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Improving the management of capital of industrial enterprises

Contents

Introduction

Relevance of the topic.

Every company's goal is to maximize the profits from its activities. Study of the process formation and functioning of the capital of the enterprise is an important issue, as the effective functioning of business activities includes a set of principles and practices of financial management, which suggest good governance and the distribution of capital enterprise.

The purpose and objectives of the study.

The purpose of this research is the analysis and management of the company capital and the Development of methodological recommendations to improve the management of the industrial enterprise capital. To achieve the goal in the course of the master's work are formulated and solved the following tasks:

The object of the research is the сompany capital management process.

The subject of the research is set of theoretical, methodological and practical aspects of industrial enterprise capital management system.

The practical significance of the results. The result of the research is to provide recommendations to improve the management of the industrial enterprise capital.

1. Theoretical bases of management of the capital of the company

The first section of master's work Theoretical bases of management of the capital of the company provides a definition of the concept of capital determines the capital management objectives, reveals its structure. A capital can be understood as long-term liabilities, as in the western practice of long-term debt accounting for its intended purpose and functions are equal to their own. [4] On the "capital" based on the study of the genesis of the theory of capital is defined as a valuable social wealth that is in constant movement and is able to generate income to its owners, who are carriers of the risk factors and the liquidity and acts as the object of of economic management. Creating an optimal capital structure due to the choice of profitability ratios and risk, as the use of leverage increases risk and leads to a higher level of expected return. The optimal capital structure - a structure that allows you to achieve a balance between risk and return. [3]



Figure 1 – The capital structure of the company
(7 frames, 10 cycles of repetitions, 92 kb)

The capital structure plays an important role in investment decisions owners and financial managers of the enterprise. With registered capital of the company is related decision-making on additional issue of shares in order to increase it. To reserve capital characteristic solutions for their use to cover any losses. With retained earnings associated decisions on its investment in the expansion of the fixed capital. For long-term debt financing solutions are characterized by non-current assets and short-term liabilities - current assets on the formation [6].

2. Characteristics of methodological approaches to the management of the company capital

The second section of master's work Characteristics of methodological approaches to the management of the company capital presented processes for managing capital enterprise. Optimization of the capital structure is one of the most important and complex problems to be solved in the course of the financial management of the enterprise. The optimal capital structure is a ratio of the use of own and borrowed funds, which provide the most effective factor of proportionality between the financial profitability and the coefficient of financial stability.

The main differences between equity and debt funding venture
Figure 2 – The main differences between equity and debt funding venture

The process of optimizing the capital structure of the company is carried out in several stages.

At the first stage the analysis of the size and composition of capital for a number of periods, as well as the analysis of trends in the structure.

At the second stage of the analysis we consider a system of financial stability ratios, determined by the structure of its capital.

The formation of the capital structure of the company should be subject to certain policies. Policy formation of capital structure is to ensure that such a combination of equity and debt, which optimizes the ratio of acceptable risk of financial stability and the high profitability of its own resources.

Capital structure optimization of the enterprise is carried out by various methods. The most important of these methods are:

3. Recommendations to improve the company's capital management system

In the third Recommendations to improve the company's capital management system on the basis of the study will provide recommendations for the improvement of the company's capital management. It is planned to identify the main problems of the company's capital management and the identification of ways to solve them, that will improve the quality of financial policy of the enterprise, which is the functional direction policy equity management of the enterprise.

Conclusion

Overall research is directed at studying modern money management concepts and their application to determine the optimization of the structure of the enterprise financing. In the master's work have been identified and substantiated the essence of the concept of capital, shows the basic principles and methods of capital management, as in the analysis of the financial condition of the company is clearly defined that its successful operation depends on a rational capital structure and efficiency of its use. In writing this essay master?s qualification work is not yet complete. The final completion of the work is scheduled for May 2017. The full text of work and materials on the subject of research can be obtained from the author or his supervisor after that date.

References

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