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Abstract

Introduction

Introduction

Current assets get special importance in the conditions of the market. Because they are an important criterion in the definition of financial condition, liquidity and solvency of the enterprise. It is necessary to increase the management effectiveness of current assets which in many respects define investment capabilities of the enterprise. The enterprise in case of effective management of the current assets can achieve the rational economic situation balanced on liquidities and profitabilities. Therefore the subject of research is topical.
The purpose of the research work is further development of the methodical fundamentals and development of recommendations on the improvement of management of current assets.
Main objectives of research:
–To execute researches of the essence and the significance of current assets
–To analyze the dynamics of current assets of the social production in Ukraine
–To consider the sources of formation of current assets
–To prove the need of the enterprise for current assets

1.Current assets: concept, structure and circulation


Funds of circulation are the enterprise assets involved in service of the process of the circulation of goods.

Revolving funds are a part of business assets of an enterprise which is completely consumed in each technological cycle of manufacture of production and completely transfers its cost to the cost of this production.

Current assets of an enterprise are the sum total of cash facilities of an enterprise that are invested in production revolving funds and funds of circulation for the purpose of the ensuring of steadiness of the production process and the process of the product sales [1].

Funds of circulation are in the constant dynamics and perform a circulation according to the stages:

1.Money – is a preparatory stage and occurs in the sphere of circulation. It is characterized by the transference of the cash assets to the production resources.
2.Production – represents the production process itself, within the framework of which the objects of labour come to the form of the incomplete production first, and then – to the final product.
3.Commodity – represents the process of the product sales, within which the final product is dispatched to the consumers, and the enterprise receives cash assets [3].

1.2. Financing sources of current assets

According to the sources of formation current assets are classified into personal, involved and others.

Personal current assets are a part of proper facilities of an enterprise advanced to the current assets for ensuring the continuous manufacturing-commercial process. Personal current assets are formed due to the profit, that is due to the inner investments, so personal current assets in particular should be the basis and sufficient at least for the satisfaction of the organization needs. For the normal ensuring of the economic activity by the current assets its size is established within 1/3 of personal capital. Personal current assets are the guarantee of financial stability, solvency and investment appeal [4].

Involved current assets are the funds of other enterprises: receiving the commercial credit, debt liability, commodity credit, advance payment. An unplanned source of the formation of the involved current assets is an account payable arising as a result of the lack of personal current assets - short-term obligations of the enterprises to the budget, to the computation documents ,which payment term has not come and have not been paid on term [2].

1.3.Determination of necessity for current assets

The need for current assets is reached at the expense of rationing of current assets.

The rationing of current assets is economically reasonable calculation of the minimum requirement for current assets, which is necessary for ensuring the normal functioning of the enterprise, taking into account the acceleration of the innovative development.
Rationing of current assets lies in setting the standards of expenses or the norms of stocks and the calculation of standards of current assets.

The norm is the relative or minimum size of current assets estimated in accordance with the established procedure on each element which is necessary for the standard calculation.

The standard of current assets is the minimum size of personal current assets in value terms which is necessary for ensuring the continuous work of the enterprise, taking into account the acceleration of the innovative development [8].


Methods of rationing of current assets

1. Direct calculation – is a calculation of standards for each element of current assets in the conditions of the reached organizational-technological level of the production.
2.Analytical – is the carrying out the analysis of available inventory items with their subsequent adjustment and withdrawal of surplus.
3.Coefficient – is a carrying out existing standards (through coefficients) according to change in production in the next period [10].

Conclusion

The financial condition of the enterprise depends on how fast the means enclosed in assets turn into real money. The most important indicators of economic activity of the enterprise profit, volume of investment and volume of realized production directly depend on the speed of rotation of current assets. In management of current assets it is necessary to be guided by the fact that any additional investment in the basic production capital is accompanied by additional increase of current assets in operating activities. The peculiarity of the investment in current assets is the need of providing a continuity of an operational cycle of the enterprise, that is a simultaneous investment of current assets at all its stages.


During the writing of this essay the research work has not finished yet. Final completion: June, 2013. The full text of work and materials on the subject can be received at the author or his supervisor after the specified date.

References

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