Purpose of working capital and its role in production. Assessing the efficiency of the formation and use of working capital of an enterprise

Introduction

Chapter 1. The role of working capital in ensuring the current activities of the enterprise

1.1 General concept of working capital. The role of working capital in the production process. Composition and structure of the enterprise's working capital

1.2 Indicators of the effective use of working capital at the enterprise

Chapter 2. Calculation and analytical part

2.1 History of development and organizational structure of management of the Limited Liability Company “Vyazemsky Mill Plant”

2.2 Analysis of technical and economic indicators of the Limited Liability Company “Vyazemsky Mill Plant”

2.3 Assessment of the efficiency of use of working capital of the Limited Liability Company "Vyazemsky Mill Plant"

2.4 Ways to increase the efficiency of using working capital of the Vyazemsky Mill Plant Limited Liability Company

Conclusion

Literature

Introduction

The financial resources of an economic entity always have two areas of practical application: part of the funds is invested (invested) in fixed assets for various purposes, the other part of the funds is advanced into working capital (working capital).

Working capital is important, first of all, from the standpoint of ensuring the continuity and efficiency of the current activities of the enterprise.

In financial activities, working capital plays an important role, since the financial condition, liquidity and solvency of the organization largely depend on the level of business activity, optimal use of working capital, assessment of its size and structure. Due to the fact that working capital forms the main share of the company's liquid assets, their value must be sufficient to ensure the rhythmic and uniform operation of the organization and, as a result, making a profit. Working capital management is aimed at meeting the current needs for financial resources to carry out statutory activities.

Economic assessment of the state of current assets is based on the use of indicators characterizing the degree of efficiency and usefulness of their use in the production process. Effective use of working capital plays a significant role in ensuring the normalization of the operation of the enterprise and increasing the level of profitability of production.

The policy for financing current assets is part of the general policy for managing its current assets, which consists in optimizing the volume and composition of financial sources of their formation (own and borrowed working capital) from the standpoint of ensuring the effective use of equity capital and sufficient financial stability of the enterprise.

Determining working capital needs is an integral part of financial planning. The planned value of working capital is established through rationing, that is, determining the working capital standard. Rationing of working capital is the basis for the rational use of an enterprise's economic assets.

The use of working capital in business activities should be carried out at a level that minimizes time and maximizes the speed of circulation of working capital and its transformation into real money supply for subsequent financing and the acquisition of new working capital. The purpose of the work is to assess the effectiveness of the formation and use of working capital of the enterprise.

working capital

Chapter 1. The role of working capital in ensuring the current activities of the enterprise

1.1 General concept of working capital. The role of working capital in the production process. Composition and structure of the enterprise's working capital

Working capital (working capital) is part of the enterprise's capital invested in its current (current) assets, which are renewed with a certain regularity to ensure current activities and, at a minimum, turn over once during the year or one production cycle. Working capital ranks second in size after fixed capital in the total volume of resources that determine the economy of an economic entity. The peculiarity of working capital is that they are not consumed, but are advanced. This ensures the continuity of the process of buying and selling goods. Unlike fixed capital, working capital during one production cycle completely transfers its value to the newly created product, and is reimbursed after each cycle in monetary form, and then in kind. Part of the working capital changes its physical form (raw materials, materials), part disappears without a trace as waste energy or gas.

Figure 1. Circulation of working capital

Figure 1 shows the circulation of working capital of the enterprise.

An enterprise's need for working capital depends on many factors:

Production and sales volumes;

The nature of the enterprise's activities;

Scale of activity;

Duration of the production cycle;

Enterprise capital structures;

Accounting policy of the enterprise and settlement system;

Conditions and practices of lending to the economic activity of an enterprise;

Level of logistics;

Types and structure of consumed raw materials;

The growth rate of production volumes and sales of the enterprise's products.

The structure of the working capital of the enterprise is presented in Figure 2.

Standardized working capital Non-standardized working capital

Figure 2. Structure of the working capital of the enterprise

Working capital in the practice of planning, accounting and evaluation is divided according to the following criteria:

By functional role in the production process: working capital and circulation funds.

The amount of working capital included in working production assets is determined by the organizational and technical level of production, the scope of activity, the scale of production and the duration of the production cycle of manufactured products. Working capital includes production inventories (raw materials, materials, fuel), work in progress, semi-finished products of own production, deferred expenses.

The amount of working capital included in the circulation funds is determined by the organization of marketing research and sales of products, the conditions for selling products, the distribution system, and methods of payment for products.

Working capital- these are means that serve the process of economic activity, participating simultaneously in both the production process and the process of selling products. One of the conditions for the continuity and rhythm of the process of production and circulation is the constant renewal of its material basis - the means of production.

In their turnover, working capital successively takes on monetary, productive and commodity forms, and therefore they are divided into circulating production assets and circulation funds . Working production assets serve the production sector. They materialize in objects of labor (raw materials, supplies, fuel, etc.) and partly in means of labor in the form of small-scale production equipment and are embodied in production inventories, work in progress, and semi-finished products of own production. Working production assets also constitute future expenses necessary for creating reserves, installing new equipment, etc. Circulation funds are not directly involved in the production process. Their purpose is to provide resources for the circulation process, to service the circulation of enterprise funds. Circulation funds consist of finished products and cash.

Being in constant motion, working capital makes a continuous circuit, which is reflected in the constant renewal of the production process:

D-T...T-P-T".. T"-D"

First stage (D - T), monetary or preparatory, when working capital goes from the form of cash to the form of inventory. Second stage circulation (T - P - T") consists of transferring purchased material assets and inventories into production, combining means and objects of labor with labor power and creating a new product that absorbs the transferred and newly created value. Third stage circuit flow (T - D") consists of selling manufactured products and receiving cash. At this stage, working capital moves from the production stage to the circulation stage and again takes the form of cash.

The cycle is not a single process. This is a process that occurs constantly and represents the turnover of capital . Having completed one circuit, working capital enters a new one, that is, the circuit occurs continuously and there is a constant change in the forms of advanced value.

The effective use of working capital plays a major role in ensuring the normalization of the enterprise. A general indicator of the efficiency of using working capital is its indicator profitability, calculated as the ratio of profit from sales of products or other financial results to the amount of working capital. This indicator characterizes the amount of profit received for each ruble of working capital and reflects the financial efficiency of the enterprise, since it is the working capital that ensures the turnover of all resources in the enterprise.

The efficiency of using working capital is assessed through its turnover indicators: 1) Working capital turnover in days is determined by dividing working capital by one-day turnover, defined as the ratio of sales volume to the duration of the period in days or as the ratio of the duration of the period to the number of turnovers; 2) direct turnover ratio (number of revolutions) for a certain period of time - a year, a quarter. This indicator reflects the number of turnovers made by the working capital of the enterprise, for example, per year. It is calculated as the quotient of the volume of sold (or commodity) products divided by working capital, which is taken as the average amount of working capital; 3) inverse turnover ratio or load (fixation) ratio working capital shows the amount of working capital spent on each ruble of sold (commodity) products and is calculated as follows.

Comparison of turnover and load ratios over time allows us to identify trends in changes in these indicators and determine how rationally and effectively the working capital of the enterprise is used.

The turnover of working capital may accelerate or slow down. When turnover slows down, additional funds are involved in turnover. The effect of accelerating turnover is expressed in a reduction in the need for working capital due to improved use and savings, which affects the increase in production volumes, and as a result, financial results. The acceleration of turnover leads to the release of part of the working capital, which is used either for production needs or for accumulation in a current account. Ultimately, solvency and financial condition improves.

The efficiency of an enterprise largely depends on the correct determining the need for working capital. Determining the enterprise's need for its own operating systems is carried out in the process of standardization, i.e. definitions of the OS standard.

Rationing represents the establishment of the optimal amount of working capital necessary for the organization and implementation of normal economic activities of the enterprise. Through rationing, the financial services of an enterprise determine the need for its own working capital in a minimum but sufficient volume to ensure the implementation of planned tasks and maintain the uninterrupted reproduction process.

The main method for determining the planned need for working capital is the direct counting method. The standardization process includes:

1) development of stock standards for certain types of inventory of all elements of standardized working capital;

determination of frequent standards for each element of working capital;

calculation of the total standard for own standardized working capital.

Working capital standards - This is the volume of stock of the most important inventory items necessary for the enterprise to ensure normal, rhythmic work. Norms are relative values that are established in days of stock or as a percentage of a certain base (commodity products, volume of fixed assets) and show the duration of the period provided by this type of stock of material resources. As a rule, they are established for a certain period of time (quarter, year), but can be valid for a longer period.

Standards are established separately for the following elements of standardized working capital:

Industrial stocks;

Work in progress and semi-finished products of own production;

Deferred expenses;

Inventory of finished products in the enterprise warehouse.

After determining the OS consumption rate, i.e. the maximum permissible planned value of raw material consumption that can be spent to produce a unit of product is determined by private OS standards. The standard shows the minimum required amount of funds to ensure the economic activities of the enterprise. In other words, this is the monetary expression of the planned inventory of inventory items.

Non-standardized working capital includes circulating funds with the exception of finished products in the enterprise's warehouse. The enterprise's need for these working capital is determined by calculation. The enterprise calculates the need for cash in the cash register and working capital for inventories of goods.

Sources of OS financing are divided into own, borrowed and attracted.

Introduction........................................................ ........................................................ .......3

1. Composition, structure and classification of the enterprise’s working capital..4

2. Principles of working capital management...................................................7

3. The role of working capital in the activities of the enterprise..................................12

Conclusion................................................. ........................................................ ..15

Bibliography............................................... ................17

Introduction

Increasing business efficiency is inextricably linked with improving the management of working capital, through which the movement of the total social product is carried out. The quality of this management, based on the rational organization of working capital, directly affects the results of economic activity. Rationing of working capital is the main element of their management.

The division of production assets into fixed and circulating assets is a consequence of their different participation in the production of the use value of goods and the different transfer of their value to the finished product. Hence the differences in the reproduction of fixed and working capital.

Unlike fixed assets, working capital of enterprises in their natural form (raw materials, basic and auxiliary materials, etc.) are entirely consumed in each production cycle (either by being part of new manufactured products, or contributing to the labor process itself) and completely transfer their cost to the finished product. After the sale of products, this cost is reimbursed in the proceeds received, which makes it possible to replenish the stock of labor items and continue the production process.

Determining the essence of working capital as a cost category is the main point for understanding their role and purpose.

However, being a value category, working capital has a certain independence of movement in relation to the movement of material assets, which are use values. This is particularly reflected in the fact that the movement of working capital of an enterprise is not always identical to the movement of material assets.

1. Composition, structure and classification of the enterprise’s working capital.

An indispensable condition for an enterprise to carry out economic activities is the availability of working capital. Working capital is money advanced into circulating production assets of circulation.

Working capital of the enterprise, participating in the process of production and sale of products, makes a continuous circuit. At the same time, they move from the sphere of circulation to the sphere of production and back, successively taking the form of circulation funds and circulating production assets. Thus, passing through three phases in succession, working capital changes its natural and material form.

Working capital of an enterprise exists in the sphere of production and in the sphere of circulation. Working capital and circulation funds are divided into various elements that make up the material structure of working capital.

Elements of working capital.

Working production assets include:

productive reserves;

work in progress and semi-finished products of own production;

Future expenses.

Industrial inventories are items of labor prepared for launch into the production process. In their composition, we can primarily distinguish the following elements: raw materials, basic auxiliary materials, fuel, fuel, purchased semi-finished products and components, containers and packaging materials, spare parts for routine repairs, low-value and wear-out items.

Work in progress and self-made semi-finished products are objects of labor that have entered the production process: materials, parts, units and products that are in the process of processing or assembly, as well as self-made semi-finished products that are not fully completed by production in some workshops and are subject to further processing in other workshops the same enterprise.

Deferred expenses are intangible elements of working capital, including costs for the preparation and development of new products, which are produced in a given period (quarter, year), but are attributed to the products of a future period.

Circulation funds consist of the following elements:

Finished products in warehouses;

Goods in transit (shipped products);

Cash;

Funds in settlements with consumers of products.

The relationship between individual elements of working capital or their components is called the structure of working capital. Thus, in the reproductive structure the ratio of circulating production assets and circulation funds is on average 4:1. In the structure of industrial inventories on average in industry, the main place (about ¼) is occupied by raw materials and basic materials, significantly lower (about 3%) by the share of spare parts and containers. Industrial reserves themselves have a higher share in fuel and material-intensive industries. The structure of working capital depends on the industry of the enterprise, the nature and characteristics of the organization of production activities, the conditions of supply and sales of settlements with consumers and suppliers.

According to the sources of formation, working capital of an enterprise is divided into its own and borrowed (attracted).

With the development of a market economy, entrepreneurial activity and corporatization, the own funds of enterprises play a decisive role. They ensure the financial stability and operational independence of the business entity. The own working capital of privatized enterprises is at their full disposal: enterprises have the right to sell them, transfer them to other economic entities, citizens, lease them, etc.

Borrowed funds, attracted mainly in the form of bank loans, cover the enterprise's additional need for funds. In this case, the main conditions for lending are the reliability of the financial condition of the enterprise and an assessment of its financial stability. The placement of working capital in the reproduction process determines its division into circulating production assets and circulation funds. Working production assets function in the production process, and circulation funds function in the circulation process, i.e. sale of finished products and acquisition of inventory items. The optimal ratio of these funds is determined by the largest share of circulating production assets involved in value creation. The size of circulation funds must be sufficient to ensure a clear and rhythmic circulation process.

Based on the principles of organization and regulation of production and circulation, working capital is divided into standardized and non-standardized. Standardized working capital is your own working capital, calculated according to economically sound standards. Non-standardized working capital is an element of circulation funds. Rational and effective management of this group of working capital prevents their unreasonable increase and helps accelerate the turnover of working capital in the sphere of circulation.

Working capital management is closely related to their composition and placement. The composition and structure of working capital varies among different economic entities. They depend on the form of ownership, the specifics of the organization of the production process, relationships with suppliers and customers, the structure of production costs, financial condition and other factors.

The condition, composition and structure of inventories of work in progress and finished products are important indicators of the commercial activity of an enterprise. Certain structures and identification of trends in changes in the elements of working capital make it possible to predict the parameters of business development.

2. Principles of working capital management

The most important element of working capital management is their scientifically based rationing. By means of rationing working capital, the total need of business entities for fixed working capital is determined. The correct calculation of this need is of great economic importance. At the same time, a constantly required minimum amount of funds is established to ensure the stable financial condition of the enterprise.

The basic principles of rationing working capital are determined depending on changes in business conditions, the development of market relations, and corporatization. Rationing of working capital is carried out at each enterprise in strict accordance with cost estimates for production and non-production needs, a business plan reflecting all aspects of commercial activity. This ensures the interconnection of production financial indicators necessary for successful business activities. Rationing should ensure the optimal value of all elements of regulated working capital.

The purpose of rationing is to determine the rational amount of working capital diverted into the sphere of circulation for a certain period of time.

Rationing is the establishment of economically justified (planned) stock standards and standards for elements of working capital necessary for the normal operation of the enterprise. Standardized working capital usually includes working capital and finished products. Circulation funds are usually not standardized.

In the process of rationing working capital, norms and standards are developed. The working capital norm is a relative value corresponding to the minimum economically justified volume of inventories of inventory items. They are usually set in days. Norms of working capital depend on the norms of material consumption in production; wear resistance standards for spare parts and tools; duration of the production cycle; conditions of supply and sales; time to give certain materials certain properties necessary for industrial consumption; other factors.

Working capital standards under relatively constant economic conditions are long-term. The need to clarify them is due to significant changes in technology and production organization, product range, business plan composition, price changes, and other indicators.

The working capital ratio is the minimum required amount of funds to ensure the business activities of the enterprise. Working capital standards are determined taking into account the needs for funds for the main activity. So it is for major repairs carried out on our own, housing and communal services, subsidiary, auxiliary and other farms that are not on an independent balance sheet.

If working capital standards can be established for a relatively long period, then the standards are calculated for a specific period (year, quarter). Working capital standards are determined as the product of the sum of one-day consumption or output and the standard for the corresponding types of working capital.

One-day consumption or output at enterprises with a uniformly increasing production volume throughout the year is calculated according to the cost estimate for the 4th quarter of the coming year. This is explained by the fact that the calculated working capital standard is valid at the end of the planned period (year, quarter) and must meet production needs at the beginning of the next period.

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Introduction

1. Working capital and its role in the financial and economic activities of the enterprise

1.1 The essence of working capital, its features and purpose

1.2 Classification of working capital of organizations

2. Current assets of the enterprise, their composition and structure

3. Sources of formation of current assets

4. Criteria for assessing the efficiency of using working capital of organizations and their analysis

Conclusion

List of used literature

Introduction

The relevance of the study is due to the fact that an indispensable condition for an enterprise to carry out economic activities is the availability of working capital (working capital). Problems of managing working capital of a business entity are attracting increasing attention from representatives of financial science. This is due to the transformation processes taking place in the Russian economy, the development of not only various forms of ownership, but also the diversity of economic behavior of owners and managers of enterprises. The presence of sufficient working capital of an optimal structure at the enterprise is a necessary prerequisite for its normal functioning in a market economy. As a result of the acceleration of turnover of working capital, they are released, which gives a number of positive effects. The faster the advanced working capital turns around, the better the result is achieved - with the help of the same amount of funds, more products are produced and sold. An enterprise, in the case of effective management of working capital, can achieve a rational economic situation, balanced in terms of liquidity and profitability.

Effective operation of an enterprise is the achievement of maximum results at minimum costs. Minimizing costs is achieved primarily by optimizing the structure of sources of working capital formation, i.e. a reasonable combination of own, credit and borrowed resources.

The structure of working capital is influenced by a number of factors: the nature of the products produced, the features of material and technical support, the progressiveness of consumption rates, stock standards and work in progress, the duration of the product manufacturing cycle, etc.

One of the main tasks of the enterprise in modern conditions is the intensification of production while strictly observing the principle of resource conservation. The successful operation of an enterprise can be ensured if its assets (both current and non-current) are properly managed. Management of the composition and structure of the working capital of an enterprise comes to the fore in modern conditions. This is primarily due to the higher content of working capital compared to non-current capital in the balance sheet.

The structure of working capital is different at different enterprises. The highest share of industrial reserves is at light industry enterprises. The share of deferred expenses in the chemical industry is high.

The amount of inventories at different enterprises in the structure of working capital is also different, which is due to the technical and economic characteristics of the products they produce.

Overall, to ensure a smooth production process, working capital plays an important role.

capital turnover enterprise

1. Working capital and its role in financial and economicactivity of the enterprise

1.1 The essence of working capital, its features and purpose

An indispensable condition for an enterprise to carry out economic activities is the availability of working capital (working capital). Working capital is money advanced into circulating production assets and circulation funds.

The essence of working capital is determined by their economic role, the need to ensure the reproduction process, including both the production process and the circulation process. Unlike fixed assets, which are repeatedly involved in the production process, working capital operates only in one production cycle and, regardless of the method of production consumption, completely transfers its value to the finished product.

The differences between working capital and working capital can be defined as follows:

Working capital, according to the accepted accounting methodology, characterizes the assets of the enterprise, and capital - the sources of funds;

Capital is usually understood as value that brings surplus value, and working capital transfers the value of working capital to the finished product;

Capital is a production relation that is presented in material or monetary form and has a specific social character. Working capital serves the production process, ensures its continuity, without being a relationship;

Working capital theory involves the separation of current assets, current debt and net working capital as the difference between current assets and debt. The theory of working capital operates in terms of its own and equivalent working capital;

The theory of working capital considers attracting borrowed funds as replenishing the lack of funds to ensure the continuity of the production process; in the theory of working capital, attracting loans is not related to the production process;

The theory of working capital considers a homogeneous group - current assets, without distinguishing between production assets and circulation funds, abstracting from their inherent features due to the participation of the former in production and the latter in the sale of products.

Working capital of enterprises according to their purpose in the reproduction process is divided into the following groups:

Productive reserves;

Unfinished production;

Finished products in warehouse and shipped;

Cash in hand and in the current account, and funds in settlements.

Industrial inventories and work in progress represent production working capital of associations and enterprises (working capital of production). Industrial inventories are located only in the sphere of production, and not in the production process itself, since at a given point in time they are not processed, but are potential elements of production. However, they are necessary because they ensure continuity of the production process. Work in progress is items of labor that are directly in the production process and are being processed. Essentially, these are unfinished products of varying degrees of readiness.

The main purpose of working capital of production (inventories and work in progress) is to ensure the uninterrupted and rhythmic nature of the production process.

Finished products, as well as cash in the cash register, on the current account and funds in settlements constitute working capital. The need for these working capital is determined by the continuity of the process of circulation of funds of production associations (enterprises).

To define the concept of working capital, we formulate external and internal factors on which the size and condition of the enterprise’s current assets depend.

External factors include: the general economic situation in the country; features of tax legislation; inflation (deflation) rates; level of bank lending rates; trends in the development of the investment market (investment climate); economic potential of the region.

The internal factors on which the size and condition of the enterprise’s current assets depend include: the competitiveness of the enterprise in the market; organization of warehousing; scale of activity of the enterprise (small business, medium, large); quantity and variety of resource types consumed; location of counterparties; growth rates of production and sales of products; share of added value in the price of the product; accounting policy of the enterprise; quality of work of top managers and personnel of the enterprise.

The amount of working capital is determined not only by the needs of the production process, but also by random factors. Therefore, it is customary to divide working capital into constant and variable.

In the theory of financial management, there are two main interpretations of the concept of “constant working capital”. According to the first interpretation, constant working capital represents that part of cash, accounts receivable and inventory, the need for which is relatively constant throughout the entire operating cycle. This is the average, for example, over time, value of current assets that are under the constant control of the enterprise. According to the second interpretation, constant working capital can be defined as the minimum necessary to carry out production activities. This approach means that an enterprise needs a certain minimum of working capital to carry out its activities, for example, a constant cash balance in a current account, some analogue of reserve capital.

The variable working capital category reflects additional current assets needed during peak periods or as safety stock. For example, the need for additional inventory may be associated with maintaining a high level of sales during seasonal sales. At the same time, as sales proceed, receivables increase. Additional cash is needed to pay for supplies of raw materials and supplies, as well as labor activities preceding a period of high business activity.

Thus, taking into account the above factors, the concept of “current assets” has been formulated - these are assets that characterize the totality of property assets of an enterprise serving current production and commercial activities, the value of which is determined by its scale and nature and depends on the duration and specifics of the production cycle, the state of the enterprise’s fixed assets , its relationships with counterparties, as well as macroeconomic parameters.

1.2 Classification of working capital of organizations

Capital is the means available to a business entity to carry out its activities with the aim of making a profit.

Working capital can be defined as a component of productive capital, which includes part of constant capital (raw materials, materials, fuel, work in progress) and all variable capital. In other words, working capital includes the cost of objects of labor (constant capital) and variable capital spent on the purchase of labor power. At the same time, the constant has the property of self-expansion due to the receipt of surplus value, and the variable can only be reproduced in the same volume.

Modern Western approaches to financial management are fundamentally based on the concept of current assets - the working capital of the enterprise, considering fixed capital as funds, resources for investment in order to generate income, funds invested in the enterprise in the form of share capital (authorized capital) or in the form of other forms of long-term financing, that is, they consider productive capital simply as money, abstracting from the material forms of existence of capital and its movement.

So, working capital is funds that serve the process of activity, participating simultaneously in the production process and in the process of selling products.

The peculiarity of working capital is that it is not spent, not consumed, but is advanced into various types of current expenses of an economic entity. The purpose of the advance is to create the necessary inventories, work in progress, finished products and conditions for their sale. Thus, working capital, intended to ensure the continuity of the production process and sales of products, can be characterized as a set of funds advanced for the creation and use of circulating production assets and circulation funds.

According to its functional purpose, or role in the process of production and circulation, the working capital of an enterprise is divided into circulating production assets and circulation funds. Based on this division, working capital can be characterized as funds invested in circulating production assets and circulation funds and undergoing continuous circulation in the process of economic activity.

The working capital of enterprises consists of three parts:

· production inventories are the items of labor necessary to start the production process, consisting of raw materials, basic and auxiliary materials, fuel, fuel, spare parts and components;

· work in progress (labor items that have entered the production process: materials, parts, components and products) and semi-finished products of own production;

· future expenses are intangible elements of working production assets, including costs for the preparation and development of new products.

Along with the listed material elements involved in inventories or unfinished products, working production assets are also represented by future expenses necessary for creating reserves, installing new equipment, etc.

Thus, circulating production assets serve the production sector, completely transfer their value to the newly created product, and at the same time change their original form. And all this - during one production cycle or circuit.

Another element of working capital is circulation funds. They are not directly involved in the production process. Their purpose is to provide resources for the circulation process, to maintain the circulation of enterprise funds and to achieve unity of production and circulation. Circulation funds include: finished products in warehouses, goods in transit, cash and funds in settlements with consumers of products, in particular, accounts receivable.

The unification of working production assets and circulation funds into a single category - working capital - is due to the fact that, firstly, the reproduction process is the unity of the production process and the process of selling products. Elements of working capital continuously move from the sphere of production to the sphere of circulation and return to production again. Secondly, the elements of circulating funds and circulation funds have the same nature of movement, circulation, constituting a continuous process.

The financial condition of an enterprise and its stability largely depend on what property the enterprise has, what assets the capital is invested in, and what income they bring to it.

The company's funds can be used both in its internal turnover and outside it (accounts receivable, long-term and short-term financial investments, cash in accounts).

The composition and structure of borrowed funds have a great influence on the financial condition of the enterprise, i.e. the ratio of long-term, medium-term and short-term financial liabilities.

Attracting borrowed funds into the turnover of an enterprise is a normal phenomenon. This helps to temporarily improve its financial condition, provided that they are not frozen in circulation for a long time and are returned in a timely manner. Otherwise, overdue accounts payable may arise, which ultimately leads to the payment of fines and a deterioration in the financial situation.

Working capital can be located in the sphere of production (inventories, work in progress, deferred expenses) and in the sphere of circulation (finished products in warehouses and shipped to customers, funds in settlements, short-term financial investments, cash in hand and in bank accounts, goods and etc.). Capital can function in monetary and material forms. During a period of inflation, holding funds in cash leads to a decrease in their purchasing power, because they are not revalued due to inflation.

Depending on the degree of exposure to inflationary processes, all balance sheet items are classified into monetary and non-monetary. Monetary assets are balance sheet items that reflect funds and liabilities in the current monetary value. Therefore they are not subject to revaluation. These include cash, deposits, short-term financial investments, and settlement funds. Non-monetary assets - fixed assets, unfinished capital construction, inventories, work in progress, finished goods, goods for sale. Their real value changes over time and price changes and therefore requires revaluation.

Depending on the degree of risk of capital investment, working capital is distinguished from:

Minimal investment risk (cash, short-term financial investments);

Low investment risk (accounts receivable minus doubtful debts, inventories minus stale ones, balances of finished products minus those not in demand, work in progress);

High investment risk (doubtful accounts receivable, stale inventories, finished products that are not in demand).

When calculating, assessing and analyzing capital, it is necessary to consider it from two positions: on the one hand, by the sources of its formation, and on the other, by the physical form of its existence.

From a legal perspective, capital should be considered as the ratio of property and obligations arising during the formation of this property.

From a financial point of view, the capital of an enterprise should be defined as the time-varying ratio of the enterprise's assets and its debts. Therefore, the basis for developing the principles of accounting for the capital of an enterprise should be an objective legal basis, and for the calculation, assessment and analysis of the state and movement of capital it is necessary to use financial approaches more often.

A business in any field of activity begins with a certain amount of cash, through which the required amount of resources is acquired and the production process and products are organized.

Working capital is money advanced into circulating production assets and circulation funds.

Working capital is part of the productive capital of the company, which is completely consumed during one cycle and transfers its value to the manufactured product and is returned to the company in cash after each cycle.

Working capital includes: costs for the purchase of consumer goods and labor costs. Working capital of an enterprise exists in the sphere of production and in the sphere of circulation.

Working capital turnover. It includes 2 stages:

1) The stay of the value of objects of labor in production inventories;

2) Passage of the value of objects of labor through work in progress and deferred expenses.

These 2 stages belong to the production sector.

Next, working capital leaves the sphere of production and moves into the sphere of circulation. Here, working capital moves as part of capital circulation, which consists of commodity capital and money capital. In the sphere of circulation, working capital also goes through 2 stages:

1) The presence of the cost of working capital in the structure of the cost of finished products;

2) The value of working capital remains in cash.

The funds received as a result of the sale of products can be spent on purchasing items of labor and paying employees of enterprises.

Working capital + capital circulation, taken together in monetary form, form the company's working capital.

The movement of the company's working capital can be represented as the following diagram:

D -- PZ -- NP (RBP) -- GP " -- D "

NP - work in progress;

RBP - deferred expenses;

D - money;

PZ - production reserves;

GP" - finished products

Industrial inventories are items of labor prepared for launch into the production process. The following elements can be distinguished in their composition: raw materials, basic auxiliary materials, fuel, fuel, purchased semi-finished products and components.

Work in progress - objects of labor that have entered the production process: materials, parts and products that are in the process of processing or assembly; Deferred expenses - costs for the preparation and development of new products that are produced in a given period (quarter, year), but relate to future products.

2. Current assets of the enterprise, their composition and structure

The composition of working capital is understood as the totality of elements that form working capital. Working capital includes inventories (including raw materials, supplies), animals for growing and fattening, costs in work in progress, finished products and goods for resale, goods shipped, deferred expenses, other inventories and costs, VAT, accounts receivable , short-term financial investments and cash. Any enterprise conducting production or other commercial activities must have certain real, that is, active, functional property or active capital in the form of fixed or working capital. The concept of working capital is identical to working capital and represents one of the components of the property of an economic entity necessary for the normal implementation and expansion of its activities.

Working capital represents the cost advanced in cash for the formation and use of circulating production assets and circulation funds in the minimum required amounts to ensure the continuity of the production process and the timeliness of payments. The correct organization, safety and efficient use of working capital is of great importance for ensuring the continuity of the process of social reproduction, the stable financial condition of all business entities, normative monetary circulation, and the real accumulation of the country's wealth.

Working capital is the totality of funds advanced for the creation of circulating production assets and circulation funds, ensuring the continuous circulation of funds. Working capital during one production cycle completely transfers its value to the newly created product and is reimbursed after each cycle in cash and then in kind. Part of the working capital changes its natural material form in the process of circulation (raw materials), part disappears without a trace as waste energy or gas. Working capital represents the moving part of assets. In each circulation, working capital goes through three stages: preparatory, production and sales. At the first stage, the enterprise's funds are used to purchase raw materials, supplies, fuel, components, etc., necessary for carrying out production activities. The production stage represents the direct production process; at this stage, the cost of used inventories continues to be advanced, wages and related expenses are additionally advanced, and the cost of fixed assets is also transferred to production products. The production stage of the circuit ends with the release of finished products, after which comes the stage of its implementation. At the third stage of the circuit, the product of labor (finished products) continues to be advanced in the same amount as at the production stage. Only after the commodity form of the value of industrial products has been converted into monetary form, the advanced funds are restored at the expense of the proceeds received from the sale of products. The remaining amount is made up of cash savings, which are used in accordance with the plan for their distribution in terms of savings (profits) intended to expand the working capital attached to them and perform subsequent turnover cycles with them.

The monetary form that current assets take on at the third stage of their circulation is at the same time the initial stage of the turnover of these funds. Working capital is located simultaneously at all stages and in all forms of production, which ensures its continuity and uninterrupted operation of the enterprise.

Working capital in its composition is divided into two components: circulating production assets and circulation funds.

Working production assets are objects of labor, raw materials, basic materials, semi-finished products, auxiliary materials, as well as means of labor with a service life of no more than 1 year or a cost of no more than 50 times the established minimum wage per month (low-value or wear-and-tear items and tools); work in progress and deferred expenses.

Work in progress and semi-finished products of our own production - parts, components and products that have not passed all stages of processing, assembly and testing, completion and acceptance, as well as objects of labor, the production of which is completely completed in one workshop and is subject to further processing in other workshops of the same enterprise.

Deferred expenses are the costs of preparing and developing new types of products produced in a given period, but to be repaid in the future.

The second part of fixed capital consists of circulating funds. Circulation funds are the funds of an enterprise invested in inventories of finished products, goods shipped but unpaid, as well as funds in settlements and cash in the cash register and in accounts. Circulation funds do not participate in the formation of value, but are carriers of already created value. The main purpose of circulation funds is to provide monetary funds for the rhythm of the circulation process.

The amount of fixed capital included in the circulation funds is determined by marketing research, conditions for selling products, the distribution system, and methods of payment for products.

After the end of the production cycle, the manufacture of finished products and their sale, the cost of working capital is reimbursed as part of the proceeds from the sale of products (works, services). This makes it possible to systematically renew the production process, which is carried out through the continuous circulation of enterprise funds.

The ratio between the individual elements of working capital, expressed as a percentage, is called the structure of working capital. In different industries it has significant differences and expresses the specific features of the production process, technology, organization of production and conditions for selling products, saving material resources. To do this, it is necessary to ensure strict compliance with the rules of storage and transportation of products, rationally prepare fuel, raw materials, materials for further processing in the production process, increase the attention of labor collectives to issues of quality of work and manufactured products, structural costs of production.

The structure of working capital in inventory is different for different enterprises. The highest share of industrial inventories is in light industry enterprises (raw materials and semi-finished products predominate - 70%; the share of deferred expenses in the chemical industry is high - 9%. In mechanical engineering, compared to industry as a whole, the share of industrial inventories is lower, and work in progress and semi-finished products are owned production is higher. This is due to the fact that in mechanical engineering the production cycle is longer than the industry average. For the same reason, at heavy energy and transport engineering enterprises, the share of completed production is significantly higher than the industry average. The amounts of working capital presented in production Inventories at various enterprises and organizations are the predominant working capital allocated in the production sector, accounting for more than 70% of all working capital.

3. Sources of formation of current assets

Working capital of enterprises is designed to ensure their continuous movement at all stages of the circulation in order to satisfy production needs for monetary and material resources, ensure timeliness and completeness of payments, and increase the efficiency of using working capital.

All sources of financing of working capital are divided into own, borrowed and attracted.

Own funds play a major role in organizing the circulation of funds, since enterprises operating on the basis of commercial calculation must have a certain property and operational independence in order to conduct business profitably and bear responsibility for the decisions made.

The formation of working capital occurs at the time of organization of the enterprise, when its authorized capital is created. The source of formation in this case is the investment funds of the founders of the enterprise. In the process of work, the source of replenishment of working capital is the profit received, as well as funds equivalent to one’s own. These are funds that do not belong to the enterprise, but are constantly in its circulation. Such funds serve as a source for the formation of working capital in the amount of their minimum balance. These include: the minimum carry-over debt for wages to employees of the enterprise, reserves to cover future expenses, the minimum carry-over debt to the budget and extra-budgetary funds, creditor funds received as an advance payment for products (goods, services), buyer funds for deposits for returnable packaging, carryover balances of the consumption fund, etc.

Borrowed funds help reduce the overall need of the economy for working capital, as well as stimulate their effective use. Borrowed funds are mainly short-term bank loans, with the help of which temporary additional needs for working capital are satisfied.

The main directions of attracting loans for the formation of working capital are: lending to seasonal stocks of raw materials, materials and costs associated with the seasonal production process; temporary replenishment of the lack of own working capital; carrying out settlements and mediating payment transactions.

Replenishment of working capital of enterprises and organizations is carried out through targeted government loans. The source of this loan is a targeted extra-budgetary fund created in the financial authorities of territories, regions, autonomous entities, the cities of Moscow and St. Petersburg. In accordance with these regulations, a loan is allocated on the basis of an agreement between the financial authority and the enterprise or organization. State-owned enterprises and organizations, joint-stock companies with a state share in the authorized capital of more than 50%, privatized enterprises and organizations, regardless of their organizational and legal forms, can receive this loan.

This loan is provided through a credit line opened to the Ministry of Finance of the Russian Federation by the Bank of Russia at a floating interest rate.

The nature of credit dynamics is determined by objective economic processes. Decrease in the share of credit since the late 80s. can be explained by a reduction in centralized lending to enterprises with a still undeveloped commercial credit system. Along with the establishment of the system of commercial banks and the growth in the volume of commercial credit, the share of credit resources in the structure of sources of formation of working capital of enterprises also increased.

Thus, with the transition to a market system of economic management, the role of credit as a source of working capital has at least not decreased. Along with the usual need to cover the excess need for working capital of enterprises, new factors have emerged that contribute to the increased importance of bank credit. These factors are primarily associated with the transitional stage of development experienced by the domestic economy. One of them is inflation. The impact of inflation on an enterprise's working capital can be both direct and indirect. The direct impact is characterized by the depreciation of working capital during their turnover, i.e., after completion of the turnover, the enterprise does not actually receive the advanced amount of working capital as part of the proceeds from sales of products.

The indirect impact is expressed in the slowdown in the turnover of funds due to the non-payment crisis, largely due to inflation. Other reasons for the non-payment crisis include: a decrease in labor productivity; extreme production inefficiency; the inability of individual managers to adapt to new conditions (look for new solutions, change the product range, reduce materials and energy intensity of production, selling redundant and unnecessary assets); and finally, the imperfection of the legislation, which makes it possible not to pay debts with impunity.

To combat non-payments and provide financial support to replenish working capital of enterprises, significant funds are allocated. However, the allocated funds are not always used for their intended purpose, which also has a strong inflationary effect.

These reasons determine the increased interest of enterprises in borrowed funds as a source of replenishment of working capital frozen in long-term accounts receivable. In this situation, the question arises of the limits of using credit as a source of working capital. This issue is related to the dual impact that the use of credit has on the financial position of the enterprise in general and on the state of working capital in particular.

On the one hand, without attracting credit resources into circulation in conditions of a shortage of own funds, the enterprise needs to reduce or completely suspend production, which threatens serious financial difficulties up to and including bankruptcy. On the other hand, solving problems only with the help of loans causes an increase in the enterprise’s dependence on credit resources due to an increase in loan debt. This leads to increased instability of the financial condition; own working capital is lost, becoming the property of the bank, since enterprises do not provide the rate of return on invested capital, specified in the form of bank interest.

Accounts payable refers to unscheduled attracted sources of working capital. Its presence means participation in the turnover of the enterprise of funds from other enterprises and organizations. Part of the accounts payable is natural, as it follows from the current payment procedure. Along with this, accounts payable may arise as a result of violation of payment discipline.

Enterprises may have accounts payable to suppliers for goods received, to contractors for work performed, to the tax inspectorate for taxes and payments, and for contributions to extra-budgetary funds.

It is also necessary to highlight other sources of the formation of working capital, which include enterprise funds that are temporarily not used for their intended purpose (funds, reserves, etc.).

The correct balance between own, borrowed and attracted sources of working capital plays an important role in strengthening the financial condition of the enterprise.

4. Criteria for assessing the efficiency of using working capital of organizations and their analysis

Effective use of working capital plays a big role in normalizing the operation of the enterprise, increasing the level of profitability of production and depends on many factors. In modern conditions, factors in the crisis state of the economy have a huge negative impact on changes in the efficiency of using working capital and a slowdown in turnover:

Decrease in production volumes and consumer demand;

High inflation rates;

Severance of economic ties;

Violation of contractual and payment discipline;

High level of tax burden;

Reduced access to creditors due to high bank interest rates.

A general indicator of the efficiency of using working capital is its profitability.

This indicator characterizes the amount of profit received for each ruble of working capital and reflects the financial efficiency of the enterprise, since it is the working capital that ensures the turnover of all resources in the enterprise.

The efficiency of using working capital is assessed through its turnover indicators. Since the criterion for assessing the efficiency of using working capital is the time factor, indicators are used that reflect, firstly, the total turnover time or the duration of one turnover in days, and, secondly, the speed of turnover.

The analysis of inventory turnover includes two indicators:

Inventory turnover;

Inventory shelf life.

Sources of financing the working capital of an enterprise are primarily accounts payable, as well as loans and borrowings, i.e. borrowed sources. The organization of the use of working capital is not carried out effectively enough, although the company is trying to carry out various activities to increase the efficiency of the organization of working capital.

5 . Directions for increasing the efficiency of using working capital of organizations

In modern conditions, the primary task of enterprises is to accelerate the turnover of working capital. This is achieved in the following ways:

1.at the stage of creating production reserves, the introduction of economically sound reserve standards;

Bringing suppliers of raw materials, semi-finished products, and components closer to consumers; widespread use of direct long-term connections;

Expanding the material support system, as well as wholesale trade in materials and equipment;

Integrated mechanization and automation of loading and unloading operations in warehouses;

2. at the stage of work in progress - acceleration of scientific and technological progress (introduction of advanced equipment and technology, especially waste-free;

Development of standardization, unification, typification; improvement of forms of organization of industrial production;

Increasing the share of products in high demand;

3.at the circulation stage - bringing consumers of products closer to their manufacturers; improvement of the payment system; an increase in the volume of products sold due to improved marketing work through direct relations, long-term production, manufacturing of products from saved materials;

Careful and timely selection of shipped products by batch, assortment, shipment in strict accordance with concluded contracts.

Conclusion

Any commercial organization (enterprise) conducting production or other commercial activities must have a certain real, i.e. functioning property or active capital in the form of fixed and working capital.

Current assets make up a significant share of all assets of the enterprise. The successful entrepreneurial activity of an economic entity largely depends on their skillful management. Management of current assets occupies a special place in the work of a financial manager, since it is a constant, daily and continuous process.

Working capital is one of the components of the enterprise's property. The condition and efficiency of their use is one of the main conditions for its successful activities. The development of market relations determines new conditions for their organization. High inflation, non-payments and other crisis phenomena force enterprises to change their policies in relation to current assets, look for new sources of replenishment, and study the problem of the efficiency of their use.

List of used literature

1 Vinokurov V.A. Organization of strategic management at an enterprise: M: Center for Economics and Marketing.-2005.-P.160.

2 Voitov A.G. Economics: General course: Textbook.-3rd ed..-M: Inf.-implementation. Center "Marketing".-2004.-P.492

3 Volkov O.I. Sklyarenko V.K. Enterprise economics: a course of lectures.-M: INFRA-M, 2005.-P.457

4 Gruzinov V.P. Gribov V.D. Economics of Enterprise 2nd ed., add. M: Finance and Statistics, 2004.-P.204

5 Gruzinov V.P. Economics of Enterprise Textbook for universities.-2nd ed., trans. and additional -M: UNITY-DANA, 2005.-P.795

6 Gudov M.M. Finance of organizations: textbook / M.M. Gudov. - Saransk: Mordovian University Publishing House, 2006. - 152s.

7 Ermolovich L.L., Sivchik L.G., Tolkach G.V., Shchitnikova I.V. Analysis of economic activity: textbook / Under general. Ed. L.L. Ermolovich.-Mn: Interpress, Ecoperspective, 2004.-654 p.

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