Financial management is the science of management. Basic concepts and essence of financial management

1. Management as a field of activity

2. Management functions

3. Subjects and objects of management

4. Roles and tasks of managers

Structural elements economies are organizations that provide the production of goods and services for the population. The activities of these organizations provide for a certain management system. In the process of searching for ways to increase the efficiency of management functions, various theories and concepts of management arose, on the basis of which its principles and methods were formed.

Management is a purposeful action of a subject on an object in order to change its state or behavior in connection with a change in circumstances, situation, or the emergence of a certain problem. Spheres of management: political, economic, social.

Enterprise management is a system of targeted influence on production and economic activities and social processes in the team.

Management- this is a type of activity, the content of which is the influence on a team of workers or individual performers in order to coordinate their actions to complete assigned tasks and achieve set goals.

Management as a science is an area of scientific knowledge that uses objective laws and patterns that reflect cause-and-effect relationships in the field of management activities.

The terms "management" and "governance" are often used in domestic practice as synonyms.

Management activities involve the performance of certain functions. Each function is aimed at solving specific problems that the organization faces in its activities.

Management functions- a set of actions and operations that the organization’s management carries out in order to coordinate joint activities its employees in the process of achieving goals.

There are general and specific (specific) functions.

General functions and management depending on the stage of management:

1. planning;

2. organization;

3. motivation;

4. control.

Specific Functions management in accordance with management objectives:

1. innovation management

2. financial management;

3. marketing management

4. personnel management;

5. operational management (production).

Specific functions are implemented through general ones. Thus, the consistent and interconnected implementation of management functions ensures the process of managing an organization, the purpose of which is the effective functioning and development of the organization.

Management as a type of activity covers not only technical aspect functioning of the organization - production processes, and social - people, since the organization is a socio-technical system. The elements targeted by this activity form the objects of management.

Management (control) object- production and economic organization and its external environment.

Management functions are performed by subject of management , which can be one person or a group of people. Subject of management (management) - guides management actions.

The subject of management activity should be distinguished from the subject of management, which can only be individual, individual Subject of management activities - a person implementing management relations.

Through management relationships, managers (subjects of management activities) influence the behavior of the organization's employees.

Manager- a specialist who is professionally engaged management activities in a specific area of operation of the enterprise.

American economist G. Mintzberg identified ten managerial roles managers, who were grouped into three groups:

1. interpersonal roles: figurehead, leader, mediator;

2. information roles: nerve center, information disseminator, representative;

3. final roles: entrepreneur, deviation liquidator, resource manager, agreement drafter.

Managers can perform all roles regardless of title. We are talking only about the overload of some roles over others and their semantic load.

The role of the entrepreneur is special; the manager performing this role is guided in his work not only by other people’s goals, using available resources to achieve them, but he himself looks for opportunities to improve the organization’s activities, initiating changes in it and taking responsibility for their consequences. Conscious acceptance of the risk associated with the introduction of innovation likens such a manager to an entrepreneur.

Separation managerial work in an organization is the basis for the classification of management personnel. There are the following types of division of labor for managers:

· professional qualification;

· functional;

· structural.

Professional and qualification division of labor takes into account the types and complexity of the work performed. According to these criteria they divide management personnel for managers, specialists, technical performers.

Managers lead the team, make decisions, and are responsible for the results of work. They are called managers. Depending on which departments they head - main production or functional ones, a distinction is made between line managers (directors, shop managers, foremen, foremen) and functional managers (chief economist, head of marketing, personnel, etc.).

Specialists analyze information about the state of the organization and the conditions of its activities and prepare solutions for managers at the appropriate level. These include an economist, accountant, technologist, marketer, lawyer, etc.

Technical performers serve the activities of specialists and managers, free them from routine work, and perform information and technical operations.

Functional division of labor is based on the formation of groups of management personnel performing the same management functions, in particular planning (planning department), motivation (labor department and wages), control (accounting, quality control department). These services are headed by functional managers, and their composition includes specialists of the relevant specialty.

Structural division of labor carried out in accordance with the scale and scope of the organization and reflects the system of hierarchical relations in it. Based on this criterion, managers are distinguished at three levels of management: upper, middle and lower.

Top level managers have the most power and are responsible for the entire organization (directors and their deputies). They develop strategy, goals and objectives, formulate policies and represent the organization externally.

Middle-level managers develop plans for common tasks, make proposals to improve the work of the unit they head and the organization as a whole, and coordinate the work of lower-level managers.

Lower-level managers (managers-controllers) are responsible for the implementation of production tasks, for the use of resources, and control the work of performers. They solve primarily operational problems.

According to research by English economist Michael Armstrong successful leaders the following qualities are inherent:

· ability to operate with basic factors (highlight the main, determining);

· possession of relevant professional knowledge;

· ability to analyze, make decisions and solve problems;

· ability to monitor the situation;

· ability to quickly restore physical and mental strength:

· advanced activity;

· ability to be creative;

· balanced skills and desire to learn;

· social (communication) skills and abilities;

· knowledge of oneself.

At the same time, the successful activities of managers are ensured by:

· creation of effective management systems and mechanisms;

· correct definition of goals and priorities in work;

· forming a well-coordinated team, achieving interaction between employees and coordinating their activities;

skillful organization of people's work, creation incentives, maintaining their enthusiasm;

· constant improvement of methods, methods and techniques for performing management operations.

All this allows managers to create conditions under which the organization they manage will be able to flexibly respond to changes in the external environment, achieving its goals.

Questions for self-control:

1. The purpose of studying the course "Management".

2. The essence of management and its functions.

3. Similar features and differences between the concepts of “management” and “control”.

4. The concept of “object” and “subject” of management.

5. Characteristics and roles of managers.

— is the management of a company’s finances, aimed at achieving the strategic and tactical goals of the company’s functioning in the market.

The main issues of financial management are related to the formation of enterprise capital and ensuring its most effective use.

Currently, the concept of “financial management” implies a variety of aspects of financial management of an enterprise. A number of areas of financial management have received in-depth development and emerged as relatively independent scientific and educational disciplines:

higher financial computing;
investment analysis;
risk management;
crisis management;
assessment of the company's value.

A Brief History of Financial Management

Financial management as a scientific direction originated at the beginning of the last century in the USA and in the early stages of its formation it mainly considered issues related to the financial aspects of creating new firms and companies, and subsequently - financial investment management and bankruptcy problems.

It is generally accepted that this direction was started by G. Markowitz, who developed in the late 1950s. portfolio theory, on the basis of which W. Sharp, J. Lintner and J. Mossin a few years later created a model for estimating the return on financial assets (CAPM), linking the risk and return of a portfolio of financial instruments. Further developments in this area led to the development of the concept efficient market, the creation of the theory of arbitrage pricing, the theory of option pricing and a number of other models for evaluating market instruments. Around this time, intensive research began in the field of capital structure and the price of sources of financing. The main contribution to this section was made by F. Modigliani and M. Miller. The year of publication of their work “Cost of Capital. Corporate finance. Investment Theory" 1958 is considered a milestone when FM emerged as an independent discipline from applied microeconomics. Portfolio theory and capital structure theory can be called the core of financial management, since they allow us to answer two main questions: where to get money from and where to invest it.

The role of financial management in managing an organization

Financial management is carried out through financial mechanism , which can be defined as an action system financial methods, expressed in the organization, planning and stimulation of use.

There are four main elements of the financial mechanism:

State legal regulation financial activities enterprises.
Market mechanism for regulating the financial activities of an enterprise.
Internal mechanism for regulating the financial activities of the enterprise (charter, financial strategy, internal standards and requirements).
A system of specific techniques and methods used at an enterprise in the process of analysis, planning and control of financial activities.

represent a system of economic relations associated with the formation, distribution and use cash in the process of their circulation. Market environment, the expansion of independence of adoption has led to a sharp increase in the importance of financial management in the management of any economic structure.

The concept of “management” can be viewed from three sides:

as a system economic management company;
as a governing body;
as a form of entrepreneurial activity.

Development market relations in our country, which gave enterprises the opportunity to independently make management decisions and manage the final result of their activities, along with a fundamental change, the emergence, introduction of new forms of ownership, improvement of the system accounting, led to an awareness of the importance of financial management as scientific discipline and the possibility of using its theoretical and practical results in management Russian enterprises and organizations.

Objectives of financial management

The main goals of financial management:

promotion market value company shares;
increase in profits;
consolidating a company in a specific market or expanding an existing market segment;
avoiding bankruptcy and major financial failures;
improving the well-being of employees and/or management personnel;
contribution to the development of science and technology.

In the process of achieving the set goals, financial management is aimed at solving the following tasks:

1. Achieving high financial stability company in the process of its development. This task is achieved through the formation of an effective policy for financing the company’s economic and investment activities, managing the formation financial resources due to various sources, optimization financial structure company capital.

2. Optimization cash flows companies. This task is achieved by effective management solvency and absolute liquidity. At the same time, the free balance of cash assets should be minimized in order to reduce the risk of depreciation of excess cash.

3. Ensuring that the company's profits are maximized. This task is implemented by managing the formation of financial results, optimizing the size and composition of the financial resources of the company’s non-current and current assets, and balancing cash flows.

4. Minimizing financial risks. This goal is achieved by developing effective system identifying risks, qualitative and quantitative assessment of financial risks, determining ways to minimize them, developing an insurance policy.

Some goals and criteria for company financial management

Increasing the welfare of company owners

Consolidation in the market, financial balance

Maximizing the current
profits

Economic growth

Criteria

Increase in market value
shares

Increasing return on equity

Positive dynamics and stability of liquidity indicators, financial independence and stability

Increase in turnover profitability indicators and
assets.

Growth in business activity indicators

Positive dynamics and stability of capital growth rates, turnover and
profit.

Increased economic profitability.

Stability of financial indicators
sustainability

Functions of financial management

Financial management includes the following aspects of activity:

organization and management of enterprise relations in financial sector with other enterprises, banks, insurance companies, budgets of all levels;
formation of financial resources and their optimization;
placement of capital and management of the process of its functioning;
analysis and management of company cash flows.

Financial management includes management strategy and tactics.

Management strategy- the general direction and method of using means to achieve the goal. This method corresponds to a certain set of rules and decision-making restrictions. Management tactics- these are specific methods and techniques for achieving a goal within the framework of certain conditions economic activity of the enterprise in question.

Financial management functions:

Planning function:

development of the company's financial strategy; formation of a system of goals and main indicators of its activities for the long and short term; carrying out long-term and short-term financial planning; drawing up a company budget;
formation pricing policy; sales forecast; analysis economic factors and market conditions;

Function of forming the capital structure and calculating its price:

determining the overall need for financial resources to support the organization’s activities; formation and analysis of alternative sources of financing; formation of an optimal financial capital structure that ensures the value of the company;
calculation of the price of capital;
formation of an effective flow of reinvested profits and depreciation charges.
investment analysis;

Investment policy development function:

formation of the most important areas for investing the company’s capital; grade investment attractiveness individual financial instruments, selection of the most effective of them;
formation of an investment portfolio and its management.

Working capital management function:

identifying the real need for certain types assets and determining their value based on the company’s expected growth rate;
formation of an asset structure that meets the company’s liquidity requirements;
increasing the efficiency of using working capital;
control and regulation of monetary transactions; cash flow analysis;

Financial risk analysis function:

identification of financial risks inherent in the investment and financial and economic activities of the company;
analysis and forecasting of financial and business risks;

Evaluation and consultation function:

formation of a system of measures to prevent and minimize financial risks;
coordination and control of execution management decisions within the framework of financial management;
organization of a system for monitoring financial activities, implementation of individual projects and management financial results;
adjustment financial plans, budgets of individual departments;
holding consultations with heads of company departments and developing recommendations on financial issues.

Information support for financial management

Specific indicators of this system are formed due to external and internal sources, which can be divided into the following groups:

Indicators characterizing the general economic development of the country (used when adopting strategic decisions in the field of financial activities).
Indicators characterizing the situation financial market(used when forming a portfolio of financial investments and making short-term investments).
Indicators characterizing the activities of competitors and counterparties (used when making operational management decisions).
Regulatory indicators.
Indicators characterizing the results of the financial activities of the enterprise (balance sheet, profit and loss statement).
Regulatory and planned indicators.

Financial management as a science

Financial man as a science, it is a system of principles, methods for developing and implementing management decisions related to the formation, distribution and use of the financial resources of an enterprise and the organization of the turnover of its funds.

Fin. Mentor is directly related to financial management. state of the enterprise.

Fin. state of the enterprise– this is his eq. a state characterized by a system of indicators reflecting the presence, placement and use of financial resources. resources of the enterprise necessary for its economic activities.

Thus, Finnish men-t is the purposeful activity of the subject of management ( senior management enterprises and their financial services) aimed at achieving the desired financial. state of the managed object (enterprise).

Stages of development of financial management in Russia

1. Formation of an independent region of finance. men-ta(1985 – 1994).

Basic postulates: strict control over all processes in the enterprise; cost optimization; proper execution of financial operations.

2. Functional approach(1990 – 1996).

Basic postulates: identification of financial functions. planning, organization and control.

3. Systematic approach(1993–present).

Basic postulates: development of universal procedures for decision making; identification of elements of the financial system. ment, determination of their relationships.

3. The purpose and objectives of financial management

The purpose of fin. men-ta– maximizing the welfare of owners with the help of rational finance. policies based on:

Long-term profit maximization;

Maximizing the market value of the company (the main goal of the enterprise and finance).

Financial tasks men-ta:

1) Ensuring the formation of the financial volume. resources necessary to ensure the intended activity;

2) Providing the most effective use Finnish resources;

3) Optimization of cash flow;

4) Cost optimization;

5) Ensuring the maximization of enterprise profits;

6) Ensuring that the level of finance is minimized. risk;

7) Ensuring constant financial balance of the enterprise (financial stability and solvency of the enterprise);

8) Ensuring sustainable economic growth rates. potential;

9) Assessment of potential financial. capabilities of the enterprise for the coming periods;

10) Ensuring target profitability;

11) Avoiding bankruptcy (crisis management);

12) Ensuring current financial sustainability of the organization.

4. Basic principles of finance. men-ta:

1) The principle of finance. independence of the enterprise;

2) The principle of self-financing;

3) Principle material interest;

4) Principle financial liability;

5) The principle of financial risk security. reserves.

Functions of finance men-ta

Functions of finance men-ta are divided into two groups:

I. Functions of finance. ment how control system:

1. Financial development function. enterprise strategy - priority development tasks are determined, etc.

2. Organizational function;

3. Analysis function;

4. Planning function;

5. Stimulating function;

6. Control function.

II. Functions of finance ment as a special area of enterprise management:

1. Asset management (OA, SAI);

2. Capital management (SC, ZK);

3. Investment management (real investments, financial investments);

4. Money management. flows (operating, investment, financial activities);

5. Financial management risks;

6. Anti-crisis financial control.

Information support for financial management.

1. Scorecard information support Finnish men formed from external sources:

Indicators of macroeconomic development;

Indicators of industry development.

2. Indicators characterizing the financial market situation:

Indicators characterizing the situation in individual segments stock market;

Indicators characterizing the situation in individual segments of the credit market and other indicators for various financial markets.

3. Indicators characterizing the activities of counterparties and competitors:

Leasing companies;

Insurance companies;

Investment companies and funds;

Product suppliers;

Buyers of products;

Competitors.

4. Regulatory indicators:

Regulatory indicators on various aspects of finance. activities of the enterprise;

Normative and regulatory indicators on the functioning of individual financial segments. market.

5. Financial indicators enterprise reporting:

Indicators characterizing the composition of assets and the structure of capital used;

Indicators characterizing the main results of the economic activity of the enterprise;

Indicators characterizing the movement of money. Wed of the enterprise.

6. Indicators characterizing financial results for the main areas of financial activity:

Indicators characterizing financial results on the main areas of finance. activities;

Indicators characterizing financial results on the main areas of activity on a regional basis;

Indicators characterizing financial results on the main areas of activity of individual “responsibility centers”.

7. Regulatory and planned indicators related to the financial development of the enterprise:

System of internal regulations governing finance. enterprise development;

System of financial planning indicators. enterprise development.

System of organizational support for financial management.

Organizational support system for financial management is a set of internal structural services and divisions of the enterprise that ensure the development and adoption of management decisions on certain aspects of its finances. activities and those responsible for the results of these decisions.

General principles formation organizational system enterprise management provide for the creation responsibility centers.

Responsibility Center(or financial responsibility center) is structural unit an enterprise that fully controls certain aspects of finance. activities, and its manager independently makes management decisions within these aspects and bears full responsibility for the implementation of the planned (standard) indicators entrusted to him.

Classification of responsibility centers:

Responsibility centers:

a) Cost centers:

Cost Control Centers;

Partially regulated cost centers.

b) Profit centers.

c) Revenue centers.

d) Investment centers.

The following are most often used in practice: principles of identifying responsibility centers in an enterprise:

Functional;

Territorial;

Matches organizational structure;

Cost structure similarities.

According to the functional principle The following centers of responsibility are identified:

Maintenance (for example: cleaning, food, etc.);

Material;

Production;

Managerial;

Sales.

8. Basic concepts of financial management:

1. The concept of ideal capital markets;

2. Cash flow concept;

3. The concept of trade-off between risk and return;

4. The concept of cost of capital;

5. Market efficiency concept;

6. Concept of asymmetric information;

7. The concept of agency relations;

8. The concept of opportunity costs.

Cash flow concept

Cash flow concept means that any financial transaction may have some cash flow associated with it (cash flow) that is, a set of payments (outflows) and receipts (inflows) distributed over time, understood in a broad sense. Cash flow elements can include cash receipts, income, expenses, profit, payment, etc.

In the vast majority of cases, we are talking about expected cash flows. It is for such flows that formalized methods and criteria have been developed that allow making well-founded financial decisions supported by analytical calculations.

Basic provisions of Federal Law No. 127-FZ of October 26, 2002 “On Insolvency (Bankruptcy)”

Insolvency (bankruptcy) is the inability of the debtor to fully satisfy the claims of creditors recognized by the arbitration court. monetary obligations and (or) fulfill the obligation to pay mandatory payments

The bankruptcy procedure is, first of all, a procedure for implementing, applying something in relation to a faulty debtor, influencing him. It can be argued that almost all options for influencing the debtor permitted by law fit into the concept of “measures (measures) applied to the debtor.” The whole variety of relations in the field of bankruptcy can be reduced to three groups:

a) determining whether there are grounds for “placing” the entity within the scope of the insolvency legislation, or, in other words, whether it has signs of bankruptcy;

b) in the presence of the latter - the application to it of certain, provided legal acts measures (protection of his property, provision of financial assistance, forgiveness of part of the debt, sale and division of its assets, etc.);

c) resolving organizational issues (training arbitration managers, coordinating activities government agencies, authorized to represent public legal entities in competitive processes, etc.).

The impact on the debtor at various stages of bankruptcy proceedings is associated with the use of certain, strictly established (permissible) measures by law.

Signs of bankruptcy

A sign of bankruptcy of a legal entity is the inability to satisfy the claims of creditors for monetary obligations and (or) to fulfill the obligation to make mandatory payments, if the corresponding obligations and (or) obligations are not fulfilled by it within three months from the date on which they must be fulfilled.

Bankruptcy cases are considered in an arbitration court, and can be initiated by arbitration courts, provided that the total claims against the debtor (legal entity) amount to at least 100,000 rubles.

If signs of bankruptcy arise, the head of the debtor's organization is obliged to send information to the founders (participants) of the debtor about the presence of signs of bankruptcy.

Bankruptcy of developers

Legal entity regardless of its organizational and legal form, including a housing construction cooperative, or individual entrepreneur, to whom there are demands for the transfer of residential premises or monetary demands;

1. The arbitration court establishes the existence of claims for the transfer of residential premises or monetary claims

2. From the date of introduction of supervision in relation to the developer, the debtor may conclude, exclusively with the consent of the temporary manager, contracts providing for the transfer of residential premises, as well as make other transactions with real estate, including land plots.

3. The expenses of the arbitration manager for notifying creditors about the presentation of claims for the transfer of residential premises and (or) monetary claims shall be borne by him at the expense of the debtor.

4. The opening of bankruptcy proceedings against the developer is the basis for the unilateral refusal of the construction participant to fulfill the contract providing for the transfer of residential premises.

Bankruptcy of a citizen

Citizen - a person belonging to legal basis to a specific state. G. has a certain legal capacity, is endowed with rights, freedoms and is burdened with responsibilities.

1. An application for declaring a citizen bankrupt may be submitted to an arbitration court by a citizen - debtor, creditor, as well as an authorized body.

2. The bankruptcy estate does not include the property of a citizen, which cannot be foreclosed on in accordance with civil procedural legislation.

3. From the moment the arbitration court makes a decision to declare a citizen bankrupt and to open bankruptcy proceedings, the following consequences occur:

The deadlines for the fulfillment of the citizen’s obligations are considered to have occurred;

The accrual of penalties (fines, penalties), interest and other financial sanctions on all obligations of a citizen ceases;

Collection from a citizen for all enforcement documents is terminated, with the exception of enforcement documents for claims for compensation for harm caused to life or health, as well as for claims for the collection of alimony.

4. Solution arbitration court on declaring a citizen bankrupt and on opening bankruptcy proceedings and writ of execution about foreclosure on a citizen's property are sent to the bailiff - executor to carry out the sale of the debtor's property.

Composition of current assets

Industrial reserves of the enterprise;

Inventories of finished and shipped products;

Accounts receivable;

Cash at the cash desk and money. Wed on the accounts of the enterprise.

From a liquidity perspective there are:

1. Highly liquid assets – monetary. Wed and short-term Finnish. Attachments

2. Quickly realizable assets – loan period less than 12 months.

3. Slowly selling assets – long-term reserves, inventories, work in progress.

By the nature of the sources of formation:

1. Gross current assets (GCA) - characterize the total volume of all assets of the enterprise, formed both at the expense of the insurance company and at the expense of the contracting company.

2. Net current assets (NOA)

NOA = VOA – KKZ

KKZ – short-term (current) loans and borrowings

3. Own current assets (COA) - those assets that are formed at the expense of their own. assets of the enterprise.

SOA = BOA – KKZ – DKZ

By the nature of participation in the operational process:

Current assets servicing the production cycle of the enterprise (materials, inventories, work in progress, finished products)

Current assets serving the financial (cash) cycle of the enterprise (cash, cash).

Compound working capital:

1. Revolving funds(are standardized):

Industrial stocks,

Deferred expenses.

2. Circulation funds (non-standardized):

Finished products in stock – M.B. and standardized;

Products shipped, unpaid;

Cash in settlements on RS.

Financial cycle of the enterprise

The second part of the operating cycle is the financial cycle of the enterprise. This is the period of full cash turnover.

PFC = PFC + Podz – Pokz

PFC – duration of the financial cycle (cash turnover cycle) of the enterprise (days)

PPV - Duration production cycle enterprises (days)

Podz - MS. DZ turnover period (days)

POKZ - Wed short circuit turnover period (days)

Inventory rationing policy:

Development and implementation complex automation according to calculations of the optimal value of reserve standards;

Scientifically based rationing of the optimal amount of reserves for each type of material resources;

Clarification of norms and standards of working capital when changing technology and organization of production, changing prices, tariffs and other indicators.

In order to optimize the amount of reserves during rationing, it is necessary:

Not to be included in the standardization materially – inventories(MPZ) located in warehouses without movement for more than a year, as well as those MPZ that exceed annual term their use.

Do not include surplus inefficiently used property in the standardization of inventories and work in progress.

A set of measures to optimize inventory management:

Rationing of inventories for each type of material resources by structural and functional divisions and services of the enterprise;

Creation of a data bank of underutilized reserves by functional divisions;

Develop measures to involve the functional services of the enterprise in production and sale of unused inventories

Bringing to structural and functional departments and services strict assignments for the sale of illiquid assets

Conducting quarterly inventories of inventories with a shelf life in warehouses of more than 1 year in order to identify excessive excess, inefficiently used property;

Based on the results of the inventory and technological audit, carry out work to involve in the production of medical equipment with a wound period of more than a year on the basis of the possibility of replacement;

Periodic(at least once a quarter) analysis of inventory turnover, compliance with inventory standards;

Determining the need for financial resources for the purchase of goods and materials to ensure control over the target and rational use working capital and standards warehouse stocks;

Ensuring further improvement of commodity and cash flow planning

Attracting creditors

Conducting a tender for the purchase of materials and equipment directly from suppliers:

The goal is to achieve the optimal balance: price, quality, timely delivery.

During the tender for the procurement of industrial equipment, special attention must be paid to the following aspects:

Compliance by suppliers with the required level of quality of supplied values;

Checking the reliability of suppliers;

Minimum price of supplied materials;

Compliance of supplied materials with technological requirements of regulatory documentation for products;

Optimal payment terms for the company.

Traditional approach

An enterprise that attracts borrowed capital (up to a certain level) is valued by the market higher than an enterprise without borrowed funds long-term financing.

Ks – cost of the SC source

Kd – cost of the source of credit

Kd< Ks =>the capital structure is optimal => the market value of the company is maximum.

Compromise approach

The optimal capital structure is determined by the ratio of benefits from the tax shield (the possibility of including fees for the contract in the cost price) and losses from possible bankruptcy.

According to this theory, as financial leverage increases, the cost of debt and equity capital increases.

The price of the enterprise exceeds the market valuation of the “unleveraged” company, i.e. not using financial leverage, by the amount of tax savings (PVn) minus bankruptcy costs (PVb):

Vl = Vu + PVn – PVb

where Vu is the market value of a financially independent organization U (the value of the organization without debt obligations).

Vl is the market value of a financially dependent organization L (the value of an organization with debt obligations).

According to the compromise approach:

An enterprise should set its target capital structure so that marginal cost capital and the marginal effect of financial leverage were equal.

100% debt capital OR exclusively equity financing are suboptimal financial management strategies.

When justifying the target capital structure, the following recommendations should be followed:

The higher the risk of the results obtained when making decisions, the lower the value of financial leverage should be.

Enterprises whose asset structure is dominated by tangible assets may have higher financial leverage compared to enterprises where a significant share of assets is represented in the form of patents, trademark, various rights of use.

For corporations that have income tax benefits, the target capital structure does not matter.

The trade-off approach assumes that firms in the same industry have a similar capital structure because:

Assets are of the same type;

Commercial risk (nature of demand, pricing of products, consumed materials, operating leverage);

Similar values of profitability of activities and tax conditions.

Ross model

Ross model (1977):

It is assumed that the financial decisions of the manager can influence the perception of risk by investors.

The actual level of cash flow risk may not change, but managers, as monopolists on information about future cash flows, can select signals about development prospects.

The Ross model justifies the choice of signals from the point of view of managers (their welfare).

It is assumed that managers receive performance-based compensation as a certain share market valuation the entire company.

For a company there are two possible real options development:

Bankruptcy: V<0

The manager's remuneration (M) is:

M = (1+k)* f0V0 + f1* (V-C)

where D is the nominal value of the circuit breaker;

K – interest rate on the market for the period;

C – payments when a company is declared bankrupt;

f 0 and f1 – share due to the manager at the beginning and end of the period;

V0 and V1 – the company’s valuation at the beginning and end of the period.

Normal operation: V>0

M= (1+k) *f0V0 +f1V

Conclusions:

In the model, a signal of good prospects for a company is high financial leverage;

A large ZK value will lead a company in difficult financial situation, to bankruptcy.

The manager's remuneration at the end of the period will depend on the current moment signal. This signal can be true (reflecting the true state of affairs in the company and prospects) or false.

A true signal will be given if the marginal benefit of a false signal, weighted by the manager's share of compensation, is less than the cost of failure borne by the manager.

If the benefit to the manager outweighs the cost of bankruptcy, then managers will choose to send a false signal.

Basic theories of DP

Dividend irrelevance theory;

DP materiality theory;

Theory of tax differentiation;

Dividend signaling theory;

Clientele theory.

1. Dividend irrelevance theory:

=> doesn't exist!

There are no taxes;

2. DP materiality theory:

M. Gordon and J. Lintner;

3. The theory of tax differentiation:

4. Dividend signaling theory:

5. The theory of clientele (or the theory of correspondence of DP to the composition of shareholders):

111. Dividend irrelevance theory:

F. Modigliani and M. Miller (1961):

The value of a firm is determined solely by the return on its assets and its investment policy;

The proportions of income distribution between dividends and reinvested profits do not affect the total wealth of shareholders.

=> optimal DP as a factor in increasing enterprise value doesn't exist!

F. Modigliani and M. Miller base their assumptions on the following premises:

There are only perfect capital markets (free and equally accessible information for all investors, no transaction costs, rational behavior of shareholders);

The new issue of shares is fully placed on the market;

There are no taxes;

Equality of dividends and capital gains for investors.

F. Modigliani and M. Miller developed three options for paying dividends:

1) If the investment project provides a level of profitability that exceeds the required one, shareholders will prefer the option of reinvesting profits;

2) If the expected return on investment is at the required level, then for the shareholder none of the options is preferable;

3) If profit is expected from inv. the project does not provide the required level of profitability, shareholders will prefer the payment of dividends.

The sequence for determining the size of a company's dividends M-M's opinion:

An investment budget is drawn up and the required amount of investment is calculated with necessary level profitability;

A structure of project financing sources is being formed, subject to the maximum possible use net profit for investment purposes;

If not all profits are used for investment purposes, the remaining portion is paid to the owners of the company in the form of dividends.

112. Theory of materiality of DP:

M. Gordon and J. Lintner;

Bird in the hand theory;

DP significantly influences the amount of total wealth of shareholders.

By increasing the share of profits allocated to dividend payments, a company can increase shareholder wealth.

113. Theory of tax differentiation:

R. Litzenberger and K. Ramswamy, late 70s and early 80s. XX C.

For shareholders, what is more important is not dividend yield, but income from capitalization of value (at that time in the United States, the tax on dividends was higher than the tax on capitalization).

114. Dividend signaling theory:

The basis for assessing the market value of shares is the amount of dividends paid on them;

An increase in the level of dividend payments causes an increase in the market value of shares, which, when sold, brings shareholders additional income;

Paying a high dividend signals that the company is on the rise and expects earnings growth in the coming period.

115. The theory of clientele (or the theory of correspondence of DP to the composition of shareholders):

The company must implement a DP that is consistent with the wishes of the majority of shareholders;

If the majority of shareholders give preference to current income, then the DP should proceed from the primary direction of profits for the purposes of current consumption and vice versa;

That part of the shareholders who do not agree with such a DP reinvests their capital in shares of other companies.

116. Stages of formation of the dividend policy of a joint-stock company:

1) Assessment of the main factors determining the formation and implementation of the DP;

2) Determination of the type of DP and methodology for paying dividends;

3) Development of a profit distribution mechanism in accordance with the selected type of DP;

4) Assessing the effectiveness of the ongoing DP.

1) Assessment of the main factors determining the formation and implementation of the DP.

Main factors:

Legal regulation dividend payments;

Ensuring a sufficient amount of investment resources;

Maintaining a sufficient level of liquidity of the company;

Comparison of the cost of equity and attracted capital;

Respect for the interests of shareholders;

Information value of dividend payments.

2) Determination of the type of DP and methodology for paying dividends:

Forms of dividend payments:

Dividend payment method based on the residual principle.

Dividends are paid last, after all possible effective investment projects of the company have been financed. The amount of dividend payments is determined after a sufficient amount of financial resources has been generated from the profits of the reporting year to ensure the full implementation of the enterprise's investment opportunities.

If the level of internal rate of return for investment projects proposed for financing exceeds the weighted average cost of capital of the company, then the profit is used to finance these projects, since they provide high rates of growth in the value of share capital.

Advantages of the residual dividend payment method are to ensure high rates of development of the enterprise, increase its market value, and maintain financial stability.

This method of dividend payments is usually used during periods of increased investment activity of companies at the initial stages of their development.

Disadvantages of the method of paying dividends on the residual principle:

Payment of dividends is not guaranteed or regular;

The size of dividends is not fixed, it varies depending on the financial situation. results of the past year and volume own resources allocated for investment purposes;

Dividends are paid only if the company has profits left unclaimed for capital investments.

As a rule, the market value of shares of companies that pay dividends on a residual basis is low.

Fixed dividend payment method (or stable dividend payment method).

The company regularly pays dividends per share in a constant amount over a long period of time, regardless of changes in the market value of shares. At high inflation rates, the amount of dividend payments is adjusted to the inflation index. If the company is developing successfully and the amount of annual profit exceeds the amount of funds required to pay dividends at a stable level, then the rate of fixed dividend payments per share can be increased.

When conducting a dividend policy using this methodology, enterprises also use the dividend yield indicator (Kdv), i.e. the ratio of dividend per ordinary share (Additional share) to profit (P volume share). due per one ordinary share. This indicator serves as a guide for the company when determining the size of a fixed dividend for the future.

The advantage of this technique is a sense of reliability, which creates a feeling of confidence among shareholders that the amount of current income will remain unchanged, regardless of various circumstances, and allows one to avoid fluctuations in the price value of shares on the stock market.

The disadvantage of this technique is the weak connection with the financial results of the company’s activities, therefore, during periods of unfavorable market conditions and a decrease in the current year’s profit, the company may not have enough own funds for investment, financial and even core activities. To avoid negative consequences, the fixed amount of dividends is set, as a rule, at a relatively low level in order to reduce the risk of a decrease in the financial stability of the enterprise due to insufficient growth of equity capital.

Method of constant percentage distribution of profits (or method of stable level of dividends).

It implies a percentage of net profit that is stable over a long period of time and is used to pay dividends on ordinary shares.

At the same time, one of the main analytical indicators characterizing the DP is the dividend yield ratio (Kdv), i.e. ratio of dividend per one ordinary share (Additional share) to profit (P volume. share) due per one ordinary share:

Kdv = Add. acc. / P ob. acc.

This type of dividend policy assumes a stable dividend yield per ordinary share over a long period of time. It should be noted that the profit due on an ordinary share is determined after the payment of income to bondholders and dividends on preferred shares (the yield of these securities is agreed upon in advance, regardless of the size of the profit, and is not subject to adjustment).

In accordance with this methodology, dividends on ordinary shares are not paid in cases where the company ended the current year with a loss or all profits received should be directed to the owners of bonds and preferred shares. In addition, the amount of dividends determined in this way can fluctuate significantly from year to year depending on the current year’s profit, which cannot but affect the market value of the shares

The object of regulation is the existing financial resources of the enterprise, debt obligations, and liquid assets. The task of financial management is to reduce losses and maximize business profitability.

Financial management focuses on strategic goals companies quickly adapt to changing situations. Management structure financial flows closely integrates with company departments to control the amount of profit (loss) for each management decision.

Tasks

From a management perspective, financial management is seen as part of overall business management and a separate department in the company, performing a narrow list of functions.

Financial management as a management system includes the creation of a financial strategy, construction accounting policy, introduction of accounting software products, constant monitoring of the company's performance. For example, the tasks of financial managers include building a budget, a system material motivation personnel.
Financial management, as a separate department, manages financial assets and risks, tracks cash flows, selects investment projects to participate, monitors information flows in the company. For example, the assessment of acquired fixed assets is carried out after studying the accompanying documentation.

The financial manager determines the company's investment policy (the list of projects in which assets are invested), manages tangible assets (executes purchase and sale transactions of fixed assets), calculates and pays dividends to shareholders. The constant task of financial management is the classification and accounting of company income and expenses, preparation analytical reports for guidance.

The effectiveness of financial management depends on the quality of external sources of information that are used to collect and analyze indicators. For example, public data from banks and insurance companies, information from competitors, regulatory requirements of supervisory authorities and financial statements of the enterprise must be checked for completeness and accuracy.

Principles

Regardless of the specifics of the company, the current and strategic goals of its development, financial management is a systemic activity aimed at solving specific problems by distributing cash flows. The activities of a financial manager are aimed at solving strategic objectives, achieving financial well-being in the long term.

Trade-off between risk and return. Financial management considers opportunity costs, overall market efficiency, projected returns and associated risks before making management decisions. For example, investing in startups brings high returns and is accompanied by the risk of losing investments.
Asymmetry and time value of information. Confidential information information about market features obtained from counterparties or supervisory authorities can bring benefits in short term. For example, a “tax holiday” for companies conducting R&D may last for two years.

Financial management assumes an unlimited period of operation of the company, strives to respect the interests of business owners and employees, and fairly evaluates available sources of financing.

The essence of financial management.

Financial management is an important part of management, or a form of managing the processes of financing business activities.

Financial management, or financial management of an enterprise, means the management of funds and financial resources in the process of their formation, distribution and use in order to obtain the optimal final result.

Financial management is the management of an enterprise's finances, aimed at optimizing profits, maximizing share prices, maximizing business value, net earnings per share, the level of dividends, net assets per share, as well as maintaining the competitiveness and financial stability of an economic entity.

Financial management as a science of financial management is aimed at achieving the strategic and tactical goals of an economic entity.

Financial management as a management system consists of two subsystems:

1) controlled subsystem (control object)

2) control subsystem (control subject).

Financial management implements a complex system for managing the total cost value of all funds involved in the reproduction process and the capital that provides financing for business activities.

Object management is a set of conditions for the implementation of monetary turnover and movement of cash flows, circulation of value, movement of financial resources and financial relations, arising in the internal and external environment enterprises. Therefore, the control object includes the following elements:

1) Cash turnover;

2) Financial resources;

3) Capital circulation;

4) Financial relations.

Subject of management- a set of financial instruments, methods, technical means, as well as specialists organized in a specific financial structure who carry out the purposeful functioning of the management object. The elements of the control subject are:

1) Personnel (trained personnel);

2) Financial instruments and methods;

3) Technical controls;

4) Information support.

Purpose of financial management- is the development of certain decisions to achieve optimal final results and find the optimal balance between short-term and long-term development goals of the enterprise and decisions made in current and future financial management.

The main goal financial management is to ensure the growth of the welfare of the owners of the enterprise in the current and future periods. This goal receives concrete expression in ensuring the maximization of the market value of the business (enterprise) and realizes the ultimate financial interests of its owner.

Tasks, solved with the help of management: - current; - strategic.

Financial strategic objectives- maximizing the profit of the enterprise, ensuring the investment attractiveness of the enterprise, ensuring financial stability in the long term.

Current goals (tasks)- ensuring a balanced cash flow (solvency and liquidity of the enterprise), ensuring a sufficient level of profitability and sales through a flexible pricing policy and cost reduction.

Profitability- an indicator of the competitiveness of an enterprise over a short period of time. Return on equity is a strategic indicator.

To current tasks also This includes avoiding bankruptcy and major financial failures.

All tasks are closely related to each other and are solved within the framework of the financial policy of the enterprise.

Financial policy consists of the followingelements (parts):

1. accounting policy;

2. credit policy - policy in relations with banks, or in relation to loans in general;

3. policy regarding cost management (method of cost regulation, classification of costs, share of fixed costs in costs);

4. tax policy and tax planning (it is necessary to minimize tax payments but not to the detriment of other areas and production);

5. dividend policy;

6. cash management policy (including current assets);

7. investment policy (the most effective from a financial point of view).

Main tasks of financial management:

1). Ensuring the formation of a sufficient amount of financial resources in accordance with the needs of the enterprise and its development strategy.

2). Ensuring the effective use of financial resources in the context of the main activities of the enterprise.

3). Optimization of cash flow and settlement policy of the enterprise.

4). Maximizing profit at an acceptable level financial risk and favorable tax policies.

5). Ensuring the constant financial balance of the enterprise in the process of its development, i.e. ensuring financial stability and solvency.

In practice, financial management makes decisions on calculating the profitability of possible investments and choosing a long-term investment project.

There is a need to determine the total cost of capital for a business. Cost of capital consists of the cost of financing, determined taking into account the weighted average cost of the loan, and the cost of shares and securities. This cost of capital is the basis for determining the discount rate used in calculating the present value of future cash inflows and return on investment.

A financial manager must be able to determine a rational scheme for financing an organization, that is, select appropriate strategic directions.

Financial management includes: the process of planning decisions aimed at maximizing the welfare of entrepreneurs. Financial managers solve the problems of monitoring and regulating monetary transactions, acquiring funds, mobilizing and distributing financial capital, as well as taking into account the relationship between risk and profit: In the performance of their duties, a financial manager comes into contact with accounting and financial information.

The goals of any organization, as a rule, are:

1) maximizing shareholder ownership;

2) profit maximization;

3) maximizing managerial remuneration;

4) social responsibility.

Financial managers must know the pricing of goods, products, works and services provided, planning and analysis of deviations from standard costs, how to manage funds and optimize the rate of income

The responsibilities of a financial manager include:

Financial analysis and planning;

Determining the amount of funds required by the organization;

Making investment decisions;

Allocation of funds for certain real estate (property owned by the organization);

Making decisions on financing and capital structure (obtaining loans on favorable terms, i.e. at a reduced interest rate or with very few restrictions);

Financial resource management;

Managing cash, accounts receivable and inventory to generate greater profits without undue risk;

Determination of accounting policies, preparation of financial statements, internal audit, accounting system and procedure, etc.;

Property protection (insurance, establishment of reliable internal control);

Determination of tax policy and methodology, preparation of tax reporting, tax planning;

Maintaining relations with investors;