CC BY
10
UDC 005.2
Chukhaeva Maripat Dagestan State University Russia, Makhachkala
IMPROVING THE EFFICIENCY OF USE OF WORKING CAPITAL BY THE ENTERPRISE IN MODERN CONDITIONS OF OPERATION
Abstract: Working capital is of practical importance in assessing the financial and economic activities of commercial enterprises. It is one of the leading factors influencing the formation of corporate profits. As part of the productive capital, current assets transfer their value to the goods produced and help to get cash back into production when they are sold. The faster this circuit of resources and money, the more actively the company operates.
Keywords: working capital; financial position; business entity; financial management; financing policy.
Working capital, having in its essence mobile properties, form the financial policy for managing its size, needs, channels of implementation and investment back into production. Studying all these issues in a specific activity of an enterprise, one can single out a common problem in financial management - an insufficient focus on improving the strategic directions for managing one's own current assets. The problem in the management of working resources is determined in the development for each enterprise of the sufficient level and rational composition of assets, the size and volume of sources of financing its activities. There is a general method for determining the need for current assets, which allows you to maintain financial stability in changing market conditions. However, enterprises have different characteristics, indicators, trends and methods of survival in their operation, they are not subject to common standards.
In the management policy of the financial condition of the entire enterprise working capital is allocated the most important factor. As noted, working capital ensures uninterrupted production and commercial activities. To ensure a high level of development, enterprises today attach great importance to the rational use of financial resources, such as inventories, cash assets, and inventory items. Of the numerous composition determine their use in activities, turnover and sales determine the implementation of optimal policies in modern risk conditions [1].
The main approaches to improving the management of working capital is to determine their needs, which in sufficient quantities will be delivered without fail to production and participate in all stages before being sold on the market. If we consider in general terms the problems of working capital management, then we note that, in general, they arise from the general state of activity. Figure 1 provides a diagram of the main causes that adversely affect the financial condition of the company [2].
All these reasons are directly or indirectly the result of improper management of material and monetary assets, so the company should strive to improve the efficiency of supply and marketing processes, inventory management and turnover.
Such factors as ineffective management of own and borrowed capital, due to a decrease in production assets and an increase in debt to suppliers, affect the decrease in financial stability.
Reduction or insufficient liquidity is determined by a low level of funds, the presence of payables and receivables, and a high level of debt of the founders on contributions to the authorized capital of the enterprise.
The decline in business activity requires solving problems in slowing the circulation of working capital. It is caused by a non-rational policy of managing its own funds, a low level of sales profitability, non-compliance of payment requirements by debtors, and an increase in loan obligations by an enterprisep. To solve the problems of reducing profitability, first of all you need to pay attention to the decrease in the size of net profit, increase in the size of stocks, increase in working capital and distribution costs.
To improve the situation with the management of monetary assets, the company needs to take the following measures:
making a forecast on cash inflows and outflows; calculation of the optimal level of cash, continuous monitoring of the need for cash by the enterprise;
continuous analysis of accounts receivable, identification of needs for short-term financing and calculations;
creation of a system of credit conditions: a clear definition of the requirement for
payment, terms, sanctions in case of violation of credit relations;
evaluation of customers and identifying the image of their activities in the market,
as they determine the financial discipline on mutual settlements;
assessment of the ratio of payables and receivables of the enterprise, since the excess
of receivables contributes to an increase in attracted financial resources;
improvement of inventory management policies, reduction of storage costs,
increased sales activities [3].
In general, it is possible to summarize ways of improving the areas of financing working capital in the following stages:
The financing policy largely depends on the chosen type of current assets management. In financial management, three main types are defined:
• conservative;
• moderate;
• aggressive.
The first type of policy, the conservative, provides for fully covering the needs of current working capital in all types to ensure efficient operations. Also, this policy reflects the creation of a high level of reserves, reserved in the amount that provides the company upon the occurrence of financial and operational risks. The disadvantage of this type of management is a decrease in the efficiency and turnover of current assets, profitability and an increase in expenses for their maintenance. A moderate approach to management is characterized by the average values of ensuring the needs of the enterprise in working capital. At the same time, an average ratio between risks and the efficiency of use of financial resources is
formed.Minimizing the need for working capital determines an aggressive approach that ensures high profitability in the conduct of normal operating activities. The disadvantage of this approach in management is in the event of a crisis when external and internal factors influence, failure and financial losses due to reduced production and marketing of own products [4].
In practice, the functioning of enterprises is difficult to determine the approaches of the selected type of working capital management. Unfortunately, today many companies do not provide information and information on financial statements. Therefore, to characterize the type of management policy does not provide an opportunity to fully conduct scientific research. However, in terms of the data obtained on the activities of the enterprise as a whole, the moderate type can be attributed.
Efficiency in the working capital of the enterprise is determined in an integrated approach, including the following measures:
1) it is necessary to develop the company's financial policy with clear goals and objectives at each specific stage in the formation of working capital;
2) in order to strengthen financial sustainability, one should increase the amount of own capital by forming and replenishing the reserve fund;
3) determine benchmarks by which it will be possible to regularly determine the rise and fall in business activity, liquidity, and financial stability of a company based on a factor analysis of the impact of working capital on operating activities.
References
1. Turgulova A.K. Financial monitoring of companies. - Almaty, Economy, 2016. - p. 345-349.
2. Kozlova E.A. Management of elements of current assets // Economics, statistics and computer science. - 2013. - № 3. - p. 40-44.
3. Cherkashnev R.Yu., Chernyshova ON, Pakhomov N.N. Ways to optimize the financing of working capital in the enterprise // Socio-economic phenomena and processes. - 2015. - № 9. - p. 167-172.
4. Sukhova L.F. Management factors for the turnover of the current, core and advanced capital of an enterprise // Financial Analytics: Problems and Solutions. -2015. - №21. - pp. 16-22.
