Main directions financial management at the enterprise
(characteristic of all types and forms of ownership)
1. Formation of assets by individual types and their total amount as a whole, based on the envisaged volumes of the enterprise's activities and optimization of the composition of assets in terms of the efficiency of their use, as well as liquidity, which maintains constant solvency.
2. Formation of the financial structure of capital, where the total need for capital to finance the formed assets of the enterprise is determined; formation of a target capital structure, providing the lowest cost and sufficient financial stability of capital.
3. Control current assets, here the subject of study is the analysis and forecasting of the duration of individual capital turnover cycles with the allocation certain types these assets: inventories, monetary assets, receivables.
4. Management of non-current assets, here the subject is to ensure the effective use of fixed assets of the enterprise, which make up the bulk of non-current assets. The management process analyzes the effectiveness of the use of certain types of basic funds, determines the need for financial resources to ensure current and major repairs, as well as replacement due to physical and moral deterioration, and also forms a system to increase the return on assets of existing basic funds.
5. Investment management, here the direction of the investment activity of the enterprise is formed, the investment attractiveness of individual real projects is assessed and financial instruments and the most efficient one is selected. Particular attention is paid to the choice of forms (leasing, etc.) and sources of financing. The composition of sources of investment resources is being optimized.
6. Management of the formation of own financial resources, here the subject is to determine the need for own financial resources for the implementation economic strategy, maintenance financial stability. Particular attention is paid to attracting own sources of equity financing (net profit and depreciation).
7. Debt Management, where the main thing is to determine the total need for borrowed funds, the ratio of short-term and long-term debt is optimized and the cost of borrowed funds is determined.
8. Financial risk management, here the composition of basic financial risks is revealed, the level of these risks and their adverse consequences for individual operations and economic activities as a whole are assessed, a system of measures is formed to prevent and minimize individual risks and their internal and external insurance, a system for assessing the diagnosis of enterprise bankruptcy is being developed .
The main directions of financial management in the enterprise - the concept and types. Classification and features of the category "The main directions of financial management at the enterprise" 2017, 2018.
Like any control system FM has a specific system control objects. It:
Enterprise assets;
Enterprise capital;
cash flows;
Financial resources;
Financial real investments;
Financial risks.
Taking into account the objects of financial management at the enterprise, the following are distinguished: main directions of financial management:
formation of the required volume of assets and their optimization;
Formation of the volume of capital and optimization of its structure;
· management of the cash flow of the enterprise in various areas of activity: operating (production); investment; financial;
management of current assets in general and in the context of individual elements;
management of non-current assets;
management of real and financial investments;
management of own financial resources, created at the expense of internal and external sources;
management of attraction of borrowed funds;
management of financial risks;
management of the financial condition and prevention of the threat of bankruptcy.
The priority areas of Financial Management for each organization are different - depending on its goals, industry specifics, legal form.
Principles of financial management
These are the fundamental principles that should be guided by when developing financial policy. The main ones are:
A) Integration with the overall enterprise system
Financial policy is part of the overall economic policy of the organization. Whatever management decision is made, whether it is the sphere of production or personnel management, or any other situation, it directly or indirectly affects the financial results.
B) Complex character management decisions
Decisions in the field of formation, distribution and use of funds are interrelated and sometimes contradictory. So, for example, if a decision is made to invest in a highly profitable project, then the share of operating profit allocated for own needs, for the payment of dividends, may decrease. Or, another example, during a period of hyperinflation, the development of production slows down, and a large share of the residual profit goes to additional payments to employees.
c) Multivariance of approaches to managerial decision
For example, there are alternative options for increasing the profitability of own funds temporarily free. They can be:
Use for growth working capital, and increase the volume of sales, and use the mass of profits received from the sale at your own discretion;
Put on a deposit in a commercial bank and receive at the end of the year an initial deposit, increased by interest;
Invest in shares of another company and receive dividends;
Invest in an investment project.
In order to choose the most suitable option, it is necessary to calculate the rate of return for each of them (i.e., the rate of return on one invested ruble) and compare it with the level of risk, because each financial transaction involves the risk of not only losing or reducing profitability but also non-recoverability of funds. There are many reasons for the emergence of financial risks, especially in conditions of market instability.
D) Focus on strategic development goals
No matter how attractive some management decisions are at the moment, they should be rejected if they contradict or push back the main goal. For example, owners are interested in receiving a larger dividend on shares, but if a decision is made to mobilize their own funds in connection with the upcoming technical re-equipment, then dividends will have to be sacrificed for the main goal. After all, the re-equipment of production will allow to produce competitive products, to strengthen the position of the enterprise in the market.
D) Dynamism in management
Dynamism in management is due primarily to variability of external factors, especially if the economic situation in the country is unstable.
The market conditions for both consumer goods and stock instruments are constantly changing, not even monthly, but more often. For example, the legislation in the field of taxation has changed, the monetary policy has changed, and the cash flows in the enterprise have changed; changes in raw material prices finished products- The assortment policy of the enterprise has also changed, which means cash flows. The decision taken yesterday in the area of generating and spending cash flows is unacceptable today.
financial work The company operates in three main areas:
1) financial planning (budgeting of income, expenses and
capital);
2) operational (current) activities for the management of cash
turnover;
3) control and analytical work.
financial planning is to develop various kinds financial plans(budgets). In accordance with methodological recommendations Ministry of Economy Russian Federation on the development of the financial policy of the enterprise from 01.10.1997 should draw up budgets for structural divisions(responsibility center) and for the enterprise as a whole.
To organize a budgeting system for large enterprises It is advisable to create the following responsibility centers:
1) by income including marketing and commercial activities;
2) on expenses, including management of production, supply and repair of fixed assets;
3) by profit, including financial management;
4) for investment including management of technical development and personnel.
The consolidated budget consists of revenue and expenditure sections. Income section forecasted on the basis of the sales plan and the plan of cash receipts from other sources, taking into account cash balances. Consumable section predicted based on:
The budget of material costs based on the production program;
The budget for the consumption of electrical energy;
The budget of the wage fund;
Plan-schedule of contributions to off-budget funds;
Schedule of tax payments;
Loan repayment schedule;
Other expenses budget.
Operational and financial work is to ensure regular financial relationships with partners to pay for purchased inventory and equipment; accrual wages, social and dividend payments; accrual and transfer of tax payments, interest and other payments; collection of debts from debtors, in transactions with securities, etc.
Control and analytical work is to exercise systematic control over the execution of structural and consolidated budgets, the structure of capital, the efficiency of the use of fixed and working capital, the solvency and liquidity of the balance sheet.
One of the tasks of financial management is to build an effective financial management system.
Based on the volume and complexity of the tasks to be solved, the financial service of an enterprise can be represented by financial management (in large enterprises) or finance department (at medium enterprises). Solution for small businesses financial matters is either financial director, or Chief Accountant; as such, there is no financial service.
The approximate structure of the financial service includes, most often, the units indicated in Fig. 1.1.
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Rice. 1.1. The structure of the financial service.
On the financial accounting duty to keep accounting records business transactions and, on its basis, prepare financial statements in accordance with established standards and requirements.
Analytics department analyzes and evaluates financial condition enterprises, forecasting financial indicators, based marketing research, as well as the analysis and evaluation of the proposed investment projects.
Department financial planning develops the main planning documents: balance of income and expenses, cash flow budget, planned balance of assets and liabilities. The information basis for planning is the data of the analytical and operational departments, accounting, and other economic services of the enterprise.
Operations department collects bills, invoices, etc., monitors their payment, controls relationships with banks regarding non-cash payments and obtaining loans, with tax inspectorates, partners, etc.
Securities Department forms a portfolio of securities and manages them, and also takes part in the work of currency and stock exchanges.
In progress financial services use financial instruments.
According to international standard under financial instrument refers to any contract that simultaneously increases the financial assets of one enterprise and the financial liabilities of another enterprise.
To financial assets relate:
Cash;
A contract to receive cash and other assets from another business;
Contract for the exchange of financial instruments with another company on mutually beneficial terms;
Shares of another company.
To financial obligations relate:
A contractual obligation to collect money from another entity or provide some other asset;
A contractual obligation to exchange financial instruments on mutually beneficial terms (for example, a forced sale of receivables).
In other words, financial instrument is an operation based on financial assets and obligations and which is framed by an agreement (has the form of a contract).
Financial instruments are divided into primary and secondary.
Primary Financial Instruments- these are credits and loans, bonds and other debt securities, accounts payable and receivable for current operations.
Secondary or derivative financial instruments(in the special literature they are called derivatives) are financial options, futures, forward contracts, swaps.
There is also a more simplified understanding of the essence of the concept of "financial instrument". In accordance with it, three categories of financial instruments are distinguished: cash (funds on hand, on current and other accounts), credit instruments (bonds, bills, futures, forward contracts, options, etc.) and methods of participation in authorized capital (shares, shares).
Financial Management Methods are diverse. The main ones are: financial forecasting and planning, financial analysis, taxation, insurance, self-financing, lending, financial sanctions, incentive system, leasing, rent, collateral transactions, factoring, transfer transactions, and so on.
Financial Management Techniques: credits, loans, interest rates, dividends, discounting, excise, compounding, exchange rate quotation, etc.
Questions for self-control
1. Formulate the main strategic goal of financial management.
2. What tasks in financial management have to be solved by the company's management to achieve its goals?
3. List the main objects of financial management.
4. Formulate the main directions of financial management.
5. On what principles is financial management based?
6. In what areas is financial work carried out at the enterprise?
7. For what purpose and according to what principles are “responsibility centers” created at the enterprise?
8. What departments are part of the financial services and what tasks do they solve?
9. What are financial instruments?
10. List the methods and techniques of financial management.
Tests for topic 1.1
1. One of the areas of financial management is:
a) formation of the required volume of assets and their optimization;
b) timely renewal of assets and reduction of costs associated with their
use;
c) provision high performance and efficiency
use of assets.
2. The principles of financial management include:
a) the complex nature of the decisions made;
b) self-sufficiency and self-financing;
c) profit maximization.
3. Financial work includes:
a) drawing up a consolidated budget;
b) tracking financial relationships;
c) control and analytical work;
d) all of the above.
4. Financial instruments include:
a) money;
b) a contract to receive an asset from another enterprise;
c) an obligation to pay money to another enterprise;
d) all of the above.
5. Credit instruments are not:
a) debt securities (bonds, bills);
b) forward contracts;
Introduction
Management - from the English word "managa" - to manage. Therefore, financial management is financial management, i.e. the process of managing cash flow, the formation and use of financial resources of enterprises. It is also a system of forms, methods and examples by which the management of money circulation and financial resources is carried out.
The development of market relations in the country led to an increase in the role of finance in general and sectoral finance in particular. The finances of enterprises have become the main indicator characterizing the final results of their activities. Quantitative and qualitative indicators of the financial condition of the enterprise determine its place in the market and the ability to function in the economic space. All this has led to an increase in the role of financial management in the overall process of managing the economy.
The greatest relevance this topic acquired in the early 90s, after Russia's transition from an administrative-command economy to market relations (market economy). With the advent of market relations, effective financial management has become one of the acute problems that have stood in the way of legal and individuals. So, for example, many giants of the domestic industry, after the start of market relations, could not win sales markets, find partners, suppliers of raw materials, manage finances effectively and, therefore, could not function normally, many went bankrupt. The main mistake that the economists of that period made was the use of the so-called "shock therapy" i.e. a sharp transition to market relations, after which there was a sharp stratification of the Russian population into very rich and very poor.
1. The main activities in the framework of financial management. Financial management and financial system
Financial management - financial management of business entities, financial analysis, planning, and finding and distributing capital. It covers all major areas of finance and extends to all segments of the financial market. Financial management is also a type of management activity. It is a system of influence of the subject of financial management (financial manager) on its object in order to improve the latter. In addition, financial management is a form of entrepreneurship.
Financial management is implemented in its inherent functions and has a pronounced specificity - cash flow management, therefore its functions are predetermined by the tasks of enterprise finance.
Financial planning is the planning of all income and directions of spending money to ensure the development of the enterprise. Planning functions can be given different meanings depending on the type and size of the enterprise.
Forecasting is a long-term development of changes in the financial condition of the object as a whole and its various parts. Forecasting can be carried out both on the basis of transferring the past into the future, taking into account the expert assessment of the trend of change, and direct prediction of changes.
The organizational function provides a systematic approach to the organization of cash flows and funds. The function of organizations in financial management is to bring together people who jointly implement financial program based on rules and procedures.
Regulation is the impact on the control object, through which the state of stability of the financial system is achieved in the event of a deviation from the specified parameters. It covers current activities to eliminate deviations from schedules, planned targets, established norms and standards.
Incentives in financial management are expressed in encouraging employees of the financial service to be interested in the results of their work.
The control function of financial management reflects the state of the circulation of resources, the efficiency of management, provides control over management decisions in the field of finance, providing for the collection of necessary information, analysis of factors.
The essence of financial management can be defined as a system of principles and methods for developing and implementing management decisions related to the formation, distribution and use of the financial resources of an enterprise and the organization of its cash flow.
Financial management is a self-regulating financial system at the level of a commercial organization that interacts with external environment and its functioning is aimed at achieving the overall goals of enterprise management. The financial management of a commercial organization is part of the financial management along with the financial and credit mechanism of the state and financial management in non-profit organizations.
Effective management of the financial activity of the enterprise is ensured by the implementation of a number of principles, the main of which are the following:
Integration with the overall enterprise management system. In whatever area of the enterprise's activity a management decision is made, it directly or indirectly affects the formation of cash flows and results. financial activities.
The complex nature of the formation of management decisions. All management decisions in the field of formation, distribution and use of financial resources and the organization of the cash flow of the enterprise are closely interconnected and have a direct or indirect impact on the results of its financial activities.
High control dynamism. Financial management should be characterized by high dynamism, taking into account changes in environmental factors, resource potential, forms of organization of production and financial activities, financial condition and other parameters of the enterprise.
Variability of approaches to the development of individual management decisions. The implementation of this principle implies that the preparation of each management decision in the field of the formation and use of financial resources and the organization of money circulation should take into account alternative possibilities of action. If there are alternative projects of management decisions, their choice for implementation should be based on a system of criteria that determine the financial ideology, financial strategy or specific financial policy of the enterprise.
Orientation to the strategic goals of the enterprise development. No matter how effective these or those projects of management decisions in the field of financial activity in the current period seem, they should be rejected if they conflict with the mission of the enterprise, the strategic directions of its development, undermine the economic base for the formation of high amounts of own financial resources from internal sources. in the upcoming period.
Effective financial management, organized taking into account the principles set out, allows you to form the resource potential of high growth rates of the enterprise's production activities, ensure constant growth of equity capital, and significantly increase it competitive position on commodity and financial markets, ensure stable economic development in a strategic perspective.
So, financial management implements a complex system of managing the total value of all funds involved in the reproduction process, and the capital that provides financing for entrepreneurial activity.
The tasks of financial management include finding the optimal balance between short-term and long-term goals of the company's development and decisions made in the short-term and long-term financial management.
So, in short-term financial management, for example, decisions are made about a combination of goals such as increasing profits and increasing the price of shares, since these goals can counteract each other. This occurs when a company investing capital in the development of production incurs current losses, counting on high profits in the future, which will ensure the growth in the value of its shares. On the other hand, the firm may refrain from investing in the renewal of fixed capital in order to obtain high current profits, which will subsequently affect the competitiveness of its products and lead to a decrease in the profitability of production, and then a fall in the market value of its shares and, consequently, to a deterioration in the financial market. .
In the long-term financial management, focused on the same ultimate goals, first of all, risk and uncertainty factors are taken into account, in particular, when determining the expected share price as an indicator of return on invested capital.
The task of financial management is to determine priorities and find compromises for the optimal combination of interests of various business units in the adoption of investment projects and the choice of sources of their financing.
Ultimately, the main task of financial management is to make decisions to ensure the most efficient movement of financial resources between the company and its sources of financing, both external and internal.
Financial management as a management system consists of two subsystems: a managed subsystem, or a management object, and a management subsystem, or a management subject.
Rice. one Hierarchical structure financial management
The object of management in financial management is a set of conditions for the implementation of cash flow, the circulation of value, the movement of financial resources and financial relations between economic entities and their divisions in the economic process.
The subject of management is a special group of people (financial management as a management apparatus, financial manager as a manager), which, through various forms of managerial influence, carries out purposeful functioning of the object.
First, any control object, any process is a system. A system is understood as a set of interacting elements that make up a holistic education. The financial system is part of the socio-economic system. The main property of the socio-economic system is that it is based on the interests of people. The totality of public, collective and personal interests affects the state of the system and the process of its development. Any system consists of elements. An element of a system is understood as such a subsystem that, under the conditions of this study (observation and its goals), seems indivisible and is not subject to further division into components. Therefore, an element is always a structural part of any system. For example, the financial system as a whole, as an element of the system, includes financial funds (monetary, fixed, working capital, circulation funds, authorized capital). For the finances of an economic entity, the finances of the structural unit of this entity are considered as an indivisible element of the system. For the finances of a subdivision of an economic entity, financial resources are considered as an indivisible element of the system.
Each element has different properties. The main properties of the system element are as follows.
An element of the system performs only its inherent function, which is not repeated by other elements of this system.
An element has the ability to interact with other elements and integrate with them. This is a sign of the integrity of the system.
An element is closely related to other elements of its system.
The properties of the elements of the financial system allow us to derive general rule financial management: one should always strive for the financial stability of systems as a whole, and not of one or another of its elements, subsystems.
Secondly, the impact of the subject on the object of control, i.e. the control process itself can be carried out only if certain information is circulated between the control and controlled subsystems. The management process, regardless of its specific content, always involves the receipt, transmission, processing and use of information.
Thirdly, the financial system is a complex, dynamic and open system.
The complexity of the financial system is determined by the heterogeneity of the constituent elements, the heterogeneity of the links between them, the structural diversity of the elements. This causes the diversity and difference of the elements of the system, their interrelations, trends, changes in the composition and state of the system, the multiplicity of criteria for their activity. The dynamism of the financial system is due to the fact that it is in the constantly changing amount of financial resources, expenses, income, in fluctuations in demand and supply for capital. This provides an increase and deepening of the links of the financial system with the external environment and complicates the process of its management. The financial system is an open system, as it exchanges information with the external environment.
(characteristic for all types and forms of ownership)
1. Formation of assets by individual types and their total amount as a whole, based on the envisaged volumes of the enterprise's activities and optimization of the composition of assets from the standpoint of the efficiency of their use, as well as liquidity, supporting constant solvency.
2. Formation of the financial structure of capital, where the total need for capital to finance the formed assets of the enterprise is determined; formation of a target capital structure, providing the lowest cost and sufficient financial stability of capital.
3. Current assets management , here the subject of study is the analysis and forecasting of the duration of individual capital turnover cycles with the allocation of certain types of these assets: inventories, monetary assets, receivables.
4. Management of non-current assets, here the subject is to ensure the effective use of fixed assets of the enterprise, which make up the bulk of non-current assets. The management process analyzes the effectiveness of the use of certain types of fixed assets, determines the need for financial resources to ensure current and major repairs, as well as replacement due to physical and moral deterioration, and also forms a system to increase the return on assets of existing fixed assets.
5. Investment management, here the direction of the investment activity of the enterprise is formed, the investment attractiveness of individual real projects and financial instruments is assessed, and the most effective of them are selected. Particular attention is paid to the choice of forms (leasing, etc.) and sources of financing. The composition of sources of investment resources is being optimized.
6. Management of the formation of own financial resources, here the subject is to determine the need for own financial resources for the implementation of the economic strategy, maintaining financial stability. Particular attention is paid to attracting own sources of equity financing (net profit and depreciation).
7. Debt Management, where the main thing is to determine the total need for borrowed funds, the ratio of short-term and long-term debt is optimized and the cost of borrowed funds is determined.
8. Financial risk management, here the composition of the main financial risks is revealed, the level of these risks and their adverse consequences for individual operations and economic activity as a whole are assessed, a system of measures is formed to prevent and minimize individual risks and their internal and external insurance, a system for assessing the diagnosis of enterprise bankruptcy is being developed .
Leverage and its role in financial management
The process of asset management aimed at increasing profits is characterized by the category of leverage.
Leverage (lever) - is interpreted in the economy as a factor, a small change in which leads to a significant change in performance indicators.
Types of leverage:
1. Financial leverage characterizes how much you need to attract borrowed funds in order to better use your own. It characterizes the optimal ratio between own and borrowed funds and shows the extent to which the enterprise has the opportunity attract borrowed funds.
2. Production leverage (operational leverage).
3. Production and financial leverage .
Financial leverage
Key indicators used in the leverage category:
– Sales proceeds (minus VAT, excises).
Production costs of products sold:
Conditional variables;
Conditionally permanent.
Balance of income and expenses from non-operating activities
= Gross income before interest and taxes
– Paying interest on loans
= Taxable income
– income tax
= Net profit
| Indicators | BUT | B |
| Assets | ||
| Liabilities | ||
| Incl. SS | ||
| AP | - | 500 at 15% per year |
| Profit | ||
| Return on assets |  | 20 % |
| Profitability CC | |  gain Δ = 5% |
| Income tax (d.b. no more than 1/3 of the profit) | Max 67 | Max 42 |
| Net profit | 200 – 67 = 133 | 125 – 42 = 83 |
| Net return on equity |  |  Δ = 3% |
With the same return on assets, different return on equity is due to a different structure financial sources, and the difference Δ = 5% represents the level of financial leverage effect.
The effect of financial leverage - this is an increment to the return on equity, obtained through the use of a loan, despite the payment of the latter.
The formula for the effect of financial leverage:
EFR = (1 - income tax rate) × (ER - SIRT) ×
EFR - the effect of financial leverage;
ER - economic profitability of the enterprise;
SRSP - average calculated interest rate;
ZS - borrowed funds
SS - own funds
The SRSP increases with each loan, as the rate of each new loan is higher than the previous one due to the ever-increasing risk. It is defined as the weighted average value of the cost of attracted loans.
This formula is used by banks when assessing creditworthiness (creditor risk) /
a) ER - SRSP > 0 - the deal is profitable
EGF is part of the theory of leverage (lever).
Rules for borrowing loans:
1. If a new borrowing brings the company an increase in the level of the effect of financial leverage, then it is beneficial for the company. In this case, it is necessary to monitor the state of the differential, because. As leverage increases, banks tend to compensate for the increase in their risk by increasing the price of the loan.
2. The creditor's risk is expressed by the value of the differential. The larger the differential, the lower the risk, and vice versa. Therefore, it is not advisable to increase the lever arm at any cost, but it is necessary to adjust it depending on the differential.
The optimal value of the EGF is in the range from 1/3 to 1/2 of the level of economic profitability of assets. In this case, the company is able to compensate for tax exemptions and provide own funds enough return.
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