Introduction………………………………………………………………………………..3
1. Theoretical foundations of financial stability management……....6
1.2. Methods for assessing absolute indicators of financial stability………………………………………………………………..……….17 1.3. Financial stability management based on the coefficient method………………………………………………………………………………….…………22
2. Analysis of the financial stability management system at OJSC “Tatarstan Sote”……………………………………………………..………..35
2.1. General characteristics of the enterprise’s activities………………..35
2.2. Analysis of the control system…………………………………….…..39
2.3. Research of approaches to managing the financial stability of an enterprise……………………………………………………………….………..48
3. Justification of directions for increasing financial stability at OJSC “Tatarstan Sote”…………………………………………………………..55
3.1. Creation of an integrated financial stability management system………………………………………………………..……………55
3.2. Taking into account financial sustainability in the process of justification and implementation of a business plan……………………………………………………………..………………59
4. Assessment of the economic efficiency of measures to improve financial stability at OJSC “Tatarstan Sote”……………….….…….72
5. Regulatory support of proposals……………..……76
Conclusion……………………………………………………………..84
List of references……………………………………………………….88
Applications
Introduction
This thesis is devoted to the study of problems of managing the financial stability of an enterprise. The choice of the topic of the thesis is justified by the fact that in market conditions, the key to survival and the basis for a stable position of an enterprise is its financial stability. If an enterprise is financially stable and solvent, then it has a number of advantages over other enterprises of the same profile in obtaining loans, attracting investments, in choosing suppliers and in selecting qualified personnel. The higher the stability of an enterprise, the more independent it is from unexpected changes in market conditions and, therefore, the lower the risk of being on the verge of bankruptcy.
Managing the financial stability of an enterprise in modern conditions should be based, first of all, on a comprehensive assessment of its level. Assessment of financial stability and solvency is also the main element of the analysis of financial condition, necessary for control, which allows assessing the risk of violating the obligations of the enterprise. In our opinion, the underlying cause of today's crisis was the 1990s. The problem was that in recent years in the Russian Federation the financial resources accumulated by commercial banks and investment institutions did not turn into real investments and did not ensure an increase in the efficiency of the production sector, which is the basis of the economy. One of the reasons for this situation, in our opinion, is the insufficiency of the current methods of justifying and evaluating investments. Theoretical provisions for analyzing and assessing the investment attractiveness of enterprises, tested abroad, are practically not applied in Russian conditions, which are extremely unstable and difficult to predict. In this regard, there was a need to develop new methods for analyzing and evaluating investments.
The process of making production and commercial decisions is always preceded by analytical procedures of various types. One of the most well-known formalized procedures of this kind is financial analysis, which is the study of the financial statements of an enterprise. Financial analysis allows you to evaluate various aspects of an enterprise’s activities, such as profitability, solvency, financial stability, and efficient use of property, which largely determine the level of its investment attractiveness.
Financial stability management is based both on the study of financial statements and on data on the nature and movement of production assets, labor resources of the enterprise, the cost structure of manufactured products, pricing policy, etc. For an external analyst, in-house information in most cases is inaccessible. Consequently, users of external financial analysis (investment institution, commercial bank, audit firm, etc.), as a rule, are limited to the analysis of financial statements. The marginal cost of deepening analytical procedures for investors, in most cases, is greater than the marginal revenue obtained as a result of implementing such procedures.
The object of the thesis is to study the financial stability management system of an enterprise. The subject of the thesis research is the management of the financial stability of Tatarstan Sote OJSC and the development of recommendations for its improvement
The purpose of this thesis is to identify problems associated with managing the financial stability of an enterprise.
Within the framework of this goal, the following tasks can be distinguished:
1. Study of the theoretical and methodological foundations of managing the financial stability of an enterprise.
2. Analysis of the financial stability of Tatarstan Sote OJSC.
3. Study of the advantages and disadvantages of the financial stability management system at OJSC “Tatarstan Sote”
The methodology of the thesis includes both a number of general logical procedures (critical analysis of existing literature on this issue, synthesis of various points of view, scientific induction, deduction, practical testing of put forward theoretical hypotheses), and specific economic and mathematical methods and models (analysis of absolute and relative indicators of financial stability, correlation and regression analysis). A large number of scientific methods used in the work make it possible to cover the posed problem of studying the management of the financial stability of an enterprise in market conditions quite broadly.
1. Theoretical foundations of financial stability management
Financial stability management is a scientifically based process for optimizing the level of financial dependence and efficiency of an enterprise. Financial dependence is determined by the ratio of borrowed and equity funds of a particular enterprise. The efficiency of an enterprise is not limited to indicators of its level of profitability. Efficiency also includes socio-economic indicators, such as, in particular, labor productivity and wages.
In our opinion, before considering the specifics of managing the financial stability of an enterprise, it is necessary to dwell on the features of financial management as a whole. In modern economic conditions, the activities of each economic entity are the subject of attention of a wide range of participants in market relations (organizations and individuals) interested in the results of its functioning. Based on the reporting and accounting information available to them, they seek to assess the financial position of the enterprise. The main tool for this is financial analysis, with which you can objectively assess the internal and external relations of the analyzed object, and then make informed decisions based on its results.
Financial management is a process based on the study of data on the financial condition and performance of an enterprise in the past in order to assess the prospects for its development, as well as the development and implementation of sound recommendations for improving the financial condition of the enterprise and its growth. Thus, the main task of financial management is to reduce the inevitable financial uncertainty associated with making future-oriented economic decisions.
Financial stability management is based on objective financial analysis. Financial analysis makes it possible to evaluate:
1) property status of the enterprise;
2) the degree of business risk, in particular the possibility of repaying obligations to third parties;
3) capital adequacy for current activities and long-term investments;
4) the need for additional sources of financing;
5) ability to increase capital;
6) rationality of raising borrowed funds;
7) the validity of the policy for the distribution and use of profits;
8) the feasibility of choosing an investment and others.
In a broad sense, financial stability analysis can be used: as a tool for justifying short- and long-term economic decisions and the feasibility of investments; as a means of assessing the skill and quality of management; as a way to predict future results. Modern financial analysis is constantly changing under the influence of the growing influence of the environment on the operating conditions of enterprises. In particular, its target orientation is changing: the control function recedes into the background and the main emphasis is on moving to justifying management and investment decisions, determining the directions of possible capital investments and assessing their feasibility.
In general, financial analysis is an essential element of financial management and auditing. Almost all users of an enterprise's financial statements use financial analysis methods to make decisions. It is based on the calculation of absolute and relative indicators characterizing various aspects of the enterprise’s activities and its financial position. However, the main thing when conducting financial analysis is not the calculation of indicators, but the ability to interpret the results obtained. Owners analyze financial statements in order to increase the return on capital and ensure the stability of the company's position. Lenders and investors analyze financial statements to minimize their risks for loans and deposits. The quality of decisions made largely depends on the quality of their analytical justification.
In our opinion, we can conclude that the main goal of the financial stability management process is to obtain a small number of key (most informative) parameters that give an objective and accurate picture of the financial condition of the enterprise, its profits and losses, changes in the structure of assets and liabilities, in settlements with debtors and creditors. At the same time, the analyst and manager (manager) may be interested in both the current financial condition of the enterprise and the forecast for the near or distant future, that is, the expected parameters of the financial condition.
Thus, the goals of analysis are achieved as a result of solving a certain interrelated set of analytical problems. The analytical task is a specification of the goals of the analysis, taking into account the organizational, informational, technical and methodological capabilities of carrying out this analysis. The main factors are the volume and quality of the source information. It should be borne in mind that the periodic financial statements of an enterprise are only “raw” information prepared during the implementation of accounting procedures at the enterprise. In order to make management decisions in the field of production, sales, finance, investment and innovation, management needs constant awareness of relevant issues, which is possible only as a result of selection, analysis, evaluation and concentration of initial “raw” information.
Analysis of financial stability is the prerogative of the highest level of management structures of the enterprise, which can influence the formation of financial resources and cash flows. The effectiveness or ineffectiveness of private management decisions related to determining the price of a product, the size of a batch of purchases of raw materials or supplies of products, the replacement of equipment or technology must be assessed from the point of view of the overall success of the company, the nature of its economic growth and the growth of overall financial efficiency. . Note that failures in using financial ratios for the purposes of making economic decisions are explained to a large extent by the fact that novice analysts use data that is incomparable from the point of view of accounting methodology for analysis and then make inadequate conclusions based on them.
The second condition, which follows from the first, is knowledge of financial analysis methods. At the same time, qualitative judgments when resolving financial issues are no less important than quantitative results. Such qualitative judgments should include, first of all, a general assessment of the situation and the problems at hand, which will determine both the use of certain specific methods of financial analysis and the interpretation of its results, the degree of required accuracy of which also depends on the specific situation and goals of the analysis. To ensure quality judgments, it is necessary to assess the reliability of available information, as well as the degree of uncertainty and risk.
The third condition is the presence of an action program related to the definition of specific goals for performing analytical work. For example, a final analysis of liquidity ratios based on reporting data, carried out for the purpose of drawing up an explanatory note, will differ from an in-depth analysis of solvency aimed at forecasting future cash flows.
The fourth condition is determined by understanding the limitations inherent in the analytical tools used and their impact on the reliability of the results of financial analysis. Thus, a key point in the decision-making process about the feasibility of new investments is determining the cost of capital.
The theory and practice of financial analysis has a diverse set of methods for calculating this investment evaluation criterion, differing both in methodological approaches to determining the value of individual components of capital and in the information base. The professionalism of an analyst is to, having mastered various methods for determining the cost of capital, understanding the problems of using one or another methodological approach, justify the choice of an acceptable method, taking into account the goals of the analysis and the available information.
The cost of the financial analysis process and the requirement to compare costs and results determine the fifth condition regarding minimizing labor costs and performing analytical work while achieving satisfactory accuracy of calculation results.
We emphasize that in modern conditions, the management of an enterprise faces the task not so much of mastering the methods of financial analysis themselves (properly trained personnel are needed to perform professional analysis), but rather of using the results of the analysis. In an effort to resolve specific issues and obtain a qualified assessment of the financial situation, business managers are increasingly beginning to resort to financial analysis. At the same time, they, as a rule, are no longer content with stating the value of reporting indicators, but expect to receive a specific conclusion about the adequacy of means of payment, the normal ratio of equity and borrowed capital, the rate of capital turnover and the reasons for its change, the types of financing of certain types of activities.
The results of financial analysis allow us to identify vulnerabilities that require special attention. It is often enough to discover these places in order to develop measures to eliminate them.
The financial side of an enterprise's activities is one of the main criteria for its competitive status. Based on the financial assessment, conclusions are drawn about the investment attractiveness of a particular type of activity and the creditworthiness of the enterprise is determined.
The financial services of the enterprise are tasked with assessing the financial condition and developing measures to improve financial stability.
The financial condition in general terms is determined by the degree of implementation of the financial plan and the extent of replenishment of own funds from profits and other sources, if they are provided for by the plan, as well as the speed of turnover of production assets and especially working capital. Thus, well-organized financial planning, based on analysis of financial activities, is the key to good financial condition.
Financial condition is the most important characteristic of the economic activity of an enterprise. It determines the competitiveness of an enterprise, its potential in business cooperation, and is an assessment of the degree to which the economic interests of the enterprise itself and its partners in financial and other relations are guaranteed.
A stable financial condition is formed in the process of all production and economic activities of the enterprise. Determining it on a particular date answers the question of how correctly the enterprise managed financial resources during the reporting period. However, partners and shareholders are not interested in the process, but in the result, that is, the indicators and assessments of financial condition themselves, which can be determined on the basis of official public reporting data.
Currently, many methods for assessing the financial condition of an enterprise have been developed and used, such as the method of Sheremet A.D., Kovalev V.V., Dontsova L.V., Nikiforova N.A., Stoyanova E.S., Artemenko V.G. ., Belendira M.V. and others. And the difference between them lies in the approaches, methods, criteria and conditions of analysis. However, in the opinion of the author, the method of Sheremet A.D. is most suitable for the communications industry. and Saifulin R.S., as well as Kovalev V.V. This technique is the focus of the thesis.
The methodology used is intended to ensure management of the financial condition of the enterprise and assessment of financial stability in a market economy.
One of the most important characteristics of the financial condition of an enterprise is the stability of its activities in the light of a long-term perspective. It is related to the structure of the enterprise’s balance sheet, the degree of its dependence on creditors and investors. But the degree of dependence on creditors is assessed not only by the ratio of borrowed and own sources of funds. This is a more multifaceted concept, including the assessment of equity capital, the composition of current and non-current assets, and the presence or absence of losses, etc.
In addition, the financial condition of the enterprise is not indifferent to the tax authorities - from the point of view of the enterprise’s ability to pay taxes on time and in full. Finally, the financial condition of an enterprise is the main criterion for banks when deciding whether to issue a loan to it, the amount of interest and the term.
Thus, its economic prospects and reliable business relationships with partners depend on improving the financial condition of an enterprise.
Under the influence of internal and external factors, the financial condition of the enterprise is constantly changing, therefore neither the enterprise itself nor market participants are satisfied with discrete reporting data on the financial condition of the enterprise. They also need to know the qualitative characteristics of the financial state, that is, how stable it is over time, how long it can persist under the influence of internal and external factors, and what proactive measures need to be taken to maintain this normal state or to exit the pre-crisis or crisis state.
To solve medium-term and strategic tasks for the development of the enterprise, management needs to have appropriate tools for assessing and predicting changes in financial stability.
The methods of analyzing the financial and economic state of an enterprise practically used today in Russia lag behind the development of a market economy. Despite the fact that changes have already been made and are being made to the accounting and statistical reporting, in general it does not yet meet the needs of enterprise management in market conditions, since the existing reporting of the enterprise does not contain any special section or separate form dedicated to assessing the financial stability of an individual enterprise . Financial analysis of an enterprise is optional and not mandatory.
The enterprise, on the one hand, has a need for timely and complete information to make management decisions and evaluate their results. On the other hand, the enterprise must provide relevant information to those who have invested (or are planning to invest) their funds in it. Along with this, and in market conditions, the need to report to the state on the correctness of tax deductions continues to exist.
Financial sustainability analysis, depending on the classification of users and their goals, can be divided into internal and external. Accordingly, financial reporting is divided into external and internal, depending on the users and the purposes of its preparation.
Internal users include the management personnel of the enterprise. He makes various production and financial decisions. For example, on the basis of reporting, a financial plan of the enterprise for the next year is drawn up, decisions are made on increasing or decreasing sales volumes, prices of goods sold, directions for investing enterprise resources, the feasibility of attracting loans, etc. Obviously, to make such decisions, complete, timely and accurate information is required, since otherwise the company may suffer large losses and even go bankrupt.
In addition, financial reporting is the link between an enterprise and its external environment. The purpose of reporting by an enterprise to external users in market conditions is, first of all, to obtain additional financial resources in financial markets. Thus, the future of the enterprise depends on what is presented in the financial statements. Responsibility for ensuring effective communication between the enterprise and financial markets lies with financial managers at the top management level of the enterprise. Therefore, financial reporting is important to them because they need to know what information external users will receive and how it will affect their decisions. This does not mean that managers do not have at their disposal additional internal information about the activities of the enterprise, in contrast to external users, for whom financial statements in many cases are the main source of information. But since the decisions of external users, ceteris paribus, are made on the basis of a limited range of financial reporting indicators, these indicators are the focus of attention of the financial manager and are the final point in assessing the impact of management decisions on the financial position of the enterprise.
Among external users of financial statements, in turn, two groups are distinguished: users directly interested in the activities of the company; users who are indirectly interested in it.
The first group includes:
1) current and potential owners of the enterprise, who need to determine the increase or decrease in the share of the enterprise’s own funds and evaluate the efficiency of the use of resources by the company’s management;
2) current and potential lenders who use reporting to assess the feasibility of granting or extending a loan, determining loan terms, determining loan repayment guarantees, and assessing trust in the company as a client;
3) suppliers and buyers who determine the reliability of business relations with a given client;
4) the state, primarily represented by the tax authorities, which check the correctness of reporting documents, tax calculations, and determine policy;
5) company employees interested in reporting data from the point of view of their salary level and job prospects at this enterprise.
The second group of users of external financial reporting are those legal entities and individuals who need to study the reporting to protect the interests of the first group of users. This group includes:
1) audit services that check reporting data for compliance with legislation and generally accepted accounting and reporting rules in order to protect the interests of investors;
2) financial consultants who use the statements to make recommendations to their clients regarding the placement of their capital in a particular company;
3) securities exchanges;
4) registration and other government bodies that make decisions on registering companies, suspending the activities of companies, and assessing the need to change accounting and reporting methods;
5) legislative bodies;
6) lawyers who need reporting to assess the fulfillment of contract terms, compliance with legislative norms in the distribution of profits and payment of dividends, as well as to determine the conditions of pension provision;
7) the press and news agencies that use reporting to prepare reviews, assess development trends and analyze the activities of individual companies and industries, and calculate summary financial reporting indicators;
8) trade and industrial associations that use reporting for statistical generalizations by industry and for comparative analysis and evaluation of performance at the industry level;
9) trade unions interested in financial information to determine their requirements in relation to wages and terms of employment agreements, as well as to assess trends in the development of the industry to which the enterprise belongs.
Assessment of financial condition by external users is carried out in two directions:
1) comparison of calculated estimated coefficients with standard values;
2) analysis of the dynamics of changes in indicators.
Russian business conditions differ from global ones, so standard values are not always accurate indicators of a strong financial position. In addition, the operating conditions of different enterprises also differ significantly from each other.
Thus, the existing approach to assessing financial condition does not provide reliable information for making management decisions. It can be used for express analysis by external users.
Distortions in the assessment are associated, firstly, with the regulatory assessment framework that is not sufficiently adapted to Russian conditions, and secondly, with the lack of methodological unity in the calculation of assessment indicators.
For internal users, a more thorough analysis is required, using evaluative indicators (when analyzing financial stability).
Thus, financial stability is the most important characteristic of the financial and economic activity of an enterprise in a market economy. If an enterprise is financially stable, then it has an advantage over other enterprises of the same profile and in attracting investments, in obtaining loans, in choosing suppliers and in selecting qualified personnel. Finally, it does not come into conflict with the state and society, since it pays taxes to the budget, contributions to social funds, wages to workers and employees, dividends to shareholders, and guarantees the repayment of loans and payment of interest on them to banks.
The higher the stability of an enterprise, the more independent it is from unexpected changes in market conditions and, therefore, the lower the risk of being on the verge of bankruptcy.
1.2. Methods for assessing absolute indicators of financial stability
In the first paragraph of the thesis research, we concluded that the financial stability of an enterprise is its independence in financial terms and the compliance of the state of the company’s assets and liabilities with the tasks of financial and economic activities. In Russian practice, a general indicator of the financial stability of a company is the surplus or shortage of funds for the formation of reserves and costs, obtained in the form of the difference in the size of sources of funds and the value of reserves and costs. This is essentially an absolute assessment of financial stability.
The most important problem in analyzing financial stability is to study the ratio of equity and borrowed funds. The ratio of the value of inventories and the values of own and borrowed sources of their formation is one of the most important factors in the stability of the financial condition of an enterprise. The degree of provision of reserves with sources of formation acts as the reason for one or another degree of the current solvency (or insolvency) of the organization.
The economic literature gives different approaches to the analysis of financial stability. Let's consider the technique of Sheremet A.D. and Saifulina R.S., who recommends determining a three-component indicator of the type of financial situation to assess financial stability.
To calculate this indicator, the total amount of reserves and costs of the enterprise and the sources of funds for their formation are compared:
ZZ = Z + VAT (1.2.1)
where ZZ is the amount of reserves and costs;
Z – reserves;
VAT – value added tax
In this case, different degrees of coverage of certain types of sources are used, namely:
1) Availability of own working capital, equal to the difference in the amount of sources of own funds (equity capital) and the amount of non-current assets.
SOS = SS – VA (1.2.2)
where SOS is own working capital;
CC – the value of sources of equity capital;
VA – the value of non-current assets;
2) It should be noted that many specialists, when calculating their own working capital, instead of their own sources, take permanent capital: the availability of their own working capital and long-term borrowed sources for the formation of inventories and costs, that is, taking into account long-term loans and borrowed funds.
PC=(SS+DZS)–VA (1.2.3)
where PC is permanent capital;
DZS – long-term borrowed funds.
3) The total value of the main sources of formation of inventories and costs, that is, the availability of own working capital, long-term loans and borrowed funds, short-term loans and borrowed funds, that is, all sources that are possible.
VI=(SS+DZS+KZS)-VA (1.2.4)
where VI – all sources;
KZS – short-term borrowed funds.
The indicator of the total value of the main sources of the formation of inventories and costs is approximate, since part of the short-term loans are issued for goods shipped (that is, they are not intended for the formation of inventories and costs), and part of the accounts payable offset by the bank when lending is used to cover inventories and costs.
Despite these shortcomings, the indicator of the total value of the main sources of reserves and costs provides a significant guideline for determining the degree of financial stability.
Three indicators of the availability of sources for the formation of reserves and costs correspond to three indicators of the provision of reserves and costs with sources of formation:
1) Surplus or shortage of own working capital:
FSOS = SOS – ZZ, (1.2.5)
where FSOS is a surplus or shortage of own working capital.
2) Surplus or shortage of permanent capital:
FPC = PK-ZZ, (1.2.6)
where FPC is the surplus or shortage of permanent capital.
3) Surplus or deficiency of all sources (indicator of financial and operational needs):
FVI = VI – ZZ, (1.2.7)
where FPC is the surplus or deficiency of all sources.
Using these indicators, a three-dimensional (three-component) indicator of the type of financial condition is determined, that is
1, if Ф>0,
0 if Ф<0.
Calculation of three indicators of the provision of reserves with sources of their formation allows us to classify financial situations according to the degree of their stability.
Based on the degree of stability, four types of financial situations can be distinguished:
1) Absolute stability of financial condition, if
S = (1, 1, 1) (1.2.9)
With absolute financial stability, the enterprise does not depend on external creditors; inventories and costs are fully covered by its own resources. In Russian practice, such financial stability is extremely rare and represents an extreme type of financial stability.
2) Normal stability of the financial condition of the enterprise, guaranteeing its solvency, that is
S = (0, 1, 1) (1.2.10)
This ratio shows that the company uses all sources of financial resources and fully covers inventories and costs.
3) An unstable financial condition associated with a violation of solvency, in which, nevertheless, it remains possible to restore balance by replenishing sources of own funds, reducing debtors and accelerating inventory turnover, that is
S = (0, 0, 1) (1.2.11)
The limit of financial instability is the crisis state of the enterprise. It manifests itself in the fact that, along with the lack of “normal” sources of covering inventories and costs (these may include part of non-current assets, overdue debt, etc.), the enterprise has losses, outstanding obligations, and bad receivables. . Professor A.D. Sheremet and R.S. Saifulin note that financial instability is considered normal (acceptable) if the amount of short-term loans and borrowings attracted for the formation of inventories and expenses does not exceed the total cost of inventories and finished products (the most liquid part of inventories and expenses).
If these conditions are not met, then financial instability is abnormal and reflects a tendency towards a significant deterioration in financial condition.
4) A crisis financial condition in which the enterprise is on the verge of bankruptcy, since in this situation cash, short-term financial investments (minus the cost of its own shares purchased from shareholders), receivables of the organization (minus the debt of the founders (participants) for contributions to authorized capital) and other current assets do not even cover its accounts payable (including reserves for future expenses and payments) and other short-term liabilities, that is:
Traditionally, the most risk-free way to replenish the sources of reserve formation should be recognized as an increase in real equity capital through the accumulation of retained earnings or through the distribution of after-tax profits to accumulation funds. An in-depth analysis of the state of inventories acts as an integral part of the internal analysis of the financial condition, since it involves the use of information about inventories that is not contained in the financial statements and requires analytical accounting data.
1.3. Financial stability management based on the coefficient method.
Managing the financial stability of an enterprise based on the coefficient method includes the following main stages:
1. Determining the goals and objectives of financial stability management.
2. Calculation of the main financial stability ratios.
3. Identification of the reasons for deviations of the obtained coefficients from standard (recommended) values.
4. Justification of measures to improve financial stability.
5. Monitoring and evaluating the effectiveness of the proposed measures, again based on the coefficient method.
Rice. 1.3.1. General scheme of analytical support for managing financial stability using the coefficient method.
Financial stability based on ratio analysis is characterized by:
1) the ratio of own and borrowed funds;
2) the rate of accumulation of own sources, as well as their composition and structure;
3) the ratio of long-term and short-term liabilities in the structure of the liabilities side of the balance sheet;
4) provision of material working capital from our own sources.
We emphasize that when assessing financial stability, an analytical approach is used, that is, the calculated actual indicators of financial stability are compared with extreme ones (arising from the practice of Western developed countries and Russia).
To assess the financial stability of an enterprise, a set or system of coefficients is used. There are a lot of such ratios; they reflect different aspects of the state of the assets and liabilities of the enterprise. In this regard, difficulties arise in the overall assessment of financial stability. In addition, there are almost no uniform normative criteria for the considered indicators. Their regulatory level depends on many factors: the industry of the enterprise, credit conditions. The existing structure of sources of funds, turnover of current assets, reputation of the enterprise, etc. Therefore, the acceptability of coefficient values, assessment of their dynamics and directions of change can only be established for a specific enterprise. Taking into account the conditions of its activity. Some comparisons between enterprises of the same specialization are possible, but they are very limited. It is also necessary to take into account that some coefficients contained in the list provide repeated information about financial stability, while others are functionally related to each other.
It can be seen that a large number of coefficients serve to assess the capital structure of an enterprise from different aspects. To evaluate this group of coefficients, there is one criterion that is universal in relation to all enterprises: the owners of the enterprise prefer a reasonable increase in the share of borrowed funds; on the contrary, creditors give preference to enterprises where the share of equity capital is high, that is, the level of financial autonomy is higher.
Having analyzed a fairly large set of available financial stability ratios, we can limit ourselves to the following seven indicators:
1) ratio of borrowed and equity funds;
2) debt ratio;
3) autonomy coefficient;
4) financial stability coefficient;
5) coefficient of maneuverability of own funds;
6) coefficient of stability of the structure of mobile devices;
7) the ratio of working capital provision from own sources of financing.
Currently, on the pages of economic journals, questions are being discussed about the number of coefficients used in the analysis of the financial and economic activities of enterprises. There is an opinion that there are too many of them. It should be taken into account that in addition to a large number of liquidity and stability ratios, profitability ratios, working capital turnover, and capital productivity are calculated.
There is a point of view that the number of coefficients should not exceed seven, since if the number of observation objects exceeds seven, then human control over them is easily lost.
The above list of indicators convinces that it can indeed be continued, since not all possible relationships of sections and items of the balance sheet are covered in it. At the same time, it is clear that the dispute about the number of indicators that should be limited to cannot find a solution until the interested parties come to the conclusion that indicators for assessing the financial condition of an enterprise should not be a set, but a system, that is, not contradict each other, do not repeat each other, do not leave “blank spots” in the activities of enterprises.
Of these seven coefficients, only three have universal application, regardless of the nature of the activity and the structure of the assets and liabilities of the enterprise: the ratio of borrowed and equity funds, the coefficient of maneuverability of own funds and the coefficient of provision of working capital with its own sources of financing.
When analyzing the financial condition, a set of the following indicators of the financial stability of the enterprise is used:
1) Financial risk ratio (debt ratio, debt-to-equity ratio, leverage) is the ratio of borrowed funds to equity. It shows how much borrowed funds the company raised per ruble of its own.
Kfr=ZS/SS, (1.3.1)
where Kfr is the financial risk coefficient;
LS – borrowed funds.
SS – own funds
The optimal value of this indicator, developed by Western practice, is 0.5. It is believed that if its value exceeds one, then the financial autonomy and stability of the enterprise being assessed reaches a critical point, but everything depends on the nature of the activity and the specifics of the industry to which the enterprise belongs.
An increase in the indicator indicates an increase in the enterprise’s dependence on external financial sources, that is, in a certain sense, a decrease in financial stability and often makes it difficult to obtain a loan.
However, the analyst must build his conclusions on the basis of analytical (internal) accounting data that reveals the direction of investment. Therefore, when calculating the normal level of the debt-to-equity ratio, it is necessary to take into account the qualitative structure and turnover rate of inventories and receivables. If accounts receivable turn over faster than tangible current assets, this means a fairly high intensity of cash flow to the company’s accounts, and as a result, an increase in equity capital; with a high turnover of material working capital and an even higher turnover of accounts receivable, the ratio of borrowed and equity funds may exceed one. . The standard value of this coefficient has been established - the ratio should be less than 0.7. Exceeding this limit means the enterprise's dependence on external sources of funds and loss of financial stability.
2) Debt ratio (financial tension index) is the ratio of borrowed funds to balance sheet currency:
Kd=ZS/Wb (1.3.2)
where Kd is the debt ratio;
ВБ – balance sheet currency.
International standard (European) up to 50%. The trend of normal financial stability is also confirmed by the debt ratio: if the share of borrowed funds in the balance sheet currency decreases, then there is a tendency to strengthen the financial stability of the enterprise, which makes it more attractive to business partners.
The standard value of the attracted capital ratio must be less than or equal to 0.4.
3) The coefficient of autonomy (financial independence) is the ratio of equity to the balance sheet currency of the enterprise:
Ka = SS / Wb, (1.3.3)
where Ka is the autonomy coefficient.
This indicator is used to judge how independent an enterprise is of borrowed capital. The autonomy coefficient is the most general indicator of the financial stability of an enterprise.
In foreign practice, there are different points of view regarding the threshold value of this indicator. Most common view: 60%. Lenders are more willing to invest in an enterprise with a high share of equity capital and provide more favorable lending conditions. But it is impossible to specify a standard (normal, normative) share of equity capital that is uniform for all enterprises, industries, and countries. In Japan, for example, the share of equity capital is on average 50% lower than in the United States (the share of debt capital is about 80%). The reason for this difference is in the sources of debt capital. In Japan this is bank capital, in the USA it is the funds of the population. A high share of borrowed capital of a Japanese company indicates the trust of banks, and therefore its reliability. For the population, on the contrary, a decrease in the share of equity capital is a risk factor.
The share of equity capital in assets is also influenced by the nature of the financial policy implemented by the company. A company with an aggressive policy always increases its share of borrowed capital. Reputable companies reduce risk and increase the share of their own funds in assets.
In the practice of Russian and foreign companies, several varieties of this indicator are used (the share of borrowed funds in assets, the ratio of equity to borrowed funds, and others). Each of them, in one form or another, reflects the structure of the company’s capital according to the sources of its formation.
Thus, the optimal value of this ratio is 50%, that is, it is desirable that the amount of own funds be more than half of all funds available to the enterprise. In this case, creditors feel calm, knowing that all borrowed capital can be compensated by the property of the enterprise. An increase in this ratio indicates an increase in the financial stability of the enterprise.
4) The financial stability coefficient is the ratio of the total of own and long-term borrowed funds to the balance sheet currency of the enterprise (long-term loans are legally added to equity capital, since they are similar in the mode of their use):
Kfu = PC / Wb, (1.3.4)
where KFU is the financial stability coefficient.
It is quite legitimate to add long-term borrowed funds (including long-term loans) to the enterprise’s own funds, since in terms of their use they are close to their own sources. Therefore, in addition to calculating the coefficients of financial stability and independence of an enterprise, they analyze the structure of its borrowed funds: a large share of long-term loans in it is a sign of the stable financial condition of the enterprise. The optimal value of this indicator is 0.8-0.9.
5) The coefficient of maneuverability of own sources is the ratio of its own working capital to the sum of sources of own funds:
Km = (SS-VA)/SS (1.3.5)
where Km is the maneuverability coefficient of own sources.
The coefficient of maneuverability of own sources shows the amount of own working capital per 1 ruble. own capital. This indicator is inherently close to liquidity indicators. However, it complements and significantly increases the information content of the first indicator.
The coefficient of maneuverability of own sources indicates the degree of mobility (flexibility) of the use of own funds, that is, what part of the equity capital is not fixed in immobile values and makes it possible to maneuver the enterprise’s funds.
Securing your own current assets with your own capital is a guarantee of a sustainable credit policy. A high value of the agility coefficient positively characterizes the financial condition of the company, and also convinces that the company’s managers provide sufficient flexibility in the use of their own funds.
The level of the agility coefficient depends on the nature of the enterprise’s activities: in capital-intensive industries, its normal level should be lower than in material-intensive ones (since in capital-intensive industries, a significant part of the company’s own funds is a source of covering fixed production assets). From a financial point of view, the higher the agility ratio, the better the financial condition.
The numerator of the indicator includes own working capital, therefore, in general, the improvement in the state of working capital depends on the rapid growth of the amount of own working capital compared to the growth of own sources of funds. The dependence can also be determined based on the fact that the enterprise has more of its own working capital, the less fixed assets and non-current assets there are per ruble of sources of own funds. It is clear that striving to reduce fixed assets and non-current assets (or to their relatively slow growth) is not always advisable.
6) The coefficient of stability of the structure of mobile funds is the ratio of net working capital to total working capital:
To set.ms.=(OB-KP)/OB (1.3.6)
where K set.ms. – coefficient of stability of the structure of mobile devices;
OB – the amount of current assets;
KP – short-term liabilities.
Net working capital is the current assets a company has after paying off its current liabilities. There is no standard for this coefficient.
7) The coefficient of working capital provision from own sources is the ratio of own working capital to current assets. It shows what part of current assets is financed from its own sources and does not require borrowing:
K SOS = (SS-VA)/OB (1.3.7.)
where Ksos is the coefficient of working capital provision from own sources.
If the indicator is below 0.1, the balance sheet structure is considered unsatisfactory and the organization is considered insolvent. A higher value of the indicator (up to 0.5) indicates the good financial condition of the organization and its ability to pursue an independent financial policy.
The level of the indicator of the provision of material reserves with own working capital is assessed, first of all, depending on the state of material reserves. If their value is significantly higher than the justified need, then own working capital can cover only part of the material reserves, that is, the indicator will be less than one. On the contrary, if the enterprise does not have enough material reserves for the uninterrupted operation of its activities, the indicator may be higher than one, but this will not be a sign of the good financial condition of the enterprise.
The numerator of the indicator includes own working capital, therefore, in general, the improvement in the state of working capital depends on the rapid growth of the amount of own working capital compared to the growth of inventories. The dependence can also be determined based on the fact that the enterprise has more of its own working capital, the less fixed assets and non-current assets there are per ruble of sources of own funds
To systematize the most significant indicators of the financial stability of an enterprise, we have compiled the following comprehensive table of coefficients.
Table 1.3.1
Main indicators of the financial stability of the enterprise
| Index | Characteristic | Recommended criterion |
| Debt ratio | < 0,4 | |
| Autonomy coefficient | > 0,5 | |
| Ratio of own working capital to the amount of own sources | ||
| Working capital coverage ratio from own sources | Ratio of own working capital to current assets |
Thus, as noted above, of the six financial stability ratios, only three have universal application: the debt-to-equity ratio, the equity agility ratio and the working capital coverage ratio from own sources of financing. But even within the framework of the three named universal coefficients, it is easy to notice that the same factors determine their growth and decline: the coefficient of maneuverability of own funds and the coefficient of supply of reserves with their own sources have the same numerator - own working capital. Therefore, the ratio of their level depends on the ratio of capital and reserves and the cost of tangible current assets. Accordingly, the dynamics of the coefficients is determined, given the same dynamics of own working capital, only by differences in the levels and directions of change in the denominators - inventories and equity capital. This does not prevent them from remaining independent coefficients, however, in practice it should be borne in mind that an increase in own working capital leads to an increase in financial stability according to two criteria for its assessment at once. In turn, the growth of own working capital is, as a rule, the result of an increase in equity capital, and in some cases, a decrease in the value of non-current assets.
An increase in equity capital, under certain conditions, also leads to a decrease in the ratio of debt and equity. Consequently, the three universal coefficients of financial stability are interconnected by factors that determine their level and dynamics. All of them focus the enterprise on increasing its own capital, with a relatively smaller increase in non-current assets, that is, on a simultaneous increase in the mobility of property.
It should be noted that it is impossible to “blindly” transfer international criteria from the practice of Western developed countries to Russian practice. It is necessary to work on creating a criteria base in Russia, for which it is necessary to apply both statistical and analytical methods, and the criteria should be differentiated by industry, type of activity, region and enterprise.
In our opinion, calculating financial stability indicators provides the manager with some of the information necessary to make a decision on the advisability of attracting additional borrowed funds. Along with this, it is important for the manager to know how the company can grow without attracting sources of financing.
2. Analysis of the financial stability management system at OJSC Tatarstan Sote.
2.1. General characteristics of the enterprise's activities.
Before considering the features of financial stability management at the enterprise under study, it is necessary to characterize its history and current state.
The organization of the dairy industry in the republic began during the Soviet period. In 1926, a special dairy section was created with the tasks of organizing the production and marketing of milk and dairy products, organizing dairy artels, partnerships and other agricultural cooperatives in the Tatar Autonomous Soviet Socialist Republic.
By decision of the Government of the Republic on June 4, 1928, the Tatar Livestock Union was established, whose responsibilities also included organizing the reception and processing of milk and the production of dairy products. Since the organization of the Tatzhivotnovodsoyuz, the dairy section of the Tatselkreditpromsoyuz has been transferred to its jurisdiction.
In order to further improve the leadership for the expansion of the dairy industry in the republic, the Council of People's Deputies of the Tatar Autonomous Soviet Socialist Republic decided on April 19, 1929 to create a new organization, the so-called Tatar Regional Union of Dairy Cooperation "Tatmaslosoyuz".
The main task of the Tatmaslosoyuz was to assist in organizing cooperative artels, partnerships, and collective farms for the production and marketing of milk and dairy products, as well as in organizing the marketing of milk and dairy products produced on individual peasant farms.
For these purposes, the Tatmaslosoyuz was entrusted with training specialist craftsmen and production instructors to service the grassroots network, enlarge existing creameries, hold competitions among members of partnerships to increase marketable milk and improve its quality, involve more peasant farms in partnerships and artels, as well as supply members of artels and partnerships with concentrated feed. Along with this, the Tatmaslosoyuz was also entrusted with maintaining the procurement of cow's butter and ghee from peasants not covered by dairy artels and partnerships.
The Tatmaslosoyuz network consisted of 83 milk processing points, in 1930 - of 111. In the early thirties, along with improving the organizational structure of agricultural cooperation, the restructuring of the relevant parts of the state apparatus of the dairy industry was carried out.
In March 1930, in accordance with the resolution of the Labor and Defense Council of February 26, 1930, the All-Union Dairy and Butter Association “Soyuzmoloko” was formed, uniting all state and cooperative organizations involved in the procurement of milk and butter. The Soyuzmoloko association was created as part of the People's Commissariat for Foreign and Internal Trade of the USSR and was its operational and economic body, acting on the basis of economic accounting.
In accordance with the above resolution of the Council of Labor and Defense, the board of the People's Commissariat of Trade Tat. On April 11, 1930, the Autonomous Soviet Socialist Republic made a decision to organize the Kazan regional office of the All-Union Association "Soyuzmoloko". The Kazan regional office "Soyuzmoloko" begins its activities by accepting finished products - butter, cheese, casein from agricultural cooperative enterprises, consumer systems and state farms of the republic. According to the Kazan regional office "Soyuzmoloko" on October 1, 1930, the number of factories in the TASSR was increased to 160. In accordance with the resolution of the Council of People's Commissars of the USSR dated August 2, 1931, the All-Union Association "Soyuzmoloko" was reorganized and two independent associations "Soyuzmoloko" and "Soyuzmasloprom" were formed and one trust with direct subordination to the USSR People's Commissariat of Supply.
Soyuzmoloko was responsible for supplying the population of large cities of the country with whole milk and fermented milk products. At Soyuzmasloprom - the association and management of creamery factories, at the trust - the construction and operation of canned and powdered milk factories. In connection with the reorganization of the All-Union Association "Soyuzmoloko" soon in Tat. The Autonomous Soviet Socialist Republic created an independent Tatar branch “Soyuzmasloprom”. Its functions included the same responsibilities as the Kazan regional office of Soyuzmoloko.
Ramazan Mingaleevich Mingaleev was appointed the first manager of the Tatar branch of Soyuzmasloprom. The department's apparatus consisted of 34 units. The beginning of the production activities of the state organization of the Tatar regional branch “Soyuzmasloprom” should be considered July 1, 1932, when the acceptance of creamery factories of the Tatzhivotnovodsoyuz in 27 regions of the republic was completely completed. In the second half of 1932, the grassroots system of the Tatarstan regional branch of Soyuzmasloprom was reorganized. From the existing procurement points, 17 district branches with independent balance were allocated. The functions of district departments and inter-district procurement points (oil depots) were to organize production, control and manage the activities of production enterprises in their zone, receive and process butter, cheese, casein and store them at the oil depot, complete carloads and ship them to their intended destination.
The unification of butter, butter, cheese and butter-casein factories, inter-district bases by the Tatar regional branch of Soyuzmasloprom was essentially the beginning of the state industrial production of butter, cheese and casein in the TASSR. Glavmasloprom, by its order dated June 27, 1934, transformed the Tatar regional branch of Soyuzmasloprom into the Tatmasloprom trust. In 1939, the Tat Ministry of Meat and Dairy Industry was formed. ASSR, which included the Tatmasloprom trust and the Kazan Dairy Plant.
The ministry functioned until 1950, after the abolition of which the Tatmasloprom trust became part of Rosglavmasloprom.
From June 1957 to December 31, 1959, the Tatmasloprom trust functioned as part of the food industry department of the Tatsovnarkhoz and at the beginning of 1960 it was abolished.
The meat and dairy industry was separated from the food industry department and independent management for this industry was organized. Operating enterprises, namely: 2 city dairies, 1 milk cannery, 56 head dairy and butter factories with a network of 135 primary enterprises and 144 separator departments and 4 oil depots were united into butter, cheese and dairy plants.
After the liquidation of the Tatsovnarkhoz, the Tatar Republican Department for Procurement of Milk and the Dairy Industry was formed in the republic, subordinate to the Main Directorate “Rosglavmaslosyrprom” of the Ministry of Meat and Dairy Industry of the RSFSR, which functioned until the end of 1971. At the beginning of 1972, the Tatar Republican Production Association of the Dairy Industry was formed in the republic, which includes all dairy plants and other enterprises and which, at the end of 1990, in connection with the transition of all enterprises to lease by the Production Association of Dairy Industry Tenants "Tatmolagroprom" of the Agroprom of the TASSR.
From the latter, in 1994, the OJSC Holding Company “Tatarstan Sete” was established with production units for logistics and the Kazan oil and cheese base.
Tatarstan Sete OJSC included 38 joint-stock companies, including: 21 dairy plants, 14 dairy factories, the Tatarskaya special motor depot, the Tatarskoye Repair and Technical Enterprise (RTP), the Tatarskoye design bureau (PKB).
Currently, the holding company has been transformed into a single joint-stock company "Tatarstan Sete" with 37 branches - dairy plants.
Currently, the holding's product range is quite wide. In particular, it includes:
Natural hard cheeses;
Processed fatty cheeses;
Mayonnaise;
Milk in a wide range;
Juices and nectars.
The products of Tatarstan Sote OJSC are in stable demand in the republican market. In fact, the enterprise under study is currently the leader in the food industry in the Republic of Tatarstan.
2.2. Control system analysis.
The organizational structure of management of the holding OJSC “Tatarastan Sote” is given in Appendix 1. Let us characterize the main functional responsibilities of the departments and services of the enterprise under study.
The supreme management body of Tatarstan Sote OJSC is the General Meeting of Shareholders. The holding scheme is that each of the dairy plants owns a certain stake in the parent enterprise - OJSC Tatarstan Sote, which, in turn, has a controlling stake in the voting shares in the authorized capital of each of the dairy plants. Thus, Tatarstan Sote OJSC has a direct influence on the strategy of financial and economic development of each of the structures included in the holding, however, the dairy plants themselves have the right, primarily through the General Meeting of Shareholders and other procedures provided for by the legislation of the Russian Federation on joint stock companies, to provide influence on the development of the holding as a whole.
The following issues fall within the competence of the general meeting of shareholders of Tatarstan Sote OJSC:
Making changes and additions to the company’s charter or approving the company’s charter in a new edition;
Reorganization of society;
Liquidation of the company, appointment of a liquidation commission and approval of interim and final liquidation balance sheets;
Determination of the quantitative composition of the board of directors (supervisory board) of the company, election of its members and early termination of their powers;
Determination of the maximum size of authorized shares;
Increasing the authorized capital of the company by increasing the par value of shares or by placing additional shares;
Reducing the authorized capital of a company by reducing the par value of shares, acquiring a part of shares by the company in order to reduce their total number or redeeming incompletely paid shares;
Formation of the executive body of the company, early termination of its powers, if the company’s charter does not include the resolution of these issues within the competence of the board of directors (supervisory board) of the company;
Election of members of the audit commission (auditor) of the company and early termination of their powers;
Approval of the company's auditor;
Approval of annual reports, balance sheets, profit and loss accounts of the company, distribution of its profits and losses;
Making a decision on the non-use of a shareholder’s preemptive right to purchase shares of the company or securities convertible into shares;
Procedure for conducting the general meeting;
Formation of the counting commission;
Determining the form of communication by the company of materials (information) to shareholders, including the determination of the press organ in the case of communication in the form of publication;
Splitting and consolidation of shares;
Completion of major transactions related to the acquisition and alienation of property by the company;
Acquisition and redemption by the company of placed shares in cases provided for by this Federal Law;
Participation in holding companies, financial and industrial groups, and other associations of commercial organizations;
The following issues fall within the exclusive competence of the Board of Directors of OJSC Tatarstan Sote:
Determining priority areas of the company’s activities;
Convening annual and extraordinary general meetings of shareholders of the company, except for the cases provided for in paragraph 6 of Article 55 of this Federal Law;
Approval of the agenda of the general meeting of shareholders;
Determining the date for compiling the list of shareholders entitled to participate in the general meeting;
Increasing the authorized capital of the company by increasing the par value of shares or by placing shares by the company within the limits of the number and category (type) of authorized shares, if in accordance with the charter of the company or a decision of the general meeting of shareholders such a right is granted to it;
Placement by the company of bonds and other securities, unless otherwise provided by the company's charter;
Acquisition of shares, bonds and other securities placed by the company in cases provided for by this Federal Law;
Formation of the executive body of the company and early termination of its powers, establishment of the amount of remuneration and compensation paid to it, if the charter of the company refers to this within its competence;
Use of reserve and other funds of the company;
Approval of internal documents of the company that determine the procedure for the activities of the company’s management bodies;
Creation of branches and opening of representative offices of the company;
Making decisions on the company's participation in other organizations;
Concluding major transactions related to the acquisition and alienation of property by the company;
Concluding transactions provided for by Chapter XI of this Federal Law;
At Tatarstan Sote OJSC, the highest line-functional manager is the General Director, who is appointed by the general meeting of shareholders. The content of the director's work includes:
Determination of the main and private goals of the organization (enterprise) and ways to achieve them;
Organization of the functioning of the management system;
Management of preparation and implementation of necessary management decisions;
Analysis and assessment of the effectiveness of the implementation of decisions made in order to make the necessary adjustments to current activities;
Selection, placement and work with personnel;
Manages the commercial and trade-operational activities of the enterprise;
Organizes a rational commodity supply system. Searches for additional commodity resources;
Chief Accountant:
Carries out the organization of accounting of the economic and financial activities of the organization and control over the economical use of material, labor and financial resources, the safety of the organization’s property;
Provides rational organization of accounting and reporting in the organization and its divisions based on maximum centralization and mechanization of accounting and computing work, progressive forms and methods of accounting and control;
Manages the development and implementation of activities aimed at maintaining government and financial discipline;
Provides control over the legality, timeliness and correctness of documents. Participates in conducting economic analysis of economic and financial activities based on accounting data;
Takes measures to prevent shortages;
Conducts work to ensure strict adherence to staffing, financial and cash discipline, estimates of administrative, economic and other expenses;
Carries out operational management of the enterprise’s finances and takes measures to improve them;
Manages the accounting staff of the organization.
Chief accountant's assistant:
Organizes the financial activities of the enterprise, aimed at providing financial resources, fulfilling tasks, preserving and effectively using fixed assets and working capital, labor and financial resources of the enterprise, timely payments on obligations to the state budget, suppliers and banking institutions;
Determines the enterprise’s need for all types of credit, a source of financing for plans for technical re-equipment and reconstruction of the enterprise;
Organizes the development of working capital standards and measures to accelerate their turnover.
Accountants:
Perform work in various areas of accounting (accounting for fixed assets, inventory, production costs, sales of products, results of economic and financial activities, settlements with suppliers and customers, as well as for services provided);
Reflect in accounting transactions related to the movement of cash and inventory;
Make accruals and transfer payments to the state budget;
Participate in conducting an economic analysis of the economic and financial activities of the enterprise based on accounting and reporting data.
An important role in the functioning of Tatarstan Sote OJSC, as shown in Appendix 1, is played by the marketing and procurement supply department, which consists of a supply group, a sales group and a marketing group
Supply group:
Determines requirements for material resources, as well as compliance of their quality with standards, technical specifications, contracts and other regulatory documents;
Participates in the preparation of projects, logistics plans, in which the fulfillment of contractual obligations;
In preparing data for drawing up claims for supplied low-quality inventory items and responding to customer complaints;
Liaises with suppliers.
Sales group:
Participates in the inventory, studies the reasons for the formation of excessive excess material resources, takes measures for their implementation;
Monitors compliance with the rules for storing inventory in warehouses, draws up the necessary documents related to sales;
Develops a sales policy based on identifying the most profitable sales channels.
Marketing Group:
Organizes a system of sales promotion and formation of demand indicators;
Studies the demand (current and future) for a specific product in a specific market;
Based on collective accounting, draws up a market marketing program for the product;
Sets an upper limit on the price of a product and the profitability of its production;
Develops the company's investment policy based on marketing;
Calculation of total production costs and profitability levels for the company as a whole;
Determines the qualitative result of the company’s economic activities: gross income, net profit after deducting the cost of material costs, wages, taxes and interest on loans.
Direct financial management of Tatarstan Sote OJSC is carried out by the Deputy General Director for Finance, whose subordination, as shown in Appendix 1, includes the economic planning department, financial group, audit service and computerization group. The main functions of the Deputy General Director for Finance are as follows:
General management of the financial activities of the parent company and holding enterprises;
Current control over the activities of the chief accountant and accounting department, the organization of the enterprise’s accounting policy;
Prompt interaction with tax authorities;
Organization of automation of financial management, implementation of a project to create a unified, daily updated information base on the financial condition of the holding’s enterprises;
General control over receivables and payables;
Organization of relationships with commercial banks.
Planning and Economic Department:
Carries out operational, calendar production planning;
Analyzes the economic activities of the enterprise and justifies measures to improve it;
Carries out activities for planning financial flows, etc.
Financial group:
Carries out current management of the financial activities of the holding;
Controls the financial condition of the enterprises included in the holding;
Organizes accounting of loan agreements for the holding as a whole, calculation of the effectiveness of attracting short-term and long-term credit resources and interest rates;
Organizes financial risk management (risk of loss of financial stability, risk of decreased liquidity and profitability of holding enterprises, etc.).
In our opinion, it should be noted that precisely the issues of financial management at the centralized level of management of Tatarstan Sote OJSC are not sufficiently adjusted. There is no unified system of financial management, accounting and analysis of financial risks for each of the holding’s enterprises. As a result, the production management function of Tatarstan Sote OJSC is clearly implemented more smoothly than the financial management function. In a strategic perspective, this can create a threat to the entire financial and economic activity of the enterprise and increase the risk of loss of financial stability and creditworthiness.
2.3. Research of approaches to managing the financial stability of an enterprise.
To study approaches to managing financial stability, it is necessary to consider three main groups of financial stability indicators, namely:
Absolute indicators of financial stability, demonstrating from what sources and in what volumes the enterprise’s need for industrial reserves is covered;
Comparative dynamics of overdue receivables and payables, characterizing, on the one hand, the payment discipline of the enterprise, and, on the other, the level of its activity in the field of working with debtors;
A system of relative indicators (coefficients) of the financial stability of an enterprise, which are advisable to compare with standard values.
We analyzed the absolute indicators of the financial stability of Tatarstan Sote OJSC for 2003. The results of the analysis are presented in Table 2.3.1 of the work. The source of information for the analysis was the balance sheet (Form No. 1 of the enterprise’s reporting) (Appendix 2).
Based on the results of assessing the main absolute indicators of the financial stability of Tatarstan Sote OJSC, it is advisable to draw the following main conclusions:
1. In 2003, the amount of inventory in the enterprise's warehouses increased quite significantly - by 678,663 thousand rubles. or by 158.4% compared to the beginning of the year. In our opinion, this trend should be considered as clearly negative - there is clearly overstocking, which negatively affects both the liquidity and financial stability of the enterprise.
Table 2.3.1
Absolute indicators of financial stability of Tatarstan Sote OJSC for 2003.
| № | Indicators | At the beginning of the period, thousand rubles. | At the end of the period, thousand rubles. | Deviation, “+””-“ thousand rubles. | Growth rate, % |
| 1 | Total inventory and costs | 428447 | 1107120 | 678673 | 158,4 |
| 2 | Availability of own working capital (SOS) | - 513205 | - 771777 | - 258572 | -50,4 |
| 3 | Permanent capital (PC) | - 313092 | - 416597 | - 103505 | - 33,1 |
| 4 | Total value of all sources (VI) | 1067807 | 1847819 | 780012 | 73,0 |
| 5 | FSOS (page 2 – page 1) | - 941562 | - 1878897 | -937335 | -99,6 |
| 6 | FPK (page 3 – page 1) | -741539 | -1523717 | -782178 | -105,5 |
| 7 | FVI (page 4 – page 1) | 639360 | 740699 | 101339 | 15,9 |
| 8 | Three-component indicator (S) | {0,0,1} | {0,0,1} | ___ | ___ |
| 9 | General characteristics of financial condition | Unstable | Unstable | No significant changes | ___ |
2. Own working capital of Tatarstan Sote OJSC during 2003 continued to remain negative and, moreover, decreased. For any industrial and commercial enterprise, such a situation is extremely alarming. It means that current assets are financed entirely by borrowed capital, and, moreover, part of the enterprise’s needs for fixed assets is also financed by borrowed capital.
3. Permanent capital, which is the sum of own and long-term borrowed funds minus non-current assets, is, in our opinion, the most important absolute characteristic of the financial stability of Tatarstan Sote OJSC. This indicator decreased slightly during the study period (by 103,505 thousand rubles or 33.1%), and continues to remain negative, which indicates the extremely unsatisfactory financial stability of the enterprise - that it does not cover its need for fixed capital not only for at the expense of own funds, but also through long-term loans.
4. The most important absolute characteristics of financial stability are the indicators contained in pp. 5 – 7 of Table 2.3.1. They show to what extent the reserves and costs of Tatarstan Sote OJSC are covered by one or another source of financing. These indicators are summarized on page 8. According to this indicator (S), we can conclude that the financial stability of Tatarstan Sote OJSC is currently extremely unsatisfactory.
In addition, forward-looking information about possible threats to the financial stability of an enterprise can be provided by information on the share of overdue receivables and payables in the total amount of debt of the corresponding type (see table 2.3.2.)
Table 2.3.2
Dynamics of overdue receivables and payables
Analytical table 2.3.2. provides, in our opinion, important information about the prospects for managing the financial stability of Tatarstan Sote OJSC. At the same time, there are a number of rather negative trends in the relationship between the level of solvency and the financial stability of the holding for the period under study:
1. There is a significant gap between the overdue receivables and payables of Tatarstan Sote OJSC for the considered 8 quarters of 2002 - 2003. Overdue receivables in general characterize the level of payment discipline of consumers of JSC products. The level of overdue accounts payable, on the contrary, demonstrates the fact that OJSC Tatarstan Sote itself pays its debts to suppliers, the budget, and wage workers on time. As Table 2.3.2 clearly shows, the OJSC itself almost always pays its debts on time, since the share of overdue accounts payable of the enterprise on a quarterly basis does not exceed a statistical error of 2%.
2. The level of non-payments to the enterprise is quite high. This is due, in our opinion, primarily to the fact that Tatarstan Sote OJSC sells a significant part of its products to rural areas of the Republic of Tatarstan, where there is always a serious shortage of cash. Accordingly, not all consumers of the products of the holding enterprises (legal entities - especially budgetary institutions such as kindergartens, schools, hospitals, etc.) are able to pay for the products received on time and in full. Thus, in the third quarter of 2003, the level of overdue receivables reached an extremely high level of 30% of the total receivables.
The worst situation may be when all overdue receivables become uncollectible. This will mean that, in fact, Tatarstan Sote OJSC will have a loss from its activities, which will negatively affect both the profitability and financial stability of the enterprise under study.
Firstly, the study of financial stability only on the basis of an assessment of absolute indicators does not allow us to compare individual sections of the balance sheet with each other in percentage terms. Meanwhile, such a comparison has the most important economic meaning, since individual sources of financing the enterprise’s activities must be clearly balanced.
Secondly, the study of only absolute indicators of the financial stability of an enterprise does not take into account such an important macroeconomic factor as inflation. The study of the dynamics of financial ratios allows us to neutralize the effect of inflation.
Table 2.3.3
Financial stability coefficients of the enterprise OJSC TPF “Tatarstan Sote” for 2003.
| Index | Characteristic | Recommended criterion | at the beginning of the period. | at the end of the period. | Growth rate, % |
| Financial risk ratio | Shows how many borrowed funds the company raised per ruble of its own | 2,63 | 4,01 | 52,5 | |
| Financial dependency ratio | Ratio of borrowed funds to balance sheet currency | < 0,4 | 0,72 | 0,74 | 3,6 |
| Autonomy coefficient | The ratio of the company's own funds to the balance sheet currency | > 0,5 | 0,28 | 0,19 | -33,1 |
| Financial stability ratio | The ratio of the total of own and long-term borrowed funds to the balance sheet currency | ||||
| Maneuverability coefficient of own sources | The ratio of permanent capital to the sum of own and long-term borrowed sources |
The results of our analysis of the financial stability of Tatarstan Sote OJSC for 2003 are presented in Table 2.3.3.
Analysis of the results obtained in Table 2.3.3 allows us to identify the following trends in the dynamics of the financial stability of Tatarstan Sote OJSC for the period under study:
1. The values of the enterprise’s financial risk, debt and autonomy coefficients are extremely unsatisfactory. In fact, the enterprise under study as a whole, according to 2003 data, is extremely financially unstable.
2. For an ordinary enterprise, the situation described above could be fraught with bankruptcy. However, OJSC “Tatarstan Sote” occupies a certain, socially significant niche in the economy of the Republic of Tatarstan. On the one hand, this imposes certain restrictions on the enterprise (the impossibility of a rapid rise in prices due to a possible rapid increase in costs, the need for detailed coordination of pricing policy with the Government of the Republic of Tajikistan). On the other hand, the special status of a holding company in a strategic perspective can lead to increased irresponsibility in the field of financial management.
Summarizing the study of the financial stability management system at Tatarstan Sote OJSC, the following conclusions can be drawn:
1. Financial stability management is spontaneous, reactive, and non-systemic in nature. It is poorly integrated into the overall enterprise management system.
2. There is no effective accounts receivable management system, especially in terms of doubtful and overdue debts.
3. Trends in changes in the financial stability coefficients of Tatarstan Sote OJSC in 2003 indicate an increase in the threat of loss of financial independence.
3. Justification of directions for increasing financial stability at OJSC “Tatarstan Sote”.
3.1. Creation of an integrated financial stability management system.
As was shown in Chapter 2 of the thesis research, the process of managing financial stability at Tatarstan Sote OJSC is still insufficiently systematic, mainly reactive in nature. The holding's enterprises have accumulated significant amounts of accounts payable, as well as debt on short-term bank loans, which they are now virtually unable to pay off. In these conditions, the management of the holding, in our opinion, should take effective measures to improve the process of managing financial stability at Tatarstan Sote OJSC.
The main problems in the field of managing the financial stability of Tatarstan Sote OJSC and the proposed directions for their solution are systematized in Table 3.1.1
Table 3.1.1
The main problems in the field of managing the financial stability of Tatarstan Sote OJSC and directions for their solution.
Continuation of table 3.1.1
| 2. Low level of financial independence, unacceptably high share of borrowed sources of financing in the overall capital structure of the holding, lack of own working capital. | 2. Gradual reduction of irrationally used bank loans at the holding enterprises, transition from external systems to systems of preferential intra-holding lending for the need for working capital. |
| 3. There is a clear tendency towards overstocking at most of the holding’s enterprises. | 3. Introduction of progressive logistics systems for optimizing production inventories. |
| 4. Unsatisfactory management of accounts receivable (high proportion of doubtful and overdue accounts receivable in its overall structure). | 4. More thorough work with debtors both at dairy plants and at the holding’s parent enterprise, intensifying legal action against the most persistent defaulters. |
The process of managing the financial stability of an enterprise, shown in Fig. 3.1.1., is cyclical in nature: its initial stage is a comprehensive assessment of financial stability, which includes a study of macroeconomic and industry conditions, as well as the relationship between profitability and financial stability at the holding enterprises (see Chapter 4 of the thesis). Finally, after implementing all management actions, identifying factors and justifying reserves for increasing investment attractiveness, planning and implementing specific activities, as well as monitoring their implementation, the process of managing the financial stability of Tatarstan Sote OJSC must again return to the assessment procedure. This approach makes it possible to clearly determine what results specific management actions led to, and thus makes it possible to directly assess their effectiveness.
Rice. 3.1.1. Conceptual diagram of the financial stability management process of Tatarstan Sote OJSC
Let us characterize the main elements of the proposed scheme for the financial stability management process at Tatarstan Sote OJSC in more detail:
1. First of all, it is necessary to assess the macroeconomic and industry conditions that affect the nature of the process of managing the financial stability of the holding. In this regard, it is advisable to study the level and dynamics of interest rates on long-term and short-term bank loans, industry average profitability and approximate financing schemes for dairy industry enterprises in the Russian Federation, the need for fixed and working capital.
2. Next, it is advisable to quickly assess the level of financial stability at all enterprises of the holding, for which it makes sense to create a single integrated information system that allows you to quickly process information coming from various enterprises of the holding OJSC “Tatarstan Sote”, promptly identify threats to reduce the level of financial stability at individual dairy plants and for the holding as a whole, as well as plan and implement measures to quickly overcome these threats.
3. It is necessary to quantify how financial stability affects the profitability of the holding’s enterprises. This kind of quantitative analysis, using the correlation-regression method, is given in Chapter 4 of the thesis.
4. It is necessary to plan as accurately as possible the factors and reserves for increasing the level of financial stability of Tatarstan Sote OJSC. The main factors listed are shown in Table 3.1.1. In particular, it is necessary to move from a policy of using credit resources to preferential self-financing, as well as introduce strict systems for monitoring receivables.
5. A gradual reduction in the financial dependence of Tatarstan Sote OJSC should be accompanied by an adequate increase in the efficiency of using available financial resources. In our opinion, measures to improve the process of managing the financial stability of an enterprise by themselves will not be effective enough if they are not accompanied by the progressive development of production management systems, in particular, the introduction of resource- and energy-intensive technologies, the development of financial management and marketing at enterprises holding.
3.2. Taking into account financial sustainability in the process of justification and implementation of a business plan.
Trends in changes in financial stability must be taken into account not only in the process of managing the financial stability of the enterprise as a whole, but also in the process of justification and implementation of individual business projects.
Currently, Tatarstan Sote OJSC has initiated a project to expand the production base of its largest subsidiary, Kazan Dairy Plant OJSC. Thus, it is planned to expand the range of products produced by OJSC Kazmolkombinat by organizing the production of various types of cheeses. In this regard, it is planned to reconstruct the building located on the territory of the enterprise and put into operation new equipment, including a line for the production of rennet (hard) cheeses with a capacity of up to 10 tons of cheese per day.
The market for the sale of domestic cheeses to the population has positive development prospects. The main direction of development of this market is the replacement of imported cheese with products from Russian producers and meeting the seasonal demand of the population. The maximum growth in sales on the market traditionally occurs in the winter period (December, January, February), up to 70% of the total sales volume under the project is planned to be carried out during this period.
The main period of production activity (production of finished products) for the project is planned to be summer (May-September). At this time, there is a sufficient amount of the main raw material (milk) and there are favorable conditions for establishing relatively low prices for purchased raw materials. The organization of cheese production will reduce the specific share of butter (unprofitable product) in the volume of products produced by the plant, and thereby increase the profitability of the entire plant as a whole.
At the first stage of the project, it is planned to carry out the main volume of work on the reconstruction of the building (building), which is under conservation, the purchase and installation of various equipment for the production of cheese, including a line for the production of rennet (hard) cheeses.
The planned amount of investments (payments) in new equipment and reconstruction work at this stage is 53,730.77 thousand rubles including VAT, including the cost of purchased equipment 44,344.3 thousand rubles. The deadline for completing the stage is the second quarter of the project implementation).
At the second stage, it is planned to complete the reconstruction of the building and carry out a trial launch of the equipment (debugging the entire cheese production process) and begin cheese production in accordance with the finished product release plan (production plan). At this stage, it is planned to purchase equipment in order to complete the entire complex of cheese production equipment and carry out various additional work related to the implementation of the project (organization of a cheese storage facility, etc.). The planned amount of investment is 24,426.26 thousand rubles including VAT, including 8,609.75 thousand rubles for new equipment, payment of debt to the supplier for the previously supplied BERTSCH cheese line - 13,469.94 thousand rubles. The deadline for completing the stage is the third quarter of the project.
The third stage of the project involves the implementation of current production activities and the return of borrowed funds (long-term loans). The total amount allocated to repay long-term (investment) loans is equal to 55,500.0 thousand rubles, interest payments will amount to 160.42 thousand rubles. The duration of the stage is 3 years.
A feature of the project implementation at the third stage is the implementation of the main production activities (up to 70%) in the summer (May-September) period, and the sale of the main volume of finished products (up to 70%) in the winter (December-February) period. In this regard, this business plan provides for obtaining short-term financing (turnover) in the total amount of 125,000.0 thousand rubles, the total amount of interest payments will be 9,740.0 thousand rubles. The main amount of this financing falls on the first 2 years of project implementation - 96,000.00 thousand rubles, the main period for receiving financing is the 2nd and 3rd quarter of the financial year (annually). The main repayment period for short-term financing (loans) is the 4th and 1st quarter of the financial year.
The total investment amount for the project will be 85,764.53 thousand rubles. Sources of project financing (long-term investments):
Own funds of the project initiator - 30,264.53 thousand rubles;
Borrowed funds (state support funds in accordance with Resolution of the Cabinet of Ministers of the Republic of Tajikistan No. 349 dated May 20, 2000) for a total amount of 45,500.0 thousand rubles, including: loan from the Ministry of Finance of the Republic of Tajikistan 10,500.0 thousand rubles, interest rate on the loan - 0% (interest-free loan);
Loan from State Unitary Enterprise "Leasing Company" 20,000 thousand rubles, interest rate on the loan 0% (interest-free loan);
Funds from the R&D fund (loan from Ak Bars Bank) 10,000.0 thousand rubles, interest rate on the loan is 1/4 of the discount rate of the Central Bank of the Russian Federation + fee to a commercial bank (4% per year) (in calculations, the fee on a bank loan is set at 10, 25% per year);
Funds of the Privatization Fund of the Republic of Tatarstan (loan from a commercial bank) 5,000.0 thousand rubles, interest rate on the loan is 1/4 of the discount rate of the Central Bank of the Russian Federation + fee to a commercial bank (3% per year) (in calculations, the fee on a bank loan is set at 9, 25% per year); - borrowed funds (commercial bank loan) 10,000.0 thousand rubles, interest rate on the loan 16% per year.
Project implementation period: 3.5 years. Implementation period of the project production program (third stage): 3 years. The repayment period for borrowed funds from the start of the production program (reaching design capacity) is 3 years. All calculations for the project were made taking into account the seasonality factor and based on the 2-shift operation of the capacities introduced under the project.
The main results of the project to update the production base are as follows:
1. Production capacity is 20 tons of cheese per day, actual capacity is up to 10 tons of cheese per day.
2. The number of personnel for the project is 53 people.
3. Net profit remaining at the disposal of the enterprise after paying interest on loans:
1 year of project implementation (- 2,818.00) thousand rubles;
2nd year of project implementation 4,575.17 thousand rubles;
3rd year of project implementation 11,767.36 thousand rubles;
4th year of project implementation 13,113.64 thousand rubles (two quarters);
Total for the billing period: 26,638.17 thousand rubles.
4. The net present value of the project (NPV) after three and a half years from the date of its implementation will be 34,509.34 thousand rubles. Discount factors are calculated based on the average annual inflation of 20% per year.
5. Internal rate of return (IRR) at discounted cost for the period of project implementation is 17.82% per year.
The effectiveness of an investment project, in our opinion, largely depends not only on making a profit, but also on the correct use of depreciation charges. The plan provides for depreciation on fixed assets starting from the 3rd quarter of the project implementation period. In the third quarter, depreciation charges for the introduced BERTSCH line (for calculation purposes) are equal to 50% of the average quarterly depreciation charge. Depreciation charges for other fixed assets are equal to 2/3 of the average quarterly depreciation charges.
The total amount of depreciation charges for 3 years will be 27,540.23 thousand rubles. The average amount of depreciation charges per quarter is 2,950.01 thousand rubles.
Sources of financing for current activities related to the implementation of the project are:
Borrowed funds (short-term lending);
Other sources.
According to the financial plan, the period of current project activity is 12 quarters. During this period, it is planned to receive the following funding:
Short-term lending for a total amount (turnover) of 125,000.0 thousand rubles (lending is expected to be carried out annually, mainly in the 2nd and 3rd quarters of the financial year; the lending interest rate is 16%; the total amount of interest payments for 12 quarters will be 9,740.0 thousand . rubles);
Depreciation charges in the amount of 27,540.23 thousand rubles;
Net profit remaining at the disposal of the project initiator after payment of interest on loans in the amount of 26,638.17 thousand rubles.
The total amount of own sources (the sum of depreciation and retained earnings) of financing the current activities of the project will be 54,178.4 thousand rubles.
The income and expense plan for the project is calculated based on the planned performance indicators of the project for a period of 14 quarters (the period of current activity is 12 quarters (3 years)). The main income for the project is the revenue received from clients for the supplied project products (cheese, butter).
For the billing period, it is planned to receive revenue totaling 416,953.72 thousand rubles excluding VAT, including:
1 year of project implementation 17,789.86 thousand rubles;
2nd year of project implementation 120,622.99 thousand rubles;
3rd year of project implementation 155,444.76 thousand rubles;
4th year of project implementation 123,096.13 thousand rubles (two quarters)
With the planned utilization of production capacity, the average quarterly amount (over a period of 12 quarters) of the project initiator’s revenue will be 34,746.14 excluding VAT. Value added tax for the period of project implementation will be received in the amount of 45,585.94 thousand rubles.
The receipt of revenue for the project depends on seasonal factors; the largest amount of revenue comes in the 4th and 1st quarters (October-March) of the project’s financial year. Over the three years of current project activity during the specified period, it is planned to receive 80.48% of the total revenue (or 335,567.75 thousand rubles). In the project calculations, the selling price of cheese (base price) is taken at the level of the predicted market price of Dutch cheese.
The cost of production for the period of project implementation will be 373,434.13 thousand rubles, including:
1 year of project implementation 57,738.72 thousand rubles;
2nd year of project implementation 134,936.35 thousand rubles;
3rd year of project implementation 134,767.02 thousand rubles;
4th year of project implementation - 45,992.01 thousand rubles.
The implementation of project expenses depends on seasonal factors, the largest amount of expenses is carried out in the 2nd and 3rd quarters (April-September) of the financial year of the project. Over the three years of current project activity during the specified period, it is planned to make expenses in the amount of 62.46% of the total cost (or 233,228.55 thousand rubles).
Variable costs for the project include:
Expenses for payment of raw materials (94.76% of variable expenses),
Labor costs for key production workers, including contributions to social funds (1.35% of variable costs),
Expenses for payment of electricity and water for technological purposes (3.88% of the total amount of variable expenses).
The total amount of variable costs for the period of current project activity will be 324,124.05 thousand rubles. The main amount of variable expenses (209,890.41 thousand rubles or 64.76%) is planned to be carried out in the 3.4, -7.8 and 11.12 quarters of the project implementation period (the second and third quarter of the financial year). With the planned utilization of production capacity, the average quarterly (over 12 quarters) variable costs for the project will be 27,010.33 thousand rubles.
The share of variable costs in the cost of production is 86.80%.
Fixed project costs include:
General business (general production) expenses (7.84% of the amount of fixed costs),
Administrative expenses (2.46% of the amount of fixed costs),
Sales expenses (1.51% of the amount of fixed costs),
Depreciation of fixed production assets (88.18% of the amount of fixed costs).
The total amount of fixed costs, including depreciation charges, will be 31,231.01 thousand rubles for the billing period.
Expenses for the current activities of the project include taxes attributed to the cost of products sold. Calculations of these expenses are given in a special table reflecting the structure and total amount of tax payments for the project. Tax payments (attributable to the cost of products sold and financial results of operations) for the period of current project activity will amount to 8,344.79 thousand rubles, including taxes attributable to the cost of products sold 339.07 thousand rubles (99.94% of the amount the above security deposits). The share of taxes attributed to the cost price in the total cost of production is 2.23%.
The average quarterly amount of tax payments attributable to cost and financial results will be 695.33 thousand rubles. The financial plan provides for the payment of interest on short-term loans for the period of current project activity in the amount of 9,740.00 thousand rubles (these payments are included in the cost of production of the project). The share of interest payments in the cost is 2.61%.
During the implementation of the project, current tax payments will be made in full. Financial calculations include federal, republican and local taxes in accordance with current legislation as of October 1, 2000.
In accordance with current legislation, the project initiator is exempt from paying property tax as an organization processing agricultural products (the share of processed agricultural raw materials in production volume is more than 70%). The project's products are entirely produced by processing similar raw materials, therefore all assets (property) used for the implementation of the project will be exempt from taxation in terms of property tax.
In accordance with current legislation, project products will be subject to value added tax at a rate of 10% (project products belong to the group of dairy products, which are taxed at a rate of 10%). Tax payments attributable to the cost of manufactured products for the period of current project activity will amount to 8,339.07 thousand rubles.
With the planned utilization of production capacity, the average quarterly amount of tax payments attributable to the cost of manufactured products under the project will be 694.92 thousand rubles. Tax payments attributable to the financial result for the period of current project activity will amount to 572 thousand rubles. The average quarterly amount of these payments will be 48 thousand rubles. Tax payments for VAT for the billing period will amount to 24,312.20 thousand rubles (the average quarterly amount is 2026.01 thousand rubles).
Tax payments for income tax for the period of current activities will amount to 17,660.80 thousand rubles (the average quarterly amount is 1,471.73 thousand rubles). The total amount of tax payments for the project for the billing period will be 50,317.79 thousand rubles. The average quarterly tax payments will be 4,193.15 thousand rubles.
Return on assets based on net profit (% per year):
2nd year of project implementation - 4.07%;
3rd year of project implementation - 10.23%.
4th year of project implementation - 15.21% (for six months); (2 blocks)
Return on sales based on net profit during the billing period (% per year):
1 year of project implementation - absent;
2nd year of project implementation - 3.79%;
3rd year of project implementation - 7.57%.
4th year of project implementation - 10.66% (for six months); (2 blocks)
The asset turnover (per year) for the project will be:
1 year of project implementation - 0.19 turnover;
2nd year of project implementation - 1.07 turnover;
3rd year of project implementation - 1.35 turnover;
4th year of project implementation - 1.42 turnover (for six months). (2 blocks)
The turnover of current assets (per year) for the project will be (per quarter):
1 year of project implementation - 0.53 turnover;
2nd year of project implementation - 2.60 turnover;
3rd year of project implementation - 2.66 turnover.
4th year of project implementation - 2.33 turnover (for six months). (2 blocks)
In my opinion, the calculated financial indicators allow us to conclude that economic efficiency is quite high.
The main stages of the project are as follows:
1. Reconstruction of the building, purchase and installation of equipment.
2. Attracting clients and forming a package of orders for the stable implementation of the technological process;
3. Carrying out current activities.
At the stage of attracting customers and forming a package of orders, there are risks of financial losses associated with entering new markets and the need to provide additional discounts on the project’s products.
The above risks are assessed by the project initiator as significant. The chosen project implementation strategy takes into account these risks. Significant volumes of products under the project are expected to be sold during a period of seasonal sales growth and a shortage of high-quality Russian-made cheese at relatively affordable prices. During this period, the hard cheese market is acquiring the characteristics of a “sellers” market, which will make it possible to sell the project’s products on favorable terms. An important factor in reducing the risk of financial losses when selling project products is that the management of the project initiator has significant experience in the rennet (hard) cheese market.
An additional reserve of the project in terms of its financial solvency is the fact that prices for the project’s products are set at the level of the expected price of Dutch cheese.
Table 3.2.1.
The main risks envisaged by the business plan of the project to modernize the production base of the largest subsidiary of Tatarstan Sote OJSC - Kazmolkombinat OJSC
| Risk group | Specific risks | Recommended areas for minimizing risks |
| 1. Production risks | increase in current costs (on average 10% compared to plan) | Creating a reserve fund to cover unexpected expenses. |
| increase in capital costs (no more than 15% compared to the plan). | concluding long-term contracts for the supply of equipment; contract insurance. | |
| 2. Commercial risks | reduction in sales market | further improvement of marketing activities; product diversification. |
| 3. Financial risks | rising inflation (over 20% per year) | the risk is unlikely; however, a constant assessment of the macroeconomic situation and price level is necessary. |
| increase in interest rates on loans (to a level of > 17.82% per annum (IRR)) | maintaining relationships with several commercial banks; ensuring a high level of payment discipline and stable financial condition |
At the stage of ongoing activities, there are risks of financial losses associated with the following events:
Relative increase in purchase prices for raw materials;
Lack of working capital to finance the current activities of the project in full;
Organizational risk, including those associated with compliance with the quality characteristics of manufactured products.
The risk of financial losses associated with a relative increase in purchase prices for milk (including in connection with the abolition of the mechanism of state regulation of purchase prices for raw materials) is significant.
A factor that allows minimizing this risk is the organization of the main purchase of raw materials for the project in the summer (surplus milk on the market of the Republic of Tatarstan). The excess supply of milk on the market in the summer makes it possible to purchase raw materials for the project on relatively favorable terms (in the event of the abolition of the state price regulation mechanism). The reserve of the project is the existing possibility of organizing part of the purchase of raw materials from rural farms directly at lower prices.
With regard to the likelihood of losses associated with a centralized (state) increase in purchase prices, in this case the project initiator assumes that the new purchase prices will not differ significantly from milk prices in other regions of Russia. Thus, the difference in cheese prices between Russian regions will remain. The price advantage of Russian cheese over imported cheese is assessed by the project initiator as significant, and an increase in purchase prices for raw materials will not be able to fundamentally affect the market positioning of the project’s products.
The risk of financial losses associated with a shortage of raw materials (milk) for the implementation of the project’s production program is assessed by the initiator as significant only during the period of seasonal shortage of raw materials. In order to minimize the impact of this risk on the financial viability of the project, the production program of the project provides for the production (laying of cheese) in the period December-April at an average level of 2-3 tons (20-30% of the actual production capacity of the project). In order to carry out stable current activities, Tatarstan Sote OJSC carries out significant work with suppliers of raw materials, establishing partnerships with them, including guaranteeing them stability of payment (purchase) of milk throughout the year (including during the period of excess raw materials at market).
The risk of financial losses associated with the untimely receipt of working capital for the purpose of financing the current activities of the project is assessed as significant (taking into account the significant volumes of required financing). In this regard, the project initiator has done work to establish partnerships with commercial banks in Kazan, including in order to obtain guarantees of providing the plant with the necessary short-term financing during the implementation of the current project activities.
The risk of financial losses associated with compliance with the quality characteristics of manufactured products (receipt of products of the required quality within the planned time frame) is assessed by the project initiator as insignificant. OJSC "Kazmolkombinat" currently has specialists with significant experience in the production of rennet (hard) cheeses; it is also planned to train specialists and workers for up to 2 months at the plant and other cheese production facilities. By the start of the actual implementation of the current project activities, it is planned to additionally invite (hire) the specialists necessary for the implementation of the project.
4. Assessment of the economic efficiency of measures to improve financial stability at OJSC “Tatarstan Sote”
Managing the financial stability of any enterprise, in our opinion, cannot be considered as an end in itself. Ultimately, this type of management should be aimed at increasing the efficiency of the enterprise and increasing its profitability. For these purposes, we carried out a correlation and regression analysis between the indicator of the coefficient of financial dependence of the subsidiaries of Tatarstan Sote OJSC and the level of profitability of their products according to 2003 data (see Table 4.1 and Fig. 4.1 of the thesis study).
Table 4.1.
Indicators of financial stability and profitability of sales of subsidiaries of the holding OJSC “Tatarstan Sote”
| Districts and cities of the Republic of Tatarstan in which dairy plants are located, subsidiaries of the holding OJSC “Tatarstan Sote” | Financial dependency ratio, % | Profitability of products sold, % |
| 1. Agryzsky. | 87,3 | 2,5 |
| 2. Aznakaevsky. | 76,5 | 4,8 |
| 3. Aktanyshsky. | 67,4 | 15,3 |
| 4. Almetyevsky. | 58,9 | 17,5 |
| 5. Apastovsky. | 72,3 | 3,6 |
| 6. Arsky. | 71,1 | 5,5 |
| 7. Baltasinsky. | 59,4 | 6,7 |
| 8. Bugulminsky. | 92,1 | -1,3 |
| 9. Buinsky. | 58,9 | 9,1 |
| 10. Bavlinsky. | 61,5 | 2,5 |
| 11. Zainsky. | 84,3 | 3,1 |
| 12. Kazansky. | 67,4 | 7,2 |
Continuation of Table 4.1.
| 13. Laishevsky. | 54,5 | 20,9 |
| 14. Kamsko-Ustinsky. | 80,1 | 0,4 |
| 15. Kukmorsky. | 74,2 | 8,1 |
| 16. Kulinginsky. | 67,5 | 1,1 |
| 17. Mamadyshsky. | 56,7 | 11 |
| 18. Menzelinsky. | 87,2 | -2,1 |
| 19. Muslyumovsky. | 74,9 | 5,7 |
| 20. Nizhnekamsk. | 74,0 | 6,8 |
| 21. Novo-Sheshminsky. | 63,4 | 5,9 |
| 22. Nurlatsky. | 85,9 | -4,5 |
| 23. Nab. Chelny | 59,3 | 9,4 |
| 24. Sabinsky. | 78,2 | 1,4 |
| 25. Sarmanovsky. | 79,9 | 3,2 |
| 26. JSC “TATSOT”. | 56,9 | 9,1 |
| 27. Tyulyachinsky. | 78,1 | 4,4 |
| 28. Tetyushsky. | 80,2 | 0,6 |
| 29. Cheremshansky. | 67,5 | 10,4 |
| 30. Atninsky. | 89,2 | 0,8 |
| 31. Aksubaevsky. | 90,5 | 0,7 |
| 33. Rybnoslobodsky. | 91,1 | 0,1 |
| 34. Design Bureau “Tatar” | 58,4 | 13,4 |
| 35. Drozhzhanovsky. | 77,9 | 0,3 |
| 36. Alekseevsky. | 83,8 | 0,6 |
| 37. Pestrechinsky. | 79,3 | 2 |
| 38. Vysokogorsky. | 69,2 | 3,2 |
Rice. 4.1. The relationship between the financial dependence of the subsidiaries of the holding OJSC “Tatarstan Sote” and the level of profitability of their sold products in 2003.
As shown in Fig. 4.1, the pair correlation coefficient (R) was 0.791, which confirms the fairly high quality of the resulting regression model.
In general, the correlation and regression analysis carried out confirms our earlier conclusion about the need to gradually reduce the level of financial dependence (the share of borrowed funds in the overall structure of financing sources) both for Tatarstan Sote OJSC as a whole and for its individual branches. In other words, with a decrease in the share of borrowed funds, the profitability of the activities of dairy plants that are part of the Tatarstan Sote OJSC holding is steadily increasing. This is understandable: interest on loans is still quite expensive, which increases the cost of production, and untimely payment of the loan itself or interest on it, as well as untimely return of accounts payable, entails fines and penalties, which also increases the cost of production and, accordingly, reduces profits and profitability.
5. Regulatory support of proposals.
The basis for the financial activities of Tatarstan Sote OJSC in general and the management of its financial stability in particular is the following regulatory legal acts in force on the territory of the Russian Federation:
1. Civil Code of the Russian Federation.
2. Federal Law on Joint Stock Companies (adopted in 2001).
3. Federal Law on the Securities Market (adopted in 1996)
4. Law on the Protection of the Rights and Legitimate Interests of Investors (adopted in 1999, as amended in 2002)
5. Instructions and regulations of the Federal Commission for the Securities Market (FCSM of the Russian Federation).
6. Regulatory acts of local authorities, etc.
The financial activity of an enterprise created in the organizational and legal form of a joint stock company has its own specifics, the study of which is devoted to this section of the thesis. Joint-stock ownership is a natural result of the process of development and transformation of private property, when at a certain stage of development the scale of production, the level of technology, and the financial organization system create the prerequisites for a fundamentally new form of organization of production based on the voluntary participation of shareholders.
The joint stock form allows you to attract the capital of many people into one enterprise, even those who themselves cannot, for any reason, engage in entrepreneurial activity. In addition, limiting liability to the size of the contribution made, together with its high diversification, makes it possible to invest in very promising, but also high-risk projects, significantly accelerating the implementation of scientific and technological progress. There are also many other positive aspects of the joint-stock form of ownership, making it truly universal and applicable wherever there is a need and opportunity to limit the extent of the entrepreneur’s liability.
The latter circumstance is especially important in an unstable economy, when an unforeseen production situation can lead to huge losses and debts, which may not be covered by all available property. Individual entrepreneurs and some legal entities that have a different organizational and legal form are subject to similar liability. Joint-stock companies make it possible to use material and other resources more efficiently and to optimally combine the personal and public interests of all participants.
Joint-stock companies, which are the main form of organization of modern large enterprises and organizations around the world, represent the most advanced legal mechanism for organizing the economy based on the pooling of property of individuals, corporations of various types and other bodies. The main features of this type of society are:
a) division of share capital into equal, freely tradable shares - shares;
b) limiting the liability of participants for the obligations of the company only to contributions to the capital of the company;
c) the statutory form of the association, which allows you to easily change the number of participants and the size of the share capital;
d) separation of general management from the management of the enterprise itself, which is concentrated in the hands of a special body - the board (directorate) of the company.
Joint stock companies have a number of advantages compared to other forms of ownership.
Firstly, the company has the opportunity to attract funds from shareholders to replenish the authorized capital and expand its activities, and these funds are not subject to return (except for the complete liquidation of the company), since the shares are not redeemed by the company, but only resold to other shareholders.
Secondly, the general management of the company’s activities is separated from specific management, which makes it possible to recruit and select the most suitable managers and directors, forcing shareholders to take seriously the selection of management personnel, since each shareholder is responsible for the effective operation of the company with invested funds.
Thirdly, it creates the possibility of actually transforming the entire workforce of the enterprise into owners by each of them acquiring shares in the company.
Fourthly, it is possible to attract your regular counterparties to the shareholders, thereby creating a common interest in the results of the company’s activities. Also, the company itself can purchase securities of other companies, thereby forming entire networks of organizations interested in each other’s work, connected by ownership relations and the right to participate in management.
Thus, a joint stock company, uniting all participants on a single legal basis, provides a unique form of realization of collective property, while creating interest in the final results of the work. The issue and distribution of shares provides a real opportunity to control and manage activities on the part of shareholders.
A joint stock company is one of the organizational and legal forms of enterprises. It is created by centralizing funds (pooling capital) of various entities, carried out through the sale of shares in order to carry out business activities and make a profit.
A joint stock company in accordance with the Civil Code of the Russian Federation of October 21, 1994. and the Federal Law “On Joint-Stock Companies” recognizes a commercial organization whose authorized capital is divided into a certain number of shares certifying the obligatory rights of the company’s participants (shareholders) in relation to the company. Individuals and legal entities can act as participants in the combination of capital by creating a joint-stock company (participants of the company).
At the same time, the participants are not liable for the obligations of the company and bear the risk of losses associated with its activities, within the limits of the value of the shares they own. Participants who have not fully paid for the shares bear joint liability for the obligations of the company to the extent of the unpaid portion of the value of the shares they own.
In the process of creating a company, its founders combine their property under certain conditions recorded in the constituent documents of the company. On the basis of such combined capital, economic activities will be conducted in the future with the aim of making a profit.
The contribution of a company participant to the combined capital can be cash, as well as any material assets, securities, rights to use natural resources and other property rights, including intellectual property rights. The value of the property contributed by each founder is determined in monetary form by a joint decision of the company's participants. The combined property, valued in monetary terms, constitutes the authorized capital of the company. The latter is divided into a certain number of equal shares. Evidence of the contribution of such shares is a share, and the monetary expression of this share is called the par value (par value) of the shares.
Thus, a joint stock company has an authorized capital divided into a certain number of shares of equal par value, which are issued by the company for circulation on the securities market. Each participant in the joint capital is allocated a number of shares corresponding to the size of the share contributed by him. The owners of the shares - shareholders - are the so-called shared owners.
A joint stock company is a legal entity. The procedure for its organization is regulated by the legislation of the Russian Federation. A joint stock company acquires the rights of a legal entity from the moment of its registration with the State Registration Chamber or other authorized state body. Upon registration, a Certificate of Registration of the joint stock company is issued, which indicates the date and number of state registration, the name of the company, as well as the name of the registering authority. The company is a legal entity and owns separate property, which is accounted for on its independent balance sheet, and can acquire and carry out property and personal non-property rights, bear responsibilities, be a plaintiff and defendant in court.
The Company has civil rights and bears the responsibilities necessary to carry out any types of activities not prohibited by the legislation of the Russian Federation. Companies can engage in types of activities the liver of which is determined by the legislation of the Russian Federation only on the basis of an appropriate permit (license). If the conditions for granting a special permit (license) to engage in a certain type of activity provide for the requirement to engage in such activity as exclusive, then the company during the period of validity of the special permit (license) has no right to carry out other types of activities, with the exception of the types of activities provided for by the special permit (license). ) and related ones.
The functioning of a joint stock company is carried out with mandatory compliance with the conditions of economic activity established by Russian legislation. As a legal entity, the company is the owner of: property transferred to it by the founders; products produced as a result of economic activities; income received and other property acquired by him in the course of his activities. The company has complete economic independence in determining the form of management, making business decisions, sales, setting prices, remuneration and distribution of profits.
The life of the company is not limited or is established by its participants.
A joint stock company is created and operates on the basis of a charter - a document that defines the subject and goals of creating the company, its structure, the procedure for managing affairs, the rights and obligations of each co-owner.
A company can be open or closed, which is reflected in its charter and corporate name.
Shareholders of an open company may alienate their shares without the consent of other shareholders of this company. Such a company has the right to conduct an open subscription for the shares it issues and carry out their free sale in accordance with the legislation of the Russian Federation. An open company has the right to conduct a closed subscription for the shares it issues, except for cases where the possibility of conducting a closed subscription is limited by the charter of the company or the requirements of legal acts of the Russian Federation. The number of shareholders of an open company is not limited.
The main characteristics of an open society are the scale of the pooled capital and the large number of owners. The main idea that is usually pursued when creating this form of private enterprise is to attract and concentrate large amounts of money (capital) from individuals and legal entities with the aim of using them to make a profit.
A company whose shares are distributed only among its founders or another predetermined circle of persons is recognized as a closed company. Such a company does not have the right to conduct an open subscription for the shares it issues or otherwise offer them for acquisition to an unlimited number of persons. The number of shareholders of a closed company should not exceed fifty. If the number of shareholders of a closed company exceeds the limit established by this paragraph, the specified company must be transformed into an open company within one year. If the number of its shareholders does not decrease to the limit established by this paragraph, the company is subject to liquidation through a judicial procedure.
Shareholders of a closed company have a preemptive right to purchase shares sold by other shareholders of this company at the offer price to another person. The company's charter may provide for the company's preemptive right to purchase shares sold by its shareholders, if the shareholders have not exercised their preemptive right to purchase shares.
The procedure and timing for exercising the pre-emptive right to purchase shares sold by shareholders are established by the company's charter. The period for exercising the pre-emptive right cannot be less than 30 or more than 60 days from the moment the shares are offered for sale.
In my opinion, in general, the main advantage of joint stock companies is that this form of ownership allows many people to be co-owners of large factories and plants and to implement the main functions of a shareholder, such as the function of participating in the management of a joint stock company and receiving income in the form of dividends and exchange rate growth share price.
A JSC can be created by establishing again and by reorganizing an existing legal entity (merger, accession, division, spin-off, transformation). The company is considered created from the moment of its state registration.
The creation of a company by incorporation is carried out by decision of the founders (founder). The decision to establish a company is made by the constituent meeting. If a company is founded by one person, the decision on its establishment is made by that person alone. The decision to establish a company must reflect the voting results of the founders and the decisions they made on the issues of establishing the company, approving the company’s charter, and electing the company’s management bodies. The decision to establish a company, approve its charter and approve the monetary value of securities, other things or property rights or other rights with a monetary value contributed by the founder in payment for the shares of the company is adopted by the founders unanimously.
The election of the company's management bodies is carried out by the founders with a three-quarters majority of votes, which represent the shares to be placed among the founders of the company.
The founders of the company enter into a written agreement between themselves on its creation, which determines the procedure for their joint activities to establish the company, the size of the authorized capital of the company, the categories and types of shares to be placed among the founders, the amount and procedure for their payment, the rights and obligations of the founders to create the company.
In our opinion, in general, the financial advantage of the joint-stock form of ownership lies in the possibility of quite quickly mobilizing additional financial resources (through an additional issue of shares, a large loan from a commercial bank).
In general, it is the joint-stock form of ownership in combination with the holding management structure that gives Tatarstan Sote OJSC quite significant opportunities for centralized management of the financial stability of its subsidiaries.
Conclusion
At the end of the thesis, it is necessary to summarize the following main conclusions and recommendations:
1. Financial stability management is a scientifically based process for optimizing the level of financial dependence and efficiency of an enterprise. Financial dependence is determined by the ratio of borrowed and equity funds of a particular enterprise. The efficiency of an enterprise is not limited to indicators of its level of profitability. Efficiency also includes socio-economic indicators, such as, in particular, labor productivity and wages.
2. In a broad sense, financial stability analysis can be used: as a tool for justifying short-term and long-term economic decisions and the feasibility of investments; as a means of assessing the skill and quality of management; as a way to predict future results. Modern financial analysis is constantly changing under the influence of the growing influence of the environment on the operating conditions of enterprises. In particular, its target orientation is changing: the control function recedes into the background and the main emphasis is on moving to justifying management and investment decisions, determining the directions of possible capital investments and assessing their feasibility.
3. The practical part of this thesis research was carried out on the materials of Tatarstan Sote OJSC. The supreme management body of Tatarstan Sote OJSC is the General Meeting of Shareholders. The holding scheme is that each of the dairy plants owns a certain stake in the parent enterprise - OJSC Tatarstan Sote, which, in turn, has a controlling stake in the voting shares in the authorized capital of each of the dairy plants. Thus, Tatarstan Sote OJSC has a direct influence on the strategy of financial and economic development of each of the structures included in the holding, however, the dairy plants themselves have the right, primarily through the General Meeting of Shareholders and other procedures provided for by the legislation of the Russian Federation on joint stock companies, to provide influence on the development of the holding as a whole.
4. An assessment of the financial stability of Tatarstan Sote OJSC, in particular, allowed us to conclude that in 2003 the amount of inventory in the enterprise’s warehouses increased quite significantly - by 678,663 thousand rubles. or by 158.4% compared to the beginning of the year. In our opinion, this trend should be considered as clearly negative - there is clearly overstocking, which negatively affects both the liquidity and financial stability of the enterprise. During 2003, the own working capital of Tatarstan Sote OJSC continued to remain negative and, moreover, decreased. For any industrial enterprise, such a situation is extremely alarming. It means that current assets are financed entirely by borrowed capital, and, moreover, part of the enterprise’s needs for fixed assets is also financed by borrowed capital.
5. The values of the enterprise’s financial risk, debt and autonomy coefficients are extremely unsatisfactory. In fact, the enterprise under study as a whole, according to 2003 data, is extremely financially unstable. For an ordinary enterprise, the situation described above could be fraught with bankruptcy. However, OJSC “Tatarstan Sote” occupies a certain, socially significant niche in the economy of the Republic of Tatarstan. On the one hand, this imposes certain restrictions on the enterprise (the impossibility of a rapid rise in prices due to a possible rapid increase in costs, the need for detailed coordination of pricing policy with the Government of the Republic of Tajikistan). On the other hand, the special status of a holding company in a strategic perspective can lead to increased irresponsibility in the field of financial management.
6. In general, financial stability management is spontaneous, reactive, and non-systemic in nature. It is poorly integrated into the overall enterprise management system. There is no effective accounts receivable management system, especially in terms of doubtful and overdue debts. Trends in changes in the financial stability ratios of Tatarstan Sote OJSC in 2003 indicate an increase in the threat of loss of financial independence.
7. We have proposed a scheme for the process of managing the financial stability of an enterprise, which is cyclical in nature: its initial stage is a comprehensive assessment of financial stability, which includes a study of macroeconomic and industry conditions, as well as the relationship between profitability and financial stability at the holding enterprises (see Chapter 4 of the diploma research ). Finally, after implementing all management actions, identifying factors and justifying reserves for increasing investment attractiveness, planning and implementing specific activities, as well as monitoring their implementation, the process of managing the financial stability of Tatarstan Sote OJSC must again return to the assessment procedure. This approach makes it possible to clearly determine what results specific management actions led to, and thus makes it possible to directly assess their effectiveness.
8. We have studied the relationship between the coefficients of financial dependence of the subsidiaries of the Tatarstan Sote holding and the level of profitability of their sold products in 2003. In general, the correlation and regression analysis carried out confirms our earlier conclusion about the need to gradually reduce the level of financial dependence (share borrowed funds in the overall structure of financing sources) both for Tatarstan Sote OJSC as a whole and for its individual branches. In other words, with a decrease in the share of borrowed funds, the profitability of the activities of dairy plants that are part of the Tatarstan Sote OJSC holding is steadily increasing. This is understandable: interest on loans is still quite expensive, which increases the cost of production, and untimely payment of the loan itself or interest on it, as well as untimely return of accounts payable, entails fines and penalties, which also increases the cost of production and, accordingly, reduces profits and profitability.
The main management conclusion, therefore, is the need for a systematic reduction in the share of borrowed funds in the structure of sources of financing of Tatarstan Sote OJSC, coupled with increasing the efficiency of using equity capital and increasing financial discipline.
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Plan
The concept of financial stability of an organization.
The essence of liquidity of an organization.
1.The concept of financial stability of an organization
Financial stability - This is the ability of a business entity to function and develop, to maintain a balance of its assets and liabilities in a changing internal and external environment, guaranteeing its solvency and investment attractiveness in the long term within the acceptable level of risk.
A stable financial condition is achieved with adequacy of equity capital, good quality of assets, a sufficient level of profitability taking into account operational and financial risk, adequacy of liquidity, stable income and ample opportunities to attract borrowed funds.
To ensure financial stability, an organization must have a flexible capital structure and be able to organize its movement in such a way as to ensure a constant excess of income over expenses in order to maintain solvency and create conditions for self-financing.
As a result of any business transaction, the financial condition may remain unchanged, improve or worsen. The flow of business transactions carried out daily is, as it were, a “disturber” of a certain state of financial stability, the reason for the transition from one type of stability to another. Knowing the limits of changes in sources of funds to cover capital investments in fixed assets or production costs makes it possible to generate such flows of business transactions that lead to an improvement in the financial condition of the organization and an increase in its sustainability.
The financial condition of the organization, its sustainability and stability depend on the results of its production, commercial and financial activities. If production and financial plans are successfully implemented, then this has a positive effect on the financial position of the organization. On the contrary, as a result of a decline in production and sales volumes, there is an increase in its cost, a decrease in revenue and the amount of profit and, as a consequence, a deterioration in the financial condition of the organization and its solvency. Consequently, a stable financial condition is the result of competent, skillful management of the entire complex of factors that determine the results of the organization’s economic activities.
A stable financial position, in turn, has a positive impact on the implementation of production plans and the provision of production needs with the necessary resources. Therefore, financial activity as an integral part of economic activity should be aimed at ensuring the systematic receipt and expenditure of monetary resources, implementing accounting discipline, achieving rational proportions of equity and borrowed capital and its most efficient use.
In the process of operating, investment and financial activities, a continuous process of capital circulation occurs, the structure of funds and sources of their formation, the availability and need for financial resources and, as a consequence, the financial condition of the organization, the external manifestation of which is solvency, change.
The financial condition can be stable, unstable (pre-crisis) and crisis. An organization's ability to make payments on time, finance its operations on an extended basis, withstand unexpected shocks and maintain its solvency in adverse circumstances indicates its sound financial condition, and vice versa.
Solvency – a form of external manifestation of the stability of the financial condition of the organization.
Financial stability – a form of internal manifestation of the stability of the financial condition of the organization, ensuring stable solvency, which is based on the balance of assets and liabilities, income and expenses, positive and negative cash flows.
Financial stability is a goal-setting property of assessing the real financial condition of an organization, and the search for intra-economic opportunities, means and ways to strengthen it determines the nature of the analysis and content of the management process. Thus, financial stability is the guaranteed solvency and creditworthiness of an organization as a result of its activities based on the effective formation, distribution and use of financial resources. At the same time, this is the provision of reserves with its own sources of their formation, as well as the ratio of own and borrowed funds - sources of covering the organization’s assets.
Solvency is an important component of financial sustainability. Solvency is calculated according to balance sheet data, based on the liquidity characteristics of current assets. Thus, solvency, characterizing the degree of liquidity of current assets, indicates primarily the financial capabilities of the organization to fully pay off its obligations as the debt matures.
In modern economic literature, the concepts of “liquidity” and “solvency” are often equated, which in our opinion is incorrect.
Solvency means that the organization has sufficient funds to pay accounts payable that require immediate repayment. An organization is considered solvent if its available funds, short-term financial investments (securities, temporary financial assistance to other organizations) and active settlements (settlements with debtors) cover its short-term obligations (short-term loans and borrowings, accounts payable).
Features of a market economy and new forms of management determine the solution of new problems, one of which today is ensuring the economic stability of the development of an enterprise. To ensure the “survival” of an enterprise in market conditions, management personnel need to assess the possible and appropriate pace of its development from the perspective of financial support, identify available sources of funds, thereby contributing to the sustainable position and development of business entities. Determining the sustainability of the development of commercial relations is necessary not only for the organizations themselves, but also for their partners, who rightly want to have information about the stability, financial well-being and reliability of their customer or client. Therefore, an increasing number of counterparties are beginning to get involved in research and assessment of the financial stability of a particular organization.
The concept of financial stability is interpreted quite unambiguously by various Russian authors; there are no significant differences in the definition of this category.
So, according to M.N. Kreinina, financial stability is the stability of the financial position of an enterprise, ensured by a sufficient share of equity capital as part of the sources of financing. A sufficient share of equity capital means that borrowed sources of financing are used by the enterprise only to the extent that it can ensure their full and timely repayment.
A.Yu. Romanov believes that the economic essence of the financial stability of an enterprise is the provision of its reserves and costs with sources of their formation.
A.V. Grachev understands the financial stability of an enterprise as the solvency of the enterprise over time, subject to the condition of financial balance between its own and borrowed financial resources.
In turn, financial balance is the ratio of an enterprise’s own and borrowed funds in which both previous and new debts are fully repaid using its own funds. Moreover, if there is no source for repaying new debts in the future, then certain boundary conditions are established for the use of existing own funds in the present.
According to I.T. Balabanov, a financially stable enterprise is considered to be one that, at its own expense, covers funds invested in assets (fixed assets, intangible assets, working capital), does not allow unjustified receivables and payables, and pays its obligations on time.
Thus, financial stability is a goal-setting property of assessing the real financial condition of an organization, and the search for intra-economic opportunities, means and methods of strengthening it determines the nature of the conduct and content of economic analysis. Thus, financial stability is the guaranteed solvency of an enterprise as a result of its activities based on the effective formation, distribution and use of financial resources. At the same time, this is the provision of reserves with their own sources of their formation, as well as the ratio of own and borrowed funds - the sources of covering the assets of the enterprise.
Financial stability is a certain state of the company’s accounts, guaranteeing its constant solvency. Indeed, as a result of any business transaction, the financial condition may remain unchanged, improve or worsen. The flow of business transactions carried out daily is, as it were, a “disturber” of a certain state of financial stability, the reason for the transition from one type of stability to another. Knowing the limits of changes in the sources of funds to cover capital investments in fixed assets or production costs makes it possible to generate such flows of business transactions that lead to an improvement in the financial condition of the enterprise and an increase in its sustainability.
When studying financial stability, a separate concept is identified - “solvency”, which is not identified with the previous one. Solvency is an integral component of financial stability. The sustainability and stability of the financial condition depend on the results of the production, commercial, financial and investment activities of the enterprise, and a stable financial condition, in turn, has a positive impact on its activities. The stability of the financial condition of the organization determines the ratio of the values of its own and borrowed sources of reserve formation and the cost of the reserves themselves. The provision of reserves and costs with sources of formation, as well as the effective use of financial resources, is an essential characteristic of financial stability, while solvency is its external manifestation. At the same time, the degree of provision of inventories and costs is the reason for one or another degree of solvency, the calculation of which is made on a specific date. Consequently, the form of manifestation of financial stability can be solvency.
In the economic literature of foreign countries, in the works of authors engaged in traditional analysis of balance sheet liquidity, it is established that the main goal of liquidity analysis is to make a judgment about the solvency of the enterprise. In this case, an organization that is able to fulfill its obligations in a timely manner is considered solvent. Here, the concept of solvency covers not only absolute or short-term, but also long-term solvency.
According to other foreign authors, the answer to the question of solvency is given from the point of view of the “rule of minimum financial balance”, i.e. A solvent enterprise is one that has sufficient own sources of working capital. In the domestic economic literature there are also different points of view about the content of solvency.
Solvency is calculated according to balance sheet data, based on the liquidity characteristics of current assets, i.e. the time it takes to convert them into cash. Thus, solvency, characterizing the degree of liquidity of current assets, indicates, first of all, the financial capabilities of the organization to fully pay off its obligations as the debt matures.
Solvency and financial stability are the most important characteristics of the financial and economic activities of an enterprise in a market economy. The concept of “financial stability” of an organization is multifaceted; it is broader in contrast to the concepts of “solvency” and “creditworthiness”, since it includes an assessment of various aspects of the organization’s activities.
In the early 90s. The margin of financial stability of an enterprise was characterized by a reserve of sources of own funds, provided that its own funds exceed borrowed funds. It was also assessed by the ratio of own and borrowed funds in the assets of the enterprise, the rate of accumulation of own funds, the ratio of long-term and short-term liabilities, and the sufficient provision of material working capital from its own sources.
Note that in world practice, the difference in interpretation of the concept of “financial stability” is explained by the presence of two approaches to balance sheet analysis: traditional and modern functional analysis of balance sheet liquidity. Given the presence of these two different approaches, analysts define the concept of financial stability in different ways.
The first approach, based on the traditional analysis of balance sheet liquidity, the financial stability of an enterprise is determined by rules aimed at simultaneously maintaining the balance of its financial structures and avoiding risks for investors and creditors, i.e. traditional financial standard rules are considered, which include:
- - the rule of minimum financial balance, which is based on the presence of mandatory positive liquidity, i.e. it is necessary to provide for a margin of financial strength, which is the amount of the excess of current assets over the excess of liabilities due to the risk of a discrepancy in the volume, time, turnover rate of short-term elements of the asset and liability of the balance sheet;
- - maximum debt rule - short-term debts cover short-term needs; the traditional financial standard sets the limit for covering the enterprise's debt with its own sources of funds; long- and medium-term debts should not exceed half of permanent capital, which includes own sources of funds and equivalent long-term borrowed sources of funds;
- - the maximum financing rule takes into account the implementation of the previous rule: the recourse to borrowed capital should not exceed a certain percentage of the amounts of all provided investments, and the percentage fluctuates depending on different lending conditions.
The second approach, based on a functional analysis of balance sheet liquidity, financial stability is determined subject to the following requirements:
- 1. Maintaining financial balance by including in the stable allocation of funds covered by constant capital, in addition to investments in fixed and partially in current assets, which is understood as part of the equity capital used for their formation. Thus, stable resources - equity capital and equivalent funds - must completely cover stable assets. A ratio of less than 100 percent indicates that part of the allocated funds was financed by unstable resources in the form of short-term liabilities, which reveals the financial vulnerability of the enterprise. As for short-term financing, it is assumed that the amount of need for current assets (in the amount of sources of own working capital) changes during the reporting period and these changes can lead to:
- - or to excessive provision of current assets, as a result of which free sources of own working capital temporarily appear;
- - or to the unsatisfaction of the need for current assets, as a result of which it is necessary to use borrowed funds.
- 2. Assessment of total debt - the approaches (functional and traditional analysis of balance sheet liquidity) to the analysis of financial stability are the same. But here we add a definition of the level of the organization’s total debt, established by relating the amount of all borrowed funds to the amount of its own. Compliance with the above requirements allows us to ensure the so-called basic equality of funds.
The ability of an organization to make timely payments, finance its activities on an expanded basis, and maintain its solvency in adverse circumstances indicates its stable financial condition.
A review of various approaches to defining sustainability showed that the variety of factors influencing sustainability divides it into internal and external, and the variety of causes determines different facets of sustainability as shown in Figure 1.
Figure 1. Types of sustainability of a commercial organization
In this case, internal stability is understood as such a state of the organization, i.e. the state of the structure of production and provision of services, their dynamics, which ensures consistently high performance results. Its achievement is based on the principle of active response to changes in the business environment.
External sustainability is determined by the stability of the economic environment within which the organization operates, and is achieved by an appropriate management system throughout the country, i.e. control from outside.
“Inherited” stability is the result of the presence of a certain margin of financial strength of the organization, formed over a number of years, protecting it from accidents and sudden changes in external, unfavorable, destabilizing factors.
Overall sustainability reflects the effectiveness of investment projects; level of material and technical equipment, organization of production, labor, management; involves the movement of cash flows that ensure profit and allow the efficient development of production.
Financial (directly, or actually) sustainability reflects a stable excess of income over expenses and the state of resources, which ensures free maneuvering of the organization’s funds and, through their effective use, contributes to the uninterrupted process of production and sales, expansion and renewal. It reflects the ratio of equity and borrowed capital, the rate of accumulation of equity capital as a result of current, investment and financial activities, the ratio of mobile and immobilized funds of the organization, sufficient provision of reserves from its own sources.
It is undeniable that financial stability is the main component of the overall sustainability of an organization, since it is a characteristic indicator of a steadily occurring excess of income over expenses. Determining its boundaries is one of the most important economic problems in a market economy, since insufficient financial stability can lead to the insolvency of the organization, and excessive financial stability will hinder development, burdening costs with excess inventories and reserves. Consequently, financial stability should be characterized by a state of financial resources that, on the one hand, meets the requirements of the market, and on the other hand, meets the development needs of the organization.
Thus, the essence of financial stability is determined, among other things, by the effective formation, distribution, and use of financial resources, and the forms of its manifestation can be different.
- - current - at a specific point in time;
- - potential - associated with transformations and taking into account changing external conditions;
- - formal - created and supported by the state, from the outside;
- - real - in a competitive environment and taking into account the possibilities of expanded production.
Figure 2. Types of financial stability of a commercial organization
The financial activity of any organization is a complex of interrelated processes that depend on numerous and varied factors. There are external and internal factors that influence the financial condition of an enterprise. The reasons for the unfavorable position of the organization are primarily systemic macroeconomic reasons, especially in an unstable economy. In our opinion, when studying external factors that shape the financial stability of an organization, it is necessary to highlight the following main characteristics:
- - close relationship between external factors and internal factors and among themselves;
- - the complexity of external factors, the difficulty or lack of their quantitative expression;
- - uncertainty, which is a function of the amount and confidence in the information that the enterprise has regarding the impact of a particular factor; Therefore, the higher the uncertainty of the external environment, the more difficult it is to identify to what extent and to what consequences this or that external factor will lead.
Thus, in an unstable economy, it is almost impossible to use a quantitative assessment method that allows one to organize the external factors being studied and brings them into a comparable form. Hence, it is almost impossible to make any accurate forecasts regarding the formation of the financial stability of an enterprise (taking into account the study of external factors), which is why, in our opinion, they are quite rightly classified as uncontrollable. But we especially emphasize that external factors influence internal ones, as if they manifest themselves through them, changing the quantitative expression of the latter. For example, the spread of non-payments in the economy leads to an increase in receivables and payables, and in their structure - to an increase in the volume of overdue and doubtful debts. It should be noted the direct (bankruptcy of debtors) and indirect (social) impact of external factors on financial stability. This division allows a more correct assessment of the nature and degree of their influence on the sustainability of the organization. Of course, individual enterprises are unable to combat many external factors, but in the current conditions they can only pursue their own strategy, which allows them to mitigate the negative consequences of the general decline in production.
External factors that are beyond the control of the enterprise, and internal factors that depend on the existing system of organizing its work, are classified according to their place of origin.
In general, we can say that financial stability is a complex concept that also has external forms of manifestation, which is formed in the process of all financial and economic activities under the influence of many different factors.
Currently, more and more attention is paid to the organization and functioning of the financial and economic services of the enterprise and the creation of a mechanism for managing financial stability.
Therefore, we consider it necessary to consider in more detail the target setting for managing the financial stability of an organization.
Enterprise financial stability management system Formation of a management system for the financial stability of an enterprise within the framework of financial resource management Even with the relative stability of the development of economic relations in modern economic conditions, the study of crisis phenomena, strategies and tactics for managing them has not lost its relevance and is one of the most important tasks in various fields of knowledge. The financial stability of an enterprise is constantly being determined under the influence of external and internal factors. If external factors include, for example, the ability to attract investors, tax policy, competitiveness, then internal factors include a constant choice between paying accounts payable, paying accrued income and creating your own sources for further development and economic growth. In the most general form, financial stability can be characterized as follows: the state of the process of formation and use of financial resources of an economic entity, which ensures its development based on an increase in the value of capital while maintaining an appropriate level of solvency and creditworthiness; a state in which the enterprise mainly covers funds invested in assets from its own sources, does not allow unjustified receivables and payables and pays its obligations on time; provision of reserves with sources of their formation. The degree of provision of reserves and costs is the reason for the level of solvency; the state of the enterprise, formed under the influence of a system of factors of the external and internal environment, characterized by economic indicators of sustainability and determining the dynamics of its development prospects; the stability of the financial position of the enterprise, ensured by a sufficient share of equity capital as part of the sources of financing. A financial stability management system can be defined as an ordered set of interrelated and interdependent elements that work together to achieve a certain state of financial resources within the limits of the sustainability of the enterprise’s production and financial system. When characterizing the issues of managing the financial stability of an enterprise, it is necessary to note the following. Particular attention in the literature on financial management is paid to the issues of assessing financial stability, while specialists bypass the issues of organizing financial stability management. This circumstance allows us to conclude that it is necessary to systematize research in the field of financial stability management and formulate their results in the form of an integrated system that would include such elements as collecting, processing and providing information, making management decisions and organizing means of control over their implementation. In the work of Roshchupkina I.V. The financial stability management process is presented in the form of the following diagram (using the example of an industrial enterprise):
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Roshchupkina I.V. Features of building a management system for the financial stability of production systems // Financial Director. - 2004. - No. 11.
Introduction
In market conditions, it is very important for any organization to ensure stability, reliability of its activities, and efficient use of its own capital. In other words, every organization strives to achieve survival in the market. The key to survival and the basis for a strong position of an enterprise is its financial stability. Financial stability is a reflection of the stable excess of income over expenses, in which a stable cash flow is achieved, allowing the enterprise to ensure its current and long-term solvency; financial stability ensures free maneuvering of the enterprise’s funds and, through their effective use, contributes to the uninterrupted process of production and sales of products. Therefore, financial stability is formed in the process of all financial and economic activities and is the main component of the overall sustainability of the enterprise. In modern economic conditions, the activities of each business entity are the subject of attention of a wide range of market participants interested in the results of its functioning, therefore, issues of managing financial stability are always relevant and significant for the enterprise. First of all, the degree of financial stability of an enterprise attracts the attention of investors and creditors - based on its assessment, they make decisions on investing funds in the relevant enterprise. Thus, if an enterprise is financially stable, then it has a number of privileges over other enterprises of the same profile in obtaining loans, attracting investments, in choosing suppliers and in selecting qualified personnel.
Obviously, if an organization is financially solvent, then it will not have contradictions with the state and society, since taxes will be paid at the appropriate time to the budget, contributions to social funds, wages to workers and employees, dividends to shareholders, and banks will be provided with repayment of loans and payment of interest on them.
The higher the stability of an enterprise, the more independent it is from sudden changes in market conditions; in turn, insufficient financial stability can lead to a lack of funds for the development of production, insolvency and, ultimately, bankruptcy.
Financial stability analysis provides an opportunity to evaluate:
· composition and placement of assets of an economic entity;
· dynamics and structure of sources of asset formation;
· degree of business risk, in particular the possibility of repaying obligations to third parties;
· capital adequacy for current activities and long-term investments;
· need for additional sources of financing;
· ability to increase capital;
· rationality of borrowing funds;
· validity of the policy for the distribution and use of profits.
Thus, the object of study of the course work is the financial stability of the enterprise, and the subject of the study is the factors that determine the level of financial stability of the enterprise.
The objectives of the course work are to consider the following aspects:
1. theoretical foundations for managing the financial stability of an enterprise;
2. basic methods of analyzing the financial stability of an enterprise;
3. measures to improve the financial condition of the enterprise.
The concept of financial sustainability and financial sustainability management
Management in the broad sense of the word always presupposes the presence of an object and a subject of management. So in the case of managing the financial stability of an enterprise: the object of management is the movement of financial resources and financial relations between business entities and their divisions in the economic process, and the subject of management is a special group of people who, through various forms of management influence, carry out the purposeful functioning of the object.
As for the concept of financial stability itself, it can be characterized from two sides and considered from two perspectives. The differences in these approaches are due to the fact that, on the one hand, the financial stability of an enterprise can be defined as a characteristic of the current financial state of the enterprise, and on the other hand, financial stability is considered as an assessment of the stability of the enterprise's functioning in the future. In accordance with the first approach, the external manifestation of the financial stability of an enterprise is its solvency. An enterprise is considered solvent when its available funds, short-term financial investments (securities, temporary financial assistance to other enterprises) and active settlements (settlements with debtors) cover its short-term liabilities: that is, the current assets of the enterprise are greater than or equal to the current liabilities of the enterprise. According to the second approach, the definition of financial stability can be formulated as follows: financial stability reflects the financial condition of the enterprise, in which it is capable, through the rational management of material, labor and financial resources, of creating such an excess of income over expenses in which a stable cash flow is achieved, allowing the enterprise to ensure its long-term solvency, as well as satisfy the investment expectations of the owners. By this definition, financial stability is a broader concept than just solvency. Thus, the appropriate approach involves ensuring the financial independence of the organization in the long term. Financial stability is characterized, therefore, by the ratio of own and borrowed funds. If the structure of “equity - borrowed funds” has a significant preponderance in the direction of debts, then this indicates that the company has a tendency to bankruptcy in the future, especially if several creditors demand the return of money at an “inconvenient” time for the company.
So, financial stability is the key to the stable existence and functioning of an enterprise. Therefore, the assessment of financial stability and its management deserves special attention. To do this, the following steps should be taken:
· analysis of balance sheet liquidity,
· horizontal and vertical balance analysis,
· calculation of relative liquidity indicators,
· determination of the size of the sources of funds available to the enterprise for the formation of its reserves and costs,
· calculation of financial stability ratios.
Analysis of balance sheet liquidity and its horizontal and vertical analysis
The need to analyze balance sheet liquidity arises in market conditions due to increased financial restrictions and the need to assess the solvency of the organization, i.e. its ability to timely and fully pay all its obligations.
Balance sheet liquidity is defined as the degree to which an organization's liabilities are covered by its assets, the period of conversion of which into money corresponds to the period of repayment of obligations. Analysis of balance sheet liquidity consists of comparing funds for assets, grouped by the degree of their liquidity and arranged in descending order of liquidity, with liabilities for liabilities, grouped by their maturity dates and arranged in ascending order of maturity.