Sources of financing for the company's activities. External financing and internal financing of the enterprise: types, classification and features
Results in any area of business depend on the availability and effectiveness of the use of financial resources, which are equated to the "circulatory system" that ensures the vital activity of the organization.
Therefore, taking care of finances is the starting point for the activity of any business entity. In a market economy, these issues are of paramount importance.
Funding sources are functioning and expected channels for obtaining funds, as well as a list of economic entities that can provide these funds.
Sources of financing of the enterprise are divided into internal and external.
Sources own funds are :
authorized capital(funds from the sale of shares and share contributions of participants);
reserves accumulated by the enterprise;
other fees of legal and individuals(target financing, donations, charitable contributions, etc.).
The main sources of funds raised include:
bank loans;
borrowed funds;
proceeds from the sale of bonds and other securities;
accounts payable.
The fundamental difference between the sources of own and borrowed funds lies in the legal reason - in the event of the liquidation of the enterprise, its owners have the right to that part of the property of the enterprise that will remain after settlements with third parties.
The main sources of financing are own funds. Let's bring brief description these sources.
The authorized capital is the amount of funds provided by the owners to ensure the statutory activities of the enterprise. The content of the category "authorized capital" depends on the organizational and legal form of the enterprise:
for a state-owned enterprise - the valuation of property assigned by the state to the enterprise on the right of full economic management;
for a limited liability partnership - the sum of the shares of the owners;
for a joint-stock company - the total nominal value of shares of all types;
for a production cooperative -- the valuation of the property provided by the participants for conducting activities;
for a leased enterprise - the amount of contributions of employees of the enterprise;
for an enterprise of a different form, allocated to an independent balance sheet - a valuation of property assigned by its owner to the enterprise on the right of full economic management.
When creating an enterprise, contributions to its authorized capital can be cash, tangible and intangible assets. At the time of the transfer of assets in the form of a contribution to the authorized capital, the ownership of them passes to the economic entity, i.e., investors lose property rights to these objects. Thus, in the event of the liquidation of the enterprise or the withdrawal of a participant from the company or partnership, he has the right only to compensate for his share within the residual property, but not to return the objects transferred to him in due time in the form of a contribution to the authorized capital. The authorized capital, therefore, reflects the amount of the company's obligations to investors.
The authorized capital is formed during the initial investment of funds. Its value is announced at the time of registration of the enterprise, and any adjustments to the size of the authorized capital (additional issue of shares, reduction in the nominal value of shares, making additional contributions, admitting a new participant, joining part of the profit, etc.) are allowed only in cases and in the manner provided for by the current legislation and constituent documents.
The formation of the authorized capital may be accompanied by the formation of an additional source of funds - share premium. This source arises when, during the initial issue, shares are sold at a price above par. Upon receipt of these amounts, they are credited to additional capital.
Profit is the main source of funds for a dynamically developing enterprise. In the balance sheet, it is present explicitly as retained earnings, and also in a veiled form -- as funds and reserves created at the expense of profits . In a market economy, the amount of profit depends on many factors, the main of which is the ratio of income and expenses. At the same time, the current regulatory documents provide for the possibility of a certain regulation of profits by the management of the enterprise. These regulatory procedures include:
variation in the boundary of attributing assets to fixed assets;
accelerated depreciation of fixed assets;
the applied depreciation method for low-value and wearing items;
the procedure for valuation and amortization of intangible assets;
the procedure for assessing participants' contributions to the authorized capital;
choice of method for estimating inventories;
the procedure for accounting for interest on bank loans used to finance capital investments;
the procedure for creating a reserve for doubtful debts;
the procedure for attributing certain types of expenses to the cost of goods sold;
the composition of overhead costs and the way they are distributed.
Profit -- the main source of formation of reserve capital (fund). This capital is intended to compensate for unforeseen losses and possible losses from economic activity, that is, it is insurance in nature. The procedure for the formation of reserve capital is determined by the regulatory documents governing the activities of an enterprise of this type, as well as its statutory documents.
Additional capital as a source of enterprise funds is formed, as a rule, as a result of revaluation of fixed assets and other material assets. Regulatory documents prohibit its use for consumption purposes.
A specific source of funds are funds for special purposes and targeted financing: donated valuables, as well as non-refundable and repayable state appropriations for financing non-production activities related to the maintenance of social, cultural and municipal facilities, for financing the costs of restoring the solvency of enterprises located on full budget financing, etc. .
Comparison of various methods of financing allows the company to choose the most optimal option for financial support of operations and capital expenditures. It should also be noted that the development of the long-term loan market in Russia is possible only if the economic system is stabilized, i.e. overcoming the decline in production, reducing the rate of inflation growth (up to 3-5% per year), reducing the discount rate bank interest up to 15-20% per annum, elimination of a significant budget deficit.
External financing - the use of funds from the state, financial and credit organizations, non-financial companies and citizens. External financing at the expense of own funds involves the use of financial resources of the founders (participants) of the enterprise. Financial support for entrepreneurial activities of this type is often the most preferable, as it ensures the financial independence of the enterprise and facilitates the conditions for obtaining bank loans (in the event of a shortage of liquid funds).
Debt financing is the provision of funds by creditors on the terms of repayment and payment. The content of this method is not in the participation of one's own funds in the capital of the enterprise, but in the usual credit relations between the borrower and the lender.
Debt financing is divided into two types:
through a short-term loan;
with a long-term loan.
Short-term borrowed capital serves as a source of financing for current assets (inventory, work in progress, seasonal costs, etc.). Prepayment by the customer of goods generates non-payments in the economy and can be considered as an interest-free loan to the supplier. Unlike in Russia, prepayment is rarely used by Western firms that work on deferred payment for goods (commercial credit) or on a system of discounts on the price of products (spontaneous financing).
Short-term attracted capital is provided by banks on the terms of a loan agreement with the borrower against the real security of his property.
Long-term attracted capital (in the form of a loan) is directed to the renewal of fixed assets and the acquisition of intangible assets.
Capital investments - investments in fixed assets (in fixed assets) include the costs of new construction, expansion, reconstruction and technical re-equipment of existing enterprises, the purchase of machinery, equipment, design and survey work, etc. Capital investments are financed both at the expense of own (net profit and depreciation), and at the expense of borrowed funds (funds of investors).
Compared to financing through loans obtained from the stock market (issuance of corporate bonds), the use of long-term debt secured loans provides the borrower with the following advantages:
funds are not spent on printing securities or their registration on electronic media, on issue, advertising and placement;
legal relations between the borrower and the lender are known to a limited circle of persons;
the conditions for granting a loan are determined by the partners in each transaction;
a shorter period between application and receipt of a loan compared to the receipt of funds from the stock market;
restrictions on the issue of bonds of a joint-stock company. Thus, the issue of bonds without property security is allowed not earlier than the third year of its existence and subject to the proper approval by this time of two annual balance sheets and full payment of the authorized capital. The Company is not entitled to issue bonds if the number of declared shares of certain categories and types is less than the number of categories and types, the right to purchase of which is provided by these securities.
Among borrowed sources of financing, the main role is usually played by long-term bank loans. This is the most common way to finance businesses.
Short-term financing is used, as a rule, to replenish working capital. The volume and structure of working capital vary depending on the industry of the enterprise, may be subject to seasonal and cyclical fluctuations, they also depend on the effectiveness of product portfolio management and working capital management strategy.
As mentioned above, the main internal sources of financing for the activities of entrepreneurial firms are profit and depreciation. Profit how economic category reflects the net income created in the sphere of material production in the process of entrepreneurial activity, and performs certain functions.
First of all, profit characterizes the economic effect obtained as a result of the activities of an entrepreneurial firm.
Profit also performs a social function, as it is one of the sources for the formation of budgets at different levels. It enters the budgets in the form of taxes and, along with other revenues, is used to finance social needs, ensure that the state performs its functions, state investment, production, scientific, technical and social programs. The social function of profit is also manifested in the fact that it serves as a source of charitable activities a firm aimed at financing individual non-profit organizations, institutions social sphere, financial assistance certain categories citizens.
The stimulating function of profit is manifested in the fact that profit is both a financial result and the main element of the company's financial resources. Indeed, profit is the main internal source of formation of the financial resources of the company, ensuring its development. The higher the level of profit generation of an enterprise in the course of its economic activity, the less its need to attract financial resources from external sources, and the higher the level of self-financing of the enterprise's development, ensuring the implementation of the strategic goals of this development. At the same time, unlike other internal sources of formation of the financial resources of the company, profit is a constantly reproducible source, and its reproduction in the conditions of successful management is carried out on an expanded basis.
Profit is the main source of increasing the market value of the company. The ability to self-increase the cost of capital is provided by capitalizing a part of the profit received by the firm. The higher the amount and level of capitalization of the profit received by the company, the greater the increase in the value of its net assets, and, accordingly, the market value of the company as a whole, determined during its sale, merger, absorption and in other cases.
Profit is the main protective mechanism that protects the firm from the threat of bankruptcy. Although the threat of bankruptcy may also arise in the conditions of a profitable economic activity of the company, but other things being equal, the company is much more successful and faster out of the crisis with a high level of profit. Due to the capitalization of the profits received, the company can quickly increase the share of highly liquid assets, increase the share of equity with a corresponding decrease in the volume of borrowed funds, and also form reserve financial funds.
Thus, in a market economy, the value of profit is enormous. The desire to make a profit directs commodity producers to increase the volume of production needed by the consumer, reduce production costs. For entrepreneurial firms, profit is an incentive to invest in those areas of activity that make a profit.
Profit is the end result of the production and economic activities of the company, an indicator of its effectiveness, a source of funds for investment, the formation of special funds, as well as payments to the budget. Making a profit is the main goal of a business organization.
The total amount of profit (loss) received by the enterprise for a certain period, i.e. gross profit consists of:
- profit (loss) from the sale of products, services, work performed;
– profit (loss) from other sales;
– profit (loss) from non-sales operations.
Profit (loss) from product sales(works, services). It is defined as the difference between the proceeds from the sale of products (works, services) without value added tax and excises and the costs of production and sales included in the cost of products (works, services).
Profit (loss) from other sales. An enterprise may have excess material assets as a result of changes in the volume of production, shortcomings in the supply system, sales, and other reasons. Long-term storage of these valuables in conditions of inflation leads to the fact that the proceeds from their sale will be lower than the purchase prices. Therefore, from the sale of unnecessary inventory items, not only profits are formed, but also losses.
With regard to the sale of surplus fixed assets, the profit from this sale is calculated as the difference between the sale price and the initial (or residual) value of the funds, which is increased by the corresponding index, legally established depending on the inflation rate.
Profit (loss) from non-sales operations. It is calculated as the difference between income and expenses on non-operating operations. Income (expenses) from non-sales operations includes income received from equity participation in the activities of other enterprises, from the lease of property; income (dividends, interest) on shares, bonds and other securities owned by the enterprise; profit received by the investor in the performance of a production sharing agreement, as well as other income (expenses) from operations not directly related to the production of products, services, performance of work, sale of property.
Income from non-sales operations also includes amounts of funds received free of charge from other enterprises in the absence of joint activities, with the exception of funds credited to the authorized capital of enterprises by their founders in the manner prescribed by law; funds received as gratuitous aid (assistance) and confirmed by an appropriate certificate; funds received from foreign organizations in the form of gratuitous assistance to Russian education, science and culture; funds received by privatized enterprises as investments as a result of investment competitions (biddings); funds transferred between the main and subsidiaries, provided that the share of the main enterprise is more than 50% in the authorized capital of subsidiaries; funds transferred for the development of the production and non-production base within one legal entity.
Non-operating expenses include fines, penalties, forfeits for violation of the terms of contracts, which are recognized by the debtor enterprise; recoverable losses caused by the enterprise; losses of previous years identified in the reporting year; the amount of receivables for which the limitation period has expired; other debts that are uncollectible; exchange differences arising from the revaluation in accordance with the established procedure of property and liabilities denominated in foreign currency; losses from the write-off of previously awarded debts for theft, for which the enforcement documents were returned by the court due to the insolvency of the defendant; losses from theft of material and other valuables, the perpetrators of which have not been established by court decisions; court costs etc. .
The total amount of profit received by the enterprise is distributed between the enterprise and the federal, regional and local budget by paying income tax on taxable profit.
Taxable income is the difference between the total (gross profit - in accordance with the Federal Law "On the Profit Tax of Enterprises and Organizations" - and the amount of profit taxed on income (on securities and from equity participation in joint ventures), as well as the amount of benefits for income tax in accordance with tax legislation, which is periodically reviewed.
Net profit- profit remaining at the disposal of the enterprise after payment of all taxes, economic sanctions and contributions to charitable foundations.
The amount of gross profit is influenced by a combination of many factors that depend and do not depend on entrepreneurial activity. Important profit growth factors that depend on the activities of enterprises are: an increase in the volume of products manufactured in accordance with contractual terms, a decrease in its cost, an increase in quality, an improvement in the assortment, an increase in the efficiency of the use of production assets, and an increase in labor productivity.
Factors that do not depend on the activities of entrepreneurial firms include changes in prices for products sold, regulated by government agencies, the impact of natural, geographical, transport and technical conditions on the production and sale of products, etc.
The procedure for the distribution and use of profits in a company is fixed in the company's charter, according to which firms can make estimates of expenses financed from profits, or form special-purpose funds: accumulation funds and consumption funds. The estimate of expenses financed from profits includes expenses for the development of production, for the social needs of the labor collective, for material incentives for employees and for charitable purposes.
The costs associated with the development of production include the costs of research, design, engineering and technological work, financing the development and development of new types of products and technological processes, costs of improving technology and organization of production, upgrading equipment, etc. This group of expenses also includes expenses for repayment of long-term bank loans and interest on them, as well as expenses for environmental protection measures, etc.
The distribution of profits for social needs includes: expenses for the operation of social facilities that are on the balance sheet of the company; financing the construction of non-production facilities, the organization and development of subsidiary agriculture, the holding of recreational, cultural events, etc.
The costs of material incentives include: one-time incentives for the performance of production tasks, the payment of bonuses, the cost of providing material assistance to workers and employees, pension supplements, compensation to workers for the cost of food, etc.
An important role in the composition of domestic sources of financing is also played by depreciation deductions, which represent the monetary value of the depreciation of fixed assets and intangible assets and are an internal source of financing for both simple and expanded reproduction. Objects for depreciation are fixed assets that are in the company on the right of ownership, economic management, operational management.
Depreciation on fixed assets leased out is made by the lessor (with the exception of depreciation deductions made by the lessee on property under the company's lease agreement, and in cases provided for in the financial lease agreement).
The accrual of depreciation on property under a company lease agreement is carried out by the tenant in the manner adopted for fixed assets owned by the organization. Depreciation of leased property is charged by the lessor or lessee, depending on the terms of the lease agreement.
For fixed assets received under a donation agreement and free of charge in the process of privatization, housing stock, external improvement facilities and similar forestry, road facilities, specialized navigation facilities and other facilities, productive livestock, buffaloes, oxen and deer, perennial plantings who have not reached the operating age, as well as for purchased publications (books, brochures, etc.), depreciation is not charged.
Objects of fixed assets, consumer properties of which do not change over time (land plots, nature management objects), are not subject to depreciation.
Depreciation deductions for an object of fixed assets begin on the 1st day of the month following the month in which this object was accepted for accounting. Depreciation deductions are charged until the full repayment of the cost of this object or the write-off of this object from accounting in connection with the termination of the right of ownership or other real right. Depreciation deductions for an object of fixed assets are terminated from the 1st day of the month following the month of full repayment of the cost of this object or write-off of this object from accounting.
In accordance with the Guidelines for Accounting of Fixed Assets, approved by the Order of the Ministry of Finance of the Russian Federation, depreciation of fixed assets can be carried out in one of the following four ways of calculating depreciation:
1) linear;
2) diminishing balance;
3) write-offs by the sum of numbers of years of the useful life;
4) cost write-offs in proportion to the volume of products (works).
The use of one of the methods for a group of homogeneous items of fixed assets is carried out during the entire period of its useful life. The accrual of depreciation deductions is not suspended during the useful life of fixed assets, except when they are under reconstruction and modernization by decision of the head of the company, and for fixed assets transferred by decision of the head of the organization to conservation with a duration that cannot be less than 3 months.
At linear method, depreciation is calculated evenly, and the annual amount of depreciation is determined from the initial cost of the fixed asset object and the depreciation rate calculated based on the useful life of this object.
With the method reducing balance the annual amount of depreciation charges is determined from the residual value of the fixed asset at the beginning of the reporting year and the depreciation rate calculated on the basis of the useful life of this object, and the acceleration factor established in accordance with the legislation of the Russian Federation.
The acceleration coefficient is applied according to the list of high-tech industries and efficient types of machinery and equipment established by the federal executive authorities. For movable property constituting the object of financial leasing and attributable to the active part of fixed assets, an acceleration factor of no more than 3 can be applied, in accordance with the terms of the leasing agreement.
The essence of this method is that the share of depreciation charged to the cost of production will decrease with each subsequent year of operation of the fixed asset, for which depreciation is charged using the reducing balance method.
With the method write-offs based on the sum of numbers of years of useful life the annual amount of depreciation is determined based on the initial cost of the fixed asset and the annual ratio, where the numerator is the number of years remaining until the end of the life of the facility, and the denominator is the sum of the numbers of years of the life of the facility.
Accrual of depreciation charges on fixed assets during the reporting year is made on a monthly basis, regardless of the method of accrual used, in the amount of 1/12 of the calculated annual amount.
This method of depreciation is preferable because it allows you to write off at the beginning of operation most the cost of fixed assets, then the write-off rate slows down, which ensures a reduction in the cost of production.
With the method write-offs in proportion to the volume of products (works) depreciation charges are calculated based on the natural indicator of the volume of production (work) in the reporting period and the ratio of the initial cost of the fixed asset item and the estimated volume of production (work) for the entire useful life of the fixed asset item.
This depreciation method can also be used in the case of the seasonal nature of the operation of the equipment, if the technical documentation provides for the dependence of the equipment service life on the number of units of production.
In accordance with the Federal Law of June 14, 1995 No. 88-FZ “On state support small business in the Russian Federation" small businesses have the right to charge depreciation of fixed assets in the amount twice as high as the norms established for the relevant types of fixed assets, and also write off additionally as depreciation deductions up to 50% of the initial cost of fixed assets with a useful life of more than 3 years.
The cost of special tools, special fixtures and replaceable equipment is repaid only by writing off the cost in proportion to the volume of products (works, services). The cost of special tools and special devices intended for individual orders or used in mass production may be fully paid at the time of transfer to production of the relevant tools and devices.
The cost of items intended for rental under a rental agreement is repaid only on a straight-line basis.
The cost of intangible assets is also repaid by accruing depreciation over their useful life. For objects for which the cost is repaid, depreciation deductions are determined in one of the following ways: a straight-line method based on the norms calculated by the organization on the basis of their useful life; method of writing off the cost in proportion to the volume of products (works, services).
For intangible assets for which it is impossible to determine the useful life, depreciation rates are set for 10 years (but not more than the life of the organization). For intangible assets received under a donation agreement and free of charge in the process of privatization, acquired using budget appropriations and other similar funds (in terms of the value attributable to the amount of these funds), and for intangible assets of budgetary organizations, depreciation is not charged.
Of the four depreciation methods provided for by the legislation of the Russian Federation, two are accelerated depreciation methods: the method of the sum of useful life numbers and the declining balance method. Despite the great popularity of accelerated depreciation in world practice, it has not received proper distribution in Russia.
This is due to the fact that the use of accelerated depreciation significantly worsens the financial and economic performance of an entrepreneurial firm due to an increase in the cost of production, since in the first years of operation of a fixed asset, most of them are written off.
In accordance with part two of the Tax Code of the Russian Federation (Chapter "Income Tax"), depreciable property is distributed among depreciation groups in accordance with its useful life as follows.
First group- all non-durable property with a useful life of 1 to 2 years inclusive.
Second group- property with a useful life of more than 2 years up to 3 years inclusive.
Third group- property with a useful life of more than 3 years up to 5 years inclusive.
Fourth group- property with a useful life of more than 5 years up to 7 years inclusive.
Fifth group- property with a useful life of more than 7 years up to 10 years inclusive.
Sixth group- property with a useful life of more than 10 years up to 15 years inclusive.
Seventh group- property with a useful life of more than 15 years up to 20 years inclusive.
Eighth group- property with a useful life of more than 20 years up to 25 years inclusive.
Ninth group- property with a useful life of more than 25 years up to 30 years inclusive.
Tenth group- property with a useful life of more than 30 years.
For other fixed assets that are not specified in depreciation groups, the useful life is set by the enterprise in accordance with the technical specifications and recommendations of manufacturers.
For tax purposes, enterprises accrue depreciation using one of the following methods:
1) linear;
2) non-linear.
Linear the depreciation method is applied to buildings, structures, transmission devices included in the eighth - tenth depreciation groups, regardless of the timing of putting these objects into operation. For other fixed assets, the enterprise has the right to apply one of two methods of depreciation in accordance with the accounting policy adopted by the enterprise.
The composition of the economic resources used by the organization is different. Of particular importance for the successful operation of the organization is the presence of a certain reserve of sources of financing.
Funding sources are the financial resources used to purchase assets and carry out transactions.
The sources of financing include short-term and long-term debt, preferred and ordinary shares (liability of the balance sheet).
An analysis of the structure of the balance sheet liability characterizing the sources of funds shows that their main types are: own and borrowed funds.
The sources of own funds are:
Authorized capital (funds from the sale of shares and share contributions of participants - the total nominal value of all types of shares, i.e., the authorized capital reflects the amount of all obligations of the company to investors, since in the event of its liquidation or withdrawal of a participant from its shareholders, the investor has the right only to compensation of their share within the residual property of the enterprise); the formation of the authorized capital may be accompanied by the formation of an additional source of funds - share premium, if during the initial issue the shares are sold at a price above par;
Reserves accumulated by the enterprise, including retained earnings;
Mobilization of internal assets (in the process of capital construction, the firm may form specific sources of financing, for example, the sale of a part of current assets);
Other contributions from legal entities and individuals (targeted funding, donations, charitable contributions, etc.).
The main sources of borrowed funds are:
Bank loans;
Postponement of tax payment;
Borrowed funds from other companies (loans of legal entities against debt obligations - promissory notes);
Funds from the sale of bonds (registered and bearer) and other securities to other companies;
Accounts payable (commercial loan);
Leasing (financial transaction for the use of property through rent).
The fundamental difference between sources of own and borrowed funds lies in the legal content - when a company is liquidated, its owners have the right to that part of the company's property that will remain after settlements with third parties.
The essence of the difference between own and borrowed funds is that interest payments are deductible before taxes, that is, they are included in expenses, and dividends on the owners' shares are deducted from profits after interest and taxes.
Depending on the duration of existence, the assets of the organization, as well as sources of funds, are divided into short-term (current) and long-term. Short-term sources include sources of financing attracted for a period of less than 1 year. Long-term sources are equity capital and borrowed capital attracted for a period of more than 1 year.
Own and borrowed capital is characterized by positive and negative features that affect the activities of the enterprise.
Equity capital is characterized by the following positive features:
1. Ease of attraction, since decisions related to the increase in equity capital (especially through internal sources of its formation) are made by the owners and managers of the organization without the need to obtain the consent of other business entities.
2. A higher ability to generate profit in all areas of activity, since when using it, the payment of loan interest in all its forms is not required.
3. Ensuring the financial sustainability of the development of the organization, its solvency in the long term, and, accordingly, reducing the risk of bankruptcy.
At the same time, negative features are also inherent in equity:
1. The limited volume of attraction, therefore, the possibility of a significant expansion of the operating and investment activities of the organization during periods of favorable market conditions.
2. High cost compared to alternative borrowed sources of capital formation.
3. An unused opportunity to increase the return on equity ratio by attracting borrowed financial resources, since without such attraction it is impossible to ensure that the financial profitability ratio of the organization's activities exceeds the economic one.
Thus, an organization that uses only its own capital has the highest financial stability (the autonomy coefficient is equal to one), but limits the pace of its development (because it cannot ensure the formation of the necessary additional volume of assets during periods of favorable market conditions) and does not use financial opportunities increase in return on invested capital.
Borrowed capital is characterized by the following positive features:
1. Sufficiently wide opportunities for attracting, especially with a high credit rating of the organization, the presence of collateral or a guarantee of the recipient.
2. Ensuring the growth of the financial potential of the organization, if necessary, a significant expansion of its assets and an increase in the growth rate of the volume of its economic activity.
3. Lower cost in comparison with equity due to the effect of a "tax shield" (withdrawal of the cost of its maintenance from the taxable base when paying income tax).
4. The ability to generate an increase in financial profitability (return on equity ratio).
At the same time, the use of borrowed capital has the following negative features:
1. The use of this capital generates the most dangerous financial risks in the activities of the organization - the risk of reducing financial stability and loss of solvency. The level of these risks increases in proportion to the growth in the share of borrowed capital used.
2. Assets formed at the expense of borrowed capital generate a lower (ceteris paribus) rate of return, which is reduced by the amount of loan interest paid in all its forms (interest on a bank loan; leasing rate; coupon interest on bonds; bill interest on commodity credit, etc.).
3. High dependence of the cost of borrowed capital on fluctuations in the financial market.
In some cases, for example, with a decrease in the average loan interest rate in the market, the use of a previously received loan (especially on a long-term basis) becomes unprofitable for the organization due to the availability of cheaper alternative sources of credit resources.
4. The complexity of the recruitment procedure (especially in large sizes), since the provision of credit resources depends on the decision of other business entities (lenders), in some cases it requires appropriate third-party guarantees or collateral (at the same time, guarantees from insurance companies, banks and other organizations are provided, as a rule, on a paid basis).
Thus, an organization using borrowed capital has a higher financial potential for its development (due to the formation of an additional volume of assets) and the possibility of increasing the financial profitability of its activities, however, it generates financial risk and the threat of bankruptcy to a greater extent (increasing as the share of borrowed funds increases). funds in the total amount of capital used).
Any organization finances its activities, including investment, from various sources. As a payment for the use of financial resources advanced to the activities of the organization, it pays interest, dividends, remuneration, etc., i.e. incurs some reasonable costs to maintain its economic potential. As a result, each source of funds has its own value as the sum of the costs of providing this source.
The total amount of funds that must be paid for the use of a certain amount of financial resources, expressed as a percentage of this volume, is called the cost of capital (Cost of Capital, CC), i.e. The cost of capital is the ratio of the amount of funds that must be paid for the use of financial resources from a particular source to the total amount of funds from this source, expressed as a percentage. In the domestic literature, one can also find another name for the concept under consideration: the price of capital, the value of capital, the cost of capital, etc.
The indicator "cost of capital" has a different economic meaning for individual business entities:
a) for investors and creditors, the level of the cost of capital characterizes the rate of return required by them on the capital provided for use;
b) for business entities that form capital for the purpose of production or investment use, the level of its value characterizes the specific costs of attracting and servicing the financial resources used, i.e. the price they pay for the use of capital.
With this indicator, the organization evaluates how much should be paid for raising a unit of capital (both from a specific source of funds, and in the whole organization for all sources).
The concept of the cost of capital is one of the basic ones in the theory of the organization's capital. The cost of capital characterizes the level of return on invested capital required to ensure the high market value of the organization. The maximization of the market value of the organization is achieved to a large extent by minimizing the cost of the sources used. The indicator of the cost of capital is used in the process of evaluating the effectiveness of investment projects and the investment portfolio of the organization as a whole.
The indicator of the cost of capital is used in the process of evaluating the effectiveness of investment projects and the investment portfolio of the organization as a whole. The adoption of many financial decisions (the formation of a policy for financing current assets, the decision to use leasing, planning the operating profit of an organization, etc.) is based on an analysis of the cost of capital.
In the process of assessing the cost of capital, the cost of individual elements of equity and debt capital is first assessed, then the weighted average cost of capital is determined.
Determining the cost of capital of an organization is carried out in several stages:
1) the identification of the main components that are sources of formation of the capital of the organization is carried out;
2) the price of each source is calculated separately;
3) the weighted average price of capital is determined based on the share of each component in the total amount of invested capital;
4) measures are being developed to optimize the capital structure and form its target structure.
The cost of capital depends on its source (owner) and is determined by the capital market, i.e. supply and demand (if demand exceeds supply, then the price is set at a higher level). The cost of capital also depends on the amount of capital raised.
The main factors under the influence of which the cost of capital of an organization is formed are:
1) the general state of the financial environment, including financial markets;
2) commodity market conditions;
3) the average rate of loan interest prevailing in the market;
4) the availability of various sources of funding for organizations;
5) the profitability of the organization's operating activities;
6) the level of operating leverage;
7) the level of concentration of own capital;
8) the ratio of the volume of operating and investment activities;
9) the degree of risk of the operations being carried out;
10) industry specifics of the organization's activities, including the duration of the operating cycle
The level of cost of capital differs significantly for its individual elements (components). An element of capital in the process of assessing its value is understood as each of its varieties according to individual sources of formation (attraction). Such elements are the capital attracted by: 1) reinvestment of the profit received by the organization (retained earnings); 2) issue of preferred shares; 3) issue of ordinary shares; 4) obtaining a bank loan; 4) issue of bonds; 5) financial leasing, etc.
For a comparable assessment, the value of each element of capital is expressed as an annual interest rate. The level of value of each element of capital is not a constant value and fluctuates significantly over time under the influence of various factors.
NIZHNY NOVGOROD INSTITUTE OF MANAGEMENT AND BUSINESS
Department of Finance
Course work
by discipline
Financial management
"Sources of financing of the organization, their structure and optimization"
Completed by: full-time student,
4 courses, specialty "Finance and Credit", FEF
Checked:
Nizhny Novgorod, 2010
Introduction…………………………………………………………………………….3
Chapter 1. Sources and methods of financing the activities of the organization ..5
Chapter 2. Management of own and borrowed capital of the organization ...... .16
Chapter 3
Conclusion……………………………………………………………………...32
List of used sources and literature………………………….34
Applications
Introduction
Funding sources are functioning and expected channels for obtaining funds, as well as a list of economic entities that can provide these funds. The basis of the project financing strategy is the development of financing schemes based on the individual characteristics of the project and the factors influencing it.
When choosing sources of financing for the activities of an enterprise, it is necessary to solve five main tasks:
Determine the need for short- and long-term capital;
· identify possible changes in the composition of assets and capital in order to determine their optimal composition and structure;
· to ensure constant solvency and, consequently, financial stability;
Use own and borrowed funds with maximum profit;
Reduce the cost of financing business activities.
The relevance of this work lies in the fact that business leaders are currently faced with such a problem as the choice of a source of financing.
The main goal of the course work is to study the main sources of funding, their types, features.
The object of research for writing this work are the sources of funding.
When writing this course work, the following tasks were set:
1. Consider the main sources of funding, their nature and types;
2. Explore the main ways of financing
3. Consider the financing process on the example of a real enterprise.
The work has a traditional structure and includes an introduction, the main part, consisting of 3 chapters, a conclusion and a bibliographic list.
Chapter 1. Sources and methods of financing the activities of the organization.
Financing the economic activity of an enterprise is a set of forms and methods, principles and conditions for financial support for simple and expanded reproduction.
When choosing sources of financing for the activities of an enterprise, it is necessary to solve five main tasks:
Determine short-term and long-term capital needs;
Identify possible changes in the composition of assets and capital in order to determine their optimal composition and structure;
Ensure constant solvency and, consequently, financial stability;
Use own and borrowed funds with maximum profit;
Reduce the cost of financing business activities.
Organizational forms of financing :
Self-financing (retained earnings, depreciation, reserve capital, additional capital, etc.).
Equity or equity financing (participation in authorized capital, purchase of shares, etc.).
Debt financing (bank loans, placement of bonds, leasing, etc.).
Budget financing (loans on a repayable basis from the federal, regional and local budgets, appropriations from the budgets of all levels free of charge, targeted federal investment programs, government borrowing, etc.).
Special forms of financing (project financing, venture financing, financing by attracting foreign capital).
The primary source of funding for any business is authorized (share) capital (fund), which is formed from the contributions of the founders. Specific methods of formation of the authorized capital depends on the organizational and legal form of the enterprise. The minimum amount of the authorized capital on the day of registration of the company is:
In a limited liability company (LLC) - 100 minimum wages (SMIC). Federal Law No. 82-FZ of June 19, 2000 “On the Minimum Wage” sets the minimum wage at 100 rubles;
In a closed joint stock company (CJSC) - 100 minimum wages;
In an open joint stock company (OJSC) - at least 1000 minimum wages.
The founders of a joint-stock company or another company are required to fully contribute the authorized capital during the first year of operation.
Sources of formation of own financial resources of the enterprise are divided into external and internal sources. Internal sources include profit remaining at the disposal of the enterprise, depreciation deductions from used own fixed assets , other internal sources of formation of financial resources. External sources include the attraction of additional share or equity capital, the receipt by the enterprise of gratuitous financial assistance.
Equity structure
Undestributed profits is a reinvested source of own funds for equipment replacement and new investments.
The profit of the enterprise depends on the ratio of income received as a result of activities, with the costs that provided these incomes. Allocate gross profit, sales profit, operating profit, profit before tax (according to accounting data), taxable profit (according to tax accounting), undistributed (net) profit of the reporting period, reinvested (capitalized undistributed) profit.
The profit remaining at the disposal of the organization is a multi-purpose source of financing for its needs. However, the main areas of profit distribution are accumulation and consumption, the proportions between which determine the prospects for the development of the enterprise.
The formation of accumulation and consumption funds, as well as other monetary funds, may be provided for by the constituent documents and the adopted accounting policy of the enterprise, then their creation is mandatory, or the decision to direct profits to these funds is made by the meeting of shareholders on the proposal of the board of directors (participants).
Profit is also the main source of formation of reserve capital (fund).
Reserve capital - part of equity allocated from profit to cover possible losses. The source of the formation of reserve capital is net profit, that is, the profit remaining at the disposal of the organization.
IN without fail the reserve fund is created only by joint-stock companies. The minimum amount of the reserve fund is 5% of the authorized capital. At the same time, the amount of annual mandatory contributions to the reserve fund cannot be less than 5% of net profit until the amount established by the company's charter is reached.
The resources of the company's reserve fund are used:
To cover the losses of the company;
Bond redemptions;
Redemption of shares of a joint-stock company in the absence of other funds.
Reserve capital cannot be used for other purposes.
Depreciation deductions. Depreciation is a method of recovering capital spent on the creation and acquisition of depreciable assets by gradually transferring the cost of fixed assets and intangible assets to manufactured products.
The depreciation functions are divided into economic And tax .
Tax depreciation is determined in accordance with the Tax Code of the Russian Federation and its role is to reduce taxable profits.
Accounting depreciation may be more than tax depreciation, depending on the accepted method of determining it in accordance with current accounting standards.
Depreciation deductions fixed assets are included in the cost of production according to the established norms to the book value of fixed assets. Fixed assets are grouped depending on their useful life, and depreciation rates are applied to the cost of each group.
For accounting purposes, there are four ways to calculate depreciation of fixed assets:
1. linear;
2. diminishing balance;
3. write-offs based on the sum of numbers of years of useful life;
4. cost write-offs in proportion to the volume of production.
The selected method of depreciation is fixed in the accounting policy of the organization and is applied during the entire life of the fixed asset.
Additional issue of shares leads to a reduction in the ownership of already existing shareholders, and therefore can only be carried out with their consent to general meeting. If, when establishing a company, it is allowed to pay shares in the amount of 50% by the time of registration, and in the remaining amount - within a year, then when issuing additional shares, at least 25% of the nominal value of their acquisition is paid, and in the remaining amount - no later than a year from the date of their placement . In accordance with the legislation of the Russian Federation, the nominal
the value of the placed preferred shares should not exceed 25% of the authorized capital of the company.
Placement of securities(shares, bonds) in the primary securities market is carried out in two forms:
Through an intermediary
way direct appeal to investors, i.e. direct sale of company securities investment funds(firms) and individuals.
Disadvantages of equity financing:
An additional issue of shares is a very expensive and time-consuming process;
The issue may be accompanied by a decline in the market price of the shares of the issuing company;
There is no tax shield.
Extra capital is a specific own source of financing for the organization's enterprise. Unlike the authorized capital, it is not divided into shares (shares) and shows the common ownership of all participants (shareholders).
The formation and increase of additional capital can be carried out in the following cases:
1. Upon receipt of share premium.
2. When revaluing fixed assets.
3. In the event of exchange rate differences as a result of the formation of authorized capital denominated in foreign currency.
4. When receiving targeted investment funds from the budget to finance capital investments (for non-profit organizations).
Bank loans. A loan can be provided in cash or commodity form on terms of urgency, payment, repayment and material security.
The principal amount of debt on a loan or credit received is accounted for by the borrowing organization in accordance with the terms of the loan agreement (or credit agreement) in the amount of actually received funds or in valuation other things stipulated by the contract.
Considering the option of raising funds with a long-term loan, the company chooses a bank that offers a lower interest rate, all other things being equal. The terms of the loan agreement are optimal for both parties if the transaction is based on market rate of interest, which allows you to equalize the market value of capital received in exchange for debt, and the present value of payments on it, coming in the future.
The loan interest is determined by adding a premium to the base rate. The base rate is set by each bank individually, based on the discount rate of the Central Bank of Russia. The premium depends on the term of the loan, the quality of the collateral and the degree of credit risk associated with its provision.
As loan security accepted:
pledge of property,
Guarantee,
State and municipal guarantees,
Assignment in favor of the bank of the borrower's claims and accounts to a third party.
Despite a number of shortcomings for the enterprise (on the one hand, the deterioration in the structure of the organization's liabilities, the need for temporary and financial costs for the preparation of a qualified business plan, for the development of a loan application in a commercial bank), long-term bank lending is still one of the most effective ways of financing. For an enterprise, the presence of long-term borrowed funds as part of the sources of its property is positive moment, because it allows you to have attracted funds for a long time. Long-term loans by Russian enterprises can be obtained both in Russian banks, as well as foreign ones.
A commercial loan is a deferral of payments from one economic entity to another. Forms of commercial credit - advance payment, advance payment, deferment and installment payment for goods and services. Used by entrepreneurs engaged in certain related activities, for example, producers-sellers and consumers-buyers of the same product. The object of a commercial loan is funds in a commodity form.
A bill of exchange is a credit document for a commercial loan. A commercial loan can also be carried out on an open account. Open account - "non-promissory" form of commercial lending, special shape settlement relations between entrepreneurs carrying out mutual deliveries, i.e. being permanent counterparties in various transactions. tactically, enterprises open credit lines to each other, within which mutual deliveries are made. Investment tax credit - tax deferral provided by the authorities state power or tax authorities.
A bond loan is a loan that provides for the issue by the borrower of debt obligations in the form of bonds.
A bond is an issuance security that secures the right of its holder to receive from the issuer of the bond, within the period stipulated by it, its nominal value and the percentage of this value or other property equivalent fixed in it. Bondholders do not have ownership rights or shares in the firm or institution that issued the bond.
Bonds are a constant (in value) claim on the issuer's profit (determined by the amount of interest paid periodically), as well as a fixed claim on the issuer's assets (equal to the redemption amount). Generally, interest on bonds is paid every six months. However, there are exceptions to this rule: in some cases, the interest payment interval is reduced to one month, and very rarely the payment is made once a year. The amount of interest paid depends on the coupon.
The book value of a bonded loan, as a rule, does not coincide with its market value. The assessment of the market value of bonds is based on a number of data indicated on the bond itself: the official date of issue, face value, maturity, declared interest rate, date of payment of interest. Enterprises issuing loans strive to bring the announced interest rate on the bond as close as possible to the market rate in force at the time of the loan placement. Changes in the market rate of interest and the market value of the issuer's loan are inversely related. If the market interest rate exceeds the announced value, then the placed bonds are sold at a discount ( discount), and in the opposite situation - to their cost is added premium. Joint-stock companies and limited liability companies are allowed to issue bonds. By Russian legislation There are a number of restrictions on the issuance of bonds. Depending on the volume of the issue, the preparedness of the enterprise for the issue, it is possible to use various methods of bond placement.
Leasing is an extended lease agreement. The owner of the equipment (lessor) provides the user (lessee) with the opportunity to operate the equipment in exchange for regular rental payments. Leasing relations act, in essence, as credit transactions, since the tenant receives for temporary use the value embodied in machinery and equipment, on terms of repayment and payment.
Chapter 2. Management of own and borrowed capital of the organization
Own capital management involves managing the process of its formation, maintenance and effective use, that is, the management of already formed assets. This involves both the management of equity in general and the management of its building blocks.
The management of own capital should be preceded by a study of the effectiveness of its management in the previous period. The analysis is necessary to determine the reserves for the formation of own funds.
The basis of the management of the enterprise's own capital is the management of the formation of its own financial resources. In order to ensure effective management of this process, the enterprise usually develops a special financial policy aimed at attracting its own financial resources from various sources in accordance with the needs of its development in the coming period.
The main tasks of equity capital management are:
Determining the appropriate amount of equity capital;
An increase, if required, in the amount of equity capital from retained earnings or an additional issue of shares;
Determining the rational structure of newly issued shares;
Definition and implementation of the dividend policy.
The development of a policy for the formation of the enterprise's own financial resources is carried out according to the following main stages.
Analysis of the formation of the company's own financial resources in the previous period. The purpose of this analysis is to identify the potential for the formation of its own financial resources and its compliance with the pace of development of the enterprise.
2. Determining the total need for own financial resources. The calculated total need covers the required amount of own financial resources generated from both internal and external sources.
3. Estimation of the cost of raising equity capital from various sources. Such an assessment is carried out in the context of the main elements of equity capital formed from internal and external sources. The results of such an assessment serve as the basis for the development of management decisions regarding the choice of alternative sources for the formation of own financial resources that ensure the growth of the enterprise's own capital.
4. Ensuring the maximum volume of attraction of own financial resources from internal sources.
5. Ensuring the necessary volume of attraction of own financial resources from external sources. The volume of attracting own financial resources from external sources is designed to provide that part of them that could not be formed from internal sources of financing. If the amount of own financial resources attracted from internal sources fully meets the total need for them in the planning period, then there is no need to attract these resources from external sources.
6. Optimization of the ratio of internal and external sources of formation of own financial resources. This optimization process is based on the following criteria:
Ensuring the minimum total cost of attracting own financial resources;
Ensuring the preservation of the management of the enterprise by its original founders.
Management of the company's own capital also includes determining the optimal ratio between own and borrowed financial resources.
Although the basis of any business is equity capital, at enterprises in a number of sectors of the economy, the amount of borrowed funds used significantly exceeds the amount of equity capital. In this regard, managing the attraction and effective use of borrowed funds is one of the most important functions of financial management, aimed at ensuring the achievement of high final results of the economic activity of the enterprise.
Borrowed capital used by the enterprise characterizes in aggregate the volume of its financial obligations (the total amount of debt). These financial obligations in modern economic practice are differentiated as follows:
1. Long-term financial liabilities (borrowed capital with a period of use of more than 1 year).
2. Short-term financial obligations (all forms of borrowed capital with a period of use up to 1 year).
In the process of development of the enterprise, as its financial obligations are repaid, there is a need to attract new borrowed funds. Sources and forms of borrowing by the enterprise are very diverse. Borrowed funds are classified by purpose, source, form and period of attraction, as well as by form of security.
Taking into account the classification of borrowed funds, the methods of managing their attraction are differentiated.
Managing the attraction of borrowed funds is a purposeful process of their formation from various sources and in various forms in accordance with the needs of the enterprise in borrowed capital at various stages of its development.
Stages of developing a policy for attracting borrowed funds by an enterprise |
|
Analysis of the attraction and use of borrowed funds in the previous period |
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Determining the objectives of raising borrowed funds in the coming period |
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Determination of the maximum amount of borrowing |
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Estimation of the cost of borrowing capital from various sources |
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Determination of the ratio of the volume of borrowed funds attracted on a short-term and long-term basis |
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Determination of forms of borrowing |
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Determination of the composition of the main creditors |
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Formation of effective conditions for attracting loans |
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Ensuring the effective use of attracted loans |
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Ensuring timely settlements on loans received |
The object of study of this course work is the open joint-stock company "Innovator".
Experienced design department"Innovator" was created in December 1947 on the basis of the department of the Chief Designer of the Plant. M.I. Kalinin (factory No. 8) as OKB-8. Initial specialization - the development of anti-aircraft guns of large caliber. In addition to military orders, OKB "Novator" has developed and put into operation land and sea meteorological missile systems. OKB "Novator" continues active work on the creation of new models of rocketry that meet the challenges of the time.
Novator OJSC has its own balance sheet, settlement and other accounts. The Company has a round seal containing its full corporate name in Russian and an indication of its location. The Company has the right to have stamps and letterheads with its company name, its own emblem, as well as duly registered trademark and other means of individualization.
Located at the address: 620017, Russia, Yekaterinburg, pr. Kosmonavtov, 18.
Analysis of the financial condition of JSC OKB Novator
The analysis of the financial condition of the enterprise is carried out according to the financial statements and the income statement for 2008. (Appendix 1 and Appendix 2).
Relative indicators of financial stability.
The coefficient of provision with own current assets:
SOS=CR-VA, where (2.1)
SOS - own working capital;
OA - current assets;
KR - capital and reserves, total of section 3;
VA - non-current assets.
The coefficient of provision with own working capital determines the degree of provision of the organization with own working capital necessary for its financial stability, and is calculated as the ratio of the difference between own funds and adjusted non-current assets to the value of current assets.
If the value of the coefficient is greater than or equal to one, the enterprise, at the expense of its own working capital fully provides its current assets, and has absolute financial stability. The lower the value of the coefficient, the more unstable the financial condition of the enterprise. An enterprise reaches a critical financial state when the ratio is 10% or less.
It can be said that at the beginning of the reporting year, the company reached a critical financial condition, since the ratio had a value of 2.6%. which is less than 10%. But by the end of the year, it is observed that the enterprise at its own expense fully provides its current assets and has almost absolute stability.
The ratio of stocks with own working capital:
- recommended value 0.5-0.8, where (2.2)
Z - stocks.
The coefficient of provision of stocks with own sources of financing shows what part of tangible current assets is financed at the expense of own capital.
If this coefficient is greater than one, then the amount of working capital exceeds the amount of reserves and costs, and the company has absolute financial stability.
This ratio shows That at the end of the reporting year, approximately 50% of tangible current assets are financed from equity.
Agility factor:
(2.3)
The ratio shows what part of equity capital is used to finance current activities, i.e. invested in current assets, and what part is capitalized, i.e. invested in non-current assets.
Fixed assets index:
It characterizes the share of fixed assets and non-current assets in the sources of own funds.
Since the coefficient of maneuverability and the index of constant prices in the seme give 1, therefore, the organization does not use long-term loans and borrowings.
Autonomy coefficient:
, where (2.5)
VB is the balance sheet currency.
The autonomy coefficient shows the share of own funds in the total amount of funding sources. This financial ratio allows assessing the dependence of the enterprise on external sources of financing, i.e. the possibility of carrying out activities without additional attraction of borrowed capital. On the other hand, the autonomy ratio shows how much the financial obligations of the enterprise can be covered by equity capital.
By the end of the reporting period, one can see a slight increase in this indicator, by 0.063 or 6.3%, which means that the dependence of own funds on borrowed funds has decreased, which means that there has been an increase in own funds.
Absolute independence coefficient:
, where (2.6)
DO - long-term liabilities.
The coefficient shows what part of the total value of the company's assets is formed from the most reliable sources of financing, i.e. not dependent on short-term borrowings. In essence, this is a refined coefficient of autonomy.
Financial dependency ratio (debt):
, where (2.7)
KO - short-term liabilities.
The coefficient of financial dependence of the enterprise means how much the assets of the enterprise are financed by borrowed funds. Too much borrowing reduces the solvency of the enterprise, undermines its financial stability and, accordingly, reduces the confidence of counterparties in it and reduces the likelihood of obtaining a loan.
Both at the beginning and at the end of the reporting year, the company has approximately the same dependence on borrowed funds. But it cannot be said that the share of borrowed funds reduces the solvency of the organization.
Funding ratio:
(2.8)
The funding ratio gives the most general assessment of the financial soundness of an organization. It shows how much borrowed funds account for each ruble of own funds invested in the assets of the enterprise. The growth of this indicator indicates an increase in the dependence of the enterprise on borrowed capital, i.e. about some decrease in financial stability, and vice versa.
Financial Leverage:
(2.9)
The shoulder of the financial lever carries fundamental information for both the entrepreneur and the banker. Large leverage means significant risk for both participants in the economic process.
Investment ratio:
The investment ratio shows the extent to which non-current assets are covered by the company's own capital.
By the end of the reporting year, this indicator increased by 0.172 or 17.2%, which means that equity capital began to cover non-current assets by 17.2%.
Return on equity:
, (2.11)
where Rsk - return on equity,
NPR - net profit
KR - credits and loans (in this case, the average value is taken).
The return on equity characterizes the effectiveness of the use of own funds invested in the organization. Return on equity shows how much net profit falls on the ruble of equity.
1 ruble of own funds in 2008 accounts for 5.9 kopecks of net profit.
Impact of Return on Sales:
(2.12)
Under the influence of return on sales, return on equity decreased by 1.7%.
Chapter 3 Optimization of the structure of business financing sources
Optimal capital structure represents such a ratio of the use of own and borrowed funds, which ensures the most effective proportionality between the financial profitability ratio and the financial stability ratio of the enterprise, i.e. its market value is maximized.
The process of optimizing the capital structure of an enterprise is carried out in the following stages:
-Analysis of the company's capital
-Assessment of the main factors determining the formation of the capital structure
- Optimization of the capital structure according to the criterion of maximizing the level of financial profitability;
- Optimization of the capital structure according to the criterion of minimizing the level of financial risks;
-Optimization of the capital structure according to the criterion of minimizing its cost.
One of the mechanisms for optimizing the capital structure of an enterprise is financial leverage, which allows you to determine how much borrowed funds are attracted by the enterprise per unit of equity capital. An indicator that reflects the level of additionally generated return on equity with a different share of the use of borrowed funds is called effect of financial leverage. It is calculated using the following formula:
EGF \u003d (1 - Sn) × (KR - Sk) × ZK / SK,
where:
EGF- effect of financial leverage, %.
Sn- income tax rate, in decimal terms.
KR- return on assets ratio (the ratio of gross profit to the average value of assets), %.
Sk- average interest rate for a loan, %.
ZK- the average amount of borrowed capital used.
SC- the average amount of own capital.
This formula opens up ample opportunities for the financial manager to determine the safe amount of borrowed funds, calculate acceptable lending conditions, ease the tax burden for the enterprise, determine the feasibility of acquiring company shares with certain values of the differential, leverage and EGF level as a whole.
The question arises: “What value of EGF should we strive for?”. Many Western economists believe that the golden mean is close to 30-50 percent, i.e. EGF should optimally be equal to one third - half of the level of ER assets. Then the EGF is able, as it were, to compensate for tax exemptions and provide a decent return on its own funds. Moreover, with such a ratio between EGF and ER, shareholder risk is significantly reduced.
When choosing sources of financing for an enterprise, it is necessary:
determine the need for short-term and long-term capital;
analyze possible changes in the composition of capital assets in order to determine their optimal structure in terms of volume and types;
ensure constant solvency and, consequently, financial stability;
use own and borrowed funds as profitably as possible;
reduce the cost of financing business activities.
The calculated indicators of financial stability for the period under review indicate that at the beginning of the reporting year, the company has reached a critical financial state, since the ratio of own working capital was 2.6%, which is less than 10%. But by the end of the year, it is observed that the enterprise at its own expense fully provides its current assets and has almost absolute stability. At the end of the reporting year, approximately 50% of the organization's tangible current assets are financed from equity. At the beginning of the period, 2.3% of equity capital, and at the end of the period already 16.4% invested in current assets. A low value of the agility index (below 50%) means that a significant part of the enterprise's own funds is fixed in immobile values, which are less liquid, i.e. cannot be converted into cash quickly enough. Since the coefficient of maneuverability and the constant price index together give 1, therefore, the organization does not use long-term loans and borrowings. By the end of the reporting period, one can see a slight increase in the autonomy indicator, by 0.063 or 6.3%, which means that the dependence of own funds on borrowed funds has decreased, which means that there has been an increase in own funds. Both at the beginning and at the end of the reporting year, the company has approximately the same dependence on borrowed funds. But it cannot be said that the share of borrowed funds reduces the solvency of the organization. By the end of the reporting year, the investment ratio increased by 0.172 or 17.2%, which means that by 17.2% equity began to cover non-current assets more.
Development only at the expense of own resources reduces some financial risks in the business, but at the same time greatly reduces the rate of increase in the size of the business, primarily revenue. On the contrary, attracting additional borrowed capital with the right financial strategy and high-quality financial management can dramatically increase the income of company owners on their invested capital. The reason is that an increase in financial resources, when properly managed, leads to a proportional increase in sales and often net profit. This is especially true for small and medium-sized companies.
However, the leveraged capital structure imposes excessively high demands on its return, as the probability of non-payment increases and the risks for the investor increase. In addition, the company's customers and suppliers, noticing the high leverage, may start looking for more reliable partners, which will lead to a drop in revenue. On the other hand, too low leverage means underutilization of a potentially cheaper source of financing than equity. This structure results in higher capital costs and inflated returns on future investments.
The optimal capital structure is such a ratio of own and borrowed sources that ensures the optimal ratio between the levels of …, i.e. maximizing the market value of the enterprise. When optimizing capital, it is necessary to take into account each part of it.
Equity capital is characterized by the following additional points:
1. Ease of involvement (need the decision of the owner or without the consent of other business entities).
2. High rate of return on invested capital, because no interest is paid on borrowed funds.
3. Low risk of loss of financial stability and bankruptcy of the enterprise.
Disadvantages of own funds:
1. Limited volume of attraction, i.e. it is impossible to significantly expand economic activity.
2. The possibility of increasing the return on equity by attracting borrowed funds is not used.
Advantages of borrowed capital:
1. Wide opportunities for raising capital (if there is a pledge or guarantee).
2. Increasing the financial potential of the enterprise, if necessary, to increase the volume of economic activity.
3. The ability to increase the return on equity.
Disadvantages of borrowed capital:
1. The complexity of attracting, because the decision depends on other business entities.
The need for collateral or guarantees.
2. Low rate of return on assets.
3. Low financial stability of the enterprise.
Based on these features and after analyzing the enterprise OKB Novator, it can be concluded that if the management of the enterprise uses borrowed capital, it will have a higher potential and the possibility of increasing the return on equity, but at the same time its financial stability will be lost. But if management decides to use equity capital as a source of financing, then financial stability, on the contrary, will be the highest, but the possibility of profit growth will be limited.
Conclusion
Financing refers to the process of generating funds or, more broadly, the process of forming the capital of an enterprise in all its forms.
Classification of funding sources is varied and can be produced according to the following features:
According to the property relations, own and borrowed sources of financing are distinguished.
According to the types of property, state resources, funds of legal entities and individuals and foreign sources are allocated.
In terms of time characteristics, funding sources can be divided into short-term and long-term.
As part of internal sources of formation of own financial resources. The main place belongs to the profit remaining at the disposal of the enterprise - it forms the predominant part of its own financial resources.
Depreciation charges also play a certain role in the composition of internal sources; although they do not increase the amount of equity capital of the enterprise.
Other internal sources do not play a significant role in the formation of the enterprise's own financial resources.
In the composition of external sources of formation of its own financial resources, the main place belongs to the attraction of additional share or equity capital by the enterprise. For individual enterprises, one of the external sources of formation of their own financial resources may be the gratuitous financial assistance provided to them (as a rule, such assistance is provided only to individual state-owned enterprises different levels).
In the conditions of transition to the market, non-traditional instruments of financing the activities of Russian enterprises are also beginning to be used. These include commercial loans, options, mortgage transactions, factoring transactions, leasing, etc.
Currently, the financing of enterprises is in an unsatisfactory state due to the lack of own funds for self-financing, the lack of sufficient state financial support, the high cost and riskiness of innovation, the long-term payback nature of innovative projects, and the dominance of conservative investors instead of aggressive ones. For further successful development, Russian companies need to solve two problems: the first is to optimize sources of financing for the development of new projects; the second is to learn how to select such innovative projects that will bring real returns even in times of crisis.
Chapter 2 of the study is devoted to the analysis of the capital structure of OAO Novator. In general, the study is aimed at studying modern concepts capital management and their application to determine the optimization of the structure of financing sources for OAO Novator. The conducted research allows us to formulate the conclusion that the management of the enterprise needs to consider all possible options for obtaining long-term loans to improve production.
List of used sources and literature
1. Federal Law of June 19, 2000 No. 82-FZ “On the Minimum Wage” // Collection of Legislation of the Russian Federation - June 26, 2000, - No. 26, - Art. 2729.
2. Kovaleva A.M., Lapusta M.G., Skamai L.G. Firm finances. - M.: INFRA - M, 2007. - S. 212.
3. Sheremet A.D. Enterprise finance: management and analysis - M. Finance 2006. - P. 156
4. Stock market: Tutorial for higher educational institutions economic profile N.I.Berzon, E.A.Buyanova, M.A.Kozhevnikov, A.V.Chalenko Moscow: Vita-Press, 2008
5. Lukasevich I.Ya. Analysis of financial transactions. Methods, models, computational techniques: - M .: Finance, UNITI, 2008. - P. 203
6. Blank I. A. Financial management: training course. - 2nd ed., revised. and additional - K ..: Elga, Nika - Center, 2005. - 656 p.
7. Financial management: textbook / Ed. E.I. Shokhina. - M.: ID FBK-PRESS, 2008. - 408 p.
8. Economic analysis of financial and economic activities / Ed. M.V.Melnik. - M.: Economy, 2006. - 320 p.
10. Balance sheet of JSC OKB Novator for 2008 (form 1)
11. Profit and loss statement of JSC OKB Novator for 2008 (form 2).
Kovaleva A.M., Lapusta M.G., Skamai L.G. Firm finances. - M.: INFRA - M, 2007. - S. 212.
Federal Law No. 91-FZ of June 24, 2008 “On Amendments to Article 1 federal law"On the minimum wage" [Text]// Collection of legislation of the Russian Federation - 06/30/2008. - N 26. -St. 3010.
Sheremet A.D. Enterprise finance: management and analysis - M. Finance 2006. - P. 156
Stock Market: Textbook for Higher Educational Institutions of Economics N.I.Berzon, E.A.Buyanova, M.A.Kozhevnikov, A.V.Chalenko Moscow: Vita-Press, 2008
Lukasevich I.Ya. Analysis of financial transactions. Methods, models, computational techniques: - M .: Finance, UNITI, 2008. - P. 203
MOSCOW HUMANITARIAN-ECONOMIC INSTITUTE
KALUGA BRANCH
Department of Finance and Credit
COURSE WORK
in the discipline "Finance of organizations (enterprises)"
Sources of financing the economic activity of the enterprise
KALUGA 2009
Introduction
Chapter 1. Theoretical basis funding sources
1.1 Essence and classification of sources of financing of the enterprise
1.3 Borrowed sources of financing of the enterprise
Chapter 2. Management of enterprise financing sources
2.1 Management of own and borrowed funds
2.2 Management of the issuance of shares
2.3 Bank loan management
Chapter 3. Problems of sources of financing for enterprises in Russia
3.1 Modern tools for financing the activities of enterprises
3.2 Problems of attracting long-term sources of financing for the activities of Russian enterprises in the context of the financial crisis
Settlement part
Conclusion
List of used sources and literature
Introduction
Relevance of the research topic. Under the conditions of the formation of a market economy, the position of economic entities is fundamentally changing compared to that which they previously occupied in the command-administrative system. The transformational processes taking place in the Russian economy and the emergence of various forms of ownership have determined the diversity of economic behavior of economic entities.
But the end result of their activities always comes down to making a profit and increasing profitability, which largely depends on the amount of financial resources and sources of financing.
The presence of a sufficient amount of financial resources, their effective use, predetermine the good financial position of the enterprise, solvency, financial stability, liquidity. In this regard, the most important task of enterprises is to find reserves for increasing their own financial resources and their most effective use in order to increase the efficiency of the enterprise as a whole.
Each enterprise in the process of its formation and development must determine how much equity capital should be invested in turnover. The expediency of attracting one or another financial source must be compared with the indicators of profitability of investments of this type and the cost of this source. The need of the enterprise for its own and borrowed funds is an object of planning, respectively, the decision on this issue has a direct impact on the financial condition and the possibility of the survival of the enterprise.
The choice of methods and sources of financing for an enterprise depends on many factors: the experience of the enterprise in the market, its current financial condition and development trends, the availability of certain sources of financing.
However, it is necessary to note the main thing: an enterprise can find capital only on the conditions under which operations to finance similar enterprises are actually carried out at a given time, and only from those sources that are interested in investing in the relevant market (in the country, industry, region).
The purpose of the work study of sources of financing the economic activity of the enterprise and problems from attracting.
In accordance with the goal, it is envisaged to solve the following tasks :
Consider the theoretical foundations of funding sources;
Learn source management techniques;
To study the problems of sources of financing for the activities of Russian enterprises.
Subject of study - sources of financing of economic activity of the enterprise
Research methodology. The theoretical and methodological basis of the study was the dialectical method of cognition and a systematic approach. When performing the work, general scientific and special methods research.
Sources of information. As sources of information, the works of domestic scientists devoted to the basics of capital management and the study of the dividend policy of organizations, periodicals were used.
The volume and structure of the course work. The course work is written on 53 sheets of typewritten text and contains 1 figure.
The introduction reflects the relevance of the topic, its study, the goals and objectives of the course work, the subject of research, as well as research methods, the literature used, the structure and content of the course work.
The first chapter "Theoretical Foundations of Funding Sources" considers the classification of funding sources and the composition of own and borrowed funds.
The second chapter "Management of sources of financing" presents the main mechanisms for managing the sources of economic activity of enterprises.
In the third chapter "Problems of sources of financing for enterprises in Russia", modern instruments of financing enterprises are studied and the problem of attracting a long-term source of financing for enterprises in Russia is investigated.
The conclusion contains the main conclusions and applications of the course work.
The list of references consists of 27 sources.
1. Theoretical foundations of funding sources
1.1 The essence and classification of sources of financing of the enterprise
Financing the economic activity of an enterprise is a set of forms and methods, principles and conditions for financial support for simple and expanded reproduction.
When choosing sources of financing for the activities of an enterprise, it is necessary to solve five main tasks:
Determine short-term and long-term capital needs;
Identify possible changes in the composition of assets and capital in order to determine their optimal composition and structure;
Ensure constant solvency and, consequently, financial stability;
Use own and borrowed funds with maximum profit;
Reduce the cost of financing business activities.
Organizational forms of financing :
Self-financing (retained earnings, depreciation, reserve capital, additional capital, etc.).
Equity or equity financing (participation in authorized capital, purchase of shares, etc.).
Debt financing (bank loans, placement of bonds, leasing, etc.).
Budget financing (loans on a repayable basis from the federal, regional and local budgets, appropriations from the budgets of all levels free of charge, targeted federal investment programs, government borrowing, etc.).
Special forms of financing (project financing, venture financing, financing by attracting foreign capital).
The primary source of funding for any business is authorized (share) capital (fund), which is formed from the contributions of the founders. Specific methods of formation of the authorized capital depends on the organizational and legal form of the enterprise. The minimum amount of the authorized capital on the day of registration of the company is:
In a limited liability company (LLC) - 100 minimum wages (minimum wages);
In a closed joint stock company (CJSC) - 100 minimum wages;
In an open joint stock company (OJSC) - at least 1000 minimum wages.
The founders of a joint-stock company or another company are required to fully contribute the authorized capital during the first year of operation.
Decision to reduce the authorized capital 2/3 of the votes of the owners of voting shares are accepted and implemented in one of two ways:
Decreasing the par value of shares;
Acquisition and redemption of part of the shares (if it is provided for by the charter of the organization).
Decision to increase the authorized capital adopted by the general meeting of shareholders. This happens either by increasing the nominal value of shares, or by placing an additional announced issue of shares. However, for business development, it is not enough to own the initial capital contributed by the founders (shareholders). An enterprise in the course of its activities needs to accumulate other available sources of financing (Fig. 1).
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1.2 Maintenance of the company's own sources of financing
Undestributed profits is a reinvested source of own funds for equipment replacement and new investments.
The profit of the enterprise depends on the ratio of income received as a result of activities, with the costs that provided these incomes. Allocate gross profit, profit from sales, operating profit, profit before tax (according to accounting data), taxable profit (according to tax accounting data), retained (net) profit of the reporting period, reinvested (capitalized retained) profit.
The profit remaining at the disposal of the organization is a multi-purpose source of financing for its needs. However, the main areas of profit distribution are accumulation and consumption, the proportions between which determine the prospects for the development of the enterprise.
The formation of accumulation and consumption funds, as well as other monetary funds, may be provided for by the constituent documents and the adopted accounting policy of the enterprise, then their creation is mandatory, or the decision to direct profits to these funds is made by the meeting of shareholders on the proposal of the board of directors (participants).
The presence of retained earnings depends on the profitability of the joint-stock company and the dividend payout ratio. The dividend payout ratio characterizes the organization's dividend policy, the content of which will be discussed later.
Profit is also the main source of formation of reserve capital (fund).
Reserve capital - part of equity allocated from profit to cover possible losses. The source of the formation of reserve capital is net profit, that is, the profit remaining at the disposal of the organization.
Mandatory reserve fund create only joint-stock companies. The minimum amount of the reserve fund is 5% of the authorized capital. At the same time, the amount of annual mandatory contributions to the reserve fund cannot be less than 5% of net profit until the amount established by the company's charter is reached.
The resources of the company's reserve fund are used:
To cover the losses of the company;
Bond redemptions;
Redemption of shares of a joint-stock company in the absence of other funds.
Reserve capital cannot be used for other purposes.
All enterprises can create reserve funds on a voluntary basis. The size and procedure for the formation of funds are established in the constituent documents.
Depreciation deductions. Depreciation is a method of recovering capital spent on the creation and acquisition of depreciable assets by gradually transferring the cost of fixed assets and intangible assets to manufactured products.
The depreciation functions are divided into economic And tax .
Tax depreciation is determined in accordance with the Tax Code of the Russian Federation and its role is to reduce taxable profits.
Accounting depreciation may be more than tax depreciation, depending on the accepted method of determining it in accordance with current accounting standards.
Depreciation deductions fixed assets are included in the cost of production according to the established norms to the book value of fixed assets. Fixed assets are grouped depending on their useful life, and depreciation rates are applied to the cost of each group.
For accounting purposes, there are four ways to calculate depreciation of fixed assets:
1. linear;
2. diminishing balance;
3. write-offs based on the sum of numbers of years of useful life;
4. cost write-offs in proportion to the volume of production.
The selected method of depreciation is fixed in the accounting policy of the organization and is applied during the entire life of the fixed asset.
For the purposes of tax accounting, depreciation is charged on fixed assets using a linear or non-linear (accelerated) method depending on the useful life of the object - belonging to a certain depreciation group.
Depreciation also offsets the cost intangible assets.
For accounting purposes, depreciation of intangible assets is charged in one of the following ways:
1. linear;
2. diminishing balance;
3. in proportion to the volume of production.
Additional issue of shares leads to a reduction in the property of existing shareholders, and therefore can only be carried out with their consent at a general meeting. If, when establishing a company, it is allowed to pay shares in the amount of 50% by the time of registration, and in the remaining amount - within a year, then when issuing additional shares, at least 25% of the nominal value of their acquisition is paid, and in the remaining amount - no later than a year from the date of their placement . In accordance with the legislation of the Russian Federation, the nominal
the value of the placed preferred shares should not exceed 25% of the authorized capital of the company.
Placement of securities(shares, bonds) in the primary securities market is carried out in two forms:
Through an intermediary
By direct contact with investors, i.e. direct sale of the company's securities to investment funds (companies) and individuals.
In world practice and in Russia, the most common underwriting- a method of placing securities on the capital market through an intermediary . Its essence is that the entire volume of issued securities is sold to an intermediary, which is an investment bank (underwriter) at a price agreed between the bank and the enterprise. The Bank fully or partially assumes risks and sells shares (bonds) on the securities market at a higher price. For the underwriting operation, the bank receives compensation in the form of the difference between the price of the bank's purchase of securities from the enterprise and the price of their sale on the stock market.
In addition to paying the bank for the underwriting operation, the issue of new shares entails other administrative costs: payment of the registration fee for the issue prospectus, printing costs, tax on transactions with securities (0.8% of the face value of newly issued shares) and other expenses .
Most Western companies among them are extremely reluctant to issue additional shares as a permanent part of their financial policy.
Disadvantages of equity financing:
An additional issue of shares is a very expensive and time-consuming process;
The issue may be accompanied by a decline in the market price of the shares of the issuing company;
There is no tax shield.
The value of the market value of shares determines the capitalization of the enterprise. Capitalization- the market value of an enterprise whose shares are traded on the stock exchange, i.e. the market price of the shares multiplied by the number of shares (most often preferred shares are not included in the calculation of this indicator).
Issue of depositary receipts. Depositary receipts - is a derivative (secondary) security for shares freely traded on the stock market foreign company deposited with a large depository bank that issued receipts in the form of certificates or in uncertificated form. ADR- marketable securities traded on the US exchange and over-the-counter markets, representing a certain number of underlying shares (that is, they represent individual securities very rarely). Global Depository Receipts ( GDR) may be sold outside the United States in other countries.
There are a number of restrictions on the issuance of American Depository Receipts.
Purposes of placement by Russian companies of depositary receipts:
1) attracting additional funds and increasing capitalization in the international market;
2) ensuring that the securities being sold are listed on the leading stock exchanges around the world;
3) indirectly attracting the attention of the whole world to the products or services offered by the issuing company;
4) an increase in the price of their securities on the Russian stock market, an increase in their liquidity.
In order to sell its own depositary receipts, a Russian company must:
Find a foreign partner bank that can find buyers and help document the sale of receipts;
Have good reporting;
Be a completely transparent company;
Reflect data (according to international standards) about the owners of the company, its financial condition over the past few years, the structure of assets and debt obligations. Moreover, under any debt obligations and risks, companies must form separate reserves.
Extra capital is a specific own source of financing for the organization's enterprise. Unlike the authorized capital, it is not divided into shares (shares) and shows the common ownership of all participants (shareholders).
The formation and increase of additional capital can be carried out in the following cases:
1. Upon receipt of share premium.
2.When revaluing fixed assets.
3. In the event of exchange rate differences as a result of the formation of the authorized capital denominated in foreign currency.
4. When receiving targeted investment funds from the budget to finance capital investments (for non-profit organizations).
From fig. 1. it can be seen that the sources of financial resources, equated to their own, include funds received in the order of redistribution: insurance indemnities for the occurrence of cases, funds from extra-budgetary funds (to pay for sick leaves, vouchers to sanatoriums, etc.) and other receipts.
1.3 Borrowed sources of financing of the enterprise
Russian bank loans. A loan can be provided in cash or commodity form on terms of urgency, payment, repayment and material security.
The principal amount of the debt on the received loan or credit is taken into account by the borrowing organization in accordance with the terms of the loan agreement (or credit agreement) in the amount of actually received funds or in the valuation of other things provided for in the agreement.
Considering the option of raising funds with a long-term loan, the company chooses a bank that offers a lower interest rate, all other things being equal. The terms of the loan agreement are optimal for both parties if the transaction is based on market rate of interest, which allows you to equalize the market value of capital received in exchange for debt, and the present value of payments on it, coming in the future.
The loan interest is determined by adding a premium to the base rate. The base rate is set by each bank individually, based on the discount rate of the Central Bank of Russia. The premium depends on the term of the loan, the quality of the collateral and the degree of credit risk associated with its provision.
As loan security accepted:
pledge of property,
Guarantee,
bank guarantee,
State and municipal guarantees,
Assignment in favor of the bank of the borrower's claims and accounts to a third party.
Despite a number of shortcomings for the enterprise (on the one hand, the deterioration in the structure of the organization's liabilities, the need for time and financial costs to prepare a qualified business plan, to study a loan application in a commercial bank), long-term bank lending is still one of the most effective ways of financing . For an enterprise, the presence of long-term borrowed funds as part of the sources of its property is a positive moment, since it allows you to have borrowed funds for a long time. Long-term loans by Russian enterprises can be obtained both from Russian banks and foreign ones.
Russian enterprises are in dire need of long-term injections aimed at restoring and modernizing fixed assets, which implies the expansion of long-term lending to the real sector of the economy and the introduction of more “favorable” rates on such loans. However, according to statistics, the largest share in the loan portfolios of Russian commercial banks are loans to enterprises with a maturity of 6 months to 1 year. This situation is due to the reluctance of banks to take on unpredictable credit risks of a systemic nature, which are associated with the unpredictability of the macroeconomic situation in Russia.
Foreign bank loans (Euro loans). The cost of eurocredits includes commissions (to the managing bank for management, members of the banking syndicate), bank margin and interest rates on loans. Interest rates are reviewed every 6 months in accordance with current or base rates. The LIBOR rate is usually taken as the basis. Other discount rates can also be used: the US prime rate - the lowest rate set for the most reliable borrowers, PIBOR (Paris Interbank offered rate), etc.
In Russia, there are practically no financial institutions capable of issuing loans worth hundreds of millions of dollars for terms of more than one or two years. Therefore, for project and trade financing, large domestic companies raise funds in foreign banks.
It became possible to obtain loans from non-residents without obtaining a corresponding permit from the Central Bank of the Russian Federation to carry out operations related to the movement of capital. Therefore, large Russian companies often make a choice in favor of lending abroad, even despite the complexity documentation a Western bank loan or an external loan.
There are certain advantages and disadvantages of obtaining foreign bank loans.
Bonds issued in the Russian Federation. A corporate bond is a security that certifies a loan relationship between its owner (creditor) and the person who issued it (borrower), the latter being joint-stock companies, enterprises and organizations of other organizational and legal forms of ownership.
Corporate bonds are classified:
1. By maturity .
Bonds with a fixed maturity date: short-term, medium-term and long-term. Bonds without a fixed maturity: callable bonds, redeemable bonds, renewable bonds.
2. In order of ownership: nominal and bearer.
3. Purpose of the bond issue: normal and target.
4. In the form of coupon income payment: coupon, discount (no-coupon), bonds with payment by choice.
5. Depending on the security: secured by collateral, unsecured by collateral.
6. By the nature of the appeal: convertible. non-convertible.
The book value of a bonded loan, as a rule, does not coincide with its market value. The assessment of the market value of bonds is based on a number of data indicated on the bond itself: the official date of issue, face value, maturity, declared interest rate, date of payment of interest. Enterprises issuing loans strive to bring the announced interest rate on the bond as close as possible to the market rate in force at the time of the loan placement. Changes in the market rate of interest and the market value of the issuer's loan are inversely related. If the market interest rate exceeds the announced value, then the placed bonds are sold at a discount ( discount), and in the opposite situation - to their cost is added premium. Joint-stock companies and limited liability companies are allowed to issue bonds. Under Russian law, there are a number of restrictions on the issuance of bonds. Depending on the volume of the issue and the company's preparedness for the issue, it is possible to use various methods of bond placement.
Corporate Eurobonds. There are the following types of Eurobonds:
Eurobonds with a fixed rate:
a) ordinary bonds with a fixed rate (“straight bonds”),
b) bonds convertible into shares (“equity-linked”),
c) bonds with a warrant or subscription certificate,
d) multicurrency bonds;
Eurobonds with a floating rate:
a) mini-max bonds,
b) bonds FLIP-FLOP ,
c) bonds with adjustable rates (“mismatch”),
d) bonds with a fixed ceiling (“capped issues”),
e) bonds with a currency option;
Other types of bonds existing in international markets.
Eurobond loan is carried out in dollars or euros. The euro loan rate (can be fixed or floating) is calculated by the formula: LIBOR rate (or the interest rate of the Central Bank of any EU country or the US Federal Reserve System) plus a few percentage points. However, there are some peculiarities in establishing coupon rates for Eurobonds of Russian oil companies.
Leasing is an extended lease agreement. The owner of the equipment (lessor) provides the user (lessee) with the opportunity to operate the equipment in exchange for regular rental payments. Leasing relations act, in essence, as credit transactions, since the tenant receives for temporary use the value embodied in machinery and equipment, on terms of repayment and payment.
budget loans. Budget loans can be attracted as a long-term borrowed source of financing for an enterprise. Competitive enterprises renewing fixed assets can obtain state-provided loans or government guarantees to attract financial resources from other credit institutions, as well as through the provision of investment tax incentives.
Encouragement of investment activity by the state is expedient only for a limited range of objects and areas of activity, which is consistent with world practice.
Mortgage credit lending. A mortgage is understood as a pledge of land plots, enterprises, buildings, structures, non-residential premises, apartments and other real estate. Mortgage of subsoil plots that are specially protected is not allowed. natural areas, other property withdrawn from circulation, property on which execution cannot be levied in accordance with federal law, multi-apartment and individual residential buildings and apartments that are in state or municipal ownership, as well as property in respect of which, in accordance with the procedure established by federal law privatization is prohibited.
There are many mortgage lending schemes, which differ mainly in terms of obtaining loans, interest payment schemes and amortization of the principal amount of the debt. The most common are: balloon payment loan, self-absorbing loan, variable rate loan, Canadian rollover.
The mortgage agreement is considered concluded and comes into force from the moment of its state registration.
In world practice, four mortgage lending organization models:
1. Savings bank model.
2. Contract savings (German) model.
3. Mortgage bank model (single-level model).
4. Two-level model (American).
In Russia, the institution of mortgages is just beginning to take shape, so we do not have the complex and extensive infrastructure of the mortgage market, which is in the developed ones, as well as a clear system of legal support and registration procedures. The secondary mortgage market is practically not developed. In fact, with the exception of the so-called quasi-mortgage schemes, only banks create supply on the Russian mortgage market.
Currently, there are several schemes in the Russian market.
1) At the expense of foreign investors.
2) At the expense of budgetary funds.
3) Due to securitization.
Chapter 2. Management of enterprise financing sources
2.1 Management of own and borrowed funds
Under own capital refers to the total amount of funds owned by the enterprise and used by it to form assets. The value of assets generated from equity invested in them is the “net assets of the enterprise”.
The total amount of the company's own capital is reflected in the result of the first section "Liability" of the balance sheet. The structure of the articles in this section makes it possible to clearly identify its initially invested part (i.e., the amount of funds invested by the owners of the enterprise in the process of its creation) and its accumulated part in the process of effective economic activity.
The basis of the first part of the company's own capital is its authorized capital.
The second part of equity is represented by additionally invested capital, reserve capital, retained earnings and some other types of it.
The formation of the company's own capital is subject to two main goals:
1. Formation at the expense of own capital of the required volume of non-current assets. The amount of the enterprise's own capital advanced into various types of its non-current assets (fixed assets; intangible assets; construction in progress; long-term financial investments, etc.) is characterized by the term own fixed capital.
The amount of own fixed capital of the enterprise is calculated according to the following formula:
SK OS \u003d VA-DZK V
where SC OS - the amount of own fixed capital formed by the enterprise;
VA - the total amount of non-current assets of the enterprise;
DZK B - the amount of long-term borrowed capital used to finance the non-current assets of the enterprise.
2. Formation at the expense of own capital of a certain amount of current assets. The amount of equity advanced in various types of its current assets (stocks of raw materials, materials and semi-finished products; volume of work in progress; stocks finished products; current accounts receivable; monetary assets, etc.), is characterized by the term own working capital.
The amount of the company's own working capital is calculated using the following formula:
SC About= OA-DKZ ABOUT– KPC
where SC About- the amount of own working capital formed by the enterprise;
OA - the total amount of current assets of the enterprise;
S/A o - the amount of long-term borrowed capital used to finance the current assets of the enterprise;
KPC - the amount of short-term borrowed capital attracted by the enterprise.
Own capital management is connected not only with ensuring the effective use of its already accumulated part, but also with
formation of own financial resources that ensure the future development of the enterprise. In the process of managing the formation
own financial resources, they are classified according to the sources of this formation.
Other external sources of formation of own financial resources include tangible and intangible assets transferred to the enterprise free of charge and included in its balance sheet.
The increase in the company's own capital is primarily associated with the management of the formation of its own financial resources. The main task of this department is to ensure the necessary level of self-financing of the development of the economic activity of the enterprise in the coming period.
1. Analysis of the formation of the company's own financial resources in the previous period. The purpose of this analysis is to identify the potential for the formation of its own financial resources and its compliance with the pace of development of the enterprise.
At the first stage of the analysis, the total volume of the formation of own financial resources, the correspondence of the growth rate of own capital to the growth rate of assets and the volume of sales of the enterprise, the dynamics of the share of own resources in the total volume of formation of financial resources in the preplanning period are studied.
At the second stage of the analysis, internal and external sources of the formation of own financial resources are considered. First of all, the ratio of external and internal sources of formation of own financial resources, as well as the cost of attracting own capital from various sources, is studied.
At the third stage of the analysis, the sufficiency of own financial resources formed at the enterprise in the preplanning period is assessed. The criterion for such an assessment is the indicator "the amount of growth in the net assets of the enterprise." Its dynamics reflects the trend of the level of security of the development of the enterprise with its own financial resources.
2. Determining the total need for own financial resources. This need is determined by the following formula:
P OFR \u003d - SK N - P R
where P OFR - the total need for the enterprise's own financial resources in the planning period;
P K - the total need for capital at the end of the planning period;
U SK - the planned share of equity capital in its total amount;
SK N - the amount of equity at the beginning of the planning period;
P R - the amount of profit allocated for consumption in the planning period.
3. Estimating the cost of raising equity capital from various sources. Such an assessment is carried out in the context of the main elements of equity capital formed from internal and external sources.
4. Ensuring the maximum volume of attraction of own financial resources from internal sources. When looking for reserves for the growth of one's own financial resources from internal sources, one should proceed from the need to maximize their total amount.
PE + JSC®SFR MAKS
where PE - the planned amount of net profit of the enterprise;
JSC - the planned amount of depreciation;
SFR MAX - the maximum amount of own financial resources generated from internal sources.
5. Ensuring the necessary volume of attraction of own financial resources from external sources.
The need to attract own financial resources from external sources is calculated using the following formula:
SFR EXTERNAL \u003d P SFR - SFR VNUT
Where SFR VNESH - the need to attract their own financial resources from external sources;
P SFR - the total need for the enterprise's own financial resources in the planning period;
SFR VNUT - the amount of own financial resources planned to be attracted from internal sources.
6. Optimization of the ratio of internal and external sources of formation of own financial resources. This optimization process is based on the following criteria:
a) ensuring the minimum total cost of attracting own financial resources. If the cost of attracting own financial resources from external sources significantly exceeds the planned cost of attracting borrowed funds, then such formation of own resources should be abandoned;
b) ensuring the preservation of the management of the enterprise by its original founders. The growth of additional equity or share capital at the expense of third-party investors can lead to a loss of such control.
The effectiveness of the developed policy for the formation of one's own financial resources is assessed using the coefficient of self-financing of the enterprise's development in the coming period.
The coefficient of self-financing of the enterprise development is calculated according to the following formula:
where K sf is the coefficient of self-financing of the future development of the enterprise;
SFR - the planned volume of formation of own financial resources;
A - the planned increase in the assets of the enterprise;
П sfr - the planned volume of spending the enterprise's own financial resources for the purpose of consumption.
Effective financial activity of the enterprise is impossible without the constant attraction of borrowed funds. Usage loan capital allows you to significantly expand the volume of economic activity of the enterprise, ensure a more efficient use of equity capital, accelerate the formation of various targeted financial funds, and ultimately increase the market value of the enterprise.
Although the basis of any business is equity capital, at enterprises in a number of sectors of the economy, the amount of borrowed funds used significantly exceeds the amount of equity capital. In this regard, managing the attraction and effective use of borrowed funds is one of the most important functions of financial management, aimed at ensuring the achievement of high final results of the economic activity of the enterprise.
Borrowed capital used by the enterprise characterizes in aggregate the volume of its financial obligations (the total amount of debt). These financial obligations in modern economic practice are differentiated as follows:
1. Long-term financial liabilities (borrowed capital with a period of use of more than 1 year).
2. Short-term financial obligations (all forms of borrowed capital with a period of use up to 1 year).
In the process of development of the enterprise, as its financial obligations are repaid, there is a need to attract new borrowed funds. Sources and forms of borrowing by the enterprise are very diverse. Borrowed funds are classified by purpose, source, form and period of attraction, as well as by form of security.
Taking into account the classification of borrowed funds, the methods of managing their attraction are differentiated.
Managing the attraction of borrowed funds is a purposeful process of their formation from various sources and in various forms in accordance with the needs of the enterprise in borrowed capital at various stages of its development.
The process of managing the attraction of borrowed funds by the enterprise is built on the following main stages.
1. Analysis of the attraction and use of borrowed funds in the previous period. The purpose of this analysis is to identify the volume, composition and forms of borrowing by the enterprise, as well as assess the effectiveness of their use.
2. Determination of the objectives of attracting borrowed funds in the coming period.
3. Determining the maximum amount of borrowing.
4. Estimation of the cost of attracting borrowed capital from various sources. 5. Determination of the ratio of the volume of borrowed funds attracted on a short-term and long-term basis.
6. Determination of forms of borrowing.
7. Determination of the composition of the main creditors.
8. Formation of effective conditions for attracting loans.
9. Ensuring the effective use of loans.
10. Ensuring timely settlements on received loans.
2.2 Share issue management
The process of managing the issue of shares is based on the following main stages.
1. Study of the possibilities of effective placement of the proposed issue of shares. The decision on the proposed primary (when the enterprise is transformed into a joint-stock company) or additional (if the enterprise has already been established in the form of a joint-stock company and needs an additional inflow of its own capital) issue of shares can only be made on the basis of a comprehensive preliminary analysis of the stock market situation and an assessment of the potential investment attractiveness of its shares.
2. Determining the purpose of the issue. The main of these goals that the company is guided by, resorting to this source of equity capital formation, are:
a) real investment;
b) the need for a significant improvement in the structure of capital used;
c) the planned takeover of other enterprises in order to obtain an effect;
d) other purposes that require the rapid accumulation of a significant amount of equity capital.
3. Determination of the issue volume.
4. Determination of the par value, types and number of issued shares. The par value of shares is determined taking into account the main categories of their future buyers (the largest par values of shares are oriented towards their acquisition by institutional investors, and the smallest ones - towards the acquisition by the population). In the process of determining the types of shares (common and preferred), the expediency of issuing preferred shares is established; if such an issue is considered expedient, then the ratio of ordinary and preferred shares is established (it should be borne in mind that, in accordance with the current legislation, the share of preferred shares cannot exceed 10% of the total issue volume).
5. Estimation of the cost of the attracted share capital. In accordance with the principles of such an assessment, it is carried out according to two parameters: a) the expected level of dividends (it is determined based on the chosen type of dividend policy); b) the cost of issuing shares and placing an issue (reduced to the average annual amount). The estimated cost of capital raised is compared with the actual weighted average cost capital and the average level of interest rates in the capital market.
Only after that the final decision on the issue of shares is made.
2.3 Bank loan management
As part of the financial loan attracted by enterprises to expand their economic activities, the priority role belongs to a bank loan. This loan has a broad target orientation and is attracted in a variety of forms.
Under bank loan means the funds provided by the bank on loan to the client for the intended use for a specified period at a certain percentage.
Bank credit is provided to enterprises at the present stage in the following main types:
1. Blank (unsecured) loan for certain business transactions. As a rule, it is provided by a commercial bank that carries out settlement and cash services enterprises. Although formally it is unsecured, it is actually secured by the amount of the company's receivables and its funds in settlement and other accounts with the same bank. This type of loan is provided, as a rule, only for a short period.
2. A contract loan ("overdraft" ). When providing this loan, the bank opens a checking account for the enterprise, which takes into account both credit and settlement operations. A checking account is used as a source of credit in an amount not exceeding the maximum negative balance (contract limit) specified in the loan agreement. On the negative balance of the checking account, the company pays the bank the established credit interest; at the same time, the agreement may determine that the bank charges the enterprise a deposit interest on the positive balance of this account. The balancing of receipts and payments on the company's checking account occurs at intervals established by the contract with the calculation of credit payments.
3. Seasonal loan with monthly debt amortization . This type of loan is usually provided for the formation of a variable part of current assets for the period of their increase due to the seasonal needs of the enterprise. Its peculiarity lies in the fact that along with the monthly servicing of this loan ( monthly payment interest on it) the loan agreement also provides for monthly amortization (repayment) of the principal amount of the debt. The schedule of such debt amortization in terms of size is linked to the volume of the decrease in the seasonal need of the enterprise for cash.
4. Opening a credit line. The agreement stipulates the terms, conditions and maximum amount of a bank loan, when there is a real need for it. For an enterprise, the advantage of this type of loan is that it uses borrowed funds in strict accordance with its real needs for them. Typically, a credit line is opened for up to one year. A feature of this type of bank loan is that it does not have the character of an unconditional contractual obligation and can be canceled by the bank if the financial condition of the client enterprise worsens.
5. Revolving (automatically renewable) credit . It characterizes one of the types of a bank loan provided for a certain period, during which both a phased "selection" of credit funds and a phased partial or full repayment of obligations on it are allowed. The advantage of this type of loan compared to opening a line of credit is the minimum restrictions imposed by the bank, although the level of interest on it is usually higher.
6. Oncol loan. A feature of this type of loan is that it is provided to the borrower without specifying the term of its use (within the framework of short-term lending) with the latter's obligation to repay it at the first request of the lender. When repaying this loan, a grace period is usually provided (according to current practice - up to three days).
7. Lombard loan . Such a loan can be obtained by an enterprise secured by highly liquid assets (bills, government short-term bonds, etc.), which are transferred to the bank for the loan period. The loan amount in this case corresponds to a certain (but not all) part of the value of the pledged assets. As a rule, this type of loan is short-term.
8. Mortgage . Such a loan can be obtained from banks specializing in issuing long-term loans secured by fixed assets or the property complex of enterprises as a whole (“mortgage banks”). An enterprise pledging its property as a pledge is obliged to insure it in full in favor of the bank. At the same time, the property pledged in the bank continues to be used by the enterprise.
9. Rollover credit . It is a type of long-term loan with a periodically revised interest rate.
10. Consortium (consortium) loan . A bank servicing an enterprise may involve other banks in lending to its client (the union of banks to carry out such lending operations is called a “consortium”). After concluding a loan agreement with the client enterprise, the bank accumulates funds from other banks and transfers them to the borrower, distributing the amount of interest accordingly when servicing the debt.
The variety of types and conditions for attracting bank loans determine the need for effective management of this process in enterprises with a high demand for this type of borrowed funds. Such control is carried out in the following main stages.
1. Determining the purposes of using the attracted bank loan.
2. Assessment of own creditworthiness.
In modern banking practice, the assessment of the level of creditworthiness of borrowers with the differentiation of their lending conditions is based on two main criteria: 1) the level of the financial condition of the enterprise;
2) the nature of the repayment by the enterprise of loans previously received by it - both interest on them and the principal debt.
3. The choice of the necessary types of attracted bank credit.
In accordance with the established list of types of attracted credit, the enterprise conducts a study and evaluation of commercial banks that can provide it with these types of loans.
4. Study and assessment of the conditions for the implementation of bank lending in the context of types of loans. This stage in the formation of a policy for attracting bank loans is the most time-consuming and responsible due to the variety of assessed conditions and the implementation of numerous calculations.
5. "Alignment" of credit conditions in the process of concluding a loan agreement. The term "leveling" characterizes the process of bringing the terms of a particular loan agreement in line with the average terms of buying and selling credit instruments in the financial market. The grant-element indicator and the effective interest rate in the credit market are used as the main criteria in the process of "levelling" credit conditions.
6. Providing conditions for the effective use of bank credit. The criteria for such efficiency are the following conditions.
7. Organization of control over the current servicing of a bank loan. The current servicing of a bank loan consists in the timely payment of interest on it in accordance with the terms of the concluded loan agreements. These payments are included in the payment calendar developed by the enterprise and are controlled in the process of monitoring its current financial activities.
8. Ensuring timely and complete amortization of the amount of principal debt on bank loans.
Chapter 3. Problems of sources of financing for enterprises in Russia
3.1 Modern tools for financing the activities of enterprises
Options
In a market environment, an important instrument that facilitates the placement of issued corporate securities is an option.
The essence of the option is that it gives one of the parties to the transaction the right to choose whether to execute the contract or refuse to execute it. There are two people involved in the deal. One person buys an option, i.e. the right to choose, and the other - sells (writes out an option), i.e. grants the right to choose. For the right to choose, the buyer of the option pays the seller a fee called a premium. The buyer has the right to exercise the option, i.e. buy or sell a financial asset only at the price fixed in the contract. This price is called the strike price.
An option allows investors to form different strategies. The simplest of these are combinations of additional share issue and options. For the issuer of shares, the issuance of a so-called preferential purchase option for existing shareholders avoids a possible loss of control over the enterprise and a decrease in the share of income per share. In such an option, the number of shares that can be bought is specified, and the exercise price is fixed equal to the subscription price.
Options are securities and can be traded on the market independently, while their market price may differ significantly from the nominal value. This is primarily due to investors' expectations regarding the shares of a particular company.
In countries with a market economy, options are a fairly common tool in the financial policy of companies. As for Russia, this experience can probably be used in the current conditions of the economic crisis to stimulate the successful placement of shares of Russian enterprises. This is due to the fact that the form of the option allows you to sell shares taking into account their possible future appreciation.
Large foreign companies also issue warrants along with bonds. A warrant is issued for a sufficiently long period or may even be indefinite. In addition, the exercise price in a warrant is usually 10-20% higher than the market price, which aims to increase its attractiveness, as well as create an opportunity to increase the authorized capital in the event of a warrant being exercised.
Pledge transactions
In countries with a developed market economy, collateral operations have become widespread, in particular in the relations of banks with firms that have certain difficulties with the level of solvency, since it is important for credit institutions to have a guarantee of repayment of the issued loan. In this case, a pledge can serve as a security, which is a way of securing obligations, in which the creditor-pledgee acquires the right, in case of default by the debtor of obligations, to receive satisfaction at the expense of the pledged property.
The subjects of pledge transactions are the pledgor and the creditor (pledge holder). The pledgor is a person to whom the subject of pledge belongs either on the basis of ownership or full economic management.
The pledge agreement may also provide for the transfer of the pledged property into the possession of the pledgee. Such an agreement is recognized as a pledge. When pledging, the pledgee has the right to use the subject of the pledge, and the income or other benefits received in this case go towards the repayment of interest on the loan or the loan itself secured by the pledge.
Pledge of an enterprise, structure, building directly connected with the land, together with land plot or the right to use it is called a mortgage. A feature of the mortgage is its distribution to all property of the enterprise, including its authorized capital, financial assets, property rights, etc.
Mortgage loans have been widely developed in countries with developed market economies, as they are one of the sources of long-term financing. The loan amount is usually lower than the appraised value of the mortgaged property, and this level is regulated by the legislation of the states. For example, in the United States, with some exceptions, it is prohibited to issue loans in excess of 80% of the appraised value of the property. As a rule, the objects of pledge are residential buildings (in the USA they account for 3/4 of the total amount of mortgages), land, farms, etc.
Mortgage loans can be issued by commercial banks, special mortgage banks, various savings and loan associations.
Mortgage loans can be provided on various terms. If a standard or standard mortgage loan is issued, this means that the borrower receives a certain amount from the lender, and then repays the debt in equal, usually monthly, installments. The term of a mortgage can be quite long (for example, in the USA - up to 30 years).
Non-traditional mortgage schemes are also known. Most of them are aimed at reducing the level of the Borrower's payments at the initial stages of the operation and shifting the main burden of debt repayment to a later period. So, there are loans with a proportional increase in payments, mortgages with a periodic increase in the amount of contributions (every 3-5 years), etc.
Since mortgage loans are issued for long periods, they are associated with a certain risk, in particular, changes in the level of interest rates in the money market. To mitigate the risk of possible losses, loan terms are used with periodic revision of the interest rate. In this case, the parties renew the loan every 3-5 years based on the revised level of the interest rate in the money market. In fact, medium-term financing occurs with long-term debt repayment.
Takes into account money market fluctuations and variable rate mortgages. The level of this rate is fixed in the contract in the form of a specific value, which is “tied” to some financial indicator or index. The rate is reviewed once every six months. At the same time, in order to mitigate fluctuations in the rate, a marginal adjustment rate (for example, no more than 2%) may be provided, and a minimum amount of adjustment may also be stipulated.
Factoring operations
As a rule, the factoring company enters into a tripartite agreement for a certain period with the supplier and the buyer, in accordance with the terms of which guarantees the supplier the payment of invoices issued to the respective payer through the factoring invoice. Such contracts may be long-term, and may also be concluded for the implementation of a one-time operation. At the same time, suppliers that have entered into a factoring agreement, during the term of the agreement, submit payment requests to the payer on behalf of the factor company for an amount reduced by the amount of the transaction fee.
In practice, factoring operations are used to speed up settlements, save working capital of the enterprise. For the provision of services, the factoring company receives commissions and loan interest from the daily balance, which is the difference between the advance payment paid to the client and uncollected invoices. Interest is charged from the date of advance payment until the day of debt repayment. Commissions are set as a percentage of the total amount of purchased invoices and depend on the volume of turnover and the degree of risk.
Leasing
Leasing represents a long-term lease of movable and immovable property and is an indirect form of financing the activities of the enterprise.
From a commercial point of view, when leasing, the same thing happens as when buying and selling equipment on an installment payment basis: the lessee makes monthly (quarterly, semi-annual) payments to the leasing institution during the agreed period, which retains the right of ownership for the period of the transaction. funded facility.
Leasing has certain features of a bank loan, as it enables the lessee to make payments within a specified period for the leased equipment through the sale of products produced on the leased equipment.
The lessee's payments are included in the cost of its products and thus reduce taxable income. However, an increase in the share of such payments leads to an increase in costs and may lead to higher prices and, as a result, loss of competitiveness. That is why, when deciding on leasing, one should carry out detailed calculations of the amount of payments for the property received under leasing, compare them with financial calculations related to the acquisition of similar equipment for one's own funds or against a long-term bank loan.
The most typical advantages of leasing compared to the purchase of investment property with the buyer's own funds are the following:
The lessee receives expensive equipment for temporary use without large one-time financial costs;
The lessee insures himself against possible rapid obsolescence of the object of the transaction. This advantage is especially important for small and medium-sized enterprises that do not have high liquidity;
The lessor provides the lessee with a full range of services for organizing the financing of the transaction, consulting, and technical maintenance of the object of the transaction;
The separation of the right to own the object of the transaction from the right to use the leasing equipment economically obliges the lessee to use it only during the period of maximum profitability;
Leasing allows the lessee to place the released cash in other assets.
You can also formulate the advantages of leasing compared to attracting a bank loan:
The object of the leasing transaction is not reflected on the balance sheet of the lessee as its debt obligation. This allows the enterprise-lessee to maintain optimal liquidity of the balance sheet (the ratio of own and borrowed funds) and not limit the attraction of financial resources of financial and credit institutions;
In the first years of equipment operation, leasing payments are usually less than the amounts paid on the loan;
Financial leasing is attractive compared to the purchase of equipment through a loan, since it achieves 100% financing of the object of the transaction, while the loan covers only 70-80% of the cost of the purchased equipment;
During the term of the leasing agreement, fixed payments are applied, which are paid more often than payments to repay the loan. This reduces the amount of one payment and contributes to the stability of the finances of the lessee;
The terms of the leasing agreement can be from 3 to 20 or more years.
Forfaiting.
Forfaiting- this is the purchase of obligations, the repayment of which occurs for a certain period in the future without the right of recourse (turnover) to any previous debtor.
Forfaiting is a financial operation to refinance receivables under an export commodity credit by transferring (endorsing) a bill of exchange in favor of a bank (forfaiting company) with the payment of a commission to the latter. The forfeitor bank assumes the obligation to finance the export operation by paying the discounted bill of exchange (simple or transferable), which is guaranteed by the provision of an aval by the bank of the importing country. As a result of forfeiting, the buyer's debt on a commercial loan is transformed into a financial debt (in favor of the bank). The purchase of bills of exchange is formalized by a standard contract, which contains an accurate description of the transaction, terms, costs, guarantees, etc.
Forfaiting combines elements of bill accounting (with their endorsement only in favor of the bank) and factoring (which exporting enterprises resort to in case of high credit risk).
Discount rates on forfeiting transactions are higher than on other forms of lending.
3.2 Problems of attracting long-term sources of financing for the activities of Russian enterprises in the context of the financial crisis
The Association of Managers of Russia, together with the international consulting company Pricewaterhouse Coopers, conducted a study of the opinion of the management of domestic companies on possible options for financing businesses in the context of the global financial crisis. The survey results showed that the top three challenges were capital market problems (54%), rising costs of borrowing (48%) and falling stock markets (39%). The deterioration of the situation in financial markets around the world, the tightening of requirements for borrowers, and the increase in interest rates cause respondents' well-founded concern about the possibilities of attracting capital.
One of the alternative financial instruments of an enterprise in market conditions is the IPO (Initial Public Offer) mechanism, which allows solving the problems of financing intensive growth, increasing the value of the business, the welfare of shareholders, and also acquiring long-term owners. An IPO opens the way to cheaper sources of capital by increasing the publicity of the company. Many domestic enterprises with foreign capital enter IPO at the request of foreign shareholders, who thus seek to increase profits and diversify the risks associated with the sale of their shares.
Based on the analysis of the domestic practice of bank lending, we can conclude that long-term loans associated with the movement of fixed capital have practically no effect on the overall dynamics of capital investments and do not play an active role in the investment process. In the domestic economy, the share of bank loans in the total volume of investment financing sources accounts for 8-9%. For comparison: in developed countries using bank loans over 50% of investment projects are financed. Despite the positive dynamics of the share of medium- and long-term loans in the total credit investments of commercial banks, their share in GDP is still not high enough. Thus, at the end of 2008, the ratio of long-term loans to the economy to GDP was only 19%.
This situation is due to the lack of a favorable investment environment throughout the Russian market space, the high cost of bank loans, which is expressed in the gap between interest rates on loans and the level of profitability of most enterprises focused on meeting domestic demand. Thus, the real sector can pay about 10-15% per annum on long-term loans for investment purposes, since the average profitability industrial enterprises is 13%. Banks, in order to maintain normal profitability, are guided by the value of the current refinancing rate, which is the base rate for them, and also take into account the risk premium. The degree of risk increases with the provision of long-term loans. Hence, banks have the right to expect a higher interest rate on long-term loans than on short-term ones, which is not consistent with the possibilities of the real sector of the economy.
One of the ways to organize the financing of investment projects aimed at upgrading equipment and creating new industries is project financing. Project financing in its “pure” form is not often seen in Russia. Instead, the country is actively developing "dirty" project financing (as a rule, with a recourse to an existing business and accepting existing assets as collateral, but with a focus on the flows generated by the project, as the only or at least the main source of return on investment). This is a specificity that reflects the objective realities of the economy and existing country, corporate and investment risks. With existing legal restrictions, lack of experience and understanding of technologies and the dangers of implementing complex and large projects for business, commercial banks simply cannot take risks by practicing “pure” project financing. But due to the increased demand for "long" resources, we can expect an increase in the volume of "dirty" project financing, which can become one of the engines for the renewal and development of manufacturing enterprises throughout Russia.
In the Forecast of socio-economic development of the Russian Federation for 2010 and for the planned period of 2011 and 2012 published by the Ministry of Economic Development of the Russian Federation. offers various options for economic development. One of the main conditions for the implementation of the moderately optimistic option is to increase the availability of credit resources and the growth of real lending. In 2010, lending to non-financial organizations and the population is projected to increase by at least 13%, in 2011 - by 15-17%, in 2012 - by 25-27%.
The conservative option is characterized by a growing imbalance between the banking and real sectors of the economy. The growth of bank credit in 2010 in this scenario is estimated at 9-10%, which in real terms (adjusted for inflation) is a continuation of the credit contraction (or stagnation). In 2011-2012 lending to non-financial organizations will increase by 13-14%.
Undoubtedly, the expansion of the activity of the banking sector and the reduction of interest rates is one of the most important factors in the recovery of investment activity. Russian government is actively pursuing a policy of reducing the refinancing rate (currently it is 10%), however, in our country the refinancing rate is not an indicator for Russian banks to reduce rates on provided credit resources. To expand the ability of banks to provide long-term loans, it is necessary not only to expand the resource base of banks, but also to reduce the risks of banks through the provision of government guarantees. The main obstacles for enterprises to attract long-term sources of financing are not only high interest rates, which increase with increasing borrowing terms, but also the requirements from banks to provide highly liquid collateral. Another reason is the lack of qualified financial managers who are able to develop a full-fledged investment project that will be of interest to potential creditors.
Settlement part
Exercise 1
The company invested 40 million rubles in the construction of the motel. The annual planned income from the operation of the motel for 4 years will be 35, 60, 80 and 100 million rubles. The discount rate is planned at 10%. Determine the payback period of the investment.
Solution:
The amount of investment is 40,000,000 rubles.
Investment income
in the first year: 35,000,000 rubles;
in the second year: 60,000,000 rubles;
in the third year: 80,000,000 rubles;
in the fourth year: 100,000,000 rubles.
Calculate the discounted cash receipts by years of implementation:
Year 1: 35,000,000 /(1 + 0.1) = 31,818,181
Year 2: 60,000,000/(1 + 0.1) 2 = 49,586,776
Year 3: 80,000,000/(1 + 0.1) 3 = 60,105,184
Year 4: 100,000,000/(1 + 0.1) 4 = 68,301,345
TOTAL: RUB 52,452,867
Calculate the discount payback period:
IC = 40,000,000 rubles.
= (31,818,181+ 49,586,776+60,105,184+68,301,345)/4 = 52,452,867 rubles.
DPP = @ 0.8 years @ 9 months
Answer: investment will pay off in approximately 9 months
Task 2
According to financial statements analyze the liability of the company's balance sheet.
Table 1 Analysis of the composition and structure of the sources of funds of JSC "Progress"
| Sources of funds | At the beginning of the period | At the end of the period | Change (+, -) | |||
| thousand roubles. | % | thousand roubles. | % | thousand roubles. | % | |
1. Sources of funds - total |
||||||
1.1 Equity - total including: |
315 569 | 68,8 | 311 131 | 78,6 | -4438 | +9,8 |
| Authorized capital | 202,5 | 0,04 | 202,5 | 0,05 | - | +0,01 |
| Extra capital | 256 806 | 56,0 | 235 465 | 59,4 | -21 341 | +3,4 |
| Reserve capital | 50,5 | 0,01 | 50,5 | 0,01 | - | - |
| Social Sphere Fund | 48 728 | 10,6 | 56 977 | 14,4 | +8249 | +3,8 |
| Targeted funding | 3782 | 0,8 | 8279 | 2,1 | +4497 | +1,3 |
| Undestributed profits | 6000 | 1,35 | 10157 | 206 | +4157 | +1,25 |
1.2 Borrowed capital - total including: |
142 942 | 31,2 | 84 825 | 21,4 | -58 117 | -9,8 |
| long term duties | 1000 | 0,2 | 1200 | 0,3 | +200 | +0,1 |
short-term obligations including: |
141 942 | 31,0 | 83 625 | 21,1 | -58 317 | -9,9 |
| Loans and credits | 2000 | 0,4 | - | - | -2000 | -0,4 |
| Accounts payable | 134 095 | 29,2 | 80 525 | 20,3 | -53 570 | -809 |
| Indebtedness to the founders for the payment of income | 5847 | 1,3 | 3100 | 0,8 | -2747 | -0,5 |
Balance currency 458 511 100 395 956 100 -62 555
At the end of the reporting year, compared with its beginning, there were significant changes in the structure of the liability of the balance sheet of Progress JSC (Table 1)
Equity capital in balance currency:
At the beginning of the year 68.8%
- at the end of the year 78.6%
Borrowed capital in balance currency:
At the beginning of the year 31.2%
- at the end of the year 21.4%
Thus, by the end of the year, equity capital decreased by 4,438 thousand rubles, and borrowed capital decreased by 58,117 thousand rubles. Equity capital at the beginning and end of the year amounted to 315,569 thousand rubles, respectively. and 311,131 thousand rubles, and borrowed - 142,942 thousand rubles. and 84,825 thousand rubles. In percentage terms: if the share of equity at the end of the year in the formation of assets was 78.6%, then the share of borrowed capital was only 21.4%. Borrowed capital decreased in two components: due to the reduction of accounts payable - by 53,570 thousand rubles. and debts to participants for the payment of income - by 2747 thousand rubles. In the total amount of borrowed capital, accounts payable at the beginning of the year amounted to 93.8% (134,095:14,942*100), and at the end of the year it increased to 95.0% (80,525:84,825*100).
Obviously, Progress JSC, trying to improve its financial situation, without applying to the bank for loans and credits, intensively used accounts payable to finance its activities for "cheap money", "interest-free loans", which ultimately could result in a decrease in confidence in organizations from partners, customers, buyers or to bankruptcy.
Table 2 Data for the calculation of the volume of products sold
Solution:
We find the planned balances of unsold products at the end of the year
OK. \u003d OB x N,
where OV - one-day output of marketable products; N is the stock rate in days.
RH = TA 4 q / 90 days
At selling prices
OV \u003d 53825/90 \u003d 598 rubles.
OK. \u003d 598 x 8 \u003d 4784 rubles.
OV \u003d 42000/90 \u003d 467 rubles.
Ok .. \u003d 467 x 8 \u003d 3736 rubles.
We find the indicator of the volume of sales of products in the planned period
V \u003d O f + TP - O to
At selling prices
V \u003d 168000 + 215300 - 4784 \u003d 378516 rubles.
By production cost
V \u003d 13700 + 176500 - 3736 \u003d 186464 rubles.
Profit from the sale of marketable products
378516 - 186464 = 192052 rubles
Answer: the volume of products sold at selling prices - 378516 rubles, and at production cost - 186464 rubles; profit from the sale of products - 192052r.
Conclusion
Financing refers to the process of generating funds or, more broadly, the process of forming the capital of an enterprise in all its forms.
Classification of funding sources is varied and can be produced according to the following features:
According to the property relations, own and borrowed sources of financing are distinguished.
According to the types of property, state resources, funds of legal entities and individuals and foreign sources are allocated.
According to the time characteristics, funding sources can be divided into short-term and long-term.
As part of internal sources of formation of own financial resources. The main place belongs to the profit remaining at the disposal of the enterprise - it forms the predominant part of its own financial resources.
Depreciation charges also play a certain role in the composition of internal sources; although they do not increase the amount of equity capital of the enterprise.
Other internal sources do not play a significant role in the formation of the enterprise's own financial resources.
In the composition of external sources of formation of its own financial resources, the main place belongs to the attraction of additional share or equity capital by the enterprise. For individual enterprises, one of the external sources of generating their own financial resources may be the gratuitous financial assistance provided to them (as a rule, such assistance is provided only to individual state-owned enterprises of various levels).
In the conditions of transition to the market, non-traditional instruments of financing the activities of Russian enterprises are also beginning to be used. These include commercial loans, options, mortgage transactions, factoring transactions, leasing, etc.
Currently, the financing of enterprises is in an unsatisfactory state due to the lack of own funds for self-financing, the lack of sufficient state financial support, the high cost and riskiness of innovation, the long-term payback nature of innovative projects, and the dominance of conservative investors instead of aggressive ones. For further successful development, Russian companies need to solve two problems: the first is to optimize sources of financing for the development of new projects; the second is to learn how to select such innovative projects that will bring real returns even in times of crisis.
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Karpova E.N. "Problems of attracting long-term sources of funds to finance the activities of Russian enterprises in the context of the financial crisis" I INTERNATIONAL INTERNET CONFERENCE "LIFELONG FINANCIAL EDUCATION - THE BASIS OF INNOVATIVE DEVELOPMENT OF RUSSIA"
Karpova E.N. Op. Op.
Karpova E.N. Decree. op.