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EQUITY/ BORROWED CAPITAL / PROBLEMS OF FUNCTIONING AND USE OF VARIOUS SOURCES OF CAPITAL OF THE ENTERPRISE/OWN CAPITAL/LOAN CAPITAL/ PROBLEMS OF FUNCTIONING AND USE OF VARIOUS SOURCES OF THE CAPITAL OF THE ENTERPRISE

annotation scientific article on economics and business, author of scientific work - Merkulova Elena Yurievna, Morozova Natalia Sergeevna

The main sources of formation of the property of the enterprise are own and borrowed capital, the value of which is in the liabilities side of the balance sheet. Using only equity, the enterprise has the highest financial stability, but limits the pace of its development. Borrowed capital ensures the growth of the financial potential of the enterprise if it is necessary to significantly expand its assets and increase the growth rate of its volume. economic activity. It is able to generate an increase in financial profitability due to the effect of financial leverage. At the same time, the use loan capital generates the risk of a decrease in financial stability and the risk of loss of solvency. The level of these risks increases in proportion to the growth in the share of use loan capital. Assets generated by loan capital, generate a smaller rate of return, which is reduced by the amount paid loan interest. There is also a high dependence of the cost loan capital from fluctuations in the financial market. Thus, an enterprise using borrowed capital has a higher financial potential for its development and the possibility of increasing financial profitability, but generates financial risk and the threat of bankruptcy to a greater extent. Analysis of the effectiveness of the use of own and loan capital organizations is a way of accumulating, transforming and using accounting and reporting information, with the aim of: assessing the current and prospective financial condition of the organization, i.e. using its own and loan capital; to substantiate the possible and acceptable pace of development of the organization from the standpoint of providing them with sources of funding; identify available sources of funds, evaluate rational ways to mobilize them; predict the position of the enterprise in the capital market.

The text of the scientific work on the topic "Characteristics and analysis of the use of own and borrowed capital of the enterprise"

UDC 336.64 doi: 10.20310/1819-8813-2016-11-10-35-40

CHARACTERISTICS AND ANALYSIS OF THE USE OF OWN AND LOAN CAPITAL OF THE ENTERPRISE

MERKULOVA ELENA YURIEVNA Tambov State University named after G. R. Derzhavin, Tambov, the Russian Federation, e-mail: merkatmb@mail.ru

MOROZOVA NATALIA SERGEEVNA Lipetsk branch of FSBEI HPE "Financial University"

under the Government of the Russian Federation”, Lipetsk, Russian Federation, e-mail: NSMorozova@fa.ru

The main sources of formation of the property of the enterprise are own and borrowed capital, the value of which is in the liabilities side of the balance sheet. Using only its own capital, the enterprise has the highest financial stability, but limits the pace of its development. Borrowed capital ensures the growth of the financial potential of the enterprise if it is necessary to significantly expand its assets and increase the growth rate of its economic activity. It is able to generate an increase in financial profitability due to the effect of financial leverage. At the same time, the use of borrowed capital generates the risk of a decrease in financial stability and the risk of loss of solvency. The level of these risks increases in proportion to the growth in the proportion of the use of borrowed capital. Assets formed from borrowed capital generate a lower rate of return, which is reduced by the amount of interest paid on loans. There is also a high dependence of the cost of borrowed capital on fluctuations in the financial market. Thus, an enterprise using borrowed capital has a higher financial potential for its development and the possibility of increasing financial profitability, but generates financial risk and the threat of bankruptcy to a greater extent. Analysis of the effectiveness of the use of own and borrowed capital of organizations is a way of accumulating, transforming and using information from accounting and reporting, with the aim of: assessing the current and prospective financial condition of the organization, i.e., the use of own and borrowed capital; to substantiate the possible and acceptable pace of development of the organization from the standpoint of providing them with sources of funding; identify available sources of funds, evaluate rational ways to mobilize them; predict the position of the enterprise in the capital market.

Keywords: own capital, borrowed capital, problems of functioning and use of various sources of enterprise capital

The study of the structure of capital has always been at the center of attention of economists of different schools and directions of economic doctrine. The study of enterprise capital as economic category, starting from the second half of XIX in. and up to the present day, carried out by such scientists as: D. Clark, J. Keynes, K. Marx, D. Mil, V. Pa-reto, W. Petty, D. Ricardo, A. Smith, I. Schumpeter. They made a huge contribution to the development of the topic of capital, and also highlighted the problems that are directly related to the analysis of equity capital and the effectiveness of the application of data obtained as a result of analytical procedures. So Professor L. T. Gitlyarovskaya notes that the analysis of capital is complex and continuous process collection, classification and application of the obtained data

accounting and financial reporting, to determine the financial position of the company, diagnosing the pace of expansion of financial and economic activities, discovering available sources of capital formation and their rational use, including forecasting the development of the company in the future in the capital market.

The sources of capital formation of the enterprise are own and borrowed funds (Table 1). Consideration of the current Russian regulatory documents on accounting leads us to the fact that the concept of "own capital" is contained only in the Concept of Accounting in the Market Economy of Russia. Other regulatory documents consider

structure of capital and methodological aspects of accounting of its constituent elements.

The equity capital of an enterprise is understood as the value of assets that belong to the owner of the enterprise on the basis of ownership rights, used to generate income.

Equity usually includes invested capital, that is, capital reinvested by the owners of the enterprise and accumulated capital, which is created in excess of what was originally invested by the founders. The invested capital consists of such articles of own capital as authorized capital, additional capital (in terms of share premium received). The first component of invested capital is offered in the balance sheet of Russian enterprises by authorized capital, the second component is by additional capital (in terms of share premium received), and the third component of invested capital is reflected by additional capital or fund social sphere. The accumulated capital of the enterprise is executed in the form that is formed due to net profit ( Reserve capital, retained earnings, accumulation fund and other items). It has also been found that the greater the share of accumulated capital, the higher the quality of equity. Sources with the help of which it is formed

Yes. That is, equity is understood as the difference between the assets of the enterprise and its liabilities. It has a rather complex structure, and its composition is directly determined by the organizational and legal form of the enterprise.

equity can be divided into two groups: internal and external. Internal sources include: net profit, depreciation, property revaluation fund and other receipts. External sources include: issuance of shares, grants financial aid, and other sources.

All information about equity, which is generated by the accounting and analytical system, is used not only by internal, but also by external users (Fig. 1).

As a result, the maximization of equity capital occurs at the expense of any of its sources of formation, which positively affects the activities of the enterprise as a whole, increases its financial independence from external sources of financing and increases production volumes.

Based on the foregoing, it can be concluded that competent management own capital and the sources of its formation will allow us to analyze the occurrence,

Sources of enterprise capital formation and their characteristics

№ Sources of capital formation Characteristics of attracted capital

Internal External Long-term Short-term Own Borrowed

1. Contributions of the founders (including additional capital from share premium) + + +

2. Retained earnings (including reserve capital and funds from profit) + + +

3. Long-term loans and credits (including issued bonds) + + +

4. Short-term loans and credits + + +

5. Accounts payable (trade loans) + + +

standing and application, as well as provide significant proposals for managerial decision-making.

Borrowed (attracted) funds represent part of the financial resources of the enterprise invested in the assets of the enterprise.

They represent economic and legal obligations to third parties. In accounting, the attracted funds are defined as liabilities, i.e., these funds must be returned to creditors within the terms established by the contract.

Users

Internal

financial managers

Owners

Information on financial results

Data on the effectiveness of deposits, amounts, dividends, cost of capital

< л Налоговые органы

Suppliers, customers, organizations

Company management Management information Investors Expediency of investments

Data required for audit

Information about tax payments

Information

about solvency

and liquidity

Lenders

Information about the solvent

Rice. 1. Users of property information]

The Framework for Accounting, developed by the American Institute of Chartered Accountants' Financial Reporting Standards Board (FASB), defines a liability as the probable future outflow of economic benefits arising from an entity's present obligation to delegate assets or provide services to other entities through transactions. or events occurring in

E. t MERKULOVA, N. 8. MOROZOVA

capital, formed in the accounting and analytical system

past periods. In addition, liabilities should include debts generated in the course of economic activity (accounts payable).

Borrowed capital for commercial structures plays a very important role as an additional means of financing economic activities. However, after a certain period of time, each entrepreneur is obliged to return these funds to creditors not only in full, but

and in the agreement established by the contract, with interest.

When deciding on the rationality of attracting borrowed funds, it is important for entrepreneurs to assess the current situation with the financial condition of the enterprise, the structure of financial resources, which are reflected in the liability of the balance sheet. But a high share and a high percentage for using a loan can make it unreasonable to attract new borrowed funds.

Despite the fact that, by attracting borrowed funds, the company receives a number of privileges, however, under certain circumstances (low level of profitability), they can also turn into their reverse side, a lack of income received, which worsens the financial situation and may lead to bankruptcy. In addition, an enterprise that has a sufficient portion of borrowed funds in the total amount of economic assets has a lower degree of opportunity for capital maneuverability. In the event of unpredictable circumstances, such as: a decrease in demand for goods, an increase in the cost of raw materials and materials, a fall in product prices, seasonal fluctuations in demand, etc., all this can provoke a loss in the solvency of an enterprise, a decrease in income and a decrease in profitability, i.e. e. deterioration financial condition enterprises.

The attracted sources of funds in accounting (financial) accounting include long-term and short-term liabilities. The attraction of borrowed funds into the turnover of the enterprise is considered a normal phenomenon, which contributes to a short-term improvement in the financial condition of the enterprise, if the funds received are not frozen, but are used in the turnover of the organization.

According to the purpose of attracting borrowed capital is divided into funds necessary for:

Reproduction of fixed assets and intangible assets;

Replenishment of current assets;

Satisfaction of social needs.

According to the form of attraction, borrowed funds are divided into funds in cash, commodity form, in the form of equipment, etc.

By sources of attraction, borrowed funds are divided into external and internal.

According to the form of collateral, all borrowed funds are divided into: secured by a pledge or mortgage, secured by a surety or guarantee, and unsecured.

For further development and functioning of the company's activities quite often before

it is the choice of one of several options for the source of capital: own or borrowed. Before an organization decides to raise borrowed funds, it is important to assess the structure of liabilities in the financial statements, if the share of debt is high enough, then attracting new borrowed funds will be unwise and even dangerous. If the company decides to use the attracted capital, then financial manager it is necessary to analyze and study in detail under what conditions and in what volume borrowed funds are provided. Undoubtedly, the company will have a number of advantages by attracting borrowed funds, but certain circumstances can complicate the financial situation and lead the company to bankruptcy.

With the help of borrowed funds, the assets of the company can be financed and replenished, and this offer is quite attractive, since the lender does not impose requirements on the future income of the company. But at the same time, regardless of the results of the organization's activities, he has every right to claim a predetermined amount from the contract and interest on it.

As you know, the amount of obligations and their maturity dates are known in advance, which undoubtedly simplifies financial planning cash flows. But the amount of expenses, which is associated with interest on the use of borrowed funds, encourages the organization to increase income through the rational use of funds raised.

If the share of borrowed funds significantly exceeds the share of own funds, then the enterprise has a meager opportunity for capital maneuvering. Also, unforeseen circumstances, such as: an increase in the cost of raw materials and materials, a decrease in demand for products, a fall in prices for goods, seasonal changes in demand, etc., in an unstable financial condition, can serve as one of the main reasons for the loss of the company's solvency.

From the point of view of financial stability, the most rational option for an enterprise is to use its own capital, since there is no threat of bankruptcy, and investors at any time will not demand a return of their funds. But the difficulty lies in the fact that own funds are rather limited due to their organizational and legal complexities. Then, in this situation, the company has the right to use the attracted capital on certain conditions. Sometimes borrowed funds can be very profitable with economic

Russian point of view. For example, the cost of capital raised, in some cases, costs the company much cheaper than the cost of its own. This fact is explained by the fact that the risk of own sources significantly dominates the creditor risk, since the amount of the incentive is fixed in the loan agreement, and the loan is guaranteed by guarantees and collateral.

If the borrowed funds exceed the allowable amount, then the financial stability of the enterprise is reduced, the risk of creditors increases and the cost of borrowed capital increases. Attracting additional own sources is a rather lengthy and slow procedure, it is much easier to attract borrowed capital. For example, a company with a perfect level of profitability uses borrowed capital much more often than its own. It is also important to note that the weighted average cost of capital (WACC) is the main economic criterion for the optimal capital structure. Preference should be given to such a source of capital formation, which helps to minimize the weighted average cost of capital (WAC).

There are several factors that are not always amenable to economic research: the risk associated with the source of capital formation, all kinds of legal changes, spent time and funds for borrowed capital .

The ratio between own and borrowed sources of funds is greatly influenced by such factors as the external and internal working conditions of an economic entity and the financial strategy chosen by it:

The difference between dividend rates and loan interest rates. If dividend rates are lower than interest rates, then leverage should be reduced, and vice versa;

Reducing or expanding the activities of economic entities. As a result, there is either an increase or decrease in the need to attract borrowed funds;

Accumulation of excess or unused stocks, materials and obsolete equipment;

Rejection of funds, in the formation of doubtful receivables, which attracts additional borrowed funds.

The ratio between the company's own and borrowed funds is one of the main analytical factors that reflect the degree of risk of investing financial assets.

resources, i.e. the larger the share of borrowed capital, the greater the degree of risk, and vice versa.

Consequently, an enterprise that uses borrowed capital will have sufficient financial opportunities for its further development (formation of an additional volume of assets) and the possibility of increasing the profitability of the business entity, but one should not exclude the financial risk and the threat of bankruptcy that arise in the event of an increase in the share of borrowed funds. in total capital.

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CHARACTERISTIC AND ANALYSIS OF USE OF OWN AND LOAN CAPITAL OF THE ENTERPRISE

MERKULOVA ELENA YURYEVNA Tambov State University named after G. R. Derzhavin, Tambov, the Russian Federation, e-mail: merkatmb@mail.ru

MOROZOVA NATALIYA SERGEEVNA Lipetsk Branch of Financial University under the Government of the Russian Federation, Lipetsk, the Russian Federation, e-mail: NSMorozova@fa.ru

The main sources of formation of property of the enterprise are own and loan capital which size is in a balance passive. Using only own capital, the enterprise has the highest financial stability, but limits rates of the development. The loan capital provides growth of financial capacity of the enterprise in need of essential expansion of its assets and increase of growth rates of volume of its economic activity. It is capable of generating a gain of financial profitability due to the effect of financial leverage. At the same time use of the loan capital generates risk of decrease in financial stability and risk of loss of solvency. The level of these risks increases in proportion to growth of specific weight of use of the loan capital. The assets created by the loan capital generate a smaller rate of return which decreases for the sum of the paid loan percent. Also there is a high dependence of cost of the loan capital on fluctuations of an environment of the financial market. Thus, the enterprise using the loan capital has higher financial potential of the development and a possibility of a gain of financial profitability, however to a large extent generates financial risk and the threat of bankruptcy. The analysis of efficiency of use of own and loan capital of the organizations represents the way of accumulation, transformation and use of information of accounting and the reporting aiming: to estimate the current and perspective financial state of the organization, i.e. use of own and loan capital; to prove the possible and acceptable rates of development of the organization from a position of providing them by financing sources; to reveal available sources of means, to estimate rational ways of their mobilization; to predict the position of the enterprise at the market of the capitals.

Key words: own capital, loan capital, problems of functioning and use of various sources of the capital of the enterprise

Improving business efficiency is impossible only within the framework of own resources enterprises. To expand their financial capabilities, enterprises resort to attracting additional borrowed funds in order to increase investments in own business, get more profit. The issue of the formation, functioning and reproduction of capital by small businesses, for whom it is not always easy to attract borrowed capital, becomes relevant. An indicator of the market stability of a company is its ability to successfully develop in the conditions of transformation of the external and internal environment. In most cases, small businesses use a bank loan as borrowing sources, which is explained by the relatively large financial resources of Russian banks, as well as the fact that when obtaining a bank loan, there is no need to publicly disclose information about the enterprise. To do this, it is necessary to have a flexible structure of financial resources and, if necessary, be able to attract borrowed funds. cash, i.e. be creditworthy.

small business

capital Management

lending

Borrowed capital

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At present, in the context of the existence of various forms of ownership in Russia, the study of the formation, functioning and reproduction of capital in small businesses is becoming especially relevant. Possibilities of becoming entrepreneurial activity and its further development can only be realized if the owner reasonably manages the capital invested in the enterprise.

Increasing business efficiency is impossible only within the framework of the enterprises' own resources. To expand their financial capabilities, it is necessary to attract additional borrowed funds in order to increase investments in their own business, to obtain greater profits. In this regard, managing the attraction and effective use of borrowed funds is one of the most important functions of financial management, aimed at ensuring the achievement of high final results of the economic activity of the enterprise. This topic is especially acute for newly organized small businesses that do not always have the opportunity to finance themselves.

Borrowed capital used by such enterprises characterizes in aggregate the volume of their financial liabilities. Sources of borrowed capital can be funds raised on the market valuable papers and credit resources. The choice of a source of debt financing and the strategy for attracting it determine the basic principles and mechanisms for organizing the financial flows of an enterprise. The efficiency and flexibility of managing the formation of debt capital contribute to the creation of an optimal financial structure enterprise capital.

Currently, the main ways to attract borrowed capital are bank loans, equity financing, leasing. In most cases, small businesses use a bank loan as borrowing sources, which is explained by the relatively large financial resources of Russian banks, as well as the fact that when obtaining a bank loan, there is no need to publicly disclose information about the enterprise. Here, some of the problems caused by the specifics of bank lending are removed, which is associated with simplified requirements for application documents, with relatively short terms for considering applications for issuing a loan, with the flexibility of borrowing conditions and forms of loan security, with the simplification of the availability of funds, etc.

Majority leaders Russian companies do not want to disclose financial information about their enterprises, as well as to make changes in financial policy. As a consequence - the fact that only 3% of Russian companies use equity financing.

According to a number of modern scholars, the concepts of "capital" and "financial resources" require a distinction in terms of financial management of enterprises. Capital (own funds, net assets) is the organization’s property free from obligations, the strategic reserve that creates conditions for its development, absorbs losses if necessary, and is one of the most important pricing factors when it comes to the price of the organization itself. Capital is the highest form of mobilization of financial resources.

The following set of various functions of capital is distinguished:

production resource (factor of production).

Object of ownership and disposal.

Part of financial resources.

Source of income.

Time preference object.

Object of sale and purchase (object of market circulation).

Carrier of the liquidity factor.

The use of borrowed capital to finance the activities of an enterprise, according to many economists, is economically beneficial, since the payment for this source is on average lower than for equity capital. This means that the interest on loans and borrowings is less than the return on equity, which characterizes, in fact, the level of the cost of equity. In other words, under normal conditions, debt capital is a cheaper source than equity capital.

In addition, attracting this source allows owners and top managers to significantly increase the amount of controlled financial resources, i.e. expand the investment opportunities of the enterprise.

Allocate various forms attraction of borrowed funds. So, borrowed capital is attracted to service the economic activities of the enterprise in the following main forms (Fig. 1.1):

Fig.1.1 Forms of borrowing.

According to the degree of security of borrowed funds attracted in cash, which serves as a guarantee of their full and timely return, the following types are distinguished (Fig. 1.2.):

Fig.1.2. Types of borrowed funds in cash.

A blank or unsecured loan is a type of loan that is issued, as a rule, to an enterprise that has a good reputation for timely repayment and fulfillment of all conditions of the loan agreement. In financial practice, this category of enterprises is characterized by a special term - "first-class borrower";

Thus, based on the composition of borrowed funds, in financial practice, the main creditors of an enterprise can be:

commercial banks and other institutions that provide loans in cash (mortgage banks, trust companies, etc.);
suppliers and buyers of products (commercial credit from suppliers and advance payments from buyers);
stock market (issuance of bonds and other securities other than shares) and other sources.

Another way to attract borrowed funds is to expand the practice financial leasing. Leasing is used every year by an increasing share of Russian enterprises. The attractiveness of financial leasing as a form of lending for commercial banks is associated with a lower degree of risk of investing in investments due to the fact that:

credit resources are directed to the acquisition of the active part of fixed assets - equipment, the actual need for which is confirmed and its use by the lessee organization is guaranteed;
the lessee organization decides to conclude a contract only if all the necessary conditions for the organization of production are available, including production area, labor force, raw materials and materials, except for equipment.

Thus, capital management is a system of principles and methods for the development and implementation of management decisions related to its optimal formation from various sources, as well as ensuring its effective use in various types economic activity of the enterprise.

It is also possible to summarize the direction of attracting capital, namely the solution of the following tasks:

Formation of a sufficient amount of capital to ensure the necessary pace of economic development of the enterprise.
Optimization of the distribution of formed capital by types of activity and areas of use.
Ensuring the conditions for achieving the maximum return on capital with the expected level of financial risk.
Ensuring the constant financial balance of the enterprise in the process of its development.
Ensuring a sufficient level of financial control over the enterprise by its founders.
Ensuring timely reinvestment of capital.

The formation of an enterprise's borrowed capital should be based on the principles and methods for developing and implementing decisions that regulate the process of attracting borrowed funds, as well as determining the most rational source of financing borrowed capital in accordance with the needs and opportunities for the development of the enterprise. The main objects of management in the formation of borrowed capital are its price and structure, which is determined in accordance with external conditions.

In the structure of borrowed capital, there are sources that require their coverage to attract them. The quality of the coating is determined by its market value, the degree of liquidity or the possibility of compensation of attracted funds.

Analyzing bank lending, we found out that one of the main problems is the reluctance of banks to issue money to finance new enterprises that do not have a credit history. But it is during this period that borrowed capital is especially important for such enterprises. In addition, the problem of high rates for new businesses is also intractable.

In other cases, attracting a bank loan is one of the most popular ways to finance an enterprise. The main feature of bank lending is a simplified procedure (with the exception of syndicated bank loans and loans in relatively large volumes).

The correct application of the above recommendations allows enterprises to increase profitability by increasing production volumes and product sales. The need to attract external sources of financing is not always associated with the insufficiency of internal sources of financing. These sources, as you know, are retained earnings and depreciation. The considered sources of self-financing are not stable, limited by the speed of cash turnover, the rate of product sales, and the amount of current expenses. That's why free money often (if not always) not enough, and an additional injection of them aimed at increasing asset turnover will be extremely beneficial for most enterprises.

Bibliographic link

Kravtsova V.A. POLICY OF LOAN CAPITAL ATTRACTION BY SMALL BUSINESS ENTERPRISES. // International Student Scientific Bulletin. - 2015. - No. 1.;
URL: http://eduherald.ru/ru/article/view?id=11974 (date of access: 03/20/2020). We bring to your attention the journals published by the publishing house "Academy of Natural History"

Introduction.

It is known that each enterprise has its own financial resources - these are the funds at the disposal of the enterprise and intended to ensure its efficient operation, to fulfill financial obligations and provide economic incentives to employees. Financial resources are formed at the expense of own and borrowed funds.

Own sources of financial resources at operating enterprises include income (profit) from the main and other activities, non-sales operations, depreciation, proceeds from the sale of retired property. Along with them, the sources of financial resources are stable liabilities, which are equated to their own sources, since they are constantly in the turnover of the enterprise, are used to finance its economic activities, but do not belong to it. Sustainable liabilities include: arrears of wages and social security contributions, a reserve of forthcoming wage payments for regular vacations and a one-time remuneration for seniority, debt to suppliers for non-fractionated deliveries, depreciation fund funds directed to the formation of production reserves for overhaul, debt to the budget for certain types of taxes, etc. The need for funds increases as the enterprise operates. It has to do with growth production program, depreciation of fixed production assets, etc. Therefore, appropriate financing of capital gains is required.

Therefore, when an enterprise does not have enough own funds to finance the activities of the enterprise, it can attract funds from other organizations, which are called borrowed capital.

1. General concept capital.

The main components of equity are: authorized, additional and reserve capital, as well as retained earnings (see Fig. 1). The authorized capital acts as a characteristic of the total nominal value of the company's shares acquired by shareholders, i.e. the amount of funds provided by the owners to ensure the statutory activities of the enterprise during its creation. The charter of the company fixes the size authorized capital, par value of shares, their number, categories of shares (ordinary, preferred), rights of shareholder. Contributions to the authorized capital can be both cash and tangible and intangible assets. At the time of the transfer of assets in the form of a contribution, the ownership of them passes to the economic entity, i.e. investors lose property rights to these objects.
The content of the category "authorized capital" depends on the legal form of the company. For example, for a joint-stock company (JSC) this is the nominal value of shares of all types, which cannot be less than a thousand times the amount (for JSC) or a hundred times the amount minimum size wages established by the Federal Law on the date state registration society. If at the end of the financial year the value net assets If the company turns out to be less than the authorized capital (but not less than the minimum value determined above), then the company will be obliged to announce a decrease in its authorized capital.
A special place in the implementation of the guarantee of protection of creditors is occupied by reserve capital, the main task of which is to cover possible losses and reduce the risk of creditors in the event of a deterioration in the economic situation. Behind this source of financing are the owners of ordinary shares, and its formation is nothing more than a restructuring of the liabilities side of the balance sheet. The reserve capital is formed in accordance with established by law order and has a strictly targeted purpose. The reserve capital is formed by annual deductions from net profit and in the amount provided for by the company's charter, but not less than 5% of its authorized capital. In accordance with Federal Law No. 120 "On joint-stock companies» the funds of the reserve fund are formed to cover losses, redeem the company's bonds, and also in the absence of other means of repurchasing own shares.
The next element of the equity capital structure is additional capital.
Additional capital is an item on the balance sheet of the company, which reflects the following elements:
● the amount of revaluation of fixed assets, capital construction facilities and other tangible assets of the organization with a useful life of more than 12 months, carried out in the prescribed manner;
● the difference between the sales value of shares, received in the process of formation of the JSC's authorized capital through the sale of shares at a price exceeding their face value, and their face value;
● positive exchange differences on contributions to authorized capital in foreign currency;
● the procedure for using this capital fund, as a rule, is determined by the owners when considering the results of the enterprise's activities for reporting period. It can be used to increase the authorized capital, pay off the balance sheet loss for the reporting year, and can also be distributed among the founders of the enterprise;
● the form of functioning of the enterprise's own capital is;
● retained earnings (RP). This is a part of the profit that is not distributed in the form of dividends between shareholders (founders) and is not used for any other purposes. Due to the relative liquidity of this category of capital, most often it is used to replenish the working capital of the enterprise. The retained earnings fund can increase from year to year, leading to the fact that, for example, in successful joint-stock companies, NP occupies a leading position among the components of equity.
The constituents of the UK can also be classified according to other criteria, for example, according to the method of preparation. In the composition of equity, there are: invested capital, that is, capital invested by owners (founders) in an economic entity; and accumulated capital - capital created by the enterprise itself in excess of what was originally advanced by the owners. Invested capital means the par value of ordinary and preferred shares, as well as capital received in excess of the par value of shares and gratuitous values received. Accordingly, the first component of the invested capital (par value of shares) refers to the authorized capital fund, the second component (in excess of the par value of shares) to additional capital, and the third component to the corresponding special funds, depending on the purpose of using donated funds.
The accumulated capital is reflected in the distribution items of net profit (reserve capital, retained earnings, special funds). At the same time, despite the fact that the source of formation of individual components of accumulated capital is net profit, the goals and procedure for the formation, directions and possibilities for using each of its items differ significantly. These articles are formed in accordance with the legislation, founding documents and accounting policies.
All sources of equity capital formation can be divided into internal and external. Internal sources include: net profit of the enterprise, depreciation deductions, property revaluation fund, income from leasing, settlements with founders, etc. External sources are the issuance of shares, gratuitous financial assistance, etc.
Equity has the following advantages.
1. Ease of attraction: decisions related to increasing equity capital (especially through internal sources of its formation) are made by the owners and managers of the enterprise without the need to obtain the consent of other business entities.
2. Shows the best ability to generate profits, because. using it does not require the payment of loan interest.
3. Ensures the financial stability of the enterprise by guaranteeing its solvency in long term and reduce the risk of bankruptcy.
At the same time, equity capital has a number of disadvantages:
● Limited volumes of attraction of this type of funds.
● Relatively high cost of this source.
● No increase in the return on equity ratio, which is provided by borrowed funds .
Attracting one or another source of financing for the company's activities is associated with certain periodic costs. For example, shareholders need to pay dividends, banks - interest payments for the use of credit resources, investors - interest on investments. In other words, the sources of funds in most cases are not free, so it would be quite logical to use such a concept as the “cost of capital”1.
The cost of funding sources is understood as “the amount of funds that must be regularly paid for the use of a certain volume of attracted financial resources, expressed as a percentage of this volume, i.e. expressed as an annual interest rate. Since the costs associated with paying interest have different interpretations in tax regulations, it turns out that attracting the same amount of funds, but from different sources, can cost the company either more or less.
Considering the cost of a company's equity capital, it is advisable to single out three main sources: equity capital in the form of preferred shares, equity capital in the form of ordinary shares and reinvested earnings. Let us describe each of these elements in more detail.
It is known that in an equilibrium market, the cost of such a source as "equity capital in the form of preferred shares", for which fixed percentage from the face value, calculated by the formula:
kps = Dps / Pm , (1)
where Dps is the expected dividend; Pm is the market price of the share at the time of valuation.
If the company decides to increase capital through an additional issue of preferred shares, formula (1) takes the form:
kps = Dps / NPps , (2)
where NPps is the projected net proceeds from the sale of shares (excluding placement costs).
The cost of the equity capital in the form of ordinary shares is calculated with more conventionality due to the uncertainty of the amount of dividends on ordinary shares (which depends primarily on the effectiveness of management). The most common method for assessing this type of capital is either the CAPM model or the Gordon model. Gordon's model has the following form:
kcs = D1 / P0 + g , (3)
where D1 is the first expected dividend; P0 is the market price of the share at the time of valuation; g is the declared dividend growth rate.
Among the shortcomings of the Gordon model is the fact that this algorithm is applicable only to companies that pay dividends. It also does not take into account the risk factor, which makes the CAPM model more objective. According to the logic of presentation, we will consider it below.
The cost of the source "reinvested profit". Regarding this source of financing for the company's activities, a number of facts can be cited that characterize it from the standpoint of the main spontaneous source of replenishment of the company's funds:
● speed of mobilization of funds, which does not require special mechanisms (unlike the issue of shares and bonds);
● the absence of emission costs makes this source cheaper than the others;
● no "signal effect"2.
The value of the source of funds "reinvested earnings" (krp) is approximately equal to the value of the source of funds "equity in the form of ordinary shares" (kcs). This is due to the preference of owners to receive dividends instead of reinvesting profits (in case the expected return on such reinvestment is less than the return on alternative investments of the same degree of risk) and use funds in the capital market by acquiring new shares in their firm.
An enterprise that uses exclusively its own capital has the greatest financial stability, but due to the fact that it, as a rule, does not seek to diversify the structure of its assets even in the presence of favorable market conditions, it thereby limits the pace of its development and excludes the possibility of obtaining excess profits. in short term, which inevitably leads at any given moment to its underestimated market value.
Since the activities of the middle and big company(in addition to legal owners) is usually financed by a group of persons (lenders) representing a variety of creditors, let's consider situations that develop under the influence of this factor. These funds are provided on a long-term basis and constitute "their" capital of the company. However, a number of conditions must be taken into account:
● Landers provide only financial resources;
● the volume and terms of supply of resources are predetermined by the original contract;
● resources are provided for temporary use for a predetermined period;
● the contract stipulates all conditions for the return of these resources;
● You have to pay for the use of financial resources.
The object of transactions with landers is borrowed capital, which is understood as "a set of long-term obligations of an enterprise to third parties" . Borrowed capital (LC) is defined as a part of the value of the property of an economic entity acquired on account of the obligation to return to the lender (bank, supplier, etc.) money or valuables that are the equivalent of the value of this property. In the composition of borrowed capital, there are short-term and long-term borrowed funds, as well as accounts payable (Fig. 2).

The thesis work was done in another company, please tell me if it is possible to improve Chapter 3. Here it is necessary to develop measures to optimize the capital structure, find a new ratio of equity / debt capital and compare with the previous structure. The main attention should be paid to the formation of borrowed capital in accordance with the chosen financial strategy of the bank, with the performance indicators of the bank. Definitely with calculations. For the shortest time. Thanks.

Credit management of the capital of an enterprise on the example of JSC "Stoilensky Mining and Processing Plant"

Credit management of the company's capital on the example of JSC "Stoilensky Mining and Processing Plant"

Introduction

Theoretical management of borrowed funds in the enterprise

1 The concept and essence of borrowed capital

2 Sources of financing and objectives for raising debt capital

3 Credit Equity Management

Organizational and economic characteristics of OJSC SGOK

1 a brief description of enterprises

2 Organization of financial activities

3 Analysis of the financial and economic activities of the enterprise

Analysis of equity credit management at JSC "SGOK"

1 Analysis of the composition, structure and dynamics of debt capital

2 Analysis of performance indicators of capital management, loans

Bibliography

Applications

financial management activities debt capital

Introduction

Debt management - loans, capital - this is important, both for a large company, where working capital account for more than half of their assets, and for small ones, in which the main source of funding is short-term liabilities.

To date, the attraction of borrowed funds are widespread in practice. On the one hand, it is an indicator of the effective operation of the enterprise, through which the deficit of financial resources has been filled, and which indicates the confidence of creditors and ensures an increase in the return on equity. On the other hand, there is a risk associated with a high level of interest on a loan. Despite this, business entities using credit, in most cases, are in a better position, since the use of credit increases the return on equity.

The relevance of the topic lies in the fact that in enterprises the amount of borrowed funds significantly exceeds the amount of equity capital. In this regard, there is a need to manage the attraction and effective use of borrowed capital, which is one of the most important functions of financial management. Decisions made in this area (credit capital management) must provide high-end, economic performance.

Debt Management Analysis Journal article. International Student Scientific Bulletin

annotation scientific article on economics and business, author of scientific work - Merkulova Elena Yurievna, Morozova Natalia Sergeevna

Related Topics scientific papers on economics and business, author of scientific work - Merkulova Elena Yurievna, Morozova Natalia Sergeevna

The text of the scientific work on the topic "Characteristics and analysis of the use of own and borrowed capital of the enterprise"

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Credit management of the capital of an enterprise on the example of JSC "Stoilensky Mining and Processing Plant"

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