Organization finances

Organization finances(or corporate finance) - monetary relations associated with the formation and distribution of cash income and savings and their use for various purposes (for example, fulfilling obligations to the financial and banking system, financing costs, paying dividends on shares, rent, and so on). Organizational finances: formation, distribution, use of funds.

The main task of corporate finance is financial support for the organization's activities. The main source of obtaining monetary resources for the economic activities of an enterprise is funds received from the sale of the enterprise's products (sales of goods, works and services). If there is a temporary lack of funds received from the sale of the enterprise's products necessary to meet the current financial needs of the business, short-term bank loans are usually taken out. To meet long-term needs, bonds or shares are often issued, or long-term loans are taken out. Such strategic decisions to borrow money or issue shares ultimately determine the very capital structure of the organization.

One of the tasks in the field of enterprise finance is to find the optimal balance between business profitability and financial risks.

Another important aspect of corporate finance is investment decisions, that is, decisions to invest money in order to generate additional income. Investment management is a critical aspect of finance at any level, and the corporate level is no exception. Before making an investment decision, you need to analyze the following factors:

• relationship between: goal - time period - inflation - risk aversion - taxes - net income
• choosing between an active and passive hedging strategy
• assessment of investment portfolio performance

Financial management in organizations is in many ways similar to accounting. But accounting is concerned with recording transactions that have already occurred (and therefore recording “historical” financial information). And financial management looks to the future and analyzes efficiency and plans for future financial transactions.

Finance functions

• Distribution - as a result of the sale of goods, works, services, the newly created value is distributed and redistributed between the manufacturer, intermediary, and the state budget.
• Stimulating - through financial levers, an enterprise can stimulate the development of priority areas of activity.
• Control - the enterprise carries out internal and external control over the safety of property, the efficient use of resources, and the rational use of funds.

Principles of organizing enterprise finance

For organizations and enterprises, there are the following principles of financial organization:

1. The principle of economic independence
2. Self-financing principle
3. The principle of material interest
4. The principle of providing financial reserves
5. The principle of financial planning and commercial calculation
6. The principle of financial responsibility
7. Principle of economic efficiency
8. Principle of financial control

Financial work in the organization

Financial work- practical activities of people in managing the finances of an organization. The ultimate goal of this activity is to achieve the best results at the lowest cost. Results refer to both economic and social performance indicators.

Objectives of financial work:

• provision of financial resources for all types of expenses necessary for current and future activities
• ensuring financial stability and economic independence
• finding reserves for increasing income and final financial results
• application of financial levers for the rational use of material, labor and financial resources
• maintaining financial discipline in interaction with government financial authorities and business partners
• strengthening, preserving and increasing property

The scope of financial (monetary) relations of an enterprise includes:

1. its investors (shareholders, participants, owners) regarding the formation and effective use of equity capital, as well as the payment of dividends and interest.
2. Relations between the enterprise, suppliers, customers regarding payments, as well as ways to ensure the fulfillment of financial obligations.
3. Relations between an enterprise and financial institutions (banks, insurance companies, other financial organizations).
4. Relations between an investor enterprise and other enterprises (organizations) regarding its investments and payments of dividends and interest on them.
5. Relations between an enterprise and the state regarding the payment of taxes and other obligatory payments.
6. Relations between parent and subsidiary enterprises regarding intra-corporate redistribution of funds.
7. Relations between an enterprise and copyright holders regarding the payment of remuneration under a commercial concession agreement.
8. Relations between the enterprise and employees regarding wages and tax withholding.
9. Other financial relations of the enterprise.

Wikimedia Foundation. 2010.

• Corporate media
• The Corporation (film, 2003)

See what “organizational finances” are in other dictionaries:

FINANCE OF THE ORGANIZATION- an integral part of the country’s finances, an independent economic category, functioning, in particular, in the process of creating and distributing the gross domestic product and national income. F.o. represent den. relationships through... Financial and credit encyclopedic dictionary

Public finance: International finance State budget Local budget Private finance: Corporate finance Household finance Financial markets: Money market Foreign exchange market Stock market Derivatives market Finance ... Wikipedia

Finance of socialist enterprises (associations) and industries- the national economy of the USSR, an integral part and the initial link of a unified system of Soviets. finance. The sphere of finance includes the relations of enterprises (associations) with the employees employed in them, with higher organizations, with other enterprises and with financial credit...

Enterprise finance- (corporate finance) a set of monetary relations that arise among business entities regarding the formation of funds of funds, their distribution and use for the needs of production and consumption. In the sphere of financial (monetary) ... ... Wikipedia

FINANCE IN PRE-REVOLUTIONARY RUSSIA AND IN THE USSR- Finance in pre-revolutionary Russia. Finance x in dr. Rus' began to take shape with the advent of the state (see Kievan Rus). Basic source income of princely power in the 9th - 12th centuries. there were tributes, various duties and in-kind duties of the population.... ... Soviet historical encyclopedia

joint stock company finance- finance of a joint-stock company Monetary relations in a commercial organization through which its production and economic activities are carried out in conditions where the authorized capital is divided into a certain number of shares certifying the rights of shareholders according to ... Technical Translator's Guide

Finance of a joint stock company (JSC)- Finance of a joint stock company (finance of joint stock company) - monetary relations in a commercial organization through which its production and economic activities are carried out in conditions when the authorized capital is divided into... ... Economic and mathematical dictionary

Finance of socialist enterprises and industries- (associations) of the national economy of the USSR, an integral part and the initial link of the unified system of Soviets. finance (See Finance). The sphere of finance includes the relations of enterprises (associations) with the employees employed in them, with higher organizations, and with others... ... Great Soviet Encyclopedia

- (financial law, financial science, financial science). The word finance originates from the medieval Latin term finatio, fonancia, used in the 13th and 14th centuries. in the sense of obligatory payment of money and deadline for payment. IN… … Encyclopedic Dictionary F.A. Brockhaus and I.A. Efron

I Finance (French finances - money, from Old French finer - to pay, to pay) a set of economic relations in the process of creating and using centralized and decentralized funds of money; originated in... Great Soviet Encyclopedia

Books

• Finances of an organization Textbook, Levchaev P., The manual reveals the theoretical and practical foundations of finances of organizations. In order to comprehensively master the provisions of the discipline "Finance of Organizations" in the book, in addition to considering... Category:

Obtaining the maximum amount of money is the main goal of any enterprise. To understand what you have and how it can be used, you need to pursue a sound financial policy. And for this you need to know the theoretical basis of this approach.

What is finance?

This is the name given to the system of monetary relations, which expresses the formation and use of trust funds during their circulation. The finances of firms occupy an important position in the economic system of the state, since at their level the bulk of the funds that will be used in the future are formed. They are divided into own and credit (attracted). The former are at the unconditional disposal of the enterprise and can be used for any purpose. The latter will need to be returned over time, also paying interest. So what are the features of enterprise finance? This is not an easy question, so the answer will be divided into several subparagraphs.

What is business finance?

It is an integral part of the national economic system. These include:

1. Pricing.
2. Tax system.
3. Level of money circulation.
4. Loans.
5. Foreign economic activity.
6. Licensing.
7. Income.

The following factors have the greatest negative impact on the finances of commercial enterprises:

1. An undeveloped emission and monetary policy that does not take into account the volume of commodity mass and the real interests of the enterprise.
2. Liberalization of prices without carrying out the necessary settlement before this.
3. Wrong budget policy.
4. Decrease in investment activity.
5. Trends in the stock market and banking policy.
6. Payment crisis.
7. Wrong export/import policy.

enterprises

To organize them, it is necessary to adhere to the following postulates:

1. Maintain interest in the final results of the work.
2. Create financial reserves.
3. Responsibility.
4. Dividing finances into your own and credit.
5. Fulfillment of assigned obligations to the budget.
6. activities and use of funds.
7. Independence.
8. Self-financing.

The principles of enterprise finance are based on maintaining a balance of interests between the private entrepreneur and the state. If you deviate from them, levers of influence are provided that will allow you to return the system to its original state.

Cash relations

Enterprise finance is an economic element that is constantly in motion. Each area of ​​spending must have its own source of funding. The following relationships are usually distinguished:

1. With buyers.
2. With employees of a company or enterprise.
3. With banking organizations.
4. With the state.
5. With management structures that have leverage.
6. When participating in other enterprises (such as distribution of profits received from joint activities).
7. Working with target funds that have intra-economic purposes.

Financial mechanism

It consists of five elements that are interrelated:

1. Financial methods. This includes ways to influence economic processes when using funds through the creation of trust funds. Forming the finances of an enterprise is the main purpose of using these methods. What makes them special is that they define the foundation on which everything else is built.
2. Financial leverage. These are actions aimed at achieving a desired goal.
3. Legal support. Includes resolutions, orders, legislative acts and other similar documentation.
4. Regulatory support. This includes instructions, tariff rates, explanations, guidelines and similar data.
5. Information Support. This includes economic, commercial, financial and other data that is valuable in each specific case. Thus, the objects can be information about solvency, financial stability, exchange rates, and so on.

As you can see, corporate finance is such a specific area where you have to act with an eye on a number of factors. Moreover, they can have both an informational basis and a legislative one. If the entrepreneur chooses the wrong method of interaction, he may face ruin.

Functions

They allow you to understand the very content of this area of ​​activity of the enterprise. There are three functions in total:

1. Distributive (stimulating). This means that the company decides where the funds received will go. With its help, funds are formed to fulfill all the obligations that the organization has to its staff, budget, counterparties and creditors. If everything is done with a reasonable approach, then the quality of work is stimulated, this can be said about the finances of commercial enterprises and government organizations.
2. Test. It consists of monitoring the financial condition of the organization and checking the effectiveness of its work. The most important thing is to control the profitability of the enterprise. This function is implemented in two ways:
   1. Monitoring the indicators that are included in operational, accounting and statistical reporting.
   2. Under the influence of financial influences (taxes, subsidies, benefits).
   3. Serving (reproducing). This function ensures that consumed resources are constantly renewed (for example: purchasing new materials, hiring new workers to replace those who retired, and so on).

Structure

Financial resources, based on their origin, can be divided into three components:

1. They are formed using their own funds. This includes profit received from core activities, sales of property, targeted income, various contributions, and so on.
2. Were mobilized in the financial market. This includes funds received from the sale of securities, interest and dividends, loans, income received from transactions with foreign currencies.
3. Received after redistribution. These are insurance compensations, financial resources (which came from other economic structures), resources (which were formed on a share basis) and budget subsidies.

Control

The formation and use of financial resources is not possible if there is no system that organizes and coordinates everything. Management implies the achievement of strategic and/or tactical goals regarding the functioning of the enterprise itself. Features of the organization of enterprise finance include:

1. Formation of financial resources, as well as their optimization.
2. Capital allocation.
3. Analysis of the company’s finances and the direction that circulates through it.
4. Management of the capital functioning process.
5. Organization and management of relationships with other enterprises, insurance companies, budgets, banks and other departments

Conclusion

As you can see, corporate finance is a complex component of any commercial organization. You need to be able to handle them and use them rationally. Any manager must be aware that the finances of an enterprise are the main guarantee of its functioning, and they should always be worked with from the point of view of optimality and efficiency.

A set of monetary relations aimed at creating, using and distributing income of an enterprise.

This is the movement of money within and outside the organization, necessary for its smooth operation.

The main goal of corporate finance is to provide the organization with cash to cover current and future expenses. For this we use:

• equity;
• profit;
• short-term or long-term loans;
• issue and sale of securities;
• share premium;
• government subsidies.

The organization’s finances are affected by management’s ability to find the optimal balance between potential profits and possible losses during investment activities. With proper investment management, investment income can be equal to, and sometimes even exceed, income from core activities.

Functions of corporate finance

• distributive - the direction and distribution of cash flows (income) between economic entities (suppliers, intermediaries, the state);
• control - ensuring the safety of the organization’s property, the efficiency and expediency of using its resources, both monetary and material;
• accounting - registration of all goods or services produced;
• stimulating - development of the most important and profitable areas of the organization's activities.

• self-sufficiency;
• financial planning;
• separation of funds;
• self-financing;
• safety of property;
• responsibility for the final result;
• compliance with the order of payments;
• control.

And etc.); regional finance(budgets and extra-budgetary funds of various administrative-territorial entities); finance of enterprises, organizations, firms. The finances of firms and enterprises occupy a decisive position in the structure of the country’s financial system, since it is at the enterprise level that the predominant mass of the state’s financial resources is formed.

General concept of financial resources

Cash income accumulated by their owners for subsequent spending, as well as funds raised as loans, amount to financial resources, which divided into own and attracted(credit). For budgets of all levels, financial resources are mobilized income and borrowed loans. For enterprises, this is equity capital, profit, loans received and securities placed on the market. For workers, a financial resource is income in the form of wages, as well as loans (for example, bank, consumer and pawnshop).

Own financial resources are at the complete disposal of their owner, and credit cards are attracted for a period and are subject to return along with interest payments for their use.

Sources credit resources These are the temporarily free funds of enterprises, the population, and in some cases the state. The purchase and sale of these resources is concentrated in the financial market. It consists of two parts: the loan capital market and the securities market. Its main function is to provide business entities with additional funds at a certain percentage.

Enterprise finance is part of the national financial system

Enterprise finance- an integral part of the whole.

The finances of business units depend on the government's economic policy. The main areas of state regulation of the financial activities of enterprises include: pricing, tax system, money circulation, credit, forms of payments and settlements, organization of circulation (), state licensing of economic activities, foreign economic relations, budget financing (Fig. 55).

Control function

The control function of an organization’s finances is to monitor the financial condition and effectiveness check her activities. For example, control over allows you to determine the degree of effectiveness of the organization’s economic activities. Along with this, an organization’s finances can influence the degree of efficiency of its economic activities through the so-called ruble control which is carried out within the organization, in its relationships with other participants in business transactions, a higher organization, the state and other participants in the financial system. Within the enterprise, the ruble controls the quality and quantity of labor, use, etc. Ruble control in relationships with other participants in business transactions is carried out subject to compliance with contractual obligations. The economic activities of the enterprise are controlled by the ruble in the process of fulfilling obligations to the budget.

The control function is implemented in two ways through:

• financial indicators in statistical and operational reporting;
• financial impact, which is carried out using economic levers and incentives (taxes, benefits, subsidies, etc.).

Maintenance function

The function of servicing the organization's income flow is the second function that reveals the content of the enterprise's finances. Since the movement of enterprise income is associated with the renewal of consumed resources, this function is often called reproductive. The presence of this function is due to the need to ensure continuous flow of income in the process of economic activity of the enterprise. The effectiveness of the process of servicing an organization’s finances for the movement of its income depends on the correspondence of the flows and cash resources that support the organization’s economic activities. In many ways, this compliance determines the ability to timely and fully fulfill its obligations to other subjects of financial relations.

Distribution, servicing and control functions reveal the content of the organization’s finances in the process of movement of each of the three forms of its income - primary, secondary and final.

The financial functions of an organization are interconnected and interdependent. Maintaining the flow of income is impossible without its distribution, and ensuring compliance between the flows of material and financial resources is achieved through the control function of the organization.

As part of the financial relations of enterprises The following groups of financial relations of enterprises are distinguished:

• with counterparties regarding the generation of income and use of funds;
• with enterprises regarding the distribution of finances; in a non-fund form (payment and receipt of fines for violation of contractual obligations, making various share contributions, participation in the distribution of profits from joint activities, purchasing securities of other enterprises and the state, receiving dividends on them, etc.);
• with consumers of products in accordance with contracts;
• with insurance organizations regarding various types of compulsory and voluntary insurance;
• with the banking system regarding settlement and cash services in connection with the receipt and repayment of loans, the payment of interest, as well as the provision of free funds to banks for temporary use for a fee;
• with the state regarding the formation and use of budgetary and extra-budgetary funds;
• vertical and horizontal relationships with higher management structures regarding intra-industry redistribution of financial resources.

These groups of monetary relations constitute the overall content of enterprise finance. Company finances represent monetary relations associated with the formation and distribution of monetary income and savings among business entities, and their use, fulfillment of obligations to the banking system, financing of current costs and costs of expanded reproduction, social security and material incentives for workers.

Financial resources of the enterprise and their structure

Financial resources enterprises are his and .

Formation and replenishment financial resources(main And working capital) is an important financial issue. Primary the formation of these capitals occurs at the time of establishment of the enterprise, when it is formed.

Authorized (share) capital- property of the enterprise created through the contributions of the founders.

Financial resources— these are the funds remaining at the disposal of the enterprise after the implementation of current costs to cover material costs and wages.

Main source formation of financial resources- This .

Sources of formation of the enterprise's financial resources: profit; proceeds from the sale of disposed property; depreciation; increase in sustainable liabilities; loans; targeted revenues; share contributions. In addition, an enterprise can mobilize financial resources in various sectors: sale of shares, bonds; dividends, interest; loans; income from other financial transactions; income from the payment of insurance premiums, etc. (Fig. 57).

Significant financial resources of an enterprise can be mobilized for financial market.

The main direction of use of financial resources is investing in expanded reproduction.

• investing in capital investments to expand production;
• investing in securities;
• payments to the budget, banking system, contributions to extra-budgetary funds;
• formation of monetary funds and reserves.

The main source of funds for an enterprise is its profit (Fig. 58). Profit is part of the gross income of an enterprise.

Gross income of the enterprise— revenue from the sale of products minus costs.

Important component gross profit - profit from the sale of fixed assets (Fig. 59).

Another component gross profit - profit from non-operating activities (renting out property, income from securities, etc.).

Among the main sources of financing for the expanded reproduction of fixed assets is depreciation. This is the process of transferring the value of fixed assets and intangible assets to production and sold products as they wear out. Accumulated depreciation amounts should be used for long-term investing.

Depreciation- the main source of self-financing at enterprises.

Has a strong impact on corporate finances tax system. The three elements of the tax system are most important for the finances of an enterprise: tax rates; the tax base; deadlines for paying taxes to the budget.

Enterprise financial management

The formation and use of financial resources is impossible without a financial management system for enterprises.

Financial management (financial management) is an activity aimed at achieving the strategic and tactical goals of the functioning of a given enterprise.

Enterprise financial management includes:

• organization and management of the enterprise’s relations in the financial sector with other enterprises, banks, insurance companies, budgets of all levels, as well as financial relations within the enterprise;
• formation of financial resources and their optimization;
• placement of capital and management of the process of its functioning;
• analysis and management of cash flows in the enterprise.

Basic functions of a financial manager:

• financial planning, enterprise budgeting, pricing policy formation, sales forecasting;
• formation of the capital structure and calculation of its price;
• capital management (working with securities; control and regulation of monetary transactions; investment analysis; management of fixed and working capital);
• financial risk analysis;
• property protection;
• assessment and consultation.

Preface

Enterprise finance is not only a component of the financial system, but also its basis. The financial condition of enterprises significantly affects the financial situation of the country as a whole. Enterprises in Ukraine have recently become financially independent. The lack of certain experience and qualified specialists is one of the causes of problems in the entire economy of the country of production.

In the conditions of Ukraine's transition to market relations, a modern organization of the financial activities of each enterprise, adequate to a market economy, is necessary. This requires the training of qualified specialists in this field, who must have deep theoretical and practical knowledge, could generalize the existing experience of countries with developed market economies, adapt it to the characteristics of the domestic economy, thereby contributing to its recovery from economic difficulties.

The manual reveals the content of the following topics: enterprise finance, organization of financial activities, formation and distribution of profits, taxation of enterprises, organization of cash payments and lending to enterprises, organization of working capital and reproduction of fixed assets, financial planning, analysis of financial condition, financial rehabilitation of enterprises.

The discipline "Enterprise Finance" requires students to acquire knowledge on the theory and practice of financial relations between business entities and allows them to receive basic training in financial issues of enterprise activities. Mastering the basic principles of the discipline enables the student to prepare for an in-depth study of the main directions in financial management and financial management of enterprises.

The main educational goal of the discipline: students obtain knowledge on organizing the financial activities of enterprises, mastering methods for assessing financial condition and financial planning.

The educational goal of the discipline is to develop socially significant and professionally significant qualities of a future specialist.

The developmental goal is the development of creative thinking, creative activity of students, the ability to think logically, and the formation of independent mental work skills.

The program consists of 11 topics. The distribution of teaching hours for studying topics in class and for students’ independent work is indicative. To master the theoretical material, the program provides for practical classes.

The study of material in the course "Enterprise Finance" is associated with the disciplines "Money and Credit", "Accounting", "Economic Analysis", "Finance", "Banking Operations" and "Accounting and Auditing in Banks".

BASICS OF ENTERPRISE FINANCE

The concept and essence of enterprise finance

Finance of organizations (enterprises)- this is a relatively independent sphere of the public finance system, which covers a wide range of monetary relations associated with the formation and use of capital, income, and monetary funds in the process of their circulation. It is in this area of ​​finance that the bulk of income is formed, which is further redistributed through various channels in the national economic complex and serves as the main source of growth and social development of society.

Enterprise finance, like finance in general, has certain general and specific characteristics.

A common feature of enterprise finance is that it expresses a set of economic (monetary) relations associated with the distribution of the value of the gross domestic product.

Specific features of enterprise finance express monetary relations that depend on the primary distribution of the value of the gross domestic product, the formation and use of monetary income and decentralized funds.

Based on the general and specific features, we can formulate the following basic definition of enterprise finance.

Enterprise finance- these are economic relations that reflect the formation, distribution and use of funds and income of business entities in the process of reproduction.

Thus, enterprise finance is directly related to cash flow. That is why quite often the concept of “enterprise finance” is understood as cash and financial resources. However, the funds or financial resources themselves do not fully reveal the essence of finance. Just like national finances, enterprise finances constitute certain monetary relations at all levels of management (this is also noticeable by the definition of enterprise finances). However, not all monetary relationships are financial. Monetary relations turn into financial ones when the movement of funds becomes relatively independent. This happens in the process of formation, distribution, use of monetary income and funds according to their intended purpose in the form of financial resources.

Enterprise finance includes groups of financial relations(Fig. 1.1):

Related to the formation of the authorized capital of business entities;

Related to the formation and distribution of monetary income: revenue, gross and net income, profit, cash funds of enterprises;

Arising between other business entities (with suppliers, buyers, construction, installation and transport organizations, post and telegraph, with enterprises, organizations and firms of foreign countries, that is, relations associated with the sale of finished products, the acquisition of material assets, with the economic activities of the enterprise) ;

Arising between an enterprise and banking institutions, insurance companies in connection with obtaining and repaying loans, paying interest on loans and other types of services, receiving interest for placing and storing funds, as well as in connection with insurance payments and compensation for various types of insurance;

Rice. 1.1. Groups of relations in the field of corporate finance

Arising between enterprises and the state regarding tax and other payments to the budget and trust funds, budget financing, receiving subsidies;

Arising from enterprises in connection with foreign economic activity;

Which are formed by enterprises in connection with the intra-production distribution of income and funds (these are relations between branches, workshops, departments related to the distribution of profits, working capital), as well as relations with workers and employees (these are payment of wages, bonuses, financial assistance, dividends for shares, etc.).

In market conditions, a fundamentally new group of financial relations has emerged, namely:

Relations related to the bankruptcy of an enterprise and the suspension of its current payments;

Relations arising during mergers and acquisitions, as well as the distribution of the enterprise itself.

So, the objects of enterprise finance are: economic relations associated with the movement of funds, the formation and use of monetary funds. The subjects of such relations can be enterprises, organizations, banking institutions and insurance companies, extra-budgetary funds, investment funds, audit organizations, and other business entities.

What is common to all types of relationships is that they all have a value expression and arise on the initiative of the enterprise or counterparty itself.

The material basis of enterprise finance is the circulation of capital, which in the conditions of commodity-money relations takes the form of money circulation. The sphere of financial relations of enterprises is the processes of primary distribution of the cost of the social product (c + v + m), when it is distributed into the cost of material costs (c), the necessary product (v), and the additional product (m). In this case, various funds of cash income are formed. With the help of finance, in social production there is a movement of funds, which acquire a specific form of financial resources that are formed by business entities and the state.