circulation funds- funds of the enterprise operating in the sphere of circulation; component working capital.
The circulation funds include:
§ funds of the enterprise invested in stocks of finished products, goods shipped, but not paid for;
§ funds in settlements;
§ cash on hand and in accounts.
The amount of working capital employed in production is determined mainly by the duration of production cycles for the manufacture of products, the level of development of technology, the perfection of technology and the organization of labor. The amount of circulation funds depends mainly on the conditions for the sale of products and the level of organization of the system of supply and marketing of products.
Working capital is a more mobile part of the assets.
In every the circulation of working capital goes through three stages: monetary, production and commodity.
To ensure an uninterrupted process, the enterprise forms inventories of working capital or material values that await their further production or personal consumption. Inventories are the least liquid item among items current assets. The following inventory valuation methods are used: at the cost of each unit of purchased goods; by average cost, in particular, by weighted average cost, moving average; at the cost of the first time purchases; at the cost of the most recent purchases. The unit of accounting for working capital as inventories is a batch, a homogeneous group, an item number.
Depending on the destination, stocks are divided into production and commodity. Depending on the functions of use, stocks can be current, preparatory, insurance or warranty, seasonal and transitional.
§ Insurance stocks- a reserve of resources intended for the uninterrupted supply of production and consumption in cases of a decrease in supplies compared to those provided.
§ Current stocks- stocks of raw materials, materials and resources to meet the current needs of the enterprise.
§ Preparatory stocks- stocks depending on production cycle are necessary if the raw material is to be processed in any way.
§ carryover stocks- part of unused current reserves, which are transferred to the next period.
Working capital is simultaneously at all stages and in all forms of production, which ensures its continuity and uninterrupted operation of the enterprise. Rhythm, coherence and high performance largely depend on optimal sizes working capital(circulating production assets and circulation funds). Therefore, the process of normalization of working capital, which relates to the current financial planning at the enterprise, is of great importance. Rationing of working capital is the basis for the rational use of economic assets of the company. It consists in the development of reasonable norms and standards for their consumption, necessary to create a constant minimum stock, and for the smooth operation of the enterprise.
The standard of working capital establishes their minimum estimated amount, which is constantly required by the enterprise for work. Failure to fill the standard of working capital may lead to a reduction in production, non-fulfillment of the production program due to interruptions in production and sales of products.
Normalized working capital- the size of inventories planned by the enterprise, work in progress and the balance of finished products in warehouses. The working capital stock rate is the time (days) during which the fixed assets are in the production stock. It consists of the following reserves: transport, preparatory, current, insurance and technological. Working capital ratio - the minimum amount of working capital, including Money necessary for a company, a firm to create or maintain carry-over inventory and ensure business continuity.
Sources of the formation of working capital can be profit, loans (banking and commercial, i.e. deferred payment), equity (authorized) capital, shares, budget funds, redistributed resources (insurance, vertical management structures), accounts payable, etc.
The efficiency of the use of working capital has an impact on the financial performance of the enterprise. In its analysis, the following indicators are used: the presence of own working capital, the ratio between own and borrowed resources, the solvency of the enterprise, its liquidity, the turnover of working capital, etc. The turnover of working capital is understood as the duration of the successive passage of funds through individual stages of production and circulation.
The following indicators of turnover of working capital are distinguished:
§ turnover ratio;
§ duration of one turn;
§ coefficient of working capital utilization.
Turnover ratio(rate of turnover) characterizes the amount of proceeds from the sale of products on the average cost of working capital. Duration of one turn in days is equal to the quotient of dividing the number of days for the analyzed period (30, 90, 360) to the turnover of working capital. The reciprocal of the turnover rate shows the amount of working capital advanced for 1 rub. proceeds from the sale of products. This ratio characterizes the degree of loading of funds in circulation and is called working capital utilization factor. The lower the value of the load factor of working capital, the more efficient use of working capital.
The main goal of managing the assets of an enterprise, including working capital, is to maximize the return on invested capital while ensuring a stable and sufficient solvency of the enterprise. To ensure sustainable solvency, the enterprise must always have a certain amount of money on the account, actually withdrawn from circulation for current payments. Part of the funds should be placed in the form of highly liquid assets. An important task in terms of managing the working capital of an enterprise is to ensure the optimal balance between solvency and profitability by maintaining the appropriate size and structure of current assets. It is also necessary to maintain the optimal ratio of own and borrowed working capital, since the financial stability and independence of the enterprise, the possibility of obtaining new loans directly depend on this.
Analysis of the turnover of working capital (analysis of the business activity of the organization)
working capital- these are funds advanced by organizations to maintain the continuity of the production and circulation process and returned to organizations as part of the proceeds from the sale of products in the same monetary form with which they began their movement.
To assess the effectiveness of the use of working capital, indicators of turnover of working capital are used. The main ones are the following:
§ average duration of one turnover in days;
§ the number (number) of turnovers made by working capital during a certain period of time (year, half year, quarter), otherwise - the turnover ratio;
§ the amount of employed working capital per 1 ruble of sold products (working capital utilization factor).
If working capital goes through all stages of the cycle, for example, in 50 days, then the first indicator of turnover (average duration of one turnover in days) will be 50 days. This indicator approximately characterizes the average time that passes from the moment of purchase of materials to the moment of sale of products made from these materials. This indicator can be determined by the following formula:
§ P - the average duration of one turnover in days;
§ SO - the average balance of working capital for the reporting period;
§ P - sales of products for this period (net of value added tax and excises);
§ B - the number of days in reporting period(in a year - 360, in a quarter - 90, in a month - 30).
So, the average duration of one turnover in days is calculated as the ratio of the average balance of working capital to the one-day turnover for the sale of products.
The indicator of the average duration of one turnover in days can be calculated in another way, as the ratio of the number of calendar days in the reporting period to the number of turnovers made by working capital for this period, i.e. according to the formula: P \u003d B / CHO, where CHO is the number of turnovers made by working capital for the reporting period.
The second turnover rate- the number of turnovers made by working capital for the reporting period (turnover ratio) - can also be obtained in two ways:
§ as the ratio of sales of products minus value added tax and excises to the average balance of working capital, i.e. according to the formula: CHO \u003d P / CO;
§ as the ratio of the number of days in the reporting period to the average duration of one turnover in days, i.e. according to the formula: CHO \u003d V / P .
The third indicator of turnover (the amount of employed working capital attributable to 1 ruble of sold products, or otherwise, the working capital utilization factor) is determined in one way as the ratio of the average balance of working capital to the turnover for the sale of products for a given period, i.e. according to the formula: CO / R.
This indicator is expressed in kopecks. It gives an idea of how many kopecks of working capital are spent to receive each ruble of proceeds from the sale of products.
The most common is the first indicator of turnover, ie. average duration of one turn in days.
Most often, turnover is calculated per year.
In the analysis, the actual turnover is compared with the turnover for the previous reporting period, and for those types of current assets for which the organization sets standards - also with the planned turnover. As a result of such a comparison, the value of the acceleration or deceleration of turnover is determined.
The initial data for the analysis are presented in the following table:
In the analyzed organization, the turnover slowed down, both for standardized and non-standardized working capital. This indicates a deterioration in the use of working capital.
With a slowdown in the turnover of working capital, an additional attraction (involvement) of them into circulation occurs, and during acceleration, working capital is released from circulation. The amount of working capital released due to the acceleration of turnover or additionally attracted as a result of its slowdown is determined as the product of the number of days by which the turnover accelerated or slowed down by the actual one-day sales turnover.
The economic effect of accelerated turnover is that the organization can produce more products with the same amount of working capital, or produce the same volume of products with a smaller amount of working capital.
The acceleration of the turnover of working capital is achieved by introducing new equipment into production, advanced technological processes, mechanization and automation of production. These activities help to reduce the duration of the production cycle, as well as increase the volume of production and sales.
In addition, to speed up the turnover importance has: rational organization of logistics and marketing of finished products, compliance with the regime of savings in the costs of production and sale of products, the use of forms of non-cash payments for products that contribute to the acceleration of payments, etc.
Directly in the analysis of the current activities of the organization, it is possible to identify the following reserves for accelerating the turnover of working capital, which consist in eliminating:
§ excess inventories: 608 thousand rubles;
§ goods shipped, not paid for by the buyers: 56 thousand rubles;
§ goods in safe custody with buyers: RUB 7,000;
§ immobilization of working capital: 124 thousand rubles.
Total reserves: 795 thousand rubles.
As we have already established, the one-day sales turnover in this organization is 64.1 thousand rubles. So, the organization has the opportunity to accelerate the turnover of working capital by 795: 64.1 = 12.4 days.
To study the causes of changes in the rate of turnover of funds, it is advisable, in addition to the considered indicators of general turnover, to calculate also indicators of private turnover. They refer to certain types of current assets and give an idea of the time spent by working capital at various stages of their circulation. These indicators are calculated in the same way as stocks in days, however, instead of the balance (stock) on a certain date, the average balance of this type of current assets is taken here.
Private turnover shows how many days on average there are working capital in this stage of the cycle. For example, if the private turnover for raw materials and basic materials is 10 days, then this means that from the moment the materials arrive at the organization's warehouse to the moment they are used in production, an average of 10 days pass.
As a result of summing up the private turnover indicators, we will not get the total turnover indicator, since different denominators (turnovers) are taken to determine the private turnover indicators. The relationship between indicators of private and general turnover can be expressed in terms of total turnover. These indicators allow you to establish what impact the turnover of certain types of working capital has on the overall turnover rate. The terms of the total turnover are defined as the ratio of the average balance of this type of working capital (assets) to the one-day turnover for the sale of products. For example, the term of the total turnover for raw materials and basic materials is equal to:
Divide the average balance of raw materials and basic materials by the one-day turnover for the sale of products (excluding value added tax and excises).
If this indicator is, for example, 8 days, then this means that the total turnover due to raw materials and basic materials accounts for 8 days. If we sum up all the terms of the total turnover, then the result will be an indicator of the total turnover of all working capital in days.
In addition to those considered, other turnover indicators are also calculated. So, in analytical practice, the indicator of inventory turnover is used. The number of turnovers made by stocks for a given period is calculated using the following formula:
Divide the proceeds from the sale of products, works and services (net of value added tax and excises) by the average value for the item "Inventories" of the second section of the balance sheet asset.
The acceleration of inventory turnover indicates an increase in the efficiency of inventory management, and the slowdown in inventory turnover indicates their accumulation in excessive amounts, ineffective inventory management. Indicators reflecting the turnover of capital, that is, the sources of formation of the organization's property, are also determined. So, for example, the turnover of equity capital is calculated according to the following formula:
The sales turnover for the year (net of value added tax and excises) is divided by the average annual cost of equity.
This formula expresses the effectiveness of the use of equity capital (authorized, additional, reserve capital, etc.). It gives an idea of the number of turnovers made by the organization's own sources of activity per year.
The turnover of invested capital is the turnover on sales of products for the year (net of value added tax and excises) divided by the average annual cost of equity and long-term liabilities.
This indicator characterizes the effectiveness of the use of funds invested in the development of the organization. It reflects the number of turnovers made by all long-term sources during the year.
When analyzing the financial condition and the use of working capital, it is necessary to find out from what sources the financial difficulties of the enterprise are compensated. If the assets are covered by sustainable sources of funds, then the financial condition of the organization will be stable not only at this reporting date, but also in the near future. Sustainable sources should be considered own working capital in sufficient amounts, non-reducing balances of carry-over debt to suppliers on accepted settlement documents, the payment deadlines for which have not come, permanently carry-over debt on payments to the budget, a non-reducing part of other accounts payable, unused balances of special-purpose funds (accumulation funds and consumption, as well as the social sphere), unused balances of targeted financing, etc.
If the organization's financial breakthroughs are blocked by unstable sources of funds, it is solvent at the reporting date and may even have free cash in bank accounts, but financial difficulties await it in the short term. Unsustainable sources include sources of working capital that are available on the 1st day of the period (balance sheet date), but not available on dates within this period: non-overdue wage arrears, contributions to off-budget funds (in excess of certain stable values), unsecured debt to banks on loans for inventory items, debts to suppliers on accepted settlement documents, the payment deadlines for which have not come, in excess of the amounts attributed to sustainable sources, as well as debts to suppliers for uninvoiced deliveries, debts on payments to the budget in excess of the amounts attributed to stable sources of funds.
It is necessary to make a final calculation of financial breakthroughs (ie, unjustified spending of funds) and sources of coverage for these breakthroughs.
The analysis ends with a general assessment of the financial condition of the organization and the preparation of an action plan to mobilize reserves to accelerate the turnover of working capital and increase liquidity and strengthen the solvency of the organization. First of all, it is necessary to assess the security of the organization with its own working capital, their safety and use for their intended purpose. Then, an assessment is made of compliance with financial discipline, solvency and liquidity of the organization, as well as the completeness of the use and security of bank loans and loans from other organizations. Measures are planned for more efficient use of both equity and borrowed capital.
The analyzed organization has a reserve for accelerating the turnover of working capital by 12.4 days (this reserve is noted in this paragraph). To mobilize this reserve, it is necessary to achieve the elimination of the causes that cause the accumulation of excess stocks of raw materials, basic materials, spare parts, other inventories and work in progress.
In addition, it is necessary to ensure the targeted use of working capital, preventing their immobilization. Finally, receiving payments from buyers for goods shipped to them that were not paid for on time, as well as the sale of goods that are in safe custody with buyers due to refusal to pay, will also speed up the turnover of working capital.
All this will help to strengthen the financial condition of the analyzed organization.
Similar information.
3. Main economic elements and performance indicators of manufacturing enterprises (firms)
3.4. Current assets of the enterprise
The concept, composition and structure of working capital. Working capital is a set of production working capital and circulation funds that is constantly in continuous motion. Therefore, working capital can be classified into working capital and circulation funds, that is, according to the spheres of turnover. Production circulating assets are objects of labor that are consumed during one production cycle and fully transfer their value to finished products.circulation funds- these are the means of the enterprise that are associated with servicing the process of circulation of goods (for example, finished products).
By its economic nature, working capital is money invested (advanced) in working capital and circulation funds. The main purpose of working capital is to ensure the continuity and rhythm of production.
The composition and structure of working capital are shown in fig. 3.5.
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working capital |
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Industrial working capital |
circulation funds |
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A) Productive reserves |
B) Funds in production costs |
V) Finished products |
G) Cash and settlements |
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1. Raw material |
10. Work in progress |
13. Finished products in the warehouse of the enterprise |
15. Settlements with debtors |
Rice. 3.5. Composition and classification of working capital
According to the purpose in the production process (by elements), working capital can be divided into the following groups.
A) Productive reserves. All elements of inventories (1-9) appear in three forms.
1. Transport stock - from the date of payment of the supplier's invoice until the arrival of the goods at the warehouse.
2. Warehouse stock is divided into preparatory and current.
2.1. A preparatory stock is created in cases where a given type of raw material or materials needs to be held (time natural processes such as lumber drying, aging of large castings, tobacco fermentation, etc.).
2.2. A running stock is created to meet the demand for materials and raw materials between two deliveries.
The size of the maximum current stock is determined by the formula
where Q max is the maximum current stock of the relevant material;
Q T - volume of average daily calendar consumption;
T p - the value of the interval of deliveries of this type of materials.
3. Safety stock is created in cases where there are frequent changes in the delivery interval, and depends on the specific conditions of the enterprise.
B) Funds in production costs.
10. Work in progress is a product (work) that has not passed all the stages provided for by the technological process, as well as products that are incomplete or have not passed testing and technical acceptance.
11. Semi-finished products own production(castings, forgings, stampings, etc.).
12. Deferred expenses are expenses incurred in the reporting period, but related to the following reporting periods.
13. Finished products in the warehouse of the enterprise.
14. Shipped, but not paid for products.
G) Cash and settlements (means of settlement):
15. Settlements with debtors (funds in settlements with debtors). Debtors are legal entities and individuals who have debts to this enterprise (this debt is called receivable).
16. Income assets are short-term (for a period not exceeding 1 year) investments of an enterprise in securities (highly liquid market securities), as well as loans provided to other business entities.
17. Cash means funds on current accounts and in the cash desk of the enterprise.
The structure of working capital is characterized by the proportion of individual elements in the total population and is usually expressed as a percentage.
Circulation and turnover of working capital
According to the nature of participation in the production and trade turnover, circulating production assets and circulation funds are closely interconnected and constantly move from the sphere of circulation to the sphere of production and vice versa according to the following scheme:
D - PZ ... PR ... GP - D 1,
where D - funds advanced by an economic entity;
ПЗ - industrial stocks;
GP - finished products;
D 1 - cash received from the sale of products (the cost of consumed means of production, surplus product, value added);
...PR... - the process of circulation is interrupted, but the process of circulation continues in the sphere of production.
It is customary to distinguish three stages of the cycle.
1. Current assets act in cash and are used to create inventories - the cash stage.
2. Inventories are consumed in the production process, forming work in progress and turning into finished products.
3. As a result of the process of selling finished products, they receive the necessary funds to replenish inventories.
Then the circuit is repeated and thus the conditions are continuously created for the resumption of the production process.
The economic assessment of the state and turnover of working capital is characterized by the following indicators.
1. The turnover ratio (K about) characterizes the number of revolutions that working capital makes for a certain period of time:
where Q is the volume of products sold;
OS o - average balances of working capital.
The calculation of the average balance of working capital is carried out according to the formula for calculating the average chronological value.
2. Turnover in days (duration of one turnover) (T o) is determined by the formula:
where T p is the duration of the period.
The acceleration of turnover is accompanied by additional involvement of funds in turnover. The slowdown in turnover is accompanied by the diversion of funds from economic turnover, their relatively longer deadening in inventories, work in progress, finished products. Turnover indicators can be calculated both for the entire set of working capital, and for individual elements.
Sources of formation of economic funds
Sources of financing of economic funds consist of own and borrowed (borrowed) funds. Their structure is shown in Table. 3.3.
Table 3.3
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Business assets of the enterprise |
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Main |
negotiable |
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Sources of formation (financing) |
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Equity |
Raised capital |
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Authorized capital |
Long-term borrowings |
Short-term borrowings |
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Long-term loans |
Short term loans |
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Long term capital |
Short term capital |
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Sources of own funds (own capital)
Authorized capital determines the minimum amount of property that guarantees the interests of its creditors. The composition of the authorized capital depends on the organizational and legal form of the enterprise. The authorized capital is formed:
- from the contributions of participants (share capital) for business partnerships and for companies with limited liability(LTD);
- par value of shares for a joint-stock company (JSC);
- property share contributions (production cooperatives or artels);
- statutory fund allocated by a state body or local self-government body.
Extra capital characterizes the amount of revaluation of non-current assets, which is carried out in the prescribed manner, as well as gratuitously received values and other similar amounts.
Reserve capital is created in accordance with the law to cover unproductive losses and losses, as well as payments of income (dividends) to participants in the absence or insufficiency of the profit of the reporting year for these purposes.
Reserve funds are created to cover future expenses, payments, doubtful debts (to the enterprise), for the upcoming payment of vacations to employees, for the payment of remuneration based on the results of work for the year, to cover the upcoming costs of repairing fixed assets, etc.
accumulation funds- Funds used to finance capital investments.
Targeted funding and income- funds allocated to the enterprise by the state (municipality) or a sponsor for the implementation of certain purposeful activities.
Lease obligations- payment to the enterprise for fixed assets leased from it.
Undestributed profits- this is the profit remaining at the disposal of the enterprise after the payment of income (dividends) to participants and the repayment of obligations.
Depreciation deductions- part of the proceeds directed, as a rule, to accumulation funds, a repair fund, etc.
Sources of borrowed funds of the enterprise:
a) Long-term credits and loans. Long-term loans are the amount of debt of the enterprise to the bank on loans received for a period of more than 1 year. Long-term loans are debts on loans received from other enterprises for a period of more than one year.
b) Short term loans characterize the amount of debt on loans received from banks with a maturity of up to one year. Short-term loans show debt on short-term loans received from other enterprises and institutions with a maturity of up to one year.
v) Advances from buyers and customers are a form of lending.
G) Accounts payable. Creditors are legal and natural persons to whom enterprises have a certain debt. The amount of this debt is called accounts payable. Accounts payable may arise as a result of the existing system of settlements between enterprises, when the debt of one enterprise to another is returned after a certain period after the occurrence of debt, in cases where enterprises first record the occurrence of debt in accounting, and then, after a certain time, repay this debt due to lack of the company has cash to pay.
e) Long-term lease of fixed assets. Fixed assets and the most stable part of working capital are financed by long-term capital, the rest of working capital is financed by short-term capital.
With this ratio, funds invested in non-current assets, as well as in the creation of the necessary reserves, cannot be unexpectedly demanded by creditors and, thus, disrupt production and economic activities.
Leasing is a form of long-term lease associated with the transfer of equipment for use, Vehicle and other movable and immovable property.
financial leasing provides for the payment by the lessee during the period of the contract of funds covering the full cost of depreciation of equipment or a large part of it, as well as the profit of the lessor. Upon expiration of the contract, the lessee may return the leased object to the lessor or redeem the leased object at the residual value.
Operational leasing is concluded for a period less than the amortization period. Financial leasing acts in the form of lending, while operating leasing is similar to short-term lease and is used in progressive industries.
Direct financial leasing is preferable when an enterprise needs to re-equip its existing technical potential (that is, when it is necessary to replace existing fixed assets). The leasing company in this transaction provides full 100% financing of the acquired property. The property goes directly to the user, who pays for it during the lease term.
There are three parties involved in a leasing transaction (Figure 3.6): an enterprise (provider of fixed assets), a leasing company (payer), and a tenant (user).
In fact, leasing is a form of property acquisition combined with simultaneous lending and rent.
1 - the leasing company concludes a tripartite contract (agreement);
2 - supply of fixed assets to the tenant; 3 - the leasing company pays the cost of fixed assets to the supplier; 4 - rent payments by the tenant to the leasing company
Rice. 3.6. Participants of the leasing transaction
The advantages of leasing are that:
a) leasing allows an enterprise to obtain fixed assets and start their operation without diverting money from circulation and without significantly increasing accounts payable;
b) fixed assets during the term of the contract are on the balance sheet of the leasing company;
c) lease payments relate to the current expenses of the enterprise, i.e. are included in the cost and, therefore, reduce the amount of taxable profit;
d) the leasing company is not responsible for the quality of the leasing object and, in case of non-fulfillment of the terms of the contract, can always return the leasing object to itself;
e) for the supplier, leasing is a means to expand sales markets.
Return lease. The essence of leaseback is that the leasing company acquires property from the enterprise and immediately provides it with this property for rent with the right to repurchase it later. An alternative to secured mortgage lending.
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revolving funds and circulation funds
4. Special clothing and special footwear - items of individual protection against harmful conditions production or items that protect the worker and his clothes from premature wear (mittens, glasses, aprons, overalls, etc.).
5. Bedding - pillows, pillowcases, mattresses, sheets used in hostels, which are on the balance sheet of a construction organization.
Production stocks, entering the production process, become means in the production process and are called revolving funds during the production process.
Working capital in the production process includes work in progress for construction and installation works, ancillary production, as well as deferred expenses.
Unfinished production construction and installation work is a material technologically unfinished part of construction production, without which the production process cannot be carried out continuously. Construction and installation works in progress include unfinished works on structural elements and types of construction and installation works that cannot be included in the acts of acceptance of work performed and paid by the customer in accordance with the existing rules for calculating the work performed.
Future spending aims to prepare production process and are designed to ensure uninterrupted construction production. They include, for example, the costs of constructing temporary non-titular buildings and structures: change houses, canteens, canteens, etc., the costs of delivery and installation of machines at construction sites, testing structures and materials, overburdening in quarries, etc. .
The peculiarity of these expenses is that they are carried out at a time in this reporting period, and are written off to the cost of construction and installation works in parts, since they are associated with the production of not only the current, but also future periods.
Each construction organization carries out economic activities not only in the sphere of production, but also in the sphere of circulation, selling finished products, works, services and buying the necessary material and technical resources. Therefore, in addition to working capital, working capital also includes circulation funds, including funds in settlements and cash.
TO funds in settlements includes amounts on invoices presented to customers for work performed, the payment deadline for which has not yet come. The reason for the formation of these amounts is that the sale of finished construction products requires a certain time, during which the previously spent funds are in the stage of settlements with customers. The funds in the calculations also include accounts receivable for goods and services, for advances issued, promissory notes received by the construction organization, amounts for accountable persons, etc.
The same article includes the amounts of debts to suppliers for goods and services, on promissory notes issued, on advances received for wages, on settlements with the budget and insurance organizations, etc. The listed amounts of debts are debt obligations of a construction organization, which are its accounts payable debt.
Cash- the amount of cash in the organization's cash desk, free cash kept on settlement, currency and other bank accounts, as well as securities (stocks, bonds, savings certificates, bills) and other funds of a construction organization.
Structure and sources of working capital formation
The ratio between the individual elements of working capital shows their structure. The structure of working capital is usually expressed through the percentage of each cost element in their total cost. It depends on the nature of the work performed, their labor intensity and material consumption, the degree of mechanization of work, the level of prefabrication of construction, the forms of payment with customers for the work performed, and a number of other factors.
working capital construction organizations by sources of formation divided into own and borrowed.
Own working capital are designed to cover the minimum need for the creation of inventories, backlog for work in progress and costs to ensure the normal and uninterrupted operation of a construction organization.
Sources of own working capital are authorized capital, profit, as well as additional and reserve capital.
Authorized capital represents a set of monetary contributions of the founders to the property of the organization during its creation. Designed to ensure the activities of the organization being created in the amount determined by the constituent document (charter of the organization).
Profit characterizes the financial result of the organization and is used as a source of funds to replenish its own working capital with an increase in the volume of work or changes in production conditions.
Extra capital is formed due to the revaluation of fixed assets in the direction of their increase, gratuitous receipt of various assets from legal entities and individuals, as well as through the sale of own securities. It is intended for the formation of the organization's own funds.
Reserve capital is formed from the profit of the organization and is intended to cover unforeseen losses and losses, including working capital, as well as the payment of dividends on preferred shares in the event that there is not enough profit for these purposes.
Borrowed funds the funds raised by construction organizations from various are called.
These funds are not assigned free of charge to organizations, but are temporarily involved in their circulation. Basically, this is a short-term bank loan for various needs of the organization, including the purchase of materials, the issuance of wages and other purposes with a mandatory return and for a fee. The interest rate for the use of a loan is set by commercial banks, taking into account the interest rate of the Central Bank of the Russian Federation.
Transport stock takes into account the period of time from the date of payment of the payment request to the date of receipt of the goods at the warehouse of the construction organization.
The preparatory stock rate includes the time required for acceptance, unloading, sorting, warehousing, picking, laboratory analysis of incoming materials, and is determined according to established standards or according to experimental data on the time spent on these operations.
Current (warehouse) stock designed to ensure the continuity of the production process in the intervals between two successive deliveries. The size of the current stock depends on the average daily consumption and the frequency of deliveries. The more often materials arrive at the construction site, the less the current stock should be with the same volume of construction and installation work. It is recommended to take the current stock in the amount of 50% of the average length of the interval between two adjacent deliveries.
Insurance (guarantee) stock necessary to prevent the consequences of possible interruptions in supply, transport and violations of delivery dates. The safety stock rate in days is recommended to be set at 30-50% of the working capital norm for the current (warehouse) stock.
Funds of circulation are connected with servicing the process of circulation of goods and function in the sphere of circulation. The circulation funds include:
- finished products in the warehouses of the enterprise, awaiting sale;
- products in transit - shipped, but not paid for by the consumer;
- cash in pending settlements with customers and suppliers - receivables, i.e. funds due to the enterprise, but not yet received by it;
- easily marketable securities;
- free funds of the enterprise on settlement accounts (ruble and currency) and in cash.
Classification and structure of working capital
The totality of funds invested in working capital and circulation funds is the current assets of the enterprise. Working capital should ensure the continuity of the production process and product sales. Working capital is in continuous and sequential motion, passing through three stages of circulation: supply (circulation), production (production) and marketing (circulation), which can be represented as follows:
D-PZ... NP... GP-D".
At the first stage, the enterprise acquires raw materials, materials, semi-finished products necessary for its uninterrupted operation with cash (D) and forms production inventories (PZ); money transfers from the sphere of circulation to the sphere of production, turning into objects of labor. At the second stage, the purchased raw materials, materials, fuel, etc. are launched directly into production and distributed over all its phases in the form of work in progress (WP), semi-finished products of own manufacture, expenses for newly mastered products or technologies, as well as finished products (finished products). At the third stage, the sale of finished products (FP) takes place, i.e. current assets from the sphere of production pass into the sphere of circulation, acting sequentially in the form of finished products in the warehouse of the enterprise, products shipped to consumers, funds employed in settlements with consumers, and cash
The main task of organizing the use of working capital is to ensure the continuity of the production process and the sale of products with the smallest amount of working capital. This means that working capital should be distributed over all stages of the cycle in a minimum but sufficient amount.
To solve this problem, the normalization of working capital is used. According to the scope of normalization, working capital is divided into normalized and non-standardized. Normalized - these are the working capital of the enterprise, for which the planned norms of stocks for each type and the general standard in monetary terms are established. Normalized include all working capital operating in the production sector (inventory, work in progress, deferred expenses), as well as finished products in the warehouse of the enterprise. Non-standardized - those working capital for which planned standards are not set, and the size of stocks is regulated on an operational basis. Non-standardized working capital includes receivables, funds in settlements, cash on hand of the enterprise and on its current accounts, easily marketable securities.
According to the sources of formation, working capital is divided into:
- own funds. These funds in the formation of state unitary enterprises are formed at the expense of the budget, in the formation of enterprises of other forms of ownership - are allocated by the founders (at the expense of equity capital, share contributions, etc.);
- borrowed funds provided on the terms of payment. These funds, as a rule, are formed from short-term bank loans and are used to cover the additional need of the enterprise for working capital, which may arise for various reasons (if it is necessary to expand production, form additional excess stocks, etc.;
- "free" loans- these are funds temporarily used in circulation and representing accounts payable to suppliers, tax debts to the budget, etc. Subject to the repayment of these debts on time, the enterprise can cover the current need for working capital at the expense of these “free” borrowed funds. If the debt repayment terms are violated, the enterprise will face the need to pay fines, penalties, etc., i.e. actually these borrowed funds will become paid.
Under working capital structure understand the cost ratio between their individual elements, expressed as a percentage of the total cost. To analyze the composition and structure of working capital, they are grouped according to the following criteria:
- by spheres of turnover (those in the sphere of production - circulating production assets and those in the sphere of circulation - circulation funds);
- by sources of formation and replenishment (own and equated to them, borrowed and attracted);
- according to the features of planning (normalized and non-standardized).
Enterprise circulation funds- these are the means of the enterprise that are associated with servicing the process of circulation of goods. The circulation funds include:
- finished products in stock;
- goods shipped but not paid for on time;
- cash held in the cash desk of the enterprise at the stage of settlements between buyers and the enterprise;
- all types of receivables.
Main appointment of circulation funds- to ensure the rhythm of the circulation process with money.
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