Formation and Use of Working Capital

TABLE OF CONTENTS

1 Theoretical bases of formation and use of working capital

1.1 Nature of the working capital of the enterprise and its organization

1.2 Sources of working capital

1.3 Model of use of borrowed working capital enterprises

2 Analysis model for the formation and use of working kapitalana venture of "Time"

2.1 Analysis of the structure of current assets

2.2 Analysis of the use of working capital of the enterprise

2.3 Analysis of net working capital and debt financing models

3 Optimization of working capital by borrowing

Conclusion

List of sources used

Appendix 1

Appendix 2

Appendix 3

INTRODUCTION

Finance companies are cash ratio, and the formation of the related allocation of financial resources. The financial resources of the enterprise have three main functions: building, maintaining optimal structure and productive capacity of the enterprise; support of the current financial and economic activities, ensuring the participation of enterprises in the implementation of social policy. To some extent the role of financial resources is important at all levels of management (strategic, tactical, operational), but it takes on special significance in terms of enterprise development strategies.

Financial management of the enterprise is the management of financial resources in the process of their formation, distribution and use in order to maximize the outcome.

In a market economy are profoundly changing the mechanism of financial management in the enterprise. The organization of effective management of financial resources, taking into account methods, adequate market economy, is part of financial management.

An important place in the property business is working capital - part of the capital invested in current assets, which ensures the sustainability of production and sales. Of working capital is an economic category that weaves a variety of theoretical and practical aspects. Among them is a very important question of the nature, functions and sources of working capital.

The organization of the working capital of the enterprise is fundamental to the whole complex of problems of increasing the efficiency of its formation and use.

Sources of working capital formation is influenced by the rate of its turnover and efficiency. The division of the working capital loan and own sources indicate the origin and form of the company working capital for permanent or temporary use.

In theory, financial management decided to allocate the different usage patterns of working capital loan: ideal, aggressive, conservative, compromise. The choice of a funding model reduces to establishing the value of long-term liabilities, and it is based on the calculation of the value of net working capital as the difference between long-term liabilities and long-term assets.

In general, the main objective of working capital management is to achieve a trade-off between liquidity, profitability and turnover. This is characterized by the relevance of the theme of the course work.

The aim of the course work - to explore the theoretical basis and the current practice of formation and use of working capital in the enterprise. In accordance with the purpose of the course work tasks were set:

explore the theoretical basis of the formation and use of working capital;

model to analyze the formation and use of working capital in the LLP "Time";

explore the possibility of optimizing the model of working capital management in the enterprise.

The methodological basis for the study is based on laws and regulations of the Republic of Kazakhstan, the works of domestic and foreign financiers, as well as the financial statements of the enterprise.

1 Theoretical bases of formation and use of working capital

1.1 Nature of the working capital of the enterprise and its organization

The company is created for business organization, socio-economic objective which is to ensure social needs and making any profit. In content, the activities of enterprises includes the manufacture and sale of products, works and services, transactions on the stock market. The company may exercise any of the activities or simultaneously all kinds.

Each enterprise carrying on industrial and economic activity must have property. Enterprise property are fixed and current assets, and other assets, the value of which is reflected in a separate balance sheet.

An important place in the property business is working capital - part of the capital invested in current assets, which ensures the sustainability of production and sales. Of working capital is an economic category that weaves a variety of theoretical and practical aspects. Among them is a very important question of the nature, functions and sources of working capital.

Working capital can be defined as cash advances in current operating assets and funds of treatment. One of the conditions of continuity of production is a constant renewal of its material basis of the means of production. In turn, this determines the continuity of the movement themselves the means of production, which occurs in the form of the circuit.

In the back of his funds consistently make money, productive and commodity form, which leads to their separation into productive capital and circulating assets. Real carrier of productive assets are the means of production, the means of labor, objects of labor. Finished goods along with cash payments in the Fund treatment.

To current production assets of enterprises include part of the means of production, the material elements of which in the course of work as opposed to the fixed assets are consumed in each production cycle, and the cost is transferred to the product of work all at once. Material elements of working capital in the course of work are changing their natural form and physico-chemical means. They lose their use