The value of finance. Socio-economic essence of finance. Functions of finance. The structure of the financial system. Budgetary institutions and sources of formation of financial resources Whose financial relations can be called initial
The concept of "organizational finance". Financial relations of organizations and their structure.
Organizational finance is a system of monetary relations associated with the creation and use various kinds income and savings of an economic entity.
Finances of organizations (enterprises) is a relatively independent sphere of the state finance system, covering a wide range of monetary relations associated with the formation and use of capital, income, cash funds in the process of circulation of their funds. It is in this area of finance that the main part of income is formed, which are subsequently redistributed through various channels in the national economic complex and serve as the main source of economic growth and social development of society.
All incomes of subjects of economic relations in the process of reproduction are divided into primary and secondary, received after the redistribution of primary incomes. They are formed:
· enterprises - in the form of profit remaining at their disposal, and depreciation (net cash flow);
For employees (households) - in the form of net wages remaining after paying taxes and mandatory payments, payments from net profit to shareholders and participants, wages to public sector employees, payments from extra-budgetary social funds;
· the state - in the form of redistributed income of enterprises in the budget and off-budget funds.
The role of finance in the economic activity of enterprises is manifested in the fact that with their help the following are carried out:
servicing the individual circulation of funds, i.e., changing the forms of value. In the process of such a circulation, the monetary form of value is transformed into a commodity form, and after the completion of the production process and the sale of the finished product, the commodity form of value again appears in its original monetary form (in the form of proceeds from the sale of the finished product);
distribution of proceeds from the sale of goods (after payment of indirect taxes) to the material cost compensation fund, including depreciation, wage fund (including contributions to off-budget funds) and net income acting in the form of profit;
redistribution of net income for payments to the budget (profit tax) and profit left at the disposal of the enterprise for production and social development;
Use of the profit left at the disposal of the enterprise (net profit) for consumption, accumulation, reserve and other purposes provided for in its financial plan (budget);
· monitoring compliance with the correspondence between the movement of material and monetary resources in the process of individual circulation of funds, i.e., the state of liquidity, solvency and financial independence of the enterprise from external sources of financing.
The existence of finance is inextricably linked with the presence of commodity-money relations and the regulatory role of the state. A significant part of the financial relations of enterprises is regulated by civil law: the amount and procedure for the formation of authorized and reserve capital for enterprises of various organizational and legal forms; procedure for placement and redemption of shares; privatization; liquidation; bankruptcy; the order of priority for debiting funds from the current account; the composition of the costs attributable to the cost of production; accounting policy options; objects and rates of taxation and a number of other relations.
The material basis of the finances of enterprises is the circulation of capital, which, under the conditions of commodity-money relations, takes the form of money circulation.
Financial statistics of enterprises (organizations) contains indicators reflecting financial position enterprises (organizations). Income (loss) from core activities is a balanced financial result and is defined as the difference between gross income from core activities and the cost of goods (works, services) sold, plus expenses of the period.
Income from core activities is a balanced financial result and is defined as the difference between income from core activities and the cost of goods (works, services) sold, plus expenses of the period.
Income (loss) from the sale of products (works, services) is reflected net of value added tax, excises, as well as the cost of returned goods, sales discounts and price discounts presented to the buyer.
The essence and significance of the organization's finances
Finance is a system of economic monetary relations, mainly associated with the redistribution of GDP and the formation of centralized and decentralized monetary funds.
Finance is a system of monetary relations associated mainly with the redistribution of profits and the formation of centralized and decentralized monetary funds. Finance is based on accounting, economic and production analysis, on the current tax system, etc.
All financial relations operate only at the level of enterprises, as legal entities. All financial relations operating within the enterprise are conditional financial relations.
Decentralized funds - all funds created at the enterprise level (accumulation fund, consumption fund, reserve fund, sinking fund).
The difference between a fund and funds: funds = the amount of funds, and the fund = the amount of funds that has a special purpose. At the enterprise, finance is used from the following economic relations:
1) relations between the enterprise and other enterprises in the course of financial and economic activities. Financial relations do not include purchase and sale relations, exchange, etc., but only the application of financial sanctions for non-fulfillment or poor-quality fulfillment;
2) between enterprises and divisions that are part of it. These relations depend on the structure of the enterprise and financial relations that arise only between units that have independent balance sheets and accounts. These relations can be supplemented by the formation of statutory funds, the redistribution of working capital, the redistribution of profits, the payment of taxes between enterprises;
3) between enterprises and employees regarding the payment of funds, mainly from profits, and a part that falls under state regulation;
4) between the enterprise and the state budget regarding the payment of taxes and regarding the receipt of benefits, targeted financing, state loans in various forms, etc.;
5) between the enterprise and commercial banks regarding the receipt and repayment of loans;
6) between enterprises and investment institutions regarding the formation of free cash resources and their use (investment funds, pension funds etc.);
7) between the enterprise and higher authorities (holdings, concerns) regarding the transfer of capital.
Finance in the enterprise performs the following functions:
1) formation - the function provides financial resources, the circulation of funds in the enterprise, i.e. function of formation of monetary funds. The task is to form the cash flows at the enterprise in such a way that all financial flows work and work efficiently. The main indicators are planned;
2) use - a function of the use of funds and funds;
3) control function - at the enterprises themselves, between enterprises, if there is a violation of the law - at the level of the budget, or the state.
The financial market is associated with the circulation of financial capital. The financial flow determines the link of economic relations where the market of financial capital and financial resources takes place. 3 links included:
1) capital market;
2) market of credit resources;
3) money market;
An economic instrument, including finance, has 2 beginnings: per-
the first is objective (following from the economic category), the second is subjective (an instrument for implementing the state's economic policy). Financial impact:
1) quantitative (characterized by the proportions of the distribution process);
2) qualitative (characterized by the impact of finance on the material interests of business entities).
The qualitative side of influence is characterized by proportions in the distribution process; reflects the impact of finance on the material interests of business entities through various forms of organization of financial relations; affects the social product and is associated with the transformation of finance into an incentive for economic development. Such a transformation is possible when the procedure for generating income, the conditions and principles for the formation of funds, the directions of their use can be closely linked with the economic interests of business entities.
An economic incentive is a tool that is associated with the material interests of business entities. The conscious use of finance in social production leads to results in which the active role of finance in social production is manifested in market conditions.
Functions and principles of organizing finance
The market economy in the Russian Federation is gaining momentum. Along with it, competition is gaining strength as the main mechanism for regulating the economic process. The competitiveness of any economic entity can only be ensured by the correct management of the movement of financial resources and capital at its disposal.
In today's conditions, most enterprises are characterized by a reactive form of financial management, i.e. making managerial decisions as a reaction to current problems.
When developing an effective financial management system, the main problem constantly arises of combining the interests of the development of an enterprise, the availability of a sufficient level of funds to carry out this development and maintain a high solvency of the enterprise. The financial well-being of the enterprise as a whole, its owners and employees depends on how efficiently and expediently financial resources are transformed into fixed and working capital, as well as into means of stimulating the workforce. Under these conditions, financial resources are of paramount importance, since this is the only type of enterprise resource that can be directly and with a minimum time interval transformed into any other type of resource. Thus, financial management, as one of the main functions of the management apparatus, acquires a key role in a market economy.
Signs of successful financial management can be called a whole system of goals: the survival of the company in a competitive environment; avoiding bankruptcy and major financial failures; growth in production and sales volumes; profit maximization; cost minimization; ensuring cost-effective activities, etc.
Management of working capital, receivables and payables, accruals and other means of short-term financing - it is in this direction that the main problem of financial management is most clearly manifested.
Skillful economic strategy, rational financial policy allow the company to maintain business activity, profitability and high reputation as a reliable partner for many years. In a market economy, the leading role belongs to financial analysis, thanks to which you can effectively manage financial resources. Financial analysis is a multipurpose tool. With its help, sound financial decisions are made, the resources available to the enterprise are assessed, trends in their use are identified, and forecasts are made for the development of the enterprise for the near and long term.
An enterprise with serious analytical work is able to recognize an impending crisis earlier, respond quickly to it, and is more likely to avoid "troubles" or reduce risk.
In an effort to resolve specific issues and get a qualified assessment of the financial situation, business leaders are increasingly beginning to resort to the help of financial analysis. At the same time, they expect to receive a specific conclusion on the sufficiency of means of payment, the normal ratio of equity and borrowed capital, the rate of capital turnover and the reasons for its change, and the types of financing for certain types of activities.
The main components of the financial analysis of the company's activities are: analysis of financial statements, calculation of financial ratios. The quality of financial analysis depends on the methodology used, the reliability of financial statements.
Monetary relations turn into financial ones when the movement of money acquires a certain independence: as a result of the production of goods and their sale, monetary incomes (financial resources) of enterprises are formed, which are subsequently used.
The finances of an enterprise are monetary relations associated with the formation and distribution of financial resources. Financial resources are formed from such sources as: own and equivalent funds (share capital, share contributions, profit from core activities, earmarked income, etc.); mobilized in the financial market as a result of operations with securities; coming in the order of redistribution.
The finances of the enterprise provide the circulation of fixed and working capital and relationships with the state budget, tax authorities, banks, insurance companies and other institutions of the financial and credit system.
The process of functioning of any enterprise is cyclical. Within one cycle, the following is carried out: attracting the necessary resources, combining them in the production process, selling the manufactured products and obtaining the final financial results. In a market economy, there is a shift in priorities in the objects and targets of the management system of the economic object.
In a market economy, effective management involves optimizing the resource potential of an enterprise. In this situation, the importance of effective management of financial resources sharply increases. The financial well-being of the enterprise as a whole, its owners and employees depends on how effectively and expediently they are transformed into fixed and working capital, as well as into means of stimulating the workforce. Under these conditions, financial resources are of paramount importance, since this is the only type of enterprise resource that can be directly and with a minimum time period transformed into any other type of resource. To some extent, the role of financial resources is important at all levels of management (strategic, tactical, operational), but it is of particular importance in terms of an enterprise development strategy. Thus, financial management, as one of the main functions of the management apparatus, acquires a key role in a market economy. Enterprise finance performs three main functions:
* formation, maintenance of the optimal structure and increase in the production potential of the enterprise;
* ensuring current financial and economic activities;
* ensuring the participation of the enterprise in the implementation of social policy.
Every business starts with asking and answering these three key questions:
1. What should be the value and optimal composition of the assets of the enterprise, allowing to achieve the goals and objectives set for the enterprise?
2. Where to find funding sources and what should be their optimal composition?
3. How to organize the current and prospective management of financial activities, ensuring the solvency and financial stability of the enterprise?
These issues are resolved within the framework of financial management, which is one of the key subsystems of the overall enterprise management system.
The organizational structure of the financial management system of an enterprise can be built in various ways, depending on the size of the enterprise and the type of its activity. The main thing that should be noted in the work of a financial manager is that it either forms part of the work of the top management of the company, or is associated with providing him with analytical information necessary and useful for making managerial decisions of a financial nature. Regardless of the organizational structure of the enterprise, the financial manager is responsible for analyzing financial problems, making decisions in some cases or making recommendations to senior management.
Methods of financial management are diverse. The main ones are: forecasting, planning, taxation, insurance, self-financing, lending, settlement system, financial assistance system, financial sanctions system, depreciation system, incentive system, pricing principles, trust operations, pledge operations, factoring, rent, leasing.
Finance is an integral part of monetary relations. Their role and significance depends on the place monetary relations occupy in economic relations. However, not all monetary relations express precisely financial relations. Finance differs from money, both in content and in the functions performed.
The main purpose of finance is to meet the needs of the state and enterprises in cash through the formation of cash income and funds. Finance is the link between the creation and use of national income. They affect production, distribution and consumption. Satisfying the needs associated with the development of production, the needs of the employee and his family, the finances of the enterprise and households serve the process of changing the form of value(commodity, monetary).
State finance serves the process of changing the form of ownership on a national scale, ensuring the satisfaction of social needs (defense, culture, education, management, etc.) and social protection of certain groups of the population (unemployment benefits, pregnancy benefits, etc.).
In addition to traditional functions, the state performs the functions of regulating economic processes, since more than 20% of GDP and 10% of the total social product are redistributed through the republican budget. This makes it possible to systematically carry out reproduction processes and finance priority areas of the economy. Meanwhile, as a result of subjective volitional decisions, financing may be inefficient.
It should be noted that the market economy has led to the strengthening of the role of finance. This is due to the following circumstances:
Firstly, with the emergence of new economic entities along with traditional groups, new groups of financial relations are emerging. At the same time, the relationship between them becomes more complicated.
Secondly- finances become independent sphere of monetary relations, acquire some isolation. Money as the material basis of finance, performing the function of a medium of exchange, become capital i.e. self-increasing cost.
Third, there is a decrease in the role of finance at the micro level and an increase in the importance of finance at the macro level.
The transition of the country to new economic relations caused a significant decline in production, the emergence of unemployment, exacerbated social and economic instability, inflation, and so on. Under these conditions, the financial policy of the state becomes unstable and often changes. However, the following trends are emerging:
Financial resources are concentrated not only in the budget, but also in other funds - pension, employment, health insurance;
The budget is mainly replenished by taxes. The main emphasis on the tax results in an even greater decline in production. Therefore, there is a need to improve the tax system;
Financing of the national economy from the budget is reduced - from 60% to 12% - which indicates the state's non-intervention in the economy.
The role and importance of finance in the economy
The role of finance in the economic life of business entities and the economy as a whole is based on its functions, and, above all, on the distribution function that characterizes the mode of operation of the category of finance. This function in itself provides redistributive processes, regardless of their consequences. At the same time, depending on the specific economic situation, economic and financial policy, the formation of financial funds and their spending can have both positive and negative economic results.
Under favorable conditions and sound economic and financial policies, the resulting financial activities funds of financial resources, organization and direction of financial flows have a significant positive impact on economic and social development. At the same time, if final consumption in the economy as a whole exceeds gross disposable national income, this indicates negative processes. Similarly, positive or negative results of financial and economic activity can develop in sectors and branches of the economy and at enterprises. In this regard, financial policy is one of the leading economic levers for organizing social reproduction, a powerful factor in the development of the national economy as a whole.
Serving the reproduction of capital, finance is a tool for the formation of funds used to continue and develop production on the basis of distribution and redistribution processes. The basis for the formation of these monetary funds is the formation of income, predetermined by production. However, the final disposable incomes of the economy as a whole, sectors of the economy, industries and the net profit of enterprises, although they depend on the primary formation of incomes, but, as noted, can differ significantly from them. These differences are a consequence of the impact of financial relations in the process of redistribution of income on the formation of monetary funds that have a designated purpose. Such an impact leads to a redistribution of income between enterprises, industries, etc. and creates the prerequisites for changes in the economy. These changes provide conditions for innovative processes, progressive structural shifts in the economy, changes in the levels of development of individual territories, etc.
With all the diversity of the role of finance in the development of the economy, it is usually reduced to two main areas: financial support for expanded reproduction and financial regulation of the development of the country's economy. Let's take a closer look at these areas.
Financial support for reproduction involves the formation of monetary resources to cover the costs of production and sale of goods and services, expansion and technological development of production. The cash funds formed in various sectors of the economy provide not only the development of production, but are also a source of funds for solving social problems, improving the living standards of the population and developing human capital. The growth of funds used for accumulation and their effective investment are the basis for accelerating economic growth and social progress. A decrease in the volume of financial resources and their irrational use lead to a narrowing of the scale of reproduction, and with a large depth and duration, to a decrease in resources for final consumption and deterioration of living conditions.
Financial support for the activities of enterprises is initially based on the authorized capital. At the same time, in the process of financial and economic activity, the funds of enterprises can increase at the expense of net profit, i.e. profit remaining at the disposal of enterprises after paying taxes and other obligatory payments. The funds accumulated by enterprises, as well as temporarily free depreciation deductions formed in the production process, are the basis for the development and innovative renewal of production. Along with their own funds, enterprises widely use direct borrowed funds from credit institutions and funds from the issuance of bonds. These funds are attracted on the basis of payment and repayment. In addition, funds from the state and municipal budgets in the form of grants, subsidies and loans, as well as other attracted funds, can be used.
Among the various sources of funds, the decisive role belongs to the own funds of enterprises. It should be borne in mind that any attraction of borrowed funds entails the need to form funds of own funds to repay debts and pay interest on them.
The most important characteristic of the activity of all economic units is their balance of assets and liabilities. The increase in assets indicates the positive results of financial and economic activity.
Economic regulation. In a market economy based on private property, each economic entity carries out entrepreneurial activity individually, based on its own interests. In the process of production, its participants independently determine the goals of their activities, partners, forms of interaction. Their interests are often conflicting. A balanced proportional development of production is achieved in the process of its economic, including financial, regulation. The basis of regulation is the objective laws of the market, market competition. The processes of distribution and redistribution of financial resources taking place on the basis of competitive production ensure cash for the restructuring of production in accordance with the changing needs of society, balancing supply and demand. Coordination of interests and adjustment of subjects of a market economy are carried out primarily on the basis of self-regulation of the market and the use of financial relations for the redistribution of monetary resources between various business entities. Enterprise finance mainly ensures the redistribution of financial resources within economic entities and between economic entities based on the transfer of property income and transfers, as well as through the use of lending mechanisms and the securities market.
Regulatory mechanisms of enterprises by themselves do not ensure the optimal distribution and use of financial resources.
Lack of market self-regulation can lead to economic and financial crises. In this regard, there is a need to regulate economic processes at the macro level. Such regulation, aimed at mitigating crisis phenomena, is carried out by stimulating or limiting economic growth and investment, regulating money circulation, Central Bank discount rates, exchange rates and other instruments.
Scientific and technological progress and the formation of an information-industrial society require increased attention to the development of innovations, high-tech industries and industries. In order to accelerate scientific and technological development, there is an urgent need to stimulate and support it, especially in the context of globalization, when domestic markets are easily captured by foreign firms. The defense industry and agriculture, which ensure the country's food security, also need economic support.
Private entrepreneurship is not sufficiently interested in the development of human capital, which is a complex of innate abilities, general and special education, acquired professional experience, knowledge, creativity, morality, but psychological and physical health, providing an opportunity to generate income. At the stage of formation of a new information-industrial society, human capital turns into the main factor of socio-economic development. The interests of private entrepreneurs are limited mainly by the needs of their enterprises. Meanwhile, human capital is considered as a category that brings benefits not only to the owners of the enterprise, but also to society as a whole.
A serious danger is the monopolization of production and financial resources.
In this regard, as well as for a number of other circumstances, state regulation of the economy and financial resources plays a significant role in a market economy. State regulation allows you to reconcile the interests of private business with the interests of society as a whole. It can contribute to the development of human capital through the support of education, health care systems and the creation of more favorable living conditions, contribute to the mitigation of crisis processes, promote innovation and major progressive structural changes, implement institutional transformations, ensure the creation of infrastructure that contributes to the development of both the social sphere and production activity.
Within the framework of the financial system, the state influences economic development through tax and depreciation policies, government subsidies, subsidies, loans, investments, public-private partnerships, government spending on the purchase of goods and services, financing the budget deficit and in other ways.
Taxation is the main instrument that determines the scale of accumulation of income generated in the economy in the centralized funds of the budgets of state and municipal governments and in state off-budget funds. It has a direct impact on the amount of enterprise cash funds that can be used for capital accumulation. With a broad tax base and a uniform tax burden on economic units, the neutrality of the tax system in relation to enterprises of various sectors and branches of the economy is ensured. In this case, taxation in itself does not affect the movement of financial resources between sectors of the economy and industries. At the same time, public authorities can use the system of tax incentives and accelerated depreciation in order to attract resources to promising industries and industries, accelerate innovation processes, develop individual regions and achieve other goals in the interests of society as a whole.
Along with tax policy, public authorities can influence production through subsidies, subsidies, public investment and loans.
Government spending is the cost associated with the implementation of the state of its functions. Expenditures consist mainly of purchases of goods and services, salaries of civil servants, transfers related to social payments, and interest payments on public debt. The state has a direct impact on the economy, increasing or decreasing both the total amount of expenditures and expenditures on individual sectors and branches of the economy. On a large scale, as part of public expenditures, according to their functional purpose, the following can be distinguished:
Expenditure on public services of general purpose (for legislative and executive authorities, foreign policy, defense, maintenance public order, security, etc.);
Expenses for public and social services (for education, health care, social insurance and security, housing and communal services, mass media, culture, etc.);
Expenditure on public services related to economic activity (to provide more high efficiency economic activity, creation of conditions for economic growth, targeted programs of an economic nature, creation of new jobs, etc.).
It should also be taken into account that government revenues and expenditures are closely related to government assets and liabilities and have a direct impact on them. The flows of funds in and out of government lead to changes in assets and liabilities. On this basis, a balance of assets and liabilities of the state can be drawn up, characterizing the value of assets owned by it at a certain point in time, and financial claims on it from institutional units of other sectors. The total value of the state's assets, less claims on it, forms the net asset value and reflects the value of its property.
Assets are divided into financial and non-financial. Financial assets include financial claims (cash, securities, etc.), monetary gold, and special drawing rights provided by the IMF. Non-financial assets include fixed assets, inventories and valuables. The value of the net asset value and its dynamics, determined by the ratio of incoming and outgoing flows of funds, is the most important characteristic of the financial condition of the state.
State regulation in the field of finance, as well as in other areas of the economy, is not only necessary, but also inevitable. At the same time, it should be taken into account that its directions and scales have objectively determined boundaries. Excessive government intervention is fraught with a weakening of economic incentives, the loss of reasonable criteria for assessing the situation, and a decrease in the efficiency of the economy.
Financial regulation is carried out along with and in cooperation with other economic regulators. Such regulators are, in particular, credit, prices, foreign exchange and customs policy. The use of these and other regulators should be subordinated to the general strategic goals of socio-economic development, tasks and general economic policy at each stage of development.
1. The essence, functions and significance of finance and financial resources of commercial organizations in the financial system of Russia.
Finance - monetary relations of economic entities, including the state, as a result of which the income of society changes its structure, increasing in the hands of one entity due to the withdrawal of this part and another entity.
The essence of finance is manifested in their functions. Functions refers to the “work” that finances perform. The question of the number and content of functions is debatable. Some well-known financiers, such as A.M. Birtman, identified three main functions: providing the process of managing with money, controlling the ruble, and distributive. A.M. Alexandrov and E.A. Voznesensky argued that finance is expressed in the formation of monetary funds, the use of monetary funds and control. I.T. Balabanov believes that with the transition to market relations, finance has lost its distributive purpose.
However, no one denies that finance is a set of monetary relations organized by the state, in the process of which the formation and use of funds of funds is carried out. The source of the formation of numerous funds at different levels is the gross domestic product. It is possible to carry out the process of distributing GDP using financial instruments: norms, rates, tariffs, deductions, and so on, established by the state.
If we consider finance as a whole, then, apparently, it should be considered that they perform three main functions: distributive, control, and regulatory.
The distributive function is carried out in all spheres of social life, that is, in material production, the non-material sphere, the sphere of circulation. The subjects of distribution are at the micro level - legal entities and individuals, at the macro level - the state. The objects of distribution are GDP and national income in monetary form. The distribution function is a complex function, it covers three successive steps:
1) the formation of funds of funds: at the micro level, the financial resources of economic entities necessary for the circulation of capital are created; household funds; at the macro level - centralized state funds;
2) distribution of monetary funds through financial instruments: at the micro level, separate funds of the enterprise are formed (authorized capital, wage fund, depreciation fund); household funds for specific consumption; at the macro level - budgets of all levels and off-budget funds;
3) use of monetary funds. At the macro level - improvement of national economic proportions; national needs of the country; at the micro level - expanded production and financing of individual members of society.
Distributive and control functions are two sides of the same economic process. The basis of the control function of finance is the movement of financial resources. In this regard, it becomes possible and necessary to control the provision of cost and natural-material proportions in the process of expanded reproduction.
The control function is manifested:
1) before the onset of the distribution process (plans, programs, estimates, forecasts, budgets are drawn up);
2) in the process of executing funds of funds (during the implementation of planned programs, estimates, budgets, and so on);
3) in the process of debriefing, making estimates. Execution of funds.
The control function is implemented:
1) through financial and economic control at individual enterprises;
2) financial and budgetary control (when making tax payments and financing from budgetary resources);
3) credit and banking control (when using the principles of lending and cash settlements).
The object of the control function is the financial performance of the enterprise. If in practice the control function is not carried out, then it is not possible to evaluate the effectiveness of the distribution function.
The regulatory function of finance is not carried out spontaneously, but in accordance with legal norms. The set of norms, regulations and rules is designed to regulate financial activities. In this regard, this function is manifested at all levels, in all spheres and links of financial relations in the hierarchy of its construction. At the macro level, this function, using government spending, taxes, government loans, achieves the results of improving the quality of the production process, improving the material situation of workers, and creating various funds. At the micro level, such results are achieved.
Finance exercises control at all stages of the creation, distribution and use of the social product and national income. Their control function is manifested in all the variety of economic activities of enterprises. The ruble is controlled by production and non-production costs, the correspondence of these costs to income, the formation and use of fixed assets and working capital. It operates at all stages of the circulation of funds, in financing and lending, conducting cashless payments, in relations with the budget and other parts of the financial system.
The interconnection and interdependence of the constituent links of the financial system are due to the single essence of finance.
Through the financial system, the state influences the formation of centralized and decentralized funds, accumulation and consumption funds, using taxes, state budget expenditures, and state credit for this.
Within the framework of the financial system, a variety of activities are carried out, including planning, financing, investing, taxation, insurance, financial and accounting activities, auditing, financial inspection and others.
According to the main features of finance, finance can be distinguished from the totality of monetary relations. Monetary relations that arise between citizens and retail trade cannot be attributed to finance, since the state here regulates monetary relations by the civil law method, for which feature is the equal position of the subjects united by these relations.
Thus, finance is always a monetary relationship, but not any monetary relationship is always a financial relationship.
The market economy has led to the strengthening of the role of finance. First, with the emergence of new economic entities, along with traditional ones, new groups of financial relations arise, the relationship between them becomes more complicated. Secondly, finance becomes an independent sphere of monetary relations, acquires a certain isolation. This is due to the fact that in market relations money (the material basis of finance), performing the function of a means of circulation, becomes capital, that is, a self-increasing value. Thirdly, there is a change of priorities; a gradual decrease in the role of finance at the macro level and an increase in the importance of finance at the micro level.
With the help of finance, the state distributes the social product not only in natural-material form, but also in value. In this regard, it becomes possible and necessary to control the provision of cost and natural-material proportions in the process of expanded reproduction.
Chapter 1
farms
1.1. Socio-economic essence and functions of household finance.
Household finances are economic monetary relations carried out by individual members of the household to create, distribute and use funds of funds in the course of their activities.
The finances of the household (households), in the conditions of the development of market relations and the expansion of cash flows, are singled out as an independent link in the financial system, which belongs to the sphere of decentralized finance. This is due to the ever-increasing economic role and social significance of households in modern society.
In economic theory, a household is a household that is run by one or more persons who live together or have a common budget. Household unites all employees, owners of large and small capital, land, securities, who are employed and not employed in social production.
Household finances in the conditions of developed market relations participate in the circulation of capital and cover part of the production process. However, unlike financial commercial enterprises and organizations that are of decisive importance in the creation, primary distribution and use of the value of GDP and national income, household finances have not become a priority link in the financial system and play a subordinate, albeit important, role in the total set of financial relations.
Households are one of the important subjects of economic activity, the results of which determine not only the well-being of an individual economic unit, but also the entire population as a whole. Households play a dual role in the economy: they are ultimately the providers of economic resources and at the same time the main spending group in the national economy. Having become the largest economic entity, along with commercial organizations and the state, the household participates in all macroregulatory processes. The well-being of not only a separate economic unit, but also the population of the country as a whole depends on the results of their economic activity.
Households are in close relationship and interdependence with the country's economy and are determined by the socio-political stability of society. Any changes in economic relations inevitably affect their activities. A general economic upsurge leads to an improvement in the material situation of families and may deter their active activity, while a recession leads to an increase in this activity in order to maintain the same living conditions.
The emergence of household finance occurs at the second stage of the production process - the distribution of the value of gross domestic product and national income. Household members participate in the primary distribution because they own the labor force and receive primary income in the form of wages at the enterprise or income from self-employment. By paying taxes to the state, they are entitled to various payments from the budget and off-budget funds, such as pensions, allowances, etc., thus they take part in the redistribution of GDP and ND, i.e. acquire the right to secondary income.
Household finances are in the form of money. In the conditions of market relations, household members receive various types of income (wages, pensions) in money (national currency, foreign currency, bills, etc.), and even income in kind is valued in monetary form.
The expenditure of income also occurs with the help of money. Monetary relationships that develop among household members become financial when monetary funds arise and are used.
There are internal and external monetary and financial relations of households. Internal include financial (monetary) relations for the formation of various family funds (reserves, for the purchase of durable goods, buying an apartment, etc.), external - relations with legal entities and the state.1
The socio-economic essence of household finance finds its manifestation in functions. Now they perform two main functions: ensuring the vital needs of the family and distributive.
The main one is the function of ensuring the vital needs of the family. It creates real conditions for the existence of members of this family. The development of market relations has significantly influenced the form of manifestation of this function. During the period of subsistence farming, the products created by household members met their needs, and the exchange of surpluses occurred rarely, in small quantities, and as a rule, in the neighborhood.
Commodity-money relations, the emergence and then the increase of the market led to:
Expansion of material, social. Cultural and other needs of the family;
Creation and growth of household funds;
The emergence of a monetary fund - family budget designed to provide material benefits.
distribution function household finance covers the distribution of the value of GDP and ND and the formation of family income, acting in the form of various funds. The distribution process carried out by household finances occurs:
Between this economic unit and other areas and links of the financial system (public finances - budgets, extra-budgetary funds, finances of enterprises). As a result, as was said, primary and secondary incomes are created in the form wages, pensions, allowances, etc.;
Within a separate household, when the total income of the family is distributed among its members, forming separate monetary funds for each. Separation of funds within the household does not change the owner and excludes any equivalence.
This function includes three consecutive steps: the formation, distribution and use of funds.
In modern economic literature, in addition to these two functions, there is a control one, meaning control over the distribution of income received among various funds and the intended use of the funds from these funds, and a regulatory one that supports the balanced development of the household as a whole. However, these functions can be seen as part of the regulatory function, which involves regulation and control.
All household functions are interconnected and operate simultaneously, complementing each other.
The concept of finance and their classification. The role and importance of finance.
In any state, the distribution and redistribution of the gross social product and national income takes place in the form of money.
The concept of finance comes from the French - the sum total of all money, which are at the disposal of the enterprise, the state, as well as the system of their formation, distribution, use.
Finance - a set of monetary funds arising from the formation, distribution and use of funds of financial resources.
1. Economic understanding - all funds
2. Legal understanding - state and municipal funds: budgets of all levels
State and municipal credit
State off-budget funds
Funds of the Central Bank
Funds of state credit organizations
Funds of state unitary enterprises
Signs of finance:
Money relations
Mandatory state participant
distribution relations
Non-equivalent
Formed by funding
Kinds:
According to its material content, the finances of the state are cash funds.
All funds of funds in the state are divided into centralized and decentralized, which are interconnected and conditional.
1) Centralized funds include funds received at the disposal of the state as a ruling entity. These include - Budget funds
State and municipal credit
State off-budget funds
2) Decentralized funds include the finances of enterprises and organizations of all forms of ownership, formed both at the expense of their own resources and at the expense of budget allocations, as well as household finances
The role and importance of finance
Finance is directly related to the functioning of public economic relations in the process of accumulation, redistribution and use of centralized and decentralized funds of funds. Mankind in the process of evolutionary development has gone from commodity exchange to commodity-money relations, where money has become a universal equivalent, and the state, in the process of managing economic and social processes, began to keep records of income and expenses in monetary form, forming various monetary funds.
Finance- not the money itself, but the relationship between people regarding the formation, redistribution, use of funds of funds.
Money is the equivalent by which labor is measured. Finance serves as an economic instrument for the distribution of the gross social product and national income. They are a means of controlling the production and distribution of material goods; a means of stimulating the development of the state and society. Finance reflect in an abstract form all the processes taking place in the state, not only in the field of economics and social processes, but also in the field of politics, ecology, demography, etc. Any event in the state cannot be carried out without the redistribution of financial resources, i.e. without the financial activity of the state, which is carried out in the legal sphere.
Finance Functions:
1. Regulatory
2. Control
3. accumulation of money. funds
4. use of den funds
5. reallocation of funds
The theory of finance consists of:
A) The doctrine of commodity-money relations.
Finance has always been considered an economic category, it is a phenomenon that exists only in commodity-money relations. The significance of finance in the state depends on the place commodity-money relations occupy in the state. From this, the role of finance decreases or increases. Until the 1990s, there was no financial law in the strict sense; it was replaced by administrative law. But not all monetary relations express financial relations. Money circulation, the sale of goods, the use of money as accounting and control, do not express financial relations. Finance is different from money. If money - is the universal equivalent by which the costs of social labor are measured, then finance is an economic category that characterizes the process of using, distributing funds in the state in a centralized or decentralized way. Finance is an economic tool for the distribution and redistribution of the totality of the social product and national income. This is a kind of means of control over the formation and use of funds of funds. The main purpose of finance is to provide not only the needs of the state, as well as enterprises, organizations, and the population in cash, through the formation of cash income and cash funds, but also to ensure the control of the ruble over the expenditure of funds. Finance expresses the monetary relation, which results in the systematic formation, distribution and use of monetary funds and funds of the state, organizations and the population.
b) The doctrine of the national income as the main source of financial resources of any state. The main source of cash income and funds of the state is the national income of the country. It is the volume of national income that determines the ability of a state to meet the needs of the population. The national income has two main parts: the fund accumulation and consumption. These two parts make it possible to determine the proportions of the development of the economy and its structure. There is such a paradox - it is impossible to distribute the national income without the participation of finance. Therefore, in this sense, finance is the link between the creation and use of national income. The link between the creation and use of national income is also budget system, with the help of it, 70-80% of the national income is distributed and redistributed.
c) The doctrine of the nature and functions of the state.
The content of finance is determined by the essence and functions of the state. The main function of the state is the economic organization in relation to finance, it is expressed in the fact that by organizing financial relations, the state sets in motion huge cash flows and thereby actively influences all economic structures: production, distribution, consumption, both parts of the national income. In this sense, finances act in terms of material content as target funds of funds. All these trust funds (budgetary, non-budgetary, etc.) constitute the financial resources of any state.
The amount of financial resources of the country is reflected only in the consolidated financial balance. At the level of the Russian Federation, the Ministry of Economic Development and the Ministry of Finance, simultaneously with the draft federal budget, prepare a draft consolidated financial balance and the federal budget makes up only a part of it, and the rest is information about the income of enterprises, etc. This is necessary in order to predict economic development. Consolidated financial balance sheets are almost never prepared by subjects of the federation and municipalities, which is a pity, since the subjects and the municipality have no less information than the entire Russian Federation.
3. What is the main meaning of the operational function of finance.
a) Activities related to the regulation of real money circulation within the framework of an entrepreneurial structure implement a set of functions of an enterprise's finances, including: providing, distributing and controlling.
b) The supporting function of enterprise finance assumes that the enterprise must be fully provided in the optimal amount with the necessary funds, subject to a very important principle: all expenses must be covered by their own income.
c) An integral part of the financial function of an enterprise is an operational function, the meaning of which lies in the current provision of enterprises with funds for normal functioning, that is, making payments and settlements, fulfilling short-term obligations. The operational function does not have a significant impact on the long-term development strategy of the enterprise. Therefore, it is limited to financial support for simple reproduction. The provisioning function prioritizes the accumulation of capital to solve long-term investment problems. Operational management (a set of measures developed on the basis of an operational analysis of the financial situation in order to obtain the maximum effect at a minimum cost through the redistribution of financial resources)
4. Is the salary always issued at your enterprise on time? Give reasons for both positive and negative answers.
a) Wage is the price paid to an employee for the use of his labor, the value of which is determined by the labor market, i.e. labor demand and supply.
b) Wages must be paid to employees at least every half a month (Article 136 of the Labor Code of the Russian Federation). It is allowed to establish other terms for the payment of wages by federal law (for certain categories of employees).
c) Employees of our organization receive wages on the 1st and 16th of each month. On the 16th, an advance payment is issued for the previous half-month, and on the 1st - wages for the entire previous month. The collective agreement establishes that the advance payment for the first half of the month is 50% of the monthly salary. The salary at the enterprise in which I work is always issued on time. The absence of delays in the payment of wages is due to the competent management of the financial activities of the enterprise, good economic and financial performance of the company, and a positive trend in the work of the organization's employees.
5. How is the debt of your company to suppliers? budget? Are there large amounts of arrears?
a) Accounts payable is the debt of the enterprise to other organizations and enterprises, legal entities and individuals. Accounts payable arise as a result of attracting funds from other organizations, enterprises and individuals, as well as for all types of payments to the budget, extra-budgetary and other funds.
b) The debt of our company to suppliers in 2010 is 6814 thousand rubles, which indicates the diversion of own funds into accounts payable, which can adversely affect the financial condition of the enterprise. The repayment of accounts payable from some organizations is the repayment of receivables from other organizations. Therefore, the elimination of accounts payable is of great importance, because. the reduction of funds in the field of settlements and the acceleration of the latter contribute to the acceleration of the turnover of working capital.
c) Financial relations that develop between the state, legal entities and individuals are called budgetary relations. As a result of the fulfillment of the obligations of legal entities and individuals to the state, a budget fund is created in which these relations materialize.
The debt of our company to the budget at the end of 2010 is 114 thousand rubles. Our company has no overdue debts.
6. What financial plans and for what period does your company make?
a) Financial planning is understood as a set of activities for the preparation and presentation of plans for the formation of income and expenses. Financial planning is part of n / x planning. It allows you to link the indicators of the n / x plan with their monetary funds
The object of financial planning is the financial activities of business entities and the state, and the final result is the preparation of financial plans, from the estimate of an individual institution to the consolidated financial balance of the state.
The following data serve as the initial basis for developing the financial plan of the enterprise:
The planned amount of proceeds from the sale of products;
Planned profit and profitability of production;
Established amounts of payments to the state budget and appropriations from it;
Volumes of state capital investments;
Amounts of appropriations from centralized funds for various planned goals, planned values of fund-forming indicators.
b) It is customary to distinguish three types of financial plans:
The balance of income and expenses is planned;
Preliminary (for the expected period);
Executive (final).
There is also the so-called checking balance of income and expenses, which is a chess sheet (chess balance).
c) Our company is developing a financial plan, the final section of which is the balance of income and expenses. The development of the financial plan is carried out by the financial service of the enterprise. In its revenue side, they show the planned profit, depreciation deductions, appropriations from the budget and other receipts, in the expenditure side - deductions to the budget, investments in capital construction and overhaul, increase in working capital, deductions to higher organizations and others.
Therefore, the financial plan of our organization includes the following sections:
Profit distribution plan,
Calculation of working capital and their growth,
Calculation of depreciation charges.
Financing of capital investments.
Calculation of payments to the budget.
Estimate for the training of personnel at the enterprise.
Calculation of the financial reserve.
The plan is drawn up for the quarter with a monthly breakdown.
Conclusion
So, in this control work, I answered the main questions regarding the functions of finance, we summarize the above material and draw conclusions.
Finance performs two functions: distributive and control. The operation of paying income tax to the state budget refers to the distributive function of finance.
Activities related to the regulation of real money circulation within the framework of an entrepreneurial structure implement a set of functions of an enterprise's finances, including: providing, distributing and controlling. The meaning of the operational function of finance lies in the current provision of enterprises with funds for normal functioning.
Wage is the price paid to an employee for the use of his labor, the value of which is determined by the labor market, i.e. labor demand and supply.
Accounts payable is the debt of the enterprise to other organizations and enterprises, legal entities and individuals.
The financial plan should ensure the economically expedient use of funds to finance the activities of the enterprise.
List of used literature
1. Azrilyan A.N. Big Economic Dictionary: 25000 terms - M .: Institute of New Economics, 2007, - 1376 p.
2. Eliseev A.S. Modern Economics: Textbook. - St. Petersburg: Dashkov i K, 2006, - 503 p.
3. Lipsits I.V. Economics: Textbook. - M.: Vita-Press, 2007. -315 p.
4. Finance, money circulation and credit. Textbook. / Ed. VC. Senchagov and A.I. Arkhipova.- M.: Prospekt, 2007. - 400 p.
And decentralized cash funds in order to increase the efficiency of social production, improve the quality of work in all parts of the national economy. The object of the control function of finance is the financial performance of enterprises, organizations, institutions. The form of implementation of the control function of finance is financial control. If the control function of finance...
The finances of enterprises can be subdivided into the finances of industry, agriculture, transport, communications, construction, supply, trade, housing and communal services, and roads. The organization of the finances of an enterprise is influenced not only by industry specifics, but also by organizational and legal forms of management. Taking into account the organizational and legal forms, the finances of enterprises should be divided into ...
In order to understand the meaning of finance and their essence, it should be noted that they arose on the basis of money, which in turn act as the material content of finance, while expressing the accepted system of economic relations. At the same time, not all monetary relations can be attributed to finance. In its essence, finance is still, to some extent, a separate part of monetary relations. And the peculiarity of finance lies in the fact that they are not directly related to the production of goods and their circulation.Finances appear when, during the production of goods and their subsequent sale, some cash incomes are formed for those involved in production, and then the distribution and appropriate use of these incomes occurs according to different schemes. The proceeds from the sale of products are mainly formed in the form of money circulation, as a means of payment and a measure of value. However, this is not yet finance, but the distribution of revenue from income - this already concerns financial relations.
With the further redistribution of revenue, the importance of finance is invaluable in view of the fact that the value created in the sphere of material production is quite often redirected to the non-productive sphere. At the distribution stage, in addition to finances, other economic categories also take part: wages, prices, various loans. The great importance of finance from other categories is that the distribution and further redistribution of value with the help of finance is necessarily accompanied by the movement of cash flows, which at the same time take such a specific form as financial resources.
In the general case, financial resources are identified as material carriers of financial relations, which in most cases are formed with the help of various types of cash flows and incomes, receipts and deductions.
Basically, financial resources are initially formed and appear at the stage of production, where the price value of the goods is mainly created, but in reality they are formed at the stage of initial distribution, that is, from the proceeds received from the sale of the price value of the goods. Financial resources must have a specific owner, so it can be both the state and any enterprise, large corporations and small businesses in various fields of production.
In modern conditions of commodity-money relations, every movement of the gross domestic product, starting from the stage of its production and ending with the stage of consumption, is mediated by the formation of monetary funds and their further use. Finance, which expresses the processes of the general formation and specific use of monetary funds of various purposes, through special forms of monetary relations, thus acts as cost economic relations in the production of material goods, including their exchange and distribution among various consumers. At the same time, the value of the share of finance for each stage of a particular reproduction is not the same.
Finance does not participate in the technological process of production. At the same time, if we consider any production as an economic process, this is the movement of the value of goods, then finances are a kind of necessary and an important factor their implementation, as well as one of the performance indicators of the entire production.
Thus, at the initial stage of reproduction, with the help of monetary funds, an enterprise acquires the necessary means of production for the manufacture or production of material goods.
Consumption is a special stage of reproduction, where finance provides the possibility of its very implementation. Personal and industrial consumption of material goods is always preceded by various processes education and rational use accumulated funds. The role of the importance of finance in the sphere of consumption is much greater than the quantitative parameters of this consumption fund itself, while finance also acts as an effective means of controlling the targeted use and investment of accumulated funds.
The value of financial ratios
Financial ratios are relative indicators of the financial performance of an enterprise that express the relationship between two or more parameters.To assess the current financial condition of the enterprise, a set of coefficients is used, which are compared with the standards or with the average performance of other enterprises in the industry. Ratios that go beyond the normative values indicate the "weak points" of the company.
Financial stability - component the overall stability of the enterprise, the balance of financial flows, the availability of funds that allow the organization to maintain its activities for a certain period of time, including servicing loans received and producing products.
The main indicators of the financial stability of the organization:
|
Index |
Description of the indicator and its normative value |
|
Autonomy coefficient |
The ratio of equity to total capital. |
|
Financial leverage ratio |
The ratio of borrowed capital to equity. |
|
Working capital ratio |
The ratio of equity to current assets. |
|
Investment coverage ratio |
The ratio of equity and long-term liabilities to total equity. |
|
Equity maneuverability ratio |
The ratio of own working capital to sources of own funds. |
|
Property mobility coefficient |
The ratio of current assets to the value of all property. Characterizes the industry specifics of the organization. |
|
Working capital mobility ratio |
The ratio of the most mobile part of current assets (cash and financial investments) to the total value of current assets. |
|
Reserves coverage ratio |
The ratio of own working capital to the value of inventories. |
|
Short-term debt ratio |
The ratio of short-term debt to total debt. |
The main indicator that affects the financial stability of the organization is the share of borrowed funds. It is generally believed that if borrowed funds account for more than half of the company's funds, then this is not a very good sign for financial stability, for various industries the normal share of borrowed funds can fluctuate: for trading companies with large turnovers, it is much higher.
In addition to the above ratios, the financial stability of an enterprise reflects the liquidity of its assets in comparison with liabilities by maturity: the current liquidity ratio and the quick liquidity ratio.
Importance of enterprise finance
Enterprise finance is an economic category, the peculiarity of which lies in its scope and inherent functions. They express monetary distribution relations, without which the circulation of social production funds cannot take place.The finances of enterprises are the most important component of the financial system of the Russian Federation. Their functioning is due to the existence of commodity-money relations and the operation of the law of value. Enterprise finance has the same features as the category of finance as a whole.
Enterprise finance is a set of monetary relations arising from specific economic entities in connection with the formation and use of cash income and savings.
The finances of enterprises perform distributive and control functions.
The distribution function is manifested in the process of distribution of the value of the social product and national income. At the level of enterprises, this process takes place by receiving cash proceeds from sold products and using it to reimburse the spent means of production, the formation of gross income. The financial resources of the enterprise are also subject to distribution in order to fulfill monetary obligations to the budget, banks, counterparties. The result of the distribution is the formation and use of targeted funds of funds (reimbursement fund, wages, etc.), maintaining an effective capital structure. The main object of the implementation of the distribution function is the profit of the enterprise.
The control function of enterprise finance should be understood as their inherent ability to objectively reflect and thereby control the financial condition of an enterprise, industry and the national economy as a whole with the help of such financial categories as profit, profitability, cost, price, revenue, depreciation, fixed and working capital. .
The control function of finance is implemented in the following main areas:
Monitoring the correctness and timeliness of the transfer of funds to funds of funds for all established sources of financing;
control over compliance with the specified structure of funds of funds, taking into account the needs of an industrial and social nature;
regular check of purposeful and effective use financial resources.
To implement the control function of the enterprise, they develop standards that determine the size of the funds of funds and the sources of their financing.
The functions of enterprise finance are interrelated and are parties to the same process.
The finances of enterprises are the initial basis of the country's financial system, since they cover the most important part of all monetary relations in the sphere of social reproduction, where a social product is created. The ability to meet social needs and improve the financial situation of the state depends on the financial condition of enterprises.
The finances of enterprises carry out the process of distribution and redistribution of the value of the social product at three main levels:
On a nationwide (national);
enterprise level;
production team level.
By distributing and redistributing value at the national level, enterprise finance ensures the formation of the country's financial resources used to form the budget and extrabudgetary funds.
At the level of enterprises, they support the sphere of material production with the necessary financial resources and funds for the continuous process of expanded reproduction.
At the level of production teams, with the help of finance, monetary funds are formed - wages, material incentives, and programs for the social development of enterprise teams are implemented.
The direct connection between the finances of enterprises and all phases of the reproduction process determines their high potential activity and the wide possibility of influencing all aspects of management. They serve as an important tool for economic stimulation and control and management of the country's economy.
Importance of financial analysis
Analysis in financial management, as in any management, is one of the fundamental stages. It is with analysis that goal setting begins. In the financial activity of an enterprise, analysis is important: with its help, conclusions are drawn about the feasibility and effectiveness of certain financial decisions. The results of the analysis always make up a significant part of the information support of financial managers. Analytical work (in addition to forecast data, statistical research, accounting data) is one of the main information systems of an enterprise.Analysis of the financial condition is an integral element of both financial management and economic relations with partners, the financial and credit system. Analysis in a general sense is the division of a whole into its component parts.
The subject of financial analysis is the financial condition of the enterprise, which makes it possible to assess the current financial condition and changes that occur in the financial performance of the enterprise.
Financial condition - a set of indicators characterizing the availability, placement and use of financial resources.
The purpose of financial analysis is to obtain information about the real state of the enterprise at the date of reporting and its forecast.
To achieve this goal in the process of financial analysis, it is necessary to solve the following tasks:
1. Establishing patterns, trends in financial phenomena and processes in the specific conditions of the enterprise.
2. Scientific substantiation of current and long-term plans.
3. Control over the implementation of plans and management decisions.
4. Evaluation of the performance of the enterprise and the development of measures for the use of identified reserves.
Principles of financial analysis:
1) the need for a state approach;
2) scientific character;
3) complexity;
4) consistency;
5) objectivity;
6) effectiveness;
7) planning;
8) efficiency (means the ability to quickly and accurately analyze, make management decisions and implement them);
9) efficiency.
An analysis of the financial condition of an enterprise within the framework of financial management can be carried out in two stages:
1. Preliminary assessment of the financial condition. At this stage, comparative tables are compiled for the last two years in order to identify absolute and relative deviations in the main reporting indicators; Relative deviations of interest rates are calculated in relation to the balance year for several years. The main purpose of such an express analysis is to select a small number of the most significant and relatively simple indicators and constantly monitor their dynamics. The selection of the necessary indicators is done by the analyst himself.
2. Detailed analysis of the financial condition. The main goal of this stage is the compilation of a more detailed description of the property and financial situation of an economic entity, the results of its activities.
A detailed analysis is carried out on the basis of a special program, which usually includes: building an analytical net balance; assessment and analysis of economic potential (assessment of property status and capital structure and analysis of financial position, assessment of financial stability); assessment and analysis of the effectiveness of financial and economic activities (analysis of turnover and profitability).
Importance of Financial Control
Financial control is control over the legality and expediency of actions of subjects of financial legal relations in the formation, distribution and use of monetary state and municipal funds for the effective socio-economic development of the country as a whole and its regions.Financial control is an integral part of the financial activities of the state and municipalities, since finance as an economic category has not only distributive, but also control functions.
Financial control is carried out in accordance with the procedure established by legal norms by the entire system of state authorities and local self-government, including special control bodies with the participation of public organizations, labor collectives and citizens.
The significance of financial control is expressed in the fact that, during its implementation, it checks, firstly, the observance of the legal order established in the field of financial activity by all state authorities and local governments, enterprises, institutions, organizations, citizens, and, secondly, the economic feasibility and effectiveness of ongoing actions, their compliance with the tasks of the state and municipalities. It serves as an important way to ensure the legitimacy and expediency of financial activities. The requirement of legality in financial activities has a constitutional basis.
Financial control is inherent in all financial and legal institutions (the institution of tax, the institution of off-budget funds, etc.). Therefore, in addition to the general financial and legal norms contained in the General Part of Financial Law and regulating the organization and procedure for conducting financial control in general, there are norms that provide for its specifics in certain financial and legal institutions of the Special Part (enterprise finance).
The main areas of financial control in the sphere of relations regulated by financial law are control over:
The performance by state authorities and local self-government of the functions of accumulation, distribution and use of financial resources in accordance with their competence;
fulfillment by organizations and citizens of financial obligations to the state and local governments;
use for the intended purpose by state and municipal enterprises, institutions, organizations of financial resources under their economic control or operational management;
compliance with the rules for financial transactions, settlements and storage of funds by enterprises, organizations, institutions.
In the process of financial control, internal reserves of production are identified - the possibility of increasing profitability, increasing labor productivity, more economical and efficient use of material and monetary resources, as well as ways to eliminate and prevent violations of financial discipline. In case of their detection, measures of influence are applied to organizations, officials and citizens, compensation for material damage to the state, organizations, citizens is provided.
The implementation of the tasks of financial control strengthens the state financial discipline, expressing one of the parties of legality. State financial discipline is the strict observance of the regulations and procedures for the formation, distribution and use of state and municipal funds established by legal norms. The requirements of financial discipline apply not only to enterprises, organizations, institutions, citizens, but also to public authorities and local governments, their officials.
The Importance of Organization Finance
Finance is a system of monetary relations through which funds of monetary resources are created, distributed and used. Finance as an economic category expresses the interests of participants in market relations. The finances of an enterprise indicate the state of its capital and present value on a specific date.Since the predominant part of financial resources is concentrated in enterprises, the stability of the financial system as a whole depends on the stable position of their finances.
In the distribution function, the main meaning of finance is manifested - the distribution of financial resources in various areas in accordance with their economic purpose and existing legislation.
The control function, or financial control, is implemented in three areas:
1) within the enterprise in the relationship between departments;
2) in connection with the external environment (third parties);
3) through the state tax service.
In the organization of enterprise finance, the following rules are used:
Independence in the field of financial and economic activities;
self-financing;
interest in the results of work;
responsibility for these results;
formation of financial reserves;
division of funds into own and borrowed;
priority of fulfillment of obligations to budgetary and state non-budgetary funds;
financial control over the activities of the enterprise.
As part of financial relations, the following interactions are distinguished:
Between enterprises and organizations in the process of formation and distribution of gross income, when paying for supplies, selling finished products or services;
when issuing and distributing shares of the enterprise, mutual lending, equity participation;
between enterprises and individual workers in the process of using income;
between legal entities, individuals and the banking system;
between enterprises and foreign partners when using the currency fund.
The finances of enterprises are the basis of the financial system of the state, since enterprises are the main link in the national economic complex. The state of the enterprise's finances has an impact on the provision of national and regional monetary funds with financial resources. The dependence here is direct: the more stable the financial position of enterprises, the more secure national and regional funds, the more fully social, cultural and other needs are satisfied.
That is why in a market economy it is necessary to learn how to combine the complete independence of enterprises and regions with state regulation of the economy and finance. These tasks should be solved by the financial mechanism functioning at one stage or another of society's development.
The financial mechanism includes:
The dependence of wages on the usefulness of the product or service produced and on the receipt of payments for it;
a reasonable distribution of profits between the enterprise, trade and banks, in which the majority should go to the manufacturer;
the objective reality of the norms for the distribution of profits between enterprises and budgets of various levels, as well as extra-budgetary funds, which implies long-term and stability;
validity of deductions for accumulation (development of production) and consumption;
sufficiency of funds for social needs, research work, training and other purposes.
The financial activity of the enterprise covers the following main aspects of financial management:
Organization of the financial service;
financial planning;
accounting for the movement of cash resources;
control and analysis of the effectiveness of the use of financial resources;
stimulating the growth of sales, profits and profitability of the enterprise.
The structure of the financial service depends on the size of the enterprise, the nature of the activity, the financial strategy, the availability of technical means of financial management, etc. In a small company, one accountant handles all financial matters. At a large enterprise, the financial service is headed by a financial director, it includes various professionals.
The main tasks of the financial service are to ensure the solvency of the enterprise and increase capital.
The value of the financial result
The concept of financial result is interpreted by each economist in different aspects and with varying degrees of detail. In general, the financial result can be represented as the difference between the total income acquired by the enterprise and the total expenses incurred by it in the course of all types of activities: current, investment, financial.The main goal of any enterprise operating in a market environment is to obtain a positive financial result, which is profit. This economic category characterizes the efficiency of the company, the quality of manufactured (sold) products or services (works) that it provides.
Increasing profit and improving its quality is a prerequisite for expanding the scale of the enterprise, as well as meeting the material and social needs of employees and founders (shareholders) of the organization. Positive financial results provide an opportunity to improve financial condition and business activity. In addition, due to profits, deductions are made to the budget of our country, while the revenue part of the state budget is formed, which leads to an increase in the economic development of the country and its individual regions, and ultimately there is an increase in the living standards of the population.
The financial result is studied using absolute and relative indicators. Absolute indicators include such indicators as gross profit, profit from sales, profit from other activities, total accounting profit, net and retained earnings. Relative indicators for assessing financial results are calculated in order to form an economically sound assessment of changes in financial results in dynamics. These indicators include indicators of profitability of income and expenses, which are relative intensity values, the main group of which is profitability of sales indicators: profitability of sales on sales profit, profitability of sales on profit before tax, profitability of sales on net profit.
The value of the analysis of financial results lies in the formation of an economically sound assessment of their dynamics and structure, as well as the identification of internal reserves for improving financial results and improving their quality.
There are various classifications of financial results, of which the most common are the following:
According to the composition of the elements: marginal profit, gross profit, net or retained earnings;
- by main types of activity of enterprises: profit from current, investment, financial activities;
- by the formation period: financial result of the previous period, reporting period or future period;
- by the nature of taxation: taxable profit and profit that is not subject to taxation.
Thus, financial results play a special role in the economic development of the company, as they are the final performance indicators of any organization.
Importance of financial activity
The need to use finance (financial system) led to the implementation by the state and municipalities of special, namely financial activities. In the course of financial activity, systematic and purposeful formation (formation), distribution and use of state and municipal centralized and decentralized monetary funds is carried out.So, the financial activity of the state is the implementation of its functions for the systematic formation (formation), distribution and use of funds (financial resources) in order to implement the tasks of socio-economic development, ensure the country's defense and security, as well as the use of financial resources for the activities of state bodies .
The financial activity of municipalities, carried out through local governments, is aimed at solving problems of local importance, determined by the legislation on local self-government. It represents the implementation of functions for the systematic formation (formation), distribution and use of municipal (local) monetary funds in order to implement socio-economic tasks of local importance and provide financial resources for the activities of local governments.
The financial activities of state authorities and local self-government are connected by a general focus on the needs of society, are of a public nature, although they differ in specific tasks. According to the Constitution of the Russian Federation (part 1, article 7), the main, defining goal of this activity should be the creation of conditions that ensure a decent life and free development of a person.
The content of the financial activities of the state and municipalities is expressed in numerous and diverse functions that operate in the above general areas: the formation (formation), distribution and use of state or municipal (local) funds *. An integral element of each of them is the control function, which follows from the essence of finance. This control is also financial in accordance with the content of all this activity.
The variety of functions is due to the multi-link nature of the financial system, the originality of its links. In this regard, the state and municipalities carry out activities to create, distribute and use various types of monetary funds: budgetary and credit resources, insurance funds, financial resources of economic sectors, state and municipal enterprises, organizations and institutions.
In addition to this point of view on the content of financial activity, which is widespread in the legal and economic literature, another view has been expressed, according to which it is limited only to the functions of the formation and distribution of monetary funds, excluding their use. Subsequently, the named author somewhat softened his position, recognizing the presence in the composition of financial activity of an element of organizing the use of monetary funds. However, this limitation appears to be unreasonable. After all, it is precisely in the use of financial resources, in accordance with the tasks facing the state, that the meaning of financial activity ultimately lies. And the relations that arise in the course of this activity can be serviced, in addition to financial law, by other branches of law.
The financial activity of the state and municipalities acts as an important and necessary component of the mechanism of social management. This is expressed in the fact that the financial resources accumulated in the course of it are directed to the sectors of the economy, social and other spheres, taking into account the priority of financed activities at the corresponding stages of the country's development, its external and internal conditions. At the same time, the state and municipalities undertake to provide those necessary public services that cannot be the subject of private entrepreneurship.
The implementation of effective financial activities of the state is a factor necessary for conducting a fair social policy, which, in the context of the transition to a market economy, requires the elimination of the negative aspects of the latter (the instability of the financial situation of members of society with a significant gap in income levels, unemployment, etc.).
Through financial activities, a material basis is created that is necessary for the functioning of public authorities and administration, law enforcement agencies, ensuring the country's defense capability and security.
The impact of the state and municipalities on socio-economic processes is carried out not only in the form of direct financial support, allocation of funds for certain plans, programs, etc., but also indirectly - by providing tax benefits, applying low interest rates when lending or providing interest-free loans, tax deferrals, etc. in order to stimulate any activity recognized by the state as a priority. Conversely, restrictive measures may be applied.
Financial activities influence the development of federal relations and local self-government. Its important side is the distribution of financial resources between federal bodies and subjects of the Federation, as well as municipalities, which is important for the regulation and coordination of production and the development of the socio-cultural sphere throughout Russia, as well as the corresponding territorial levels. The regional policy in the Russian Federation should be aimed at equalizing the conditions for the socio-economic development of the regions while creating a single economic space.
As an integral part of the mechanism of state administration and regulation of socio-economic processes, financial activity contains ample opportunities to influence the development of market relations. The American scientist R. Klitgaard drew attention to the need to demonstrate such a role of the state, noting that an efficient market is not created by itself, but is, in particular, a product or result of reasonable legislation, state policy. “The success of market reforms,” he believes, “depends to a decisive extent on public administration. This lesson comes as a surprise to those who have welcomed the self-detachment of the state from the management of the economy.
Recently, the state authorities of the Russian Federation have been developing measures to increase the role of the state in regulating the market economy, including the field of finance.
The financial activity of the state has its own organizational and legal features:
First, unlike other spheres of state activity, it has an intersectoral character, since the accumulation, distribution and use of financial resources affects all sectors and spheres of public administration. In addition, in the process of financial activity, the state controls the work of state bodies, as well as enterprises, organizations, institutions for the implementation of their tasks.
Secondly, the implementation of financial functions by the state proceeds (depending on their content, role, scale of action) in the form of activities of both representative and executive bodies authorities (government bodies). For example, the distribution of budgetary funds in the main areas of life of the Russian Federation or its subjects is carried out by representative bodies, and the distribution of financial resources within sectors of the economy - by executive authorities.
Thirdly, the sphere of financial activity belongs to the jurisdiction of both federal bodies and subjects of the Federation, as well as local governments. In addition, there is an area of joint jurisdiction of the Federation and its subjects.
As a control system, financial activity is carried out in a variety of ways. Their choice depends on a number of factors: the tasks of the state or municipalities at a particular stage; sources of their income; on the purpose of using the funds; on the ratio of the volume of financial resources at the disposal of the state or municipality, and the need for funds, on the state of the country's economy; priority of activities, etc.
So, to attract funds to the budget system, extra-budgetary state and municipal trust funds, methods of mandatory and voluntary payments are used. They cover several types of payments, each of which is unique. For example, the main obligatory payments to the state or local budget are taxes, fees, state duties from legal entities and individuals. There are obligatory payments and deductions credited to target off-budget funds. The mandatory payment method is also applied when state insurance(compulsory passenger insurance, etc.). Required reserves are deposited at the expense of mandatory deductions from banks in the Central Bank (Bank of Russia).
Along with this, voluntary methods are also used to form state and municipal funds: lotteries, loans, donations from legal entities and individuals, deposits in banks, etc.
When distributing public funds, two main methods are used: financing, i.e. their irrevocable and gratuitous provision, and lending, which means the allocation of funds on the basis of compensation and repayment. Both of these methods are divided into several types depending on the purpose of using the funds, their sources, the organizational and legal characteristics of the entities involved in these relations, and other factors. State and municipal organizations receive state funds through both financing and lending, non-state organizations - mainly through lending (for example, providing loans on favorable terms to farms).
The receipt in the process of financial activity of funds at the disposal of the state, legal entities and individuals, as well as their use is carried out through settlement operations. They are made by methods of non-cash cash settlements in various forms and cash payments.
Settlements of enterprises, institutions, organizations, state bodies and local governments are made mainly in non-cash form, payments by the population - mainly in cash. However, in the latter case, non-cash payments are also used (for example, when collecting income tax, insurance payments from the wages of workers and employees). The state is helping to expand the scope of non-cash payments, which is important for stabilizing the monetary system and more efficient use of money supply.
In external economic, scientific, cultural, and other relations, various forms of international settlements are used, and currency transactions are carried out.
The methods of financial activity of the state and municipalities changed according to their tasks at each stage of development. Significant changes have taken place in them at the present stage of transition to market relations. They have become more diverse, filled with new content. Thus, the number of taxes and other obligatory payments, voluntary methods of attracting funds has significantly increased. In financing institutions, a normative method is used, proceeding from the performance of a certain work (treatment of a patient, training of specialists, etc.), and not from the number of staff units. New methods have entered into credit relations, where banks become partners of economic entities, the interest rate for a loan, etc. is actively used.
Developing, acquiring new features, the financial market as a sphere for the sale of securities - shares, bonds and others, as well as credit. It is used to form the monetary funds of enterprises, organizations, as well as to replenish the financial resources of the state and local governments. Legislation protects the financial market from monopoly.
To a certain extent, the securities market in the country existed even before the market reforms (distribution of government bonds, credit), but in a limited area. Now the types of securities have also significantly diversified, the circle of entities issuing and acquiring them has increased, and the scope of bank credit has expanded.
When characterizing the financial activities of the Russian Federation at the present stage, it is important to note that it is carried out in the conditions of economic cooperation with the CIS countries. In doing so, Russia proceeds from the task of strengthening and developing its equal and mutually beneficial economic relations with these states, and developing integration relations with them. To regulate and develop such cooperation, a special body has been created - the Ministry for the Commonwealth of Independent States (Ministry of the Commonwealth of Russia). Within the framework of the CIS, there is an Interstate Economic Committee, consisting of deputy heads of government and being a permanent body of the Economic Union. * Agreements are also concluded on certain issues of financial activity (for example, on the avoidance of double taxation and the prevention of tax evasion).
Foreign economic relations are also carried out by the constituent entities of the Russian Federation within the limits of the powers granted to them by the Constitution of the Russian Federation and federal legislation, as well as by agreements between federal authorities and constituent entities of the Russian Federation. The general procedure for coordinating these ties is established by a special federal law.
The Importance of Financial Sustainability
One of the characteristics of the stable position of the enterprise is its financial stability. It is due both to the stability of the economic environment within which the enterprise operates, and from the results of its functioning, its active and effective response to changes in internal and external factors.Financial stability is a characteristic that indicates a stable excess of income over expenses, free maneuvering of the enterprise's funds and their effective use, an uninterrupted production process and product sales. Financial stability is formed in the process of all production and economic activities and is the main component of the overall sustainability of the enterprise.
An analysis of the stability of the financial condition on a particular date allows you to find out how correctly the company managed financial resources during the period preceding this date. It is important that the state of financial resources meet the requirements of the market and meet the needs of the development of the enterprise, since insufficient financial stability can lead to the insolvency of the enterprise and the lack of funds for the development of production, and excess - hinder development, burdening the costs of the enterprise with excessive stocks and reserves. Thus, the essence of financial stability is determined by the effective formation, distribution and use of financial resources.
Its external manifestation is solvency.
Solvency is the ability to fully fulfill their payment obligations arising from trade, credit and other payment transactions in a timely manner.
The assessment of solvency is given for a specific date. However, one should take into account its subjective nature and the fact that it can be performed with varying degrees of accuracy.
Solvency is confirmed by the data:
Availability of funds on current accounts, foreign currency accounts, short-term financial investments. These assets should have an optimal value. The more significant the amount of cash in the accounts, the more likely it can be argued that the company has sufficient funds for current settlements and payments. However, the presence of insignificant balances in cash accounts does not always mean that the company is insolvent: funds can be transferred to settlement, foreign currency accounts, to the cash desk within the next few days, short-term financial investments can easily be turned into cash. The constant crisis lack of cash leads to the fact that the enterprise turns into a "technically insolvent", and this can already be considered as the first step on the path to bankruptcy;
about the absence of overdue debts and delays in payments;
untimely repayment of loans, as well as long-term continuous use of loans.
Low solvency can be both accidental, temporary, and long-term, chronic. The reasons for this may be:
Lack of financial resources;
non-fulfillment of the plan for the sale of products;
irrational structure of working capital;
late receipt of payments from contracts;
surplus goods in safekeeping.
In the process of solvency analysis in financial planning for the future, a balance of non-payments is drawn up, the asset of which reflects indicators of non-payments: short-term debt on loans and settlement documents of suppliers, arrears to the budget and other non-payments (non-payment of wages, etc.).
There are two sections in the liabilities side of the balance sheet. In the first - "Reasons for non-payments" - indicate the lack of own working capital; overplanned inventories; goods shipped, but not paid for on time by buyers; goods in safe custody with buyers due to refusal of acceptance; immobilization of working capital in capital construction, etc. The second section - "Sources easing financial tension" (IOFN) - reflects temporarily free cash (own funds of the reserve and special funds), attracted funds (excess of normal accounts payable over receivables); bank loans for temporary replenishment of working capital.
In the economic literature, it is recommended to define the solvency ratio as the ratio of the cash balance and bank accounts, as well as short-term financial investments to the amount of urgent payments for wages, bank loans, budget, suppliers for acquired inventories. If the organization draws up form No. 4 "Cash flow statement", then it is possible to calculate the solvency ratio as the ratio of the sum of the balance of funds at the beginning of the year and cash receipts to the funds spent.
The highest form of enterprise sustainability is its ability to develop. To do this, the enterprise must have a flexible structure of financial resources and the ability, if necessary, to attract borrowed funds, i.e. be creditworthy.
An enterprise is creditworthy if it has the prerequisites for obtaining a loan and the ability to repay the loan in a timely manner with the payment of interest due from its own resources.
At the expense of profit, the enterprise not only repays its obligations to banks, the budget, insurance companies and other enterprises, but also invests in capital expenditures. To maintain financial stability, it is important not only to increase the absolute value of profit, but also its level relative to the invested capital or costs of the enterprise, i.e. profitability. It should be remembered that high profitability is associated with higher risk, which means that instead of income, the enterprise may suffer significant losses and even become insolvent.
Thus, the financial stability of an enterprise is such a state of its financial resources, their distribution and use, which ensures the development of the enterprise based on the growth of profits and capital while maintaining solvency and creditworthiness under conditions of an acceptable level of risk.
The financial stability of an enterprise is influenced by a huge variety of factors, such as:
The position of the enterprise in the commodity market;
production and release of cheap, in-demand products;
its potential in business cooperation;
degree of dependence on external creditors and investors;
presence of insolvent debtors;
efficiency of business and financial transactions, etc.
We present the classification of factors given by V.M. Rodionova and M.A. Fedotova:
According to the place of origin - external and internal;
by the importance of the result - main and secondary;
in structure - simple and complex;
by the time of action - permanent and temporary.
Internal factors depend on the organization of the enterprise itself.
Let's consider the main ones.
The sustainability of the enterprise primarily depends on the composition and structure of products and services provided, production costs. Moreover, the ratio between fixed and variable costs is important.
Another important factor in the financial stability of an enterprise, closely related to the structure of products and production technology, is the optimal composition and structure of assets, as well as the right choice of strategy for managing them. The art of managing current assets is to keep on the accounts of the enterprise only the minimum necessary amount of liquid funds, which is needed for current operational activities.
The more an enterprise has its own financial resources, primarily profits, the more stable its position. At the same time, not only the total mass of profit is important, but also its distribution, especially the share that is directed to the development of production.
The financial stability of the enterprise is greatly influenced by funds additionally mobilized in the loan capital market. The more money an enterprise can attract, the higher its financial capabilities, but the financial risk also increases - whether the enterprise will be able to pay its creditors in a timely manner.
Here, a large role is given to reserves as one of the forms of financial guarantee of the solvency of an economic entity.
So, the internal factors affecting financial stability are:
Industry affiliation of a business entity;
the structure of manufactured products (services), its share in the total effective demand;
the amount of paid authorized capital;
the value and structure of costs, their relationship with cash income;
the state of property and financial resources, including stocks and reserves, their composition and structure.
In addition, internal factors include the competence and professionalism of enterprise managers, their ability to take into account changes in the internal and external environment.
External factors include the economic conditions of management, the technique and technology prevailing in society, effective demand and the level of consumer income, the tax and credit policy of the government of the Russian Federation, legislative acts to control the activities of the enterprise, foreign economic relations, the system of values in society, etc.
Significance of the financial system
The concept of the financial system is a development of a more general definition of "finance". Finance is a historical category. By their nature, they are closely connected with the state, which needs money to perform its functions. In pre-capitalist formations, state revenues and expenditures were predominantly in-kind. Most of the state needs were met by various kinds of duties and revenues from in-kind fees.With the disintegration of feudalism and the gradual development of the capitalist mode of production, monetary incomes and expenditures of the state began to acquire ever greater importance; the share of in-kind dues and duties has sharply decreased. This process is intensified with the expansion of the sphere of commodity-money relations, the growth and complexity of the functions of the state.
In the early stages of the development of the state, there was no distinction between the resources of the state and the resources of its head: the monarchs disposed of the country's funds as their own property. With the separation of the state treasury from the personal cash desk and property of the monarch, the concepts of state finance, state budget, and state credit arise.
Under the conditions of the capitalist mode of production, commodity-money relations are most widely developed. They cover all spheres and functions of the public economy. In turn, finance, expressing the movement of value, is playing an increasingly important role in the life of the state. In its essence, finance is economic relations associated with the formation, distribution and use of funds of funds in the process of distribution and redistribution of national income.
The financial system is a set of financial links designed to ensure the state's implementation of its political and economic functions, and consists, on the one hand, of public finances, and on the other, of the finances of private enterprises, corporations, monopolies.
In the era of pre-monopoly capitalism, the state financial system had two links - the state budget and local finance. They made it possible to form funds of funds with the help of which the state performed its functions. Under the influence of the development of productive forces, profound changes in the economy, the structure of the financial system is changing. There is an allocation and development of new financial units, the growth of their independence.
At the present stage, the state financial system in developed foreign countries includes four links: the state budget; local finance; special off-budget funds and finances of state enterprises. The leading element of public finance is the state budget. In terms of its material content, it is the main centralized fund of the state's funds.
The state budget is the main means of redistributing the national income. Up to 40% of the country's national income is redistributed through this link in the financial system. The state budget concentrates the largest revenues and the most politically and economically important national expenditures. The main financial institutions - taxes, internal loans, expenses - find an organic link in it.
The main revenues of the state budget are taxes, ranging from 70 to 90% or more of the total amount of its revenues. The main taxes are assigned to the state budget in countries with developed market economies - personal income tax, corporate income tax, excises, value added tax, customs duties. The main expenses are also made from the state budget for: military purposes, intervention in the economy, maintenance of the state apparatus, social spending, subsidies and loans to developing countries.
The state budget, by virtue of its position, is closely connected with other parts of the financial system. It acts as a coordinating center that provides them with the necessary assistance in a market economy. This assistance in the form of budget subsidies, loans, and guarantees ensures the normal functioning of the remaining links of the financial system and the solution of the tasks assigned to them.
The next most important financial link is the system of local finance. In modern conditions, under the influence of the development of productive forces, scientific and technological progress, there is an increase in the role and influence of local authorities. The scale of the local economy, their connection and dependence on big capital, are growing, the functions of local authorities are expanding and becoming more complex. All this enhances the importance of local finance, increases their role and share in the financial system. Local finance covers a wide group of secondary taxes (mainly property taxes), the local credit system, and special funds. The central place in this link belongs to local budgets, which are not part of the state budget and have a certain independence. The structure of local finance is determined state structure and the corresponding administrative division of the state.
In modern conditions, this link of the financial system is increasingly used for economic purposes, to regulate economic processes. To this end, a significant part of local budget funds is directed to the development of economic and social infrastructure.
A special financial link is formed by special government funds, which have a certain independence, are separated from the state budget and are managed directly by the central, and in some cases - by local authorities. These include social insurance funds, various trust funds, as well as state and semi-state financial and credit institutions.
The initial task of these funds was to finance individual targeted activities. Subsequently, they acquire the value of a reserve, which governments resort to in cases of financial difficulties, i.e. are used to increase the agility of the financial system. Unlike state budgets, special funds are subject to much less control by parliaments, which facilitates their use and increases the interest of governments in their growth. An independent financial link is formed by the finances of state enterprises. Its emergence is associated with the development of the public sector in the economy of a number of Western European countries (Great Britain, France, Italy, Germany, Austria) - a process that became most widespread after the Second World War. Its main task is to support the private economy by preserving and developing important industries that, due to their specifics, have low profitability and are therefore unprofitable for entrepreneurship (railway, air transport, electricity, gas, coal industries, etc.). State-owned enterprises thus represent an attempt to resolve the contradiction between private enterprise interests and national economic problems. At the same time, the finance of state enterprises is a link in the financial system, through which the state participates in the primary distribution of national income, accumulating in its hands a part of the income generated by these enterprises.
State enterprises have fixed and circulating funds assigned to them, are on an independent budget and carry out legally regulated relationships with the state budget. Depending on the type of enterprise, they have varying degrees of autonomy, production and financial independence.
The second sphere of the financial system of developed foreign countries is the finance of private enterprises, corporations, monopolies, which arise in the course of economic activity and ensure the process of production and profit. They materialize in the form of money capital, various monetary funds of the enterprise.
Due to the fact that the activities of enterprises are carried out on the basis of the individual circulation of capital, these monetary funds are of a separate, decentralized nature. At the same time, the state has a direct relationship with the finances of private enterprises. They are expressed in the form of collection of payments to the state budget, the formation of an amortization fund, the regulation of credit relations, the provision of state subsidies.
Private enterprises make up the vast majority of material production, they account for the main share of the generated gross domestic product and national income. Therefore, the state uses various methods(including financial ones) to stimulate the activities of these enterprises, the growth of their savings, various monetary funds associated with the acceleration of scientific and technological progress, the creation of reserves, and the improvement of the skills of workers. The state establishes a preferential regime for taxing profits, a system of accelerated depreciation, in some cases provides budget loans, and provides other forms of financial support. In turn, private enterprises through their payments participate in the formation of the revenue base of the state budget and other state funds.
In view of the foregoing, it is possible to expand the definition of the financial system. Each link in the financial system is a specific area of financial relations, and this system as a whole is a set of various areas of financial relations, in the process of which funds of funds are formed and used.
In other words, the financial system is a system of forms and methods of formation, distribution and use of state and enterprise funds.
Importance of Financial Statements
Accounting (financial) statements - a system of indicators reflecting the property and financial position of the enterprise at the reporting date, as well as the financial results of the enterprise for the reporting period.The main requirement for financial statements is that they must give a reliable and complete picture of the property and financial position of the organization, its changes, as well as financial performance.
Accounting (financial) statements of organizations (with the exception of budget ones) consist of:
– balance sheet;
– profit and loss statement;
– annexes to them, in particular the cash flow statement, the appendix to the balance sheet and other reports provided for by the regulatory acts of the accounting regulatory system;
- explanatory note;
- an auditor's report confirming the reliability of the organization's financial statements (if it is subject to mandatory audit in accordance with the law).
Numerical indicators in the financial statements are given for at least two years - the reporting and preceding the reporting (except for the report compiled for the first year).
Joint stock companies open type, banks and other credit organizations, insurance organizations, stock exchanges, investment and other funds created at the expense of private, public and state funds (contributions) are required to publish annual financial statements no later than June 1 of the year following the reporting one.
The publicity of financial statements consists in their publication in newspapers and magazines available to users of financial statements, or distribution among them of brochures, booklets and other publications containing financial statements, as well as in their transfer to the territorial bodies of state statistics at the place of registration for provision to interested users.
The annual accounting (financial) statements of the organization (except for budget ones) are open to interested users. The enterprise should provide an opportunity for users to familiarize themselves with it.
External users of accounting (financial) statements are banks, investors, creditors, suppliers and contractors, buyers and customers working at the enterprise, authorities, public organizations and others. External users can view the annual financial statements and receive copies of them with reimbursement of copying costs.
The internal users of financial statements include managers, managers of various levels, founders, participants and owners of the property of the enterprise.
All of them have some need for information about the enterprise to study it.
Banks, lenders, and lenders are interested in information that makes it possible to determine the feasibility of granting loans, the conditions for their provision, and to assess the risk of repayment of loans and the payment of interest. Lenders providing long-term loans are interested not only in the liquidity of the enterprise for short-term obligations, but also in the solvency of the enterprise from the standpoint of its stability in the future, i.e. also interested in information that allows you to judge the profitability of the business.
Investors (including potential owners) are interested in assessing the risk and profitability of ongoing and proposed investments, the ability of the enterprise to generate profits and pay dividends.
Suppliers and contractors are interested in whether the company will be able to pay them for its obligations on time, i.e. balance sheet liquidity and financial stability as a partner's stability factor.
Buyers and customers are interested in information that testifies to the reliability of existing business relationships and determines the prospects for their further development.
Employees are interested in information about the profitability and stability of the enterprise as an employer, in order to have a guaranteed salary for their labor and a job.
Authorities are interested in information for the implementation of the functions assigned to them, for statistical monitoring and others. According to the financial statements of the enterprise, the Russian Federal Service for Insolvency and Financial Recovery and its territorial agencies analyze and assess the financial condition of the enterprise in terms of establishing an unsatisfactory balance structure in order to prepare a decision on insolvent enterprises. The tax authorities use the reporting data to exercise their right (as well as the debtor, creditor and prosecutor), provided for by the Federal Law on Insolvency (Bankruptcy), to apply to the arbitration court with an application for declaring the debtor bankrupt due to non-fulfillment of monetary obligations. The criterion for determining the unsatisfactory structure of the balance sheet of insolvent enterprises is the liquidity and financial stability of the enterprise.
Shareholders, owners of the enterprise are also interested in the amount of dividends, profitability of the enterprise in the future, its liquidity and financial stability in terms of the riskiness of invested capital.
Internal users (heads, managers) on the basis of financial statements analyze and evaluate the indicators of the financial condition of the enterprise, determine trends in its development, prepare an information base for financial statements that provides all interested users.
Accounting information serves as the basis for making decisions on investment, financial and operating activities.
Internal analysis is aimed at predicting the expansion of production activities, the choice of sources and the possibility of attracting investments in certain assets, maintaining the liquidity of the enterprise or the likelihood of its bankruptcy. The accounting (financial) statements themselves can serve as an assessment of the work of managers (according to the coefficients characterizing the financial situation, external users can judge the work of managers). In addition, the enterprise itself is interested in reliable partners and refers to reading their statements and statements of future potential counterparties.
Providing users (primarily external ones) with complete and objective information about the financial position and financial performance of economic entities is the most important task of international standards, in accordance with which the concepts for the development of modern Russian accounting and reporting are built.
According to the adopted concept, the Ministry of Finance of the Russian Federation has now approved accounting regulations (standards) that regulate the procedure for the formation of accounting information and the procedure for disclosing information in accounting (financial) statements. The use in practice of the requirements for disclosure of information in the accounting (financial) statements, provided for by the relevant provisions (standards), provides a more complete information base for an objective and comprehensive analysis of the financial condition of the enterprise, its sustainable development.
Thus, information in which all users are interested should make it possible to assess the ability of an enterprise to reproduce cash and similar assets, generate profits, operate stably, and also make it possible to compare information over different periods of time in order to determine trends in indicators of interest to users. and financial situation in general.
Economic Importance of Finance
The socio-economic essence of finance lies, first of all, in ensuring regular commodity-money circulation and meeting the need for financial resources.Finance is a product of the economic development of society, which was formed in the process of the formation of the state and the development of commodity-money relations.
The reason for the emergence of finance was the need for business entities and the state in the financial resources necessary to ensure their activities.
The science of finance studies the socio-economic essence of finance through the study of the totality of financial relations that arise in the process of formation and use of cash income and funds at different levels of the economic system: national (macro level) regional (level of administrative-territorial units) and at the level of individual subjects of jurisdiction economy (micro level). Separately allocated international finance.
In modern financial and economic literature, finance is considered as a system of socio-economic relations that arise regarding the distribution and redistribution of the value of the gross domestic product, and, under certain conditions, national wealth in order to form financial resources for business entities and the state, and use them for extended reproduction, satisfaction of other public interests and needs.
Finance is a set of monetary relations that are associated with the formation, mobilization and placement of financial resources, as well as with the exchange, distribution and redistribution of the value of the gross domestic product created on the basis of the use of finance, and under certain conditions, national wealth.
The main features of finance:
Exchange and distribution character;
- the movement of value from one subject to another;
- monetary form of relations;
- formation of income and implementation of expenses;
- equivalent (by purpose) nature of exchange and distribution and non-equivalent by redistribution.
Finance is a complex multifaceted social phenomenon, which is characterized by different essential features and forms of manifestation. An important feature of finance is its monetary nature. Financial resources act as material carriers of financial relations.
The use of financial resources occurs mainly through special-purpose funds, therefore, there is also a definition of finance as an economic category, which reflects the creation of the distribution and use of funds of financial resources to meet the needs of economic activity, provide various services to the population from the state, ensure that the state performs its functions.
The socio-economic essence of finance in a market economy is most fully reflected in their functions.
The value of financial leverage
The financial leverage ratio (debt-to-equity ratio) is an indicator of the ratio of debt and equity capital of an organization. It belongs to the group of the most important indicators of the financial position of the enterprise, which includes coefficients of autonomy and financial dependence that are similar in meaning, also reflecting the proportion between the organization's own and borrowed funds. The term "financial leverage" is often used in a more general sense, speaking of a principled approach to business financing, when, with the help of borrowed funds, an enterprise forms a financial leverage to increase the return on its own funds invested in the business.The financial leverage ratio is calculated as the ratio of debt to equity:
Financial Leverage Ratio = Liabilities / Equity
Both the numerator and the denominator are taken from the liabilities side of the organization's balance sheet. Liabilities include both long-term and short-term liabilities (i.e., whatever is left after subtracting from the equity balance).
Normal value
Optimal, especially in Russian practice, is an equal ratio of liabilities and equity (net assets), i.e. financial leverage ratio equal to 1. A value of up to 2 may be acceptable (for large public companies, this ratio may be even higher). With large values of the coefficient, the organization loses its financial independence, and its financial position becomes extremely unstable. It is more difficult for such organizations to attract additional loans. The most common ratio in developed economies is 1.5 (ie 60% debt and 40% equity). A too low value of the financial leverage ratio indicates a missed opportunity to use financial leverage - to increase the return on equity by involving borrowed funds in activities.
Like other similar coefficients that characterize the structure of capital (autonomy coefficient, financial dependence coefficient), the normal value of the financial leverage coefficient depends on the industry, the scale of the enterprise and even the method of organizing production (capital-intensive or labor-intensive production). Therefore, it should be evaluated in dynamics and compared with the indicator of similar enterprises.
Importance of Public Finance
Public finances are part of the financial system of the state. It is central, since through it the influence of the state on economic and social development is carried out.In its economic essence, public finance is a set of distribution relations that arise in the process of formation and use of the state's financial resources.
They are designed to provide the state with its functions.
Public finance is a science that is at the intersection of economics and politics, studying the revenues and expenses of public authorities, as well as their relationship.
With the help of the country's finances, the state distributes and redistributes GDP.
The subjects of state finance are, on the one hand, the state, on the other hand, the population and business entities.
They cover 80% of all monetary resources and include a variety of financial institutions through which the state carries out its activities.
Composition of public finances:
1. The totality of all state budgets.
2. Centralized and decentralized special-purpose funds.
3. Finances of enterprises and organizations of various forms of ownership.
4. State loan.
State, personal, property insurance.
The functioning of public finances is inseparable from the state. Their necessity is due to the fact that in any type of economic system, the main purpose of the state is to provide financial resources for those needs that cannot be satisfied through the market mechanism, as well as personally by each person.
Needs:
environmental protection;
- conducting scientific research;
- secondary education;
- labor protection and health;
- structural transformations of the economy;
- law and order.
Proceeding from this, the state builds its financial policy, determines the level of intervention in economic activity, social security of citizens. These factors determine which part of the GDP should be concentrated in financial institutions created by the state.
For the first time, the functions of the state and public finance in a market economy were formed in 1978 (Theory and Practice of Public Finance - R. A. Musgrave).
Functions of public finance:
1. The provision of public goods and services, or the regulation of the process in relation to which the distribution of limited production factors (labor, capital) between the public and private sectors occurs.
2. Adjusting the distribution of income and property.
3. Maintenance high level employment and price stability.
The state can influence the distribution of scarce resources using methods:
1. Exercise of ownership.
2. Direct administrative orders with appropriate penalties for their violation ( building codes, determination of the maximum achievable level of environmental pollution, conscription, administrative methods in the field of the labor market and foreign trade).
3. Direct provision by the state of certain benefits, which are financed by general taxes and fees (state orders for scientific research).
4. Use of fees and taxes to drive production or consumption (fees for water treatment, tax incentives for investment in environmental protection).
5. Formation of the tax system, taking into account economic and structural policies (tax incentives for savings).
6. State subsidies to enterprises, cheaper loans from budgetary funds, provision of public goods at preferential prices.
7. Partial financing by the state of entrepreneurial risk by providing guarantees.
The state influences the distribution and redistribution of income and property of citizens with the help of tools:
1. Taxes (tax on income, property).
2. Direct provision of public goods without the participation of the user in the costs (free education, health care).
3. Provision of various types of financial assistance (subsidies for housing and utilities).
4. State subsidies.
The state carries out activities aimed at the best use of production resources.
An analysis of the theoretical concepts and practices of developed countries shows that in a market economy, the state takes on the solution of those tasks that cannot be solved by the private sector, i.e. the state is necessary for a society to be viable.
Importance of local finance
Local finance performs three functions:1. Distribution function - manifests itself in the order of formation of income and expenditure of local budgets, trust funds of local governments. Funds are initially accumulated in local budgets and trust funds, and then distributed and used to meet a variety of local needs. Through the system of interbudgetary relations, resources are redistributed between separate administrative-territorial units in order to ensure financial equalization.
2. Control Function - is implemented by controlling the drafting of the local budget, its consideration and approval, as well as the implementation of local budgets, and control of reporting on this implementation. The scope of the control function includes various funds of funds and, in general, financial resources at the disposal of local governments. The control function sets as the basis the task to ensure the proportions of distribution and redistribution of financial resources, their targeted and economic use.
3. Stimulating function - is to create conditions under which local governments are directly interested in increasing the volume of budget revenues, additional attraction of national and local tax revenues, as well as searching for alternative sources of income, efficient use of financial resources, i.e. the implementation of the stimulating function consists in the formation of local budgets' own revenues.
Local finance plays a big role in economic system each state where financially effective local self-government is recognized and operates.
Local finance in the economic system of the state:
Influence:
On the socio - economic development of the country;
- financial security of the state;
- financial stability of economic development;
- welfare of the population;
- development of democracy in society.
Used as a tool:
Redistribution of gross domestic product;
- state regulation of the development of territories;
- economic, including financial policy;
- state regional policy.
Determine:
The volume and quality of the provision of local public services to the population;
- state and development of the local economy;
- financial base of local self-government;
- provision of constitutional guarantees to the population;
- the state of financial alignment.
Local finances play a significant role in ensuring the financial security of the state, which is one of the most important components of the country's economic security. Financial security, which is of decisive importance in the functioning of the economic system, in general, affects the spheres of public life, without its provision it is impossible to achieve both current and long-term national development goals.
The main indicators of financial security include:
The degree of implementation of the consolidated and state budget;
- deficit of the state budget and its financing;
- formation and use of off-budget funds;
- the level of redistribution of the gross domestic product through the consolidated budget.
Thus, local finance, as an integral and complex system of economic relations, acquires an important role in reforming the domestic economy, creating the foundations of a market economy, and forming a democratic socially oriented state.
Modern changes in the field of local finance are aimed at their further improvement in order to achieve the following goals:
1. stabilization of the economic system;
2. adaptation of economic entities, in particular small and medium-sized enterprises, to market transformations;
3. implementation of tasks of the state regional policy;
4.stimulation entrepreneurial activity and investment activity;
5. solution of social, demographic, ecological, national and other problems of the regions.
Importance of the financial market
Place of the financial market in the financial system. For the normal functioning of the economy, it is necessary to constantly mobilize, distribute and redistribute financial resources between its spheres and sectors.The financial system does this by:
Mobilizing budgetary resources through taxes and allocating them in accordance with the needs of the government;
a financial market that mobilizes savings on a voluntary basis and provides loans or investments in response to market conditions.
In a market economy, the subjects of economic relations are the state, enterprises, and the population. In the process of managing, some have a need for funds to finance their activities, while others have surpluses of financial resources that can be used for investment. The financial intermediaries of such a cycle are various financial institutions (commercial banks, insurance companies, pension funds, investment funds, etc.).
Thus, there is a need for the existence of a market for financial resources. The financial market is a monetary relationship that develops in the process of buying and selling financial assets under the influence of supply and demand.
The financial market performs a number of functions:
It ensures the interaction of buyers and sellers, as a result of which such prices for financial assets are set that balance supply and demand for them (balanced price, or market clearing price). Differences between sellers and buyers remain, they give rise to changes in price, which culminate in the agreement of the two parties to the act of purchase and sale of money capital.
Introduces a mechanism for the repurchase of financial assets and thereby increases their liquidity. Redemption of financial assets from investors is provided by financial intermediaries (market dealers).
It helps to find the counterparty of the agreement, significantly reduces the costs of operations and information costs, as well as the corresponding investment risks.
The significance of the financial market is to ensure the distribution of resources for expanded reproduction on a commercial basis. It also has certain features in contrast to the markets for manufactured products (goods and services), the labor market. Firstly, the main instrument of turnover - money capital - a specific product; secondly, the activities of market participants are reduced to one denominator - efficiency; thirdly, only professionals can work in this market.
With the help of the mechanism of functioning of the financial market, the volume and structure of demand for financial assets are determined.
Financial market participants are:
State (central and local authorities and administration, central bank).
Non-financial institutions (enterprises, agricultural associations, institutions, etc.).
Population.
Foreign market participants (international organizations, foreign governments, corporations, financial institutions, individuals).
Professional market participants:
a) financial institutions (commercial, investment and savings banks, savings and credit associations, credit unions, investment, insurance companies, pension funds, etc.);
b) infrastructure institutions (organizers of trade - exchanges and over-the-counter systems, clearing centers, depositories, registrars, information and rating agencies, centers for training specialists, production of forms of securities).
The financial market consists of the money market, the credit market, the securities market (stock market), the foreign exchange market and the insurance market.
The money market is a short-term investment. In this market, financial assets are in circulation, the turnover period of which does not exceed one year: treasure and commercial bills, certificates of deposit, banker's acceptances. The credit and stock markets are a capital market designed for long-term investment in fixed assets. On the capital market, medium and long-term loans are provided, medium- and long-term debt securities are in circulation, as well as property instruments - shares, for which the turnover period is not set.
The domestic foreign exchange market is separated and strictly regulated in relation to foreign exchange control, the rules for the circulation of foreign currency on the territory of Ukraine, the fundamentals of the functioning of the interbank foreign exchange market, etc.
The insurance market of Ukraine is a special area of economic relations associated with the development of the insurance business.
A special place in the structure of the financial market is occupied by the securities market (stock market). He is important element market infrastructure.
The primary market is the market for first and repeated issues, where the initial placement of financial assets among investors and the initial investment of capital in various sectors of the economy are carried out.
Previously issued financial assets have turnover in the secondary market. Operations in the secondary market do not increase the total number of financial assets and total investment in the economy. Important features of the secondary market - liquidity, the ability to absorb large amounts of financial assets in a short time at low cost, speculative transactions associated with an increase in income. The financial market as a historical category appeared simultaneously with finance and, with the development of commodity-money relations, was transformed into a special sphere of economic relations. The development of commodity production at a certain stage caused an acute need among its participants for additional capital necessary for the further expansion of production. This capital is called investment capital and is used to create jobs, purchase tools and objects of labor, new technologies and other elements of production.
Financial market as an economic category. Investment, as mentioned, is provided through a developed financial market. Let's find out how this market and its segments differ from others. In the economic literature, there is no single interpretation of the economic essence of the concept of "financial market". Often it is identified with the money, credit or investment market.
The concept of "financial market" is very broad, since it covers not only financial ties, but also many forms of property relations and their redistribution (transformation).
The financial market is a system of economic relations in the process of which the country's financial assets are distributed and redistributed under the influence of supply and demand for them from different economic entities. These economic relations are determined by objective economic laws and the financial policy of the state, which, in principle, form the essence of the financial market, that is, connections and relations both directly in the market and with other economic categories.
Functions of the financial market.
The essence of the financial market and its role in the economy of the state are most fully revealed in its functions, the main of which are the following:
Motivated mobilization of savings of individuals, private businesses, government agencies and foreign investors and the transformation of accumulated funds into loan and investment capital;
realization of the value embedded in financial assets and bringing financial assets to consumers (buyers, depositors);
redistribution of funds of enterprises on mutually beneficial terms for the purpose of their more efficient use;
financial use of participants in the economic cycle and financial support for the processes of investment in production, expansion of production and share participation on the basis of determining the most effective directions for the use of capital in the investment sphere;
impact on money circulation and acceleration of capital turnover, which contributes to the activation of economic processes;
formation of market prices for certain types of financial assets;
insurance activities and creation of conditions for minimizing financial and commercial risks;
operations on export-import of financial assets and other financial operations related to foreign economic activity;
lending to the government, local self-government bodies by placing government and municipal securities;
distribution of state credit resources and their placement among the participants in the economic cycle.
Importance of financial policy
The successful functioning and development of the economy of any state is largely determined by the ability of state and municipal authorities to implement the functions assigned to them to ensure economic stability, the defense capability of the state, develop the social sphere, and improve the standard of living of the population. The implementation of these functions is impossible without the formation of a financial base for the activities of government bodies, the regulation of financial relations in society, the creation of a financial mechanism for their implementation in accordance with the goals of economic development.Changing the goal of economic development necessitates changes in financial relations in its sectors, areas of activity, the sources of formation of financial resources and the forms of their use are being reviewed. Under these conditions, the state develops an appropriate financial policy, which is a set of targeted measures of the state in the field of the use of finance in order to determine the most effective measures that meet modern conditions to create a financial basis for the implementation of the economic policy of the state.
The subjects of financial policy are the legislative (representative) and executive authorities, which determine and approve the main directions for the development of financial relations, develop specific ways of organizing them in the interests of business entities, the population and the state.
The object of financial policy is the totality of financial relations and financial resources that form the spheres and links of the financial system of the state.
Development of a scientifically based concept for the development of finance;
determination of the main directions for the use of finance for the future and the current period;
development of specific ways to implement the main directions of the use of finance in the future.
The development of a scientifically based concept for the development of finance is carried out in order to identify the objective need for the implementation of the planned financial policy measures and justify the change existing mechanism implementation of financial relations. In modern conditions, the financial policy of most states is based on various concepts of state regulation of the economy. Depending on the stage of the economic cycle (economic recession, depression (stagnation), recovery, economic recovery) at which the country's economy is located, the subjects of power use a restrictive or stimulating (stabilization) financial policy.
In the conditions of economic recession and depression, there is a reduction in trade, a decrease in the effective demand of the population, the income of business entities, a decrease in the investment activity of investors, an increase in unemployment, and an increase in inflation. At these stages of the economic cycle, the state uses a stabilization financial policy, which is associated with stimulating the business activity of business entities by reducing taxes and increasing government spending to support strategically and socially significant sectors of the economy. Under these conditions, the state mobilizes additional financial resources in the financial market, so the government's debt management policy should be given increased attention.
At the stages of economic recovery and recovery, the business activity of business entities increases, the real volume of their income grows, trade increases, and social tension in society decreases. The state gets the opportunity to increase the amount of mobilized revenues, repay existing debt obligations ahead of schedule, and pursue an active investment and innovation policy. Fiscal policy in these conditions is of a contractionary nature, which implies a reduction in public spending during the stages of economic recovery and recovery and an increase in the tax burden during the stage of economic recovery to prevent overheating of the economy and slow down economic growth.
To achieve the stability of economic development, the functioning of the economy can be ensured on the basis of the built-in stabilizers, which include automatic changes in tax revenues and transfer payments depending on the stage of the economic cycle. If the financial policy is built taking into account the action of built-in stabilizers, then when developing it, special attention should be paid to making forecasts for the economic and social development of the state, building models for the development of the tax and budget systems, the domestic financial market, depending on the stage of the economic cycle.
The determination of the main directions for the use of finance for the future and the current period is based on the goals and objectives of the state's economic policy, the allocation of priority sectors in the economy, the determination of the conditions for the development of the social sphere, the composition of the powers of state and municipal authorities in the financial and budgetary sphere, the assessment of domestic and international state positions. Accounting for these factors makes it possible to develop a financial policy that meets the conditions of the state's economic development. The development of specific ways to implement the main directions of the use of finance involves the development of ways to solve the set goals and objectives that will contribute to the implementation of the main directions of financial policy in a certain period of time. So, for example, if its task is to reduce the volume of the state debt of the Russian Federation, then possible ways of realizing this task should be identified, among which are the early repayment of existing debt obligations, reducing the volume of borrowings in the domestic and foreign financial markets, negotiating with creditors on the possibility of writing off part of the debt. However, it should be borne in mind that the development of a mechanism for the implementation of these measures to manage the public debt of the Russian Federation, its legal regulation does not relate to financial policy, but to its implementation, respectively, in the financial mechanism and financial law.
Financial policy can be classified not only by content, but also by other criteria:
According to the territorial criterion, a national (federal), regional and local financial policy is distinguished. The development of a financial policy at each level of government allows in the future to provide a financial basis for the development of both the state as a whole and each territorial and municipal entity;
according to the time criterion, financial policy is divided into financial strategy and financial tactics. The financial strategy includes large-scale goals and objectives of financial policy that have an impact on the development of society as a whole, the implementation of which is always of a long-term nature.
At present, the financial strategy includes the development of a system of anti-crisis measures to stabilize and further develop the state economy in the conditions of an economic downturn, including reducing the tax burden on business entities, especially in the field of medium and small businesses; additional financial support from the state of socially unprotected and low-income segments of the population; further implementation of the reform of pension, medical and social insurance in the context of the economic downturn; revision and search for new sources and mechanisms of financing both the economy as a whole and priority sectors for the state, which determine the specialization of the Russian economy in the global economic system and allow realizing national competitive advantages.
Financial tactics combines the tasks and measures of financial policy that relate to a certain stage of economic development and must be implemented in a specific financial period. An example of financial tactics is the reduction of tax rates for certain types of taxes, the improvement of the application of special tax regimes by small businesses, the expansion of opportunities for the use of accelerated depreciation of technological equipment, the regular indexation of social payments, the increase in the effectiveness of social benefits and guarantees for socially unprotected, low-income segments of the population. At the same time, financial measures of a tactical nature should be carried out within the framework of the financial strategy and cannot contradict it in order to avoid the occurrence of negative consequences of their impact on the functioning of the financial system and the economy as a whole; depending on the objects of influence, they distinguish financial policy in the field of finance of business entities and financial policy in the field of state and municipal finance. As part of the latter, one can single out budget policy and policy in the field of state social insurance.
The budgetary policy of the state is the main component of financial policy, since it determines the conditions and principles for organizing financial relations in the formation of the revenue base of budgets, in the course of budget expenditures, and in the organization of interbudgetary relations.
Budget policy directly affects the size and proportion of financial resources centralized by the state and determines not only the current structure of budget expenditures, but also the prospects for using budget funds for the development of the economy and the social sphere. In addition, budget policy predetermines the organization of financial relations between business entities and the state in the course of implementing tax policy, conducting state investment policy, and developing budget policy in relation to priority sectors and activities.
The main goals and objectives of the budget policy for the current financial year and the medium term are determined in the annual Budget Message of the President of the Russian Federation to the Federal Assembly.
When developing the goals and objectives of the social policy of the state important place is assigned to the development of policy in the field of state social insurance on the principles corresponding to the market conditions of management. At the same time, the state assesses the possible degree of participation of economic entities in its implementation, determines its own financial possibilities for the implementation of social guarantees to the population, adjusts the directions for the development of state social insurance, methods of mobilization and forms of spending state social non-budgetary funds in accordance with the current conditions for the functioning of the economy. The policy in the field of state social insurance makes it possible to mitigate the impact of adverse factors affecting the working capacity of the population, stimulate the creation of safe living and working conditions, improve the health of the nation and mitigate the adverse impact of market economic conditions on socially unprotected segments of the population.
The financial policy in the field of finance of business entities includes the development of (Basic measures in the field of state depreciation policy, development of priority activities, regulation of business activity of business entities in accordance with the goals of the economic development of the state.
The value of financial policy lies in the results that can be obtained in the course of its implementation both during the financial year and in a longer period.
In the course of developing and implementing the goals and objectives of financial policy, the following factors influence its effectiveness:
A scientific approach to the development of the concept of financial policy, which must meet the conditions of the economic development of the state, the stage of the economic cycle and the provisions of financial science, take into account the laws of social development;
forecasting possible consequences implementation of the proposed activities in determining the main directions for the use of finance for the future and the current period and in the course of developing specific ways to implement the main directions for the use of finance. The validity of the proposed measures and forthcoming decisions on the financial issues of the country's development should be supported by appropriate calculations, which make it possible to determine not only the total cost of the state's expenses for the implementation of the goals and objectives of the financial policy, but also to assess their financial consequences;
taking into account the accumulated experience in the course of implementing the financial policy in the previous period in order to identify both its positive results and negative consequences that may adversely affect the further development of the state economy;
a clear definition of macroeconomic indicators that should serve as a benchmark for assessing the effectiveness of financial policy, which implies the implementation of a financial policy aimed at results;
taking into account national and geographical features that directly affect the effectiveness of the policy in the field of interbudgetary relations and the choice of policy priorities in the field of budget expenditures at the regional and municipal levels;
an integrated approach in the development and implementation of financial policy, involving the coordination of goals and objectives of budget policy, policy in the field of state social insurance, financial policy in the field of finance of business entities, their relationship. At the same time, all the constituent elements of financial policy should be focused on achieving the common goal of economic development, and the financial policy itself should be coordinated and interconnected with other components of the state's economic policy - monetary policy, pricing policy, insurance policy, foreign exchange policy of the state;
multi-variant financial policy, which is built taking into account possible changes in the conditions for the functioning of the state economy. In modern conditions, much attention is paid to the development of financial forecasting and medium-term financial planning, they are considered as a tool for scientific foresight, variant analysis, obtaining additional information when developing financial policy;
taking into account the internal situation and international positions of the state, which determine the features of its economic development. The financial policy of the state is built taking into account competition in world markets, financial support is provided for its own producers and exporters, protection of the interests of national companies abroad, and the possibility of attracting foreign investment in the state economy.
The implementation of financial policy should also provide for the growth of financial resources at the disposal of business entities, contribute to the creation of a solid financial basis for the activities of government bodies to implement the tasks and functions assigned to the state, ensure the stability of social production in order to improve the economic situation of the state and social protection of the population.
The type of economy also influences the construction of the state's financial policy. Thus, in the conditions of a centrally planned economy, with the use of an administrative-command management system, financial policy is carried out with the aim of mobilizing financial resources to the maximum extent possible at the macro level and subordinating the financial and economic activities of business entities to the interests of the state. The financial policy is built in conditions of directive financial planning and centralized distribution of financial resources between sectors of the economy and organizations in accordance with the main indicators of the state plan.
In a market economy, the main goals of financial policy are to mitigate the adverse effects of market economic conditions on business entities and the population, to ensure the development of economic sectors (for example, education, culture, national defense) and activities that are of strategic importance, but cannot develop under conditions competitive environment, achieving a balance of financial interests of public authorities, local governments, business entities and the population. These goals are also characteristic of the modern financial policy of the Russian Federation.
The Importance of Municipal Finance
Municipal finance is a set of social and economic relations that arise regarding the formation, use and distribution of financial resources in order to solve problems of a local nature. These relations arise between the population that lives on the territory of the municipality and local governments, and business entities.Municipal finance includes:
Extrabudgetary municipal funds;
- funds of local budgets;
- municipal and state securities owned by local governments;
- other funds that are in municipal ownership.
The fundamental principles of municipal finance are:
Financial state support;
- the principle of independence;
- the principle of publicity.
The essence of municipal finance is as follows: cash flow is the material basis of finance. Real money turnover is an economic process that causes the movement of value and is accompanied by a flow of settlements and cash payments. Financial resources, which are the source of funding for reproduction, are the object of real money turnover.
Municipal and state finances identify economic relations that are associated with the provision of centralized sources of financing for the municipal and state sectors of the economy, the most significant programs for the development of the public sector and production, public sector institutions and organizations, and so on. Their functioning is fully aimed at achieving universal goals for the development of a socially oriented market economy.
Municipal and state finances function within the boundaries of the financial state system and are directly the central link.
Finance largely depends on the perfect transformations in the relationship between the various parts of the financial system. First of all, this refers to the links between micro-level finance and macro-level finance. Finance at the macro level, and above all the municipal and state budgets, are based on the financial prospects of enterprises. Finances largely contribute to the achievement of the goals of overall economic development, so their optimal organization is necessary. The chosen method of organization largely determines the qualitative side of finance. The use and distribution of financial resources in the state is carried out with the help of an integrated system for managing financial flows.
The process of managing municipal finances is divided into three stages:
1. financial planning process;
2. budget process;
3. evaluation of the obtained results.
The goals and nature of activities at each of these stages differ significantly.
Determining the role of municipal finance is of particular importance in reforming the Russian economy.
The reform of municipal finances is an integral part of the overall reform of local governments. The provision of municipal organizations with material and financial resources largely determines the effectiveness of local self-government. To fulfill the tasks set, municipalities are required to have sufficient and necessary financial and material resources, as well as to have the right to independently manage these resources.
In accordance with the new legislation, a new budget level is allocated in the structure of the budget systems of the subjects of the Federation. The system of local budgets includes the budgets of an urban district, the budgets of settlements (urban and rural), and the budgets of municipal districts. Bodies of all types of executive power of municipalities (urban districts, municipal districts, rural and urban settlements) are endowed with legislatively fixed expenditure and revenue powers.
Importance of financial planning
Financial planning is one of the constituent functions of management. It is closely related to the planning of all economic activities of the organization. In a market economy, the role of planning not only does not decrease, but also increases many times over. A convincing argument confirming the expediency of planning is the practice of foreign commercial companies, where business plans are developed everywhere and on an ongoing basis.Without a business plan, it is impossible to effectively manage not only a large, but also a relatively small enterprise. The future of any organization without it is uncertain and unpredictable. Therefore, management personnel need to be able to draw up a business plan.
A business plan is a document that describes the main aspects of the future of a commercial organization, analyzes all the risks that it may face, determines ways to solve possible problems and ultimately answers the question: is it worth investing in this project at all and will it bring income that will pay off the costs.
Typically, a business plan includes the following sections:
Overview section (summary);
description of the organization (enterprise);
description of products (goods, works, services);
market analysis;
production plan;
sales plan (marketing activities);
financial plan;
project sensitivity analysis;
environmental and regulatory information;
applications.
Thus, the financial plan is the most important part of the business plan, which can be drawn up both to justify specific investment projects and programs, and to manage all the current and strategic activities of the organization. The financial plan can be viewed as a task for individual indicators, as well as a financial document that links the organization's development indicators with the financial resources available for this.
Financial planning as an integral part of business planning is aimed, on the one hand, at preventing erroneous actions in the field of finance, on the other hand, at identifying reserves and mobilizing unused opportunities. Having a business plan is an important factor in deciding whether to provide financial support to an organization from external investors.
The main tasks of financial planning in the organization are:
Providing the necessary financial resources for the activities of the enterprise;
determination of ways of effective investment of capital, assessment of the degree of its rational use;
identification of on-farm reserves for increasing profits through the economical use of funds;
establishment of rational financial relations with the budget, off-budget funds, banks and contractors;
observance of the interests of shareholders and other investors;
control over the financial condition, solvency and creditworthiness of the organization.
The value of financial planning for an organization is that it:
Embodies the developed strategic goals in the form of specific financial indicators;
provides financial resources for the economic proportions of development laid down in the production plan;
provides opportunities to determine the viability of financial projects;
serves as a tool for obtaining financial support from external investors.
Financial planning is closely related and based on the marketing, production and other plans of the enterprise, subject to the mission and overall strategy of the enterprise. It should be noted that no financial forecasts will gain practical value until production and marketing decisions are worked out. Moreover, financial plans will be unrealistic if the marketing goals set are unattainable, if the conditions for achieving the target financial indicators are unfavorable for the enterprise in the long term.
Importance of financial resources
The concept of "financial resources" different authors put different meanings. Financial resources are a set of funds of funds at the disposal of business entities, the state, households, i.e., this is money that serves financial relations.Financial resources are the most important source for the implementation of expanded reproduction, the socio-economic development of society. Increasing the volume of financial resources is one of the most important tasks of the state's financial policy. A decrease in the volume of financial resources has a negative effect on the development of society, leads to a reduction in investment, a decrease in consumption funds, and creates disproportions in the distribution of the social product and national income. The composition and volume of financial resources depend on the level of economic development of the state, on the efficiency of production. Economic growth serves as the basis for increasing the volume of financial resources, and the amount of financial resources allocated to the expansion and development of production contributes to an increase in its efficiency.
It is necessary to distinguish between the centralized financial resources of the state and the decentralized financial resources of enterprises. Decentralized financial resources are formed in the form of various national funds, primarily the budget and extra-budgetary funds, the funds of which are used to carry out the most important functions of the state, such as the development of the national economy, the financing of social and cultural events, the provision of defense needs and the maintenance of the political superstructure of society. The sources of centralized financial resources are national income and partly national income in case of its involvement in economic circulation and effective use, borrowed and borrowed funds.
The main sources of financial resources of enterprises are profit and depreciation, borrowed and borrowed funds. The volume of decentralized financial resources depends on the same factors as the volume of centralized ones, but their value is also influenced by the degree of centralization. The emergence and development of the financial market gives business entities new opportunities to expand the composition of financial resources and increase their volume by issuing securities, using loans from various credit organizations and commercial loans, placing temporarily free funds on deposits in commercial banks, etc.
The formation and use of financial resources can be carried out not only in stock, but also in non-stock form. Centralized financial resources are formed and used mainly in the form of cash funds, which include, for example, the budget, the social insurance fund, the road fund, the fund for the reproduction of the mineral resource base and other extra-budgetary and special funds consolidated in the budget. At the enterprise level, financial resources can be created and used both in stock and non-stock form.
The volume of financial resources of the state and enterprises are directly dependent, since the source of the formation of state budgetary and extrabudgetary funds is the gross domestic product created by economic entities.
The subject of money as a system of currency relations are the monetary resources of the state. The definition of "financial resources" is one of the fundamental in monetary science and the main object of study in corporate finance. In a more general sense, the "resource" in dictionaries is considered as a reserve, which acts as a source of satisfaction of needs, the creation of funds. Financial opportunities - a set of funds at the disposal of the state, enterprises, organizations, other coordination systems of various types of property. Monetary opportunities (money in cash and non-cash form) can be spent on replenishment of coordination expenses, purchase of material resources, payment for personnel activities and other expenses. The expansion of financial resources is one of the important tasks of the state's monetary policy.
In modern conditions of transition to a commercial economy, a significant task for corporations and firms is to strengthen and expand their positions in the market of goods and services. In a commercial economy, economists often operate with the concept of "capital", which is a real object for a financier - practice, on which he can constantly influence to acquire new earnings for the enterprise.
The formation and development of the financial market provides the dominant entities with the latest opportunities for increasing the composition of monetary resources and increasing their volume by issuing the most valuable securities, using loans from various credit companies and commercial loans, placing temporarily free funds on deposits in commercial banks, etc. In countries with a federal federal by the device, government financial resources are divided into the resources of the federation and the resources of the subjects of the federation; aware of this, sources of income and channels for the expenditure of any of these varieties of resources are distinguished in full amounts or in parts of funds.
As you know, an enterprise is a fundamental link in the economy, and the financial resources of an enterprise speak of its solvency or insolvency. The capital of a corporation is considered to be the share of monetary resources invested in production and providing income, aware of the closing of circulation. The financial resources of organizations are a system of monetary relations, combined with the formation and use of monetary funds and increases in organizations for general economic purposes, financing the costs of the enterprises themselves, social. Needs and financial incentives for employees. The use of financial resources is performed by the enterprise in many areas, the basic of which are: payments to companies of the monetary and banking system in connection with the implementation of financial obligations (taxes to the budget, payment of interest to banks for the use of loans, repayment of previously received loans, insurance payments); investment of monetary resources in securities of other enterprises purchased on the market; the direction of monetary resources for the formation of foreign exchange funds of an incentive and social nature; use of financial resources for charitable purposes, sponsorship.
The main source of formation of monetary resources of the enterprise is predetermined by the proceeds from the sale of goods (works, services) related to work under the charter of the enterprise. Its financial resources are the profit and depreciation of the corporation. It should be borne in mind that the main and ring funds (with the exception of cash) of the enterprise can be turned into cash resources, but this requires a certain time.
A part of the monetary resources involved in the turnover of the enterprise and providing income is considered the capital of the enterprise.
The money resources of firms have features that describe the political nature of the funds in general. In real life, income and borrowed capital are closely related. Unlike entrepreneurial capital, credit capital is not invested in the firm, but is transferred to it for non-permanent use in order to receive interest.
The monetary resources of the household also include social transfers (social payments) (in the SNA - current transfers). 2 importantly the importance of the financial resource of the household in Russian Federation considered social payments. Certain types of public payments are pensions, scholarships, social benefits, subsidies for housing and communal services, and other funds from the budgets of the budget system. Social Payments according to the time criterion can be one-time, periodic, stable. Payments can be marked or calculated. Fixed payments represent a certain amount of financial resources, which is the same for all categories of recipients, isolated from the amount of earnings of consumers. Each type of public payments differs in the method of calculation.
The functioning of financial resources is based on such tasks of financial resources as a means of payment, a means of accumulation, global finance. A means of payment is a function in which finance serves the repayment of all kinds of debt obligations between the subjects of economic relations that arise during expanded reproduction. A store of value is a function in which money serves the accumulation of value in its general theoretical form during extended reproduction. Global money is a function where finance serves the movement of value in international legal circulation and ensures the implementation of relations between powers.
Monetary opportunities act as financial carriers of financial relations. A depreciation asset is a currency intended for ordinary and increased reproduction of fixed assets. The composition and volume of monetary resources depend on the level of economic development of the state, on the effectiveness of production. With the exception of financial resources, credit resources, individual foreign exchange earnings of the people, etc., also work in cash. The process of capital concentration is a necessary condition for the reliability of economic development and the main goal of any business entity. The specifics of the influence of economic laws determine both the scope of operation and the purpose of the financial resources of the enterprise, and the impact of the most important environmental criteria. Proceeds from property occupy a small share in the financial resources of Russian home enterprises.
The sources that are aware of the account, which form the single assets of financial resources, also include deductions from dominant entities to state public insurance bodies, economic and individual insurance, to budgetary and extrabudgetary funds. In every society, financial opportunities do not exist on their own, they always have an owner or a person to whom the owner has transferred the right to dispose of them. A decrease in the volume of financial resources limits the possibility of a targeted impact of financial resources on the development of the economy, entails a reduction in the parameters of investments in the production and social spheres, a decrease in the asset of use as part of the used state income, an imbalance in the natural and cost system of social production, all kinds of disproportions.
The authorized capital funds are used to receive basic funds and form return funds, targeted financing and other sources, the depreciation fund of the enterprise, in addition to its own funds, by banks and other organizations, the redistribution and use of the enterprise's earnings, due to the fact that it does not always have the opportunity to compensate their needs are only realized through their sources, part of the benefit of the enterprise goes to reimburse the invested expenses, the purchase of materials, the organization of the authorized capital, part of the benefit of the enterprise goes to the reimbursement of the invested costs, the purchase of materials.
