4 / 74998 * 100% \u003d 6.733%
Uz 2kv \u003d 6311.75 / 106554 * 100% \u003d 5.924%
Uz 3kv \u003d 6311.75 / 105678 * 100% \u003d 5.973%
Uz 4kv \u003d 7574.1 / 124423 * 100% \u003d 6.087%
Calculate the inventory turnover ratio.
Kpz 1kv \u003d 5049.4 / 4132.8 \u003d 1.222 revolutions
Kpz 2kv \u003d 6311.75 / 5166 \u003d 1.222 revolutions
Kpz 3kv \u003d 6311.75 / 5166 \u003d 1.222 revolutions
Kpz 4kv \u003d 7574.1 / 6199.2 \u003d 1.222 revolutions
Calculate the duration of one turnover of inventories.
Dz 1kv \u003d 360 / 1.222 \u003d 294.65 days
Dpz 2kv \u003d 360 / 1.222 \u003d 294.65 days
Dpz 3kv \u003d 360 / 1.222 \u003d 294.65 days
Dpz 4kv \u003d 360 / 1.222 \u003d 294.65 days
We calculate the share of material costs in the total cost of production.
Umz 1kv \u003d 4132.8 / 74998 * 100% \u003d 5.511%
Umz 2kv \u003d 5166 / 106554 * 100% \u003d 4.846%
Umz 3kv \u003d 5166 / 105678 * 100% \u003d 4.888%
Umz 4kv \u003d 6199.2 / 124423 * 100% \u003d 4.982%
Calculate the receivables turnover ratio.
Kdz 1kv \u003d 49689.5 / 18613.8 \u003d 2.669 revolutions
Kdz 2kv \u003d 55689.5 / 23267.25 \u003d 2.393 revolutions
Kdz 3kv \u003d 43689.5 / 23267.25 \u003d 1.878 revolutions
Kdz b4kv \u003d 49689.5 / 27920.7 \u003d 1.780 revolutions
Calculate the period of repayment of receivables.
Ddz 1kv \u003d 360 / 2.669 \u003d 134.857 days
Ddz 2kv \u003d 360 / 2.393 \u003d 150.409 days
Ddz 3kv \u003d 360 / 1.878 \u003d 191.721 days
Ddz 4kv \u003d 360 / 1.780 \u003d 202.285 days
Calculate the share of receivables in the total working capital
Udz 1kv \u003d 18613.8 / 74998 * 100% \u003d 24.819%
Udz 2kv \u003d 23267.25 / 106554 * 100% \u003d 21.836%
Udz 3kv \u003d 23267.25 / 105678 * 100% \u003d 22.017%
Udz 4kv \u003d 27920.7 / 124423 * 100% \u003d 22.440%
Calculate the turnover ratio of accounts payable.
Kkz 1kv \u003d 49689.5 / 22414.2 \u003d 2.217 revolutions
Kkz 2kv \u003d 55689.5 / 28017.75 \u003d 1.988 revolutions
Kkz 3kv \u003d 43689.5 / 28017.75 \u003d 1.559 revolutions
Kkz b4kv \u003d 49689.5 / 33621.3 \u003d 1.478 revolutions
Calculate the duration of one turnover of accounts payable.
Dkz 1kv \u003d 360 / 2.217 \u003d 162.391 days
Dkz 2kv \u003d 360 / 1.988 \u003d 181.118 days
Dkz 3kv \u003d 360 / 1.559 \u003d 230.865 days
Dkz 4kv \u003d 360 / 1.478 \u003d 243.586 days
Calculate the share of accounts payable in total working capital
Ukz 1kv \u003d 22414.2 / 22414.2 * 100% \u003d 24.819%
Ukz 2kv \u003d 28017.75 / 28017.75 * 100% \u003d 21.836%
Ukz 3kv \u003d 28017.75 / 28017.75 * 100% \u003d 22.017%
Ukz 4kv \u003d 33621.3 / 33621.3 * 100% \u003d 22.440%
Let's calculate the accumulation coefficient:
Kn 1 half year = \u003d 6.1
Kn 2 half year = = 6.49
Let's determine the savings or overrun of stocks compared to the same period last year, according to formula 9:
Δ3 = 25247 - = +644.1 thousand rubles
Calculate material yield.
MO 1kv \u003d 49689.5 / 4132.8 \u003d 12.023 rubles / rub.
MO 2kv \u003d 55689.5 / 5166 \u003d 10.78 rubles / rub.
MO 3kv \u003d 43689.5 / 5166 \u003d 8.46 rubles / rub.
MO 4kv \u003d 49689.5 / 6199.2 \u003d 8.015 rubles / rub.
Let's calculate the cost of materials.
ME 1kv \u003d 1 / 12.023 \u003d 0.083 rubles / rub.
ME 2kv \u003d 1 / 10.78 \u003d 0.093 rubles / rub.
ME 3kv \u003d 1 / 8.46 \u003d 0.118 rubles / rub.
ME 4kv \u003d 1 / 8.015 \u003d 0.125 rubles / rub.
Let us calculate the value of the increase in the volume of production at the analyzed enterprise, according to formula 11:
ΔVp = (1.5974 -1.7724) * 124423 = - 21774.03.
Due to a decrease in the turnover of working capital, the loss in production volumes amounted to 21,774.03 thousand rubles.
The influence of turnover on the increase in profit P will be found by the formula:
ΔP \u003d - 6.238 - (- 6.238) \u003d 11.86
Current assets in the analyzed enterprise are represented by the following main structural components (table 2).
table 2
Structure of current assets for 2008 (thousand rubles)
|
Index |
At the beginning of the period |
At the end of the period |
Changes |
|
Tangible assets in inventories |
|
|
|
|
Including: |
|||
|
3.Building additive |
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|
4.Technological powder |
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|
VAT on purchased assets |
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|
Accounts receivable |
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|
Total current assets |
Next, we present the derivative indicators of the use of current assets. The importance of these indicators lies in the fact that the total inventory turnover depends on the speed of the working capital passing through the individual stages and phases of the cycle.
The calculation results are shown in Table 3.
Table 3
Inventory turnover rates in 2008
|
Index |
||||
|
Sales proceeds (without VAT, excises), thousand rubles |
||||
|
Reserves, thousand rubles |
||||
|
Inventory turnover ratio, turnover |
||||
|
Inventory turnover ratio, days |
||||
|
The share of stocks in the total volume of working capital, % |
||||
|
Industrial stocks, thousand rubles |
||||
|
Inventory turnover, turnover |
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|
Duration of one turnover of inventories, days |
||||
|
The share of material costs in the total cost of production,% |
||||
|
Accounts receivable, thousand rubles |
||||
|
Accounts receivable turnover, turnover |
||||
|
Receivables repayment period, days |
||||
|
Share of accounts receivable in total working capital, % |
||||
|
Accounts payable, thousand rubles |
||||
|
Accounts payable turnover, turnover |
||||
|
Period of repayment of accounts payable, days |
||||
|
Share of accounts payable in total working capital, % |
2.2 Analysis of the dynamics of indicators of management of the acceleration of working capital
Current assets of the enterprise account for 99% of the total assets and at the moment it is increasing the pace of production. The asset structure of Mebel-Pro LLC is presented in table 4, and their dynamics in fig. 1 and 2.
Table 4
Analysis of the structure of assets for 2008
|
Index |
Absolute values |
Share in total assets |
Changes |
|||
|
beginning of period |
end of period |
beginning of period |
end of period |
|
in inheritance. weights, % |
|
|
Fixed assets |
||||||
|
current assets |
||||||
Rice. 1 Dynamics of non-current assets
Rice. 2 Dynamics of current assets
The dynamics of asset turnover indicators and the calculation of the influence of factors that form the turnover of current assets are presented in table 5.
Table 5
Dynamics of Asset Turnover Indicators and Calculation of Influence of Factors Forming Turnover in 2008
|
Index |
|||||||||
|
1. Sales volume in contract prices (without VAT) for the quarter, thousand rubles. |
|||||||||
|
2. Average quarterly balances of all assets, thousand rubles. |
|||||||||
|
3. Average quarterly balances of current assets, thousand rubles. |
|||||||||
|
4. The turnover ratio of all assets, turnover |
|||||||||
|
5. Turnover ratio of current assets, turnover |
|||||||||
|
6. The turnover ratio of current assets with the volume of sales for the corresponding quarter and the average balances of working capital in the first quarter, turnover |
|||||||||
|
7. Change in the turnover ratio of current assets compared to Q1, turnover |
|
||||||||
|
8. Duration of one turnover of all assets, days |
|||||||||
|
9. Duration of one turnover of current assets, days |
|||||||||
|
10. Impact on the acceleration (deceleration) of the turnover of current assets: |
|
|
|
|
|||||
|
Sales volume (indicator 6 for the corresponding quarter - indicator 5 for the I quarter) |
|||||||||
|
Average quarterly balances of working capital (indicator 5 for the corresponding quarter - indicator 6 for the corresponding quarter) |
|||||||||
Thus, the turnover of current assets as a whole increased, this was due to an increase in the turnover of receivables and payables, but the turnover of inventories decreased.
Table 6 shows the calculation of the profitability of the enterprise and the factors that influenced its change by quarter.
Table 6
Profitability of the enterprise and calculation of factors that influenced the change in its level by quarters in 2008
|
Index |
|
|
|
|
||||
|
1. Net profit, thousand rubles. |
||||||||
|
2. Average quarterly balances of all assets, thousand rubles. |
||||||||
|
3. Profitability of the enterprise,% |
||||||||
|
4. Proceeds from sales (without VAT and excises), thousand rubles. |
|
|
|
|
||||
|
5. Net profit per 1 rub. sales, % |
|
|
|
|
||||
|
6. Impact on the change in the profitability of enterprises |
||||||||
|
Turnover of all assets |
||||||||
|
Net profit per 1 rub. implementation |
||||||||
The return on equity and the calculation of the influence of factors on the change in its level by quarters in 2008 is shown in Table. 7.
Table 7
Return on equity and calculation
influence of factors on the change in its level by quarters in 2008
|
Index |
||||
|
1. Average quarterly balances of own cap. capital, thousand rubles |
||||
|
2. Net profit, thousand rubles. |
||||
|
3. Return on equity, % |
||||
|
4. Average quarterly balances of all assets, thousand rubles. |
||||
|
5. Proceeds from sales (without VAT, excises), thousand rubles. |
|
|
|
|
|
6. Financial flexibility ratio |
|
|
|
|
|
7. Net profit per 1 rub. sold products, % |
|
|
|
|
The turnover of inventories characterizes the speed of movement of material assets and their replenishment. The faster the turnover of capital placed in stocks, the less capital is required for a given volume of business transactions.
For the normal course of production and marketing of products, stocks must be optimal. The challenge is to find a “middle ground” between over-inventory, which can cause financial hardship (cash shortage), and over-inventory, which threatens production stability and, last but not least, threatens the image of a reliable supplier in the market, since the availability of stocks necessary for potential customers can be considered as a means of competition.
Such a task cannot be solved in conditions of spontaneous formation of reserves. To do this, it is necessary to analyze the state of stocks according to a certain methodology that allows you to maintain competitiveness and keep capital investments at a minimum level.
Under the optimal variant, the accumulation coefficient should be less than 1. The coefficient value greater than 1 (which is observed in this enterprise) indicates the presence of excess stocks of inventory items, an increase in the cost of production, with a short supply of purchased semi-finished products and components, transport difficulties.
In this case, the values of this coefficient indicate a very low value of finished product residues. The reason for this is the work of the enterprise only under a specific order.
At the analyzed enterprise during the reporting period, the share of material costs in the cost of production slightly increased. At the end of the period, there was a slight increase in material consumption, and, accordingly, a decrease in material productivity.
The correct ratio between own and borrowed sources of working capital formation plays an important role in strengthening the financial condition of the enterprise. In the process of analysis, it is important to assess the company's need for working capital, and then compare it with the amount of available financial sources. The system of formation of working capital influences the speed and efficiency of the use of working capital. The economic efficiency of the enterprise is characterized by relative indicators of profitability or profitability. This issue is also important because the market situation is constantly changing, which means that the needs of the enterprise for working capital are unstable, it is very often almost impossible to cover them from their own sources. Profit today is an insignificant source in the structure of sources of formation.
Thus, in the process of the performed calculations, the enterprise has practically no non-current assets.
Current assets of the enterprise account for 99% of the total assets and at the moment it is increasing the pace of production.
The turnover of current assets in the 2nd quarter tended to decrease, and then increased again, which indicates a positive trend in the enterprise.
The turnover of current assets as a whole increased, this was due to an increase in the turnover of receivables and payables, but the turnover of inventories decreased.
At the analyzed enterprise during the reporting period, the share of material costs in the cost of production slightly increased. At the end of the period, there was a slight increase in material consumption, and, accordingly, a decrease in material productivity.
Timely receipt and efficient use of material resources ensures uninterrupted operation and increased profits.
At the analyzed enterprise, there is an excess of sources to cover stocks own sources their formation. This means that cash, short-term financial investments and other working capital cover accounts payable and other short-term liabilities of the enterprise.
Conclusion
In the course of the work done, it was found that in any enterprise, working capital management is necessary, first of all, to determine the effectiveness of the enterprise. The use of working capital determines how the enterprise should carry out its work, with what means and from what sources. Improving the use of working capital leads to the rhythmic operation of the enterprise, and in case of inefficient use of working capital, the available working capital is misused, which will soon lead to irregular work and deterioration of the enterprise.
Any organization has property in the form of fixed and working capital.
In 2008, the company observed a slowdown in the turnover of working capital, which contributes to an increase in the need for working capital. There was a release of working capital and the absolute savings amounted to 11926 thousand rubles.
Due to a decrease in the turnover of working capital, the loss in production volumes amounted to 21,774.03 thousand rubles.
The main share of stocks falls on finished products, work in progress. During the reporting period, inventory turnover decreased by 0.21 days and at the end of the year amounted to 7.81 days. This indicates a decrease in the efficiency of inventory management, however, there was an increase in the turnover of deferred expenses, and this also characterizes the decline in the production activity of the enterprise. The accumulation coefficient amounted to 6.49, and should be less than 1, which indicates the presence of excess stocks of inventory items, an increase in the cost of production, with a short supply of purchased semi-finished products and components, and transport difficulties.
There is an increase in inventories due to an increase in their total turnover, which may have led to the accumulation of inventories.
The receivables repayment period increased from 141 days to 168 days by the end of the year, which indicates a deterioration in settlements with buyers. Accounts receivable at the enterprise is more than half of working capital. By the end of the year, its size increased by 41,025 thousand rubles.
To ensure the uninterrupted release of marketable products for the purpose of subsequent sale and profit, an industrial enterprise needs to have working capital (current assets). Their size should allow acquiring relevant materials and components within a certain period of time. Part of working capital is required to pay employees and pay for consumed energy resources (electricity, heat, hot and cold water) during production. Cash costs are also necessary for the storage and shipment of finished products to consumers.
Some of the working capital (deferred expenses) is spent on the development of design documentation for samples of new products, on the preparation of their manufacturing technology, on the redevelopment of workshops and the readjustment of equipment, etc. In cases where it is impossible to avoid the involvement of other industrial enterprises for the production of marketable products (usually this is typical for the production of especially complex types of products), advances are required to be paid to allied enterprises.
In a word, the organization of an uninterrupted production process at an industrial enterprise is impossible without investing in current operations. However, the features of the formation and use of working capital at Russian industrial enterprises during the formation and development of market relations (and, therefore, under conditions of increased risk) are not sufficiently analyzed in our economic literature and other practical studies.
List of used sources and literature
1. PBU No. 19/02 "Accounting for financial investments".
2. RAS No. 15/01 "Accounting for loans and credits and the costs of servicing them."
3. PBU No. 5/01 "Accounting for inventories".
4. PBU No. 4/99 "Accounting statements of the organization".
5. Efimova O.V., Melnik M.V. Analysis of financial statements: M., OMEGA-L, 2004
6. Kovalev V.V., Kovalev Vit.V. Finance of enterprises: M., TK Velby, 2003.
7. Kovaleva A.M., Barannikova N.P., Bogacheva V.D. Finance and statistics: M., 1998
8. Kolchina N.V., Polyak G.B., Pavlova L.N. and other finances of enterprises. / Ed. prof. Kolchinoy N.V../ - 2nd ed., revised. and additional: M., UNITY - DANA, 2001
9. Pavlova L.N. Finance of enterprises: M., Finance, UNITI, 1998
10. Sheremet A.D., Saifulin R.S. Finance of enterprises: M., INFRA - M, 1999
11. Journal "Financial Director": M., No. 11, pp. 38-40
12. Journal "Financial Director": M., No. 12, pp. 19-21
annotation
This course work consists of 43 sheets, on which there are 37 sheets of the theoretical part and 6 sheets of calculated data for a commercial enterprise. The methodological basis of the course work is the works of Sheremet A.D., Saifulin R.S. and Kolchina N.V.
The paper considers proposals for improving the quality of working capital management. They are considered on the example of a particular enterprise, and actions are also proposed to optimize the work of a financial manager with the working capital of an enterprise.
