The main meaning of finance is... The essence of finance. The meaning of financial leverage

Finance is an integral part of monetary relations. Their role and significance depends on what place monetary relations occupy in economic relations. However, not all monetary relations express financial relations. Finance differs from money, both in content and in the functions performed.

The main purpose of finance is to meet the cash needs of the state and enterprises through the formation of cash income and funds. Finance is the link between the creation and use of national income. They affect production, distribution and consumption. Satisfying the needs associated with the development of production, the needs of the employee and his family, the finances of the enterprise and households serve process of changing the form of value(commodity, money).

State finances serve the process of changing the form of ownership on a national scale, ensuring the satisfaction of public needs (defense, culture, education, management, etc.) and social protection of certain groups of the population (unemployment benefits, maternity benefits, etc.).

In addition to traditional functions, the state carries out functions to regulate economic processes, since more than 20% of GDP and 10% of the total social product are redistributed through the republican budget. This makes it possible to systematically carry out reproductive processes and finance priority areas of the economy. Meanwhile, as a result of subjective volitional decisions, financing may be ineffective.

It should be noted that the market economy has led to an increased role of finance. This is due to the following circumstances:

Firstly, with the emergence of new economic entities along with traditional groups, new groups of financial relations arise. At the same time, the relationships between them become more complicated.

Secondly– finances become independent sphere of monetary relations, acquire some isolation. Money as the material basis of finance, performing the function of a medium of circulation, become capital that is, self-increasing cost.

Third, there is a decrease in the role of finance at the micro level and an increase in the importance of finance at the macro level.

The country's transition to new economic relations caused a significant decline in production, the emergence of unemployment, aggravated social and economic instability, inflation, etc. Under these conditions, the state's financial policy becomes unstable and changes frequently. At the same time, the following trends emerge:

Financial resources are concentrated not only in the budget, but also in other funds - pension, employment, health insurance;

The budget is mainly replenished from taxes. The main focus on the tax results in an even greater decline in production. Therefore, there is a need to improve the tax system;

Funding of the national economy from the budget is decreasing - from 60% to 12% - which indicates the state's non-intervention in the economy.

The role and importance of finance in the economy

The role of finance in the economic life of business entities and the economy as a whole is based on its functions, and, above all, on the distribution function, which characterizes the mode of action of the category of finance. This function itself ensures redistribution processes regardless of their consequences. At the same time, depending on the specific economic situation, economic and financial policies, the formation of financial funds and their expenditure can have both positive and negative economic results.

Under favorable conditions and sound economic and financial policies, the funds of financial resources formed in the process of financial activity, the organization and direction of financial flows have a significant positive impact on economic and social development. At the same time, if in the economy as a whole final consumption exceeds gross disposable national income, this indicates negative processes. Similarly, positive or negative results of financial and economic activities can develop in sectors and industries of the economy and enterprises. In this regard, financial policy is one of the leading economic levers for organizing social reproduction, a powerful factor in the development of the national economy as a whole.

Serving the reproduction of capital, finance is a tool for the formation of funds used to continue and develop production on the basis of distribution and redistribution processes. The basis for the formation of these monetary funds is the formation of income, predetermined by production. However, the final disposable income of the economy as a whole, economic sectors, industries and the net profit of enterprises, although they depend on the initial formation of income, but, as noted, can differ significantly from them. These differences are a consequence of the impact of financial relations in the process of income redistribution on the formation of monetary funds that have a designated purpose. This impact leads to the redistribution of income between enterprises, industries, etc. and creates the preconditions for changes in the economy. These changes provide conditions for innovative processes, progressive structural changes in the economy, changes in the levels of development of individual territories, etc.

With all the diversity of the role of finance in the development of the economy, it is usually reduced to two main directions: financial support for expanded reproduction and provision of financial regulation of the development of the country's economy. Let's take a closer look at these areas.

Financial support for reproduction involves the formation of monetary resources to cover the costs of production and sale of goods and services, expansion and technological development of production. Funds of funds generated in various sectors of the economy provide not only the development of production, but are also a source of funds for solving social problems, improving the standard of living of the population and developing human capital. The growth of funds used for savings and their efficient investment are the basis for accelerating economic growth and social progress. A decrease in the volume of financial resources and their irrational use lead to a narrowing of the scale of reproduction, and with great depth and duration - to a decrease in resources for final consumption and a deterioration in living conditions.

Financial support for the activities of enterprises is initially based on the authorized capital. At the same time, in the process of financial and economic activities, enterprise funds can increase due to net profit, i.e. profit remaining at the disposal of enterprises after paying taxes and other obligatory payments. The funds of funds accumulated by enterprises, as well as temporarily free depreciation charges generated during the production process, are the basis for the development and innovative renewal of production. Along with their own funds, enterprises widely use direct borrowings from credit institutions and funds from the issue of bonds. These funds are attracted on the basis of payment and repayment. In addition, funds from state and municipal budgets can be used in the form of grants, subsidies and loans, as well as other borrowed funds.

Among the various sources of funds, the decisive role belongs to the own funds of enterprises. It should be borne in mind that any attraction of borrowed funds entails the need to form funds of own funds to repay debts and pay interest on them.

The most important characteristic of the activities of all economic units is their balance of assets and liabilities. An increase in assets indicates positive results of financial and economic activities.

Economic regulation. In a market economy based on private property, each economic entity carries out business activities individually, based on its own interests. During the production process, its participants independently determine the goals of their activities, partners, and forms of interaction. Their interests are often contradictory. Balanced, proportional development of production is achieved in the process of its economic, including financial, regulation. The basis of regulation is objective market laws and market competition. The processes of distribution and redistribution of financial resources occurring on the basis of competitive production provide funds for restructuring production in accordance with the changing needs of society, balancing supply and demand. Coordination of interests and adjustment of subjects of a market economy are carried out, first of all, on the basis of self-regulation of the market and the use of financial relations for the redistribution of monetary resources between various business entities. Enterprise finance mainly ensures the redistribution of financial resources within business entities and between business entities based on the transfer of property income and transfers, as well as through the use of lending mechanisms and the securities market.

The regulatory mechanisms of enterprises by themselves do not ensure the optimal distribution and use of financial resources.

Insufficient market self-regulation can lead to economic and financial crises. In this regard, there is a need to regulate economic processes at the macro level. Such regulation, aimed at mitigating crisis phenomena, is carried out by stimulating or limiting economic growth and investment, regulating money circulation, discount rates of the Central Bank, exchange rates and other instruments.

Scientific and technological progress and the formation of an information-industrial society require increased attention to the development of innovation, high-tech industries and production. In order to accelerate scientific and technological development, there is an urgent need to stimulate and support it, especially in the context of globalization, when domestic markets are easily captured by foreign firms. The defense industry and agriculture, which ensure the country's food security, also need economic support.

Private enterprise is not sufficiently interested in the development of human capital, which is a complex of innate abilities, general and special education, acquired professional experience, knowledge, creativity, morality, but also psychological and physical health, providing the opportunity to generate income. At the stage of formation of a new information-industrial society, human capital turns into the main factor of socio-economic development. The interests of private entrepreneurs are limited mainly by the needs of their enterprises. Meanwhile, human capital is considered as a category that brings benefits not only to the owners of the enterprise, but also to society as a whole.

A serious danger is the monopolization of production and financial resources.

In this regard, as well as for a number of other circumstances, state regulation of the economy and financial resources plays a significant role in a market economy. State regulation makes it possible to coordinate the interests of private enterprise with the interests of society as a whole. It can contribute to the development of human capital through support for education, health care systems and the creation of more favorable living conditions, help mitigate crisis processes, promote the development of innovation and major progressive structural changes, carry out institutional transformations, ensure the creation of infrastructure that promotes the development of both the social sphere and production activities.

Within the financial system, the state influences economic development through tax and depreciation policies, government grants, subsidies, loans, investments, public-private partnerships, government spending on the purchase of goods and services, financing the budget deficit and other means.

Taxation is the main instrument that determines the scale of accumulation of income generated in the economy in centralized funds of the budgets of state and municipal governments and in state extra-budgetary funds. It has a direct impact on the amount of funds of enterprises that can be used for capital accumulation. With a broad tax base and a uniform tax burden on economic units, the neutrality of the tax system in relation to enterprises in various sectors and industries of the economy is ensured. In this case, taxation in itself does not affect the movement of financial resources between economic sectors and industries. At the same time, government authorities can use a system of tax incentives and accelerated depreciation in order to attract resources to promising industries and production, accelerate innovation processes, develop individual regions and achieve other goals in the interests of society as a whole.

Along with tax policy, government authorities can influence production through subsidies, grants, public investments and loans.

Government expenditures are the costs associated with the implementation by the state of its functions. Expenditures consist mainly of purchases of goods and services, salaries of government employees, transfers related to social benefits, and interest payments on government debt. The state has a direct impact on the economy, increasing or decreasing both the total volume of expenditures and expenditures on individual sectors and branches of the economy. In a large plan, the following can be distinguished as part of government expenditures according to their functional purpose:

Expenditures on general government services (legislative and executive authorities, foreign policy, defense, maintaining public order, security, etc.);

Expenditures on public and social services (education, healthcare, social insurance and welfare, housing and communal services, media, culture, etc.);

Expenditures on public services related to economic activity (to ensure higher efficiency of economic activity, create conditions for economic growth, targeted economic programs, create new jobs, etc.).

It is also necessary to take into account that state income and expenses are closely related to state assets and liabilities and have a direct impact on them. Flows of funds into and out of government result in changes in assets and liabilities. On this basis, a balance sheet of assets and liabilities of the state can be compiled, characterizing the value of assets owned by it at a certain point in time, and financial claims on it from institutional units of other sectors. The total value of the state's assets minus the claims against it forms the net asset value and reflects the value of the property owned by it.

Assets are divided into financial and non-financial. Financial assets include financial claims (cash, securities, etc.), monetary gold, and special drawing rights provided by the IMF. Non-financial assets include fixed assets, inventories and valuables. The value of net asset value and its dynamics, determined by the ratio of incoming and outgoing flows of funds, is the most important characteristic of the financial condition of the state.

State regulation in the field of finance, as well as in other areas of the economy, is not only necessary, but also inevitable. At the same time, it should be taken into account that its directions and scales have objectively determined boundaries. Excessive government intervention is fraught with a weakening of economic incentives, the loss of reasonable criteria for assessing the situation, and a decrease in economic efficiency.

Financial regulation is carried out along with and in interaction with other economic regulators. Such regulators are, in particular, credit, prices, currency and customs policies. The use of these and other regulators must be subordinated to the overall strategic goals of socio-economic development, objectives and general economic policy at each stage of development.

1. The essence, functions and importance of finance and financial resources of commercial organizations in the Russian financial system.

Finance is the monetary relations of economic entities, including the state, as a result of which the income of society changes its structure, increasing in the hands of one entity due to the withdrawal of this part and another entity.

The essence of finance is manifested in its functions. Functions refer to the “work” that finance does. The question of the number and content of functions is controversial. Some famous financiers, such as A.M. Birtman, identified three main functions: ensuring the management process with funds, control of the ruble, and distribution. A.M. Alexandrov and E.A. Voznesensky argued that finance is expressed in the formation of monetary funds, the use of monetary funds and control. I.T. Balabanov believes that with the transition to market relations, finance lost its distribution purpose.

However, no one denies that finance is a set of monetary relations organized by the state, during which the formation and use of funds of funds is carried out. The source of the formation of numerous funds at different levels is the gross domestic product. The process of GDP distribution can be carried out using financial instruments: norms, rates, tariffs, deductions, and so on, established by the state.

If we consider finance as a whole, then, apparently, we should assume that it performs three main functions: distribution, control, and regulation.

The distribution function is carried out in all spheres of social life, that is, in material production, the immaterial sphere, and the sphere of circulation. The subjects of distribution are legal entities and individuals at the micro level, and the state at the macro level. The objects of distribution are GDP and national income in monetary form. The distribution function is a complex function; it covers three successive stages:

1) formation of funds of funds: at the micro level, financial resources of economic entities necessary for the circulation of capital are created; household funds; at the macro level - centralized state funds;

2) distribution of funds through financial instruments: at the micro level, separate funds of the enterprise are formed (authorized capital, wage fund, depreciation fund); household funds for specific consumption; at the macro level - budgets of all levels and extra-budgetary funds;

3) use of funds. At the macro level - improvement of national economic proportions; national needs of the country; at the micro level - expanded production and financing of individual members of society.

Distribution and control functions represent two sides of the same economic process. The basis of the control function of finance is the movement of financial resources. In this regard, the possibility and necessity of monitoring the provision of cost and natural-material proportions in the process of expanded reproduction arises.

The control function is manifested:

1) before the onset of the distribution process (plans, programs, estimates, forecasts, budgets are drawn up);

2) in the process of executing funds of funds (during the implementation of planned programs, estimates, budgets, and so on);

3) in the process of summing up, drawing up assessments. Execution of funds.

The control function is implemented:

1) through financial and economic control at individual enterprises;

2) financial and budgetary control (when making tax payments and funding from budgetary resources);

3) credit and banking control (when using the principles of lending and cash settlements).

The object of the control function is the financial performance of the enterprise. If in practice the control function is not carried out, then it is not possible to assess the effectiveness of the distribution function.

The regulatory function of finance is not carried out spontaneously, but in accordance with legal norms. A set of rules, regulations and rules is designed to regulate financial activities. In this regard, this function manifests itself at all levels, in all areas and links of financial relations in the hierarchy of its construction. At the macro level, this function, using government spending, taxes, government loans, achieves results in improving the quality of the production process, improving the financial situation of workers, and creates various funds. Such results are achieved at the micro level.

Finance exercises control at all stages of the creation, distribution and use of the social product and national income. Their control function is manifested in all the diversity of economic activities of enterprises. Ruble control is carried out over production and non-production costs, the correspondence of these costs to income, the formation and use of fixed assets and working capital. It operates at all stages of the circulation of funds, during financing and lending, non-cash payments, in relations with the budget and other parts of the financial system.

The interconnection and interdependence of the components of the financial system are determined by the single essence of finance.

Through the financial system, the state influences the formation of centralized and decentralized funds, accumulation and consumption funds, using taxes, state budget expenditures, and state credit.

A variety of activities are carried out within the financial system, including planning, financing, investing, taxation, insurance, financial and accounting activities, auditing, financial inspection and others.

Based on the main features of finance, finance can be distinguished from the entire set of monetary relations. Monetary relations that arise between citizens and retail trade cannot be classified as finance, since the state here regulates monetary relations using the civil law method, which is characterized by the equality of subjects united by these relations.

Thus, finance is always a monetary relationship, but not every monetary relationship is always a financial relationship.

The market economy has led to an increased role of finance. Firstly, with the emergence of new economic entities, along with traditional ones, new groups of financial relations arise, and the relationships between them become more complicated. Secondly, finance becomes an independent sphere of monetary relations and acquires a certain isolation. This is due to the fact that in market relations money (the material basis of finance), performing the function of a medium of exchange, becomes capital, that is, a self-increasing value. Thirdly, there is a change in priorities; a gradual decrease in the role of finance at the macro level and an increase in the importance of finance at the micro level.

With the help of finance, the state distributes the social product not only in physical form, but also in value. In this regard, it becomes possible and necessary to control the provision of cost and natural-material proportions in the process of expanded reproduction.

Chapter 1. Economic content and importance of household finances

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1.1. Socio-economic essence and functions of household finances.

Household finance is the economic monetary relations carried out by individual members of the household to create, distribute and use funds of funds in the course of their activities.

Household finances, in the context of the development of market relations and the expansion of cash flows, are allocated to an independent link in the financial system, which belongs to the sphere of decentralized finance. This is due to the ever-increasing economic role and social importance of households in modern society.

In economic theory, a household is understood as an economy that is run by one or more persons living together or having a common budget. The household unites all hired workers, owners of large and small capital, land, securities, who are and are not employed in social production.

Household finances, in conditions of developed market relations, participate in the circulation of capital and cover part of the production process. However, unlike the finances of commercial enterprises and organizations, which are crucial in the creation, primary distribution and use of the value of GDP and national income, household finances have not become a priority link in the financial system and play a subordinate, albeit important role in the overall set of financial relations

Households are one of the important subjects of economic activity, the results of which determine not only the well-being of an individual economic unit, but also the entire population as a whole. Households play a dual role in the economy: they are ultimately suppliers of economic resources and at the same time the main spending group in the national economy. Having become the largest economic entity along with commercial organizations and the state, the household participates in all macro-regulatory processes. The well-being of not only individual economic units, but also the population of the country as a whole depends on the results of their economic activities.

Households are closely interconnected and interdependent with the country's economy and are determined by the socio-political stability of society. Any changes in economic relations inevitably affect their activities. A general economic rise causes an improvement in the financial situation of families and can restrain their active activity, while a recession leads to an intensification of this activity in order to maintain previous living conditions.

The emergence of household finance occurs at the second stage of the production process - the distribution of the value of gross domestic product and national income. Household members participate in primary distribution, since they are the owner of labor power and receive primary income in the form of wages at an enterprise or income in individual entrepreneurship. By paying taxes to the state, they have the right to various payments from the budget and extra-budgetary funds, such as pensions, benefits, etc., thus they take part in the redistribution of GDP and personal income, i.e. acquire the right to secondary income.

Household finances come in monetary form. In market relations, household members receive various types of income (wages, pensions) in money (national currency, foreign currency, bills, etc.), and even income in kind is valued in monetary terms.

Spending of income also occurs with the help of money. The monetary relations that develop among household members become financial when monetary funds arise and are used.

There are internal and external monetary and financial relations of households. Internal include financial (monetary) relations for the formation of various family funds (reserve, for the purchase of durable goods, purchase of an apartment, etc.), external - relations with legal entities and the state.1

The socio-economic essence of household finance is manifested in functions. Now they perform two main functions: ensuring the vital needs of the family and distribution.

The main function is to provide for the vital needs of the family. It creates real conditions for the existence of members of a given family. The development of market relations has significantly influenced the form of manifestation of this function. During the period of subsistence farming, the products produced by household members satisfied their needs, and the exchange of surpluses occurred rarely, in small quantities, and, as a rule, in the neighborhood.

Commodity-money relations, the emergence and then expansion of the market led to:

Expansion of material, social. Cultural and other needs of the family;

Creation and growth of household funds;

The emergence of a monetary fund - a family budget intended to provide material goods.

Distributive function Household finance covers the distribution of the value of GDP and income and the formation of family income in the form of various funds. The distribution process carried out by household finance occurs:

Between this economic unit and other spheres and links of the financial system (public finance - budgets, extra-budgetary funds, enterprise finance). As a result, as was said, primary and secondary incomes are created in the form of wages, pensions, benefits, etc.;

Within an individual household, when the total family income is distributed among its members, forming separate monetary funds for each. Segregation of funds within a household does not change the owner and excludes any equivalence.

This function includes three successive steps: formation, distribution and use of monetary funds.

In modern economic literature, in addition to these two functions, there is a control function, which means control over the distribution of income received across various funds and the targeted use of the funds from these funds, and a regulatory function, supporting the balanced development of the household as a whole. However, these functions can be considered as components of the regulatory function, which involves regulation and control.

All household functions are interconnected and operate simultaneously, complementing each other.

The concept of “organizational finances”. Financial relations of organizations and their structure.

Organizational finance is a system of monetary relations associated with the creation and use of various types of income and savings of an economic entity.

Finance of organizations (enterprises)) is a relatively independent sphere of the state finance system, covering a wide range of monetary relations associated with the formation and use of capital, income, and monetary funds in the process of circulation of their funds. It is in this area of ​​finance that the bulk of income is formed, which is subsequently redistributed through various channels in the national economic complex and serves as the main source of economic growth and social development of society.

All incomes of subjects of economic relations in the process of reproduction are divided into primary and secondary, received after the redistribution of primary incomes. They are formed:

· for enterprises - in the form of profit remaining at their disposal and depreciation charges (net cash flow);

· for employees (households) - in the form of net wages remaining after paying taxes and mandatory payments, payments from net profit to shareholders and participants, wages to public sector employees, payments from extra-budgetary social funds;

· from the state - in the form of redistributed income of enterprises to the budget and extra-budgetary funds.

The role of finance in the economic activities of enterprises is manifested in the fact that with their help the following are carried out:

· servicing the individual circulation of funds, i.e. changing the forms of value. In the process of such a circulation, the monetary form of value turns into a commodity form, and after the completion of the process of production and sale of the finished product, the commodity form of value again appears in its original monetary form (in the form of proceeds from the sale of the finished product);

· distribution of proceeds from the sale of goods (after payment of indirect taxes) to the fund for reimbursement of material costs, including depreciation charges, wage fund (including contributions to extra-budgetary funds) and net income in the form of profit;

· redistribution of net income into payments to the budget (income tax) and profits left at the disposal of the enterprise for production and social development;

· use of the profit left at the disposal of the enterprise (net profit) for consumption, savings, reserve and other purposes provided for in its financial plan (budget);

· monitoring compliance between the movement of material and monetary resources in the process of individual circulation of funds, i.e., the state of liquidity, solvency and financial independence of the enterprise from external sources of financing.

The existence of finance is inextricably linked with the existence of commodity-money relations and the regulatory role of the state. A significant part of the financial relations of enterprises is regulated by civil legislation: the amount and procedure for the formation of authorized and reserve capital for enterprises of various organizational and legal forms; procedure for placement and redemption of shares; privatization; liquidation; bankruptcy; the order of priority for debiting funds from the current account; composition of costs attributable to the cost of production; accounting policy options; objects and tax rates and a number of other relations.

The material basis of enterprise finance is the circulation of capital, which in the conditions of commodity-money relations takes the form of money circulation.

Financial statistics of enterprises (organizations) contains indicators reflecting the financial position of enterprises (organizations). Income (loss) from core activities is a balanced financial result and is defined as the difference between gross income from core activities and the cost of goods (work, services) sold plus period expenses.

Income from core activities is a balanced financial result and is defined as the difference between income from core activities and the cost of goods (work, services) sold plus period expenses.

Income (loss) from the sale of products (works, services) is reflected minus value added tax, excise taxes, as well as the cost of returned goods, sales discounts and price discounts presented to the buyer.

The essence and significance of an organization’s finances

Finance is a system of economic monetary relations associated mainly with the redistribution of GDP and the formation of centralized and decentralized monetary funds.

Finance is a system of monetary relations associated mainly with the redistribution of profits and the formation of centralized and decentralized monetary funds. Finance is based on accounting, economic and industrial analysis, the current tax system, etc.

All financial relations operate only at the level of enterprises, as legal entities. All financial relations operating within the enterprise are conditional financial relations.

Decentralized funds are all funds created at the enterprise level (accumulation fund, consumption fund, reserve fund, depreciation fund).

The difference between a fund and funds: funds = the amount of funds, and a fund = the amount of funds that has a specific purpose. At the enterprise, finance is used from the following economic relations:

1) relations between the enterprise and other enterprises in the course of financial and economic activities. Financial relations do not include relations of purchase and sale, exchange, etc., but only the application of financial sanctions for non-performance or poor quality performance;

2) between enterprises and divisions that are part of it. These relationships depend on the structure of the enterprise and financial relationships that arise only between divisions that have independent balance sheets and accounts. These relations can be replenished by the formation of authorized capital, redistribution of working capital, redistribution of profits, payment of taxes between enterprises;

3) between enterprises and employees regarding the payment of funds, mainly from profits, and the part that falls under state regulation;

4) between the enterprise and the state budget regarding the payment of taxes and regarding the receipt of benefits, targeted financing, government loans in various forms, etc.;

5) between an enterprise and commercial banks regarding the receipt and repayment of loans;

6) between enterprises and investment institutions regarding the formation of free monetary resources and their use (investment funds, pension funds, etc.);

7) between the enterprise and higher authorities (holdings, concerns) regarding the transfer of capital.

Finance in an enterprise performs the following functions:

1) formation - the function provides financial resources, the circulation of funds in the enterprise, i.e. function of forming monetary funds. The task is to create cash flows in the enterprise so that all financial flows work and work efficiently. Key indicators – planned;

2) use – the function of using money and funds;

3) control function - at the enterprises themselves, between enterprises, if there is a violation of the law - at the budget or state level.

The financial market is associated with the circulation of financial capital. Financial flow determines the link in economic relations where the market for financial capital and financial resources takes place. 3 links are included:

1) capital market;

2) market for credit resources;

3) money market;

An economic instrument, including finance, has 2 principles:

the first is objective (arising from the economic category), the second is subjective (an instrument for implementing the state’s economic policy). Financial influence:

1) quantitative (characterized by the proportions of the distribution process);

2) qualitative (characterized by the impact of finance on the material interests of business entities).

The qualitative side of influence is characterized by proportions in the distribution process; reflects the impact of finance on the material interests of business entities through various forms of organizing financial relations; influences the social product and is associated with the transformation of finance into a stimulus for economic development. Such a transformation is possible when the procedure for generating income, the conditions and principles for the formation of funds, and the directions for their use can be closely linked with the economic interests of business entities.

An economic incentive is an instrument that is associated with the material interests of business entities. The conscious use of finance in social production leads to results that demonstrate the active role of finance in social production in market conditions.

Functions and principles of financial organization

The market economy in the Russian Federation is gaining more and more strength. Along with it, competition is gaining strength as the main mechanism for regulating the economic process. The competitiveness of any business entity can only be ensured by proper management of the movement of financial resources and capital at its disposal.

In today's conditions, most enterprises are characterized by a reactive form of financial management, i.e. making management decisions as a response to current problems.

When developing an effective financial management system, the main problem of combining the interests of enterprise development, the availability of a sufficient level of funds to carry out this development and maintaining the high solvency of the enterprise constantly arises. The financial well-being of the enterprise as a whole, its owners and employees depends on how efficiently and expediently financial resources are transformed into fixed and working capital, as well as into means of stimulating the workforce. Financial resources in these conditions become of paramount importance, since this is the only type of enterprise resource that can be transformed directly and with a minimum time interval into any other type of resource. Thus, financial management as one of the main functions of the management apparatus acquires a key role in a market economy.

Signs of successful financial management include a whole system of goals: the survival of the company in a competitive environment; avoiding bankruptcy and major financial failures; growth in production and sales volumes; profit maximization; cost minimization; ensuring profitable activities, etc.

Management of working capital, accounts receivable and payable, accruals and other means of short-term financing - it is in this direction that the main problem of financial management is most clearly manifested.

A skillful economic strategy and rational financial policy allow the company to maintain business activity, profitability and a high reputation as a reliable partner for many years. In a market economy, the leading role belongs to financial analysis, thanks to which it is possible to effectively manage financial resources. Financial analysis is a multi-purpose tool. With its help, informed financial decisions are made, the resources available to the enterprise are assessed, trends in their use are identified, and forecasts for the development of the enterprise are developed for the short and long term.

An enterprise in which analytical work is seriously carried out is able to recognize an impending crisis earlier, quickly respond to it and is more likely to avoid “troubles” or reduce the degree of risk.

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 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 main components of financial analysis of an enterprise's activities are: analysis of financial statements, calculation of financial ratios. The quality of financial analysis depends on the methodology used and the reliability of financial statements.

Monetary relations turn into financial relations when the movement of money acquires a certain independence: as a result of the production of goods and their sale, cash income (financial resources) of enterprises is formed, which are subsequently used.

Enterprise finance represents monetary relations associated with the formation and distribution of financial resources. Financial resources are generated from such sources as: own and equivalent funds (share capital, share contributions, profit from core activities, targeted income, etc.); mobilized in the financial market as a result of transactions with securities; arriving in order of redistribution.

The finances of the enterprise ensure the circulation of fixed and working capital and relationships with the state budget, tax authorities, banks, insurance companies and other institutions of the financial and credit system.

The process of functioning of any enterprise is cyclical. Within one cycle, the following are carried out: attracting the necessary resources, combining them in the production process, selling manufactured products and obtaining final financial results. In a market economy, there is a shift in priorities in the objects and targets of the management system for a business entity.

In a market economy, effective management involves optimizing the resource potential of an enterprise. In this situation, the importance of effective management of financial resources sharply increases. The financial well-being of the enterprise as a whole, its owners and employees depends on how effectively and expediently they are transformed into fixed and working capital, as well as into means of stimulating the workforce. Financial resources in these conditions become of paramount importance, since this is the only type of enterprise resource that can be transformed directly and with a minimum period of time into any other type of resource. To one degree or another, the role of financial resources is important at all levels of management (strategic, tactical, operational), but it acquires particular importance in terms of the enterprise development strategy. Thus, financial management as one of the main functions of the management apparatus acquires a key role in a market economy. Enterprise finance performs three main functions:

* formation, maintenance of an optimal structure and increasing the production potential of the enterprise;

* ensuring current financial and economic activities;

* ensuring the participation of the enterprise in the implementation of social policy.

Any business begins by asking and answering the following three key questions:

1. What should be the size and optimal composition of the enterprise’s assets in order to achieve the goals and objectives set for the enterprise?

2. Where to find sources of financing and what should be their optimal composition?

3. How to organize current and future management of financial activities, ensuring the solvency and financial stability of the enterprise?

These issues are resolved within the framework of financial management, which is one of the key subsystems of the overall enterprise management system.

The organizational structure of an enterprise's financial management system can be built in various ways depending on the size of the enterprise and the type of its activity. The main thing that should be noted in the work of a financial manager is that it either forms part of the work of the top management of the company, or is associated with providing him with analytical information necessary and useful for making financial management decisions. Regardless of the organizational structure of the enterprise, the financial manager is responsible for analyzing financial problems, making decisions in some cases, or making recommendations to senior management.

Financial management methods are varied. The main ones are: forecasting, planning, taxation, insurance, self-financing, lending, settlement system, financial assistance system, financial sanctions system, depreciation system, incentive system, pricing principles, trust transactions, collateral transactions, factoring, rent, leasing.

3. What is the main meaning of the operational function of finance.

a) Activities related to the regulation of real money turnover within the framework of the business structure implement a set of financial functions of the enterprise, among them: provision, distribution and control.

b) The supporting function of enterprise finance presupposes that the enterprise must be fully provided in the optimal amount with the necessary funds while observing a very important principle: all expenses must be covered by its own income.

c) An integral part of the supporting function of an enterprise’s finances is the operational function, the meaning of which is the current provision of enterprises with funds for normal functioning, that is, making payments and settlements, fulfilling short-term obligations. The operational function does not have a significant impact on the long-term development strategy of the enterprise. Therefore, it is limited to financial support for simple reproduction. The enabling function prioritizes capital accumulation to solve long-term investment problems. Operational management (a set of measures developed on the basis of an operational analysis of the financial situation in order to obtain the maximum effect at a minimum cost through the redistribution of financial resources)

4. Are salaries always paid out on time at your company? Give reasons for both positive and negative answers.

a) Wages are the price paid to a worker for the use of his labor, a value determined by the labor market, i.e. labor demand and supply.

b) Wages must be paid to employees at least every half month (Article 136 of the Labor Code of the Russian Federation). It is permissible to establish other terms for payment of wages by federal law (for certain categories of employees).

c) Employees of our organization receive wages on the 1st and 16th of each month. On the 16th, an advance payment is issued for the previous half month, and on the 1st, wages for the entire previous month are issued. The collective agreement establishes that the advance payment for the first half of the month is 50% of the monthly salary. Salaries at the company where I work are always paid on time. The absence of delays in the payment of wages is due to the competent management of the financial activities of the enterprise, good economic and financial performance of the company, and a positive trend in the work of the organization’s employees.

5. What is the situation with your company’s debt to suppliers? Budget? Are the amounts of overdue debt large?

a) Accounts payable is the debt of an enterprise to other organizations and enterprises, legal entities and individuals. Accounts payable arise as a result of attracting funds from other organizations, enterprises and individuals, as well as for all types of payments to the budget, extra-budgetary and other funds.

b) The debt of our enterprise to suppliers in 2010 amounted to 6814 thousand rubles, which indicates the diversion of our own funds into accounts payable, which can adversely affect the financial condition of the enterprise. The repayment of accounts payable from some organizations is the repayment of receivables from other organizations. Therefore, the liquidation of accounts payable is of great importance, because the reduction of funds in the sphere of payments and the acceleration of the latter contribute to the acceleration of the turnover of working capital.

c) Financial relations that develop between the state, legal entities and individuals are called budgetary relations. As a result of fulfilling the obligations of legal entities and individuals to the state, a budget fund is created in which these relations are materialized.

The debt of our enterprise to the budget at the end of 2010 is 114 thousand rubles. Our company has no overdue debt.

6. What financial plans does your company have and for what time frame?

a) Financial planning is understood as a set of measures for drawing up 4 and implementing plans for the formation of income and expenses. Financial planning is part of n/x planning. It allows you to link the indicators of the agricultural plan with their cash flow

The object of financial planning is the financial activities of business entities and the state, and the final result is the preparation of financial plans, ranging from the estimate of an individual institution to the consolidated financial balance of the state.

The initial basis for developing a financial plan for an enterprise is the following data:

Planned amount of revenue from product sales;

Planned profit and profitability of production;

Established amounts of payments to the state budget and allocations from it;

Volumes of government capital investments;

Amounts of allocations from centralized funds for various planned purposes, planned values ​​of fund-forming indicators.

b) It is customary to distinguish between three types of financial plans:

The balance of income and expenses is planned;

Preliminary (for the expected period);

Executive (final).

There is also a so-called test balance of income and expenses, which is a chess sheet (chess balance).

c) Our company is developing a financial plan, the final section of which is the balance of income and expenses. The development of a financial plan is carried out by the financial service of the enterprise. In its revenue part they show planned profit, depreciation charges, allocations from the budget and other income, in the expenditure part - deductions to the budget, investments in capital construction and major repairs, increase in working capital, deductions to higher organizations and others.

Therefore, the financial plan of our organization includes the following sections:

Profit distribution plan,

Calculation of working capital and its growth,

Calculation of depreciation charges.

Financing of capital investments.

Calculation of payments to the budget.

Estimate for personnel training at the enterprise.

Calculation of financial reserve.

The plan is drawn up for the quarter with a monthly breakdown.

Conclusion

So, in this test, I answered the main questions regarding the functions of finance, we summarize the above material and draw conclusions.

Finance performs two functions: distribution and control. The operation of paying income tax to the state budget belongs to the distribution function of finance.

Activities related to the regulation of real money turnover within the entrepreneurial structure implement a set of functions of the enterprise’s finances, among them: provision, distribution and control. The meaning of the operational function of finance is the current provision of enterprises with funds for normal functioning.

Wages are the price paid to a worker for the use of his labor, a value determined by the labor market, i.e. labor demand and supply.

Accounts payable is the debt of an enterprise to other organizations and enterprises, legal entities and individuals.

The financial plan must ensure the economically feasible use of funds to finance the activities of the enterprise.

List of used literature

1. Azriliyan A.N. Large economic dictionary: 25,000 terms - M.: Institute of New Economics, 2007, - 1376 p.

2. Eliseev A.S. Modern economics: Textbook. – St. Petersburg: Dashkov and K, 2006, - 503 p.

3. Lipsits I.V. Economics: Textbook. – M.: Vita-Press, 2007. –315 p.

4. Finance, money circulation and credit. Textbook. / Ed. VC. Senchagov and A.I. Arkhipova. - M.: Prospekt, 2007. - 400 p.

And decentralized funds of funds in order to increase the efficiency of social production, improve the quality of work in all parts of the national economy. The object of the control function of finance is the financial performance indicators of enterprises, organizations, and institutions. The form of implementation of the control function of finance is financial control. If the control function of finance...

Enterprise finance can be divided into finance of industry, agriculture, transport, communications, construction, supply, trade, housing and communal services, and road services. The organization of an enterprise’s finances is influenced not only by industry characteristics, but also by organizational and legal forms of management. Taking into account the organizational and legal forms, the finances of enterprises should be divided into...

The concept of finance and their classification. The role and importance of finance.

In any state, the distribution and redistribution of the gross social product and national income occurs in monetary form.

The concept of finance comes from the French - the totality of all funds, at the disposal of the enterprise, the state, as well as the system of their formation, distribution, and use.

Finance is a set of funds arising from the formation, distribution and use of funds of financial resources.

1. Economic understanding - all funds

2. Legal understanding – state and municipal funds: budgets of all levels

State and municipal credit

State extra-budgetary funds

Central Bank funds

Funds of state credit organizations

Funds of state unitary enterprises

Signs of finance:

Money relations

Mandatory participant state

Distribution relations

Non-equivalent

Formed by funding

Kinds:

In terms of their material content, state finances represent cash funds.

All funds of funds in the state are divided into centralized and decentralized, which are interconnected and conditional.

1) Centralized funds include funds at the disposal of the state as a ruling entity. These include - Budget funds

State and municipal credit

State extra-budgetary funds

2) Decentralized funds include the finances of enterprises and organizations of all forms of ownership, formed both from their own resources and from budgetary allocations, as well as household finances

The role and importance of finance

Finance is directly related to the functioning of public economic relations in the process of accumulation, redistribution and use of centralized and decentralized funds of funds. Humanity, in the process of evolutionary development, has passed the path from commodity exchange to commodity-money relations, where money has become a universal equivalent, and the state, in the course of its activities to manage economic and social processes, began to keep records of income and expenses in monetary form, forming various monetary funds.

Finance- not the money itself, but the relationship between people regarding the formation, redistribution, and use of funds.

Money is the equivalent by which labor is measured. Finance serves as an economic instrument for the distribution of gross social product and national income. They are a means of controlling the production and distribution of material goods; a means of stimulating the development of the state and society. Finance reflect in abstract form all processes occurring in the state, not only in the field of economics and social processes, but also in the field of politics, ecology, demography, etc. Any event in the state cannot be carried out without redistribution of financial resources, i.e. without the financial activities of the state, which are carried out in the legal sphere.

Finance functions:

1. Regulatory

2. Test

3. accumulation of money. funds

4. use of money

5. redistribution of funds

The theory of finance consists of:

A) Teachings about commodity-money relations.

Finance has always been considered an economic category; it is a phenomenon that exists only in commodity-money relations. The importance of finance in a state depends on the place commodity-money relations occupy in the state. This causes the role of finance to decrease or increase. Until the 90s, there was no financial law in the strict sense; it was replaced by administrative law. But not all monetary relations express financial relations. Money circulation, the sale of goods, the use of money as accounting and control do not express financial relations. Finance is different from money. If money - is the universal equivalent by which the costs of social labor are measured, then finances are like that an economic category that characterizes the process of using and distributing funds in the state in a centralized or decentralized way. Finance is an economic instrument for the distribution and redistribution of the aggregate social product and national income. This is a kind of means of control over the formation and use of funds. The main purpose of finance is to provide, through the formation of cash income and cash funds, not only the needs of the state, as well as enterprises, organizations, and the population in funds, but also to ensure control over the expenditure of funds in rubles. Finance expresses the monetary relationship, as a result of which the systematic formation, distribution and use of monetary funds and funds of the state, organizations and the population is ensured.

b) The doctrine of national income as the main source of financial resources of any state. The main source of cash income and state funds is the country's national income. It is the volume of national income that determines the capabilities of a particular state in meeting the needs of the population. National income has two main parts: fund accumulation and consumption. These two parts make it possible to determine the proportions of economic development and its structure. There is such a paradox - without the participation of finance it is impossible to distribute national income. Therefore, in this sense, finance is the link between the creation and use of national income. The link between the creation and use of national income is also budget system, with its help, 70-80% of national income is distributed and redistributed.

c) The doctrine of the nature and functions of the state.

The content of finance is determined by the essence and functions of the state. The main function of the state is economic organization in relation to finance, it is expressed in the fact that by organizing financial relations, the state sets in motion huge cash flows and thereby actively influences all structures of the economy: production, distribution, consumption, both parts of the national income. In this sense, finance acts in terms of material content as target funds of funds. All these target funds (budgetary, non-budgetary, etc.) constitute the financial resources of any state.

The volume of a country's financial resources is reflected only in the consolidated financial balance sheet. At the level of the Russian Federation, the Ministry of Economic Development and the Ministry of Finance, simultaneously with the draft federal budget, prepare a draft consolidated financial balance sheet and the federal budget makes up only part of it, and the rest consists of information on enterprise income, etc. This is necessary in order to predict economic development. Consolidated financial balances are almost never prepared by the constituent entities of the federation and municipalities, and it is a pity, since the constituent entities and the municipality have no less information than the entire Russian Federation.

Finance appears when, during the production of goods and their subsequent sale, certain monetary incomes are generated for those involved in production, and then the distribution and appropriate use of these incomes occurs according to various schemes. Proceeds from the sale of products are mainly formed in the form of money circulation, as a means of payment and a measure of value. However, this is not finance yet, but the distribution of income from income - this already concerns financial relations.

With the further redistribution of revenue, the importance of finance is invaluable in view of the fact that the value created in the sphere of material production is quite often redirected to the non-productive sphere. At the distribution stage, in addition to finance, other economic categories also take part: wages, price, various loans. The great importance of finance from other categories is that the distribution and further redistribution of value with the help of finance is necessarily accompanied by the movement of cash flows, which take such a specific form as financial resources.

In general, financial resources are identified as material carriers of financial relations, which in most cases are formed through various types of cash flows and income, receipts and deductions.

Basically, financial resources are initially formed and appear at the production stage, where the price value of the product is mainly created, but in reality they are formed at the stage of initial distribution, that is, from the proceeds received from the sale of the price value of the product. Financial resources must have a specific owner, so it can be either the state or any enterprise, large corporations and small businesses in various fields of production.

In modern conditions of commodity-money relations, every movement of the gross domestic product, from the stage of its production to the stage of consumption, is mediated by the formation of monetary funds and their further use. Finance, which expresses the processes of general formation and specific use of monetary funds of various purposes, through special forms of monetary relations, thus acts as value economic relations in the production of material goods, including their exchange and distribution between various consumers. At the same time, the value of the share of finance for each stage of a specific reproduction is not the same.

Finance is not involved in the technological production process. At the same time, if we consider any production as an economic process, this is the movement of the value of a product, then finance is a certain necessary and important factor in its implementation, as well as one of the indicators of the efficiency of all production.

Thus, at the initial stage of reproduction, with the help of monetary funds, an enterprise acquires the necessary means of production for the manufacture or production of material goods.

Consumption is a special stage of reproduction, where finance provides the opportunity for its very implementation. Personal and industrial consumption of material goods is always preceded by various processes of formation and rational use of accumulated funds. The role of finance in the sphere of consumption is much greater than the quantitative parameters of this consumption fund itself, while finance also acts as an effective means of controlling the targeted use and investment of accumulated funds.

The meaning of financial ratios

To assess the current financial condition of an enterprise, a set of ratios is used, which are compared with standards or with the average performance indicators of other enterprises in the industry. Ratios that go beyond standard values ​​signal the company’s “weaknesses.”

Financial stability is an integral part of the overall stability of the enterprise, the balance of financial flows, the availability of funds that allow the organization to maintain its activities for a certain period of time, including servicing received loans and producing products.

Key indicators of the financial stability of the organization:

The main indicator influencing the financial stability of an organization is the share of borrowed funds. It is generally believed that if borrowed funds account for more than half of a company's funds, then this is not a very good sign for financial stability; for different industries, the normal share of borrowed funds may fluctuate: for trading companies with large turnovers it is much higher.

In addition to the above ratios, the financial stability of an enterprise reflects the liquidity of its assets in comparison with its liabilities by maturity: the current ratio and the quick ratio.

The importance of enterprise finance

Enterprise finance is the most important component of the financial system of the Russian Federation. Their functioning is determined by the existence of commodity-money relations and the operation of the law of value. Enterprise finance has the same features as the category of finance as a whole.

Enterprise finance is a set of monetary relations that arise among specific economic entities in connection with the formation and use of cash income and savings.

Enterprise finance performs distribution and control functions.

The distribution function is manifested in the process of distributing the value of the social product and national income. At the enterprise level, this process occurs through their receipt of cash proceeds for sold products and their use to reimburse spent means of production and generate gross income. The financial resources of the enterprise are also subject to distribution in order to fulfill monetary obligations to the budget, banks, and counterparties. The result of the distribution is the formation and use of target funds of funds (compensation fund, wages, etc.), maintaining an effective capital structure. The main object of implementation of the distribution function is the profit of the enterprise.

The control function of enterprise finance should be understood as their inherent ability to objectively reflect and thereby control the financial condition of the enterprise, industry and national economy as a whole using such financial categories as profit, profitability, cost, price, revenue, depreciation, fixed and working capital .

The control function of finance is implemented in the following main areas:

Monitoring the correctness and timeliness of transfers of funds to cash funds for all established sources of financing;
control over compliance with the specified structure of cash funds, taking into account production and social needs;
regular verification of the targeted and effective use of financial resources.

To implement the control function, enterprises develop standards that determine the size of cash funds and sources of their financing.

The finance functions of enterprises are interconnected and are parties to the same process.

Enterprise finance is the initial basis of the country's financial system, since it covers the most important part of all monetary relations in the sphere of social reproduction, where a social product is created. The ability to meet social needs and improve the financial position of the state depends on the financial condition of enterprises.

Enterprise finance carries out the process of distribution and redistribution of the value of the social product at three main levels:

At the national (national) level;
enterprise level;
level of production teams.

By distributing and redistributing value at the national level, enterprise finance ensures the formation of the country's financial resources used to form the budget and extra-budgetary funds.

At the enterprise level, they support the sphere of material production with the necessary financial resources and funds for the continuous process of expanded reproduction.

At the level of production teams, with the help of finance, monetary funds are formed - wages, material incentives, and social development programs for enterprise teams are implemented.

The direct connection of the finances of enterprises with all phases of the reproduction process determines their high potential activity and wide possibility of influencing all aspects of management. They serve as an important tool for economic stimulation and control and management of the country's economy.

The Importance of Financial Analysis

Analysis of financial condition is an integral element of both financial management and economic relationships with partners and the financial and credit system. Analysis in a general sense is the division of a whole into its component parts.

The subject of financial analysis is the financial condition of an enterprise, which allows one to assess the current financial condition and changes that occur in the financial performance of the enterprise.

Financial condition is a set of indicators characterizing the availability, allocation and use of financial resources.

The purpose of financial analysis is to obtain information about the real state of the enterprise at the date of reporting and its forecast.

To achieve this goal in the process of financial analysis, it is necessary to solve the following tasks:

1. Establishing patterns, trends in financial phenomena and processes in the specific conditions of the enterprise.
2. Scientific substantiation of current and future plans.
3. Monitoring the implementation of plans and management decisions.
4. Assessing the results of the enterprise’s activities and developing measures to use the identified reserves.

Principles of financial analysis:

1) the need for a government approach;
2) scientific character;
3) complexity;
4) consistency;
5) objectivity;
6) effectiveness;
7) planning;
8) efficiency (means the ability to quickly and clearly conduct analysis, make management decisions and implement them);
9) efficiency.

Analysis of the financial condition of an enterprise within the framework of financial management can be carried out in two stages:

1. Preliminary assessment of financial condition. At this stage, comparative tables are compiled for the last two years in order to identify absolute and relative deviations in the main reporting indicators; the relative deviations of interest rates in relation to the balance year for several years are calculated. The main goal of such an express analysis is to select a small number of the most significant and relatively simple calculations of indicators and constantly monitor their dynamics. The selection of the necessary indicators is done by the analyst himself.
2. Detailed analysis of financial condition. The main goal of this stage is to compile a more detailed description of the property and financial situation of the business entity and the results of its activities.

A detailed analysis is carried out on the basis of a special program, which usually includes: construction of a net analytical balance; assessment and analysis of economic potential (assessment of property status and capital structure and analysis of financial position, assessment of financial stability); assessment and analysis of the effectiveness of financial and economic activities (analysis of turnover and profitability).

The Importance of Financial Control

Financial control is an integral part of the financial activities of the state and municipalities, since finance as an economic category has not only distribution, but also control functions.

Financial control is carried out in the manner established by legal norms by the entire system of state authorities and local self-government, including special control bodies with the participation of public organizations, labor collectives and citizens.

The importance of financial control is expressed in the fact that when it is carried out, it is checked, firstly, compliance with the legal order established in the field of financial activities by all state authorities and local governments, enterprises, institutions, organizations, citizens and, secondly, the economic feasibility and effectiveness of the activities carried out actions, their compliance with the tasks of the state and municipalities. It serves as an important way to ensure the legality and appropriateness of financial activities. The requirement to comply with the law in financial activities has a constitutional basis.

Financial control is inherent in all financial and legal institutions (tax institution, institution of extra-budgetary funds, etc.). Therefore, in addition to the general financial and legal norms contained in the General Part of Financial Law and regulating the organization and procedure for conducting financial control in general, there are norms that provide for its specificity in individual financial and legal institutions of the Special Part (enterprise finance).

The main areas of financial control in the sphere of relations regulated by financial law are control over:

The performance by state authorities and local self-government of the functions of accumulation, distribution and use of financial resources in accordance with their competence;
fulfillment by organizations and citizens of financial obligations to the state and local governments;
use for the intended purpose by state and municipal enterprises, institutions, organizations of monetary resources under their economic jurisdiction or operational management;
compliance with the rules for carrying out financial transactions, settlements and storage of funds by enterprises, organizations, institutions.

In the process of financial control, internal production reserves are identified - opportunities to increase profitability, increase labor productivity, more economical and efficient use of material and monetary resources, and also determine ways to eliminate and prevent violations of financial discipline. If they are identified, sanctions are applied to organizations, officials and citizens, and compensation for material damage to the state, organizations, and citizens is provided.

The implementation of financial control tasks strengthens state financial discipline, which expresses one of the aspects of legality. State financial discipline is strict compliance with the requirements established by legal norms and the procedure for the formation, distribution and use of state and municipal monetary funds. The requirements of financial discipline apply not only to enterprises, organizations, institutions, citizens, but also to state authorities and local governments and their officials.

Importance of an organization's finances

Since the predominant part of financial resources is concentrated in enterprises, the stability of the financial system as a whole depends on the stable position of their finances.

The distribution function reveals the main importance of finance - the distribution of financial resources in various directions in accordance with their economic purpose and existing legislation.

The control function, or financial control, is implemented in three areas:

1) within the enterprise in relationships between divisions;
2) in connection with the external environment (third parties);
3) through the state tax service.

The following rules are used in organizing the finances of enterprises:

Independence in the field of financial and economic activities;
self-financing;
interest in work results;
responsibility for these results;
formation of financial reserves;
division of funds into own and borrowed funds;
priority of fulfilling obligations to budgetary and state extra-budgetary funds;
financial control over the activities of the enterprise.

The following interactions are distinguished as part of financial relations:

Between enterprises and organizations in the process of generating and distributing gross income, when paying for supplies, selling finished products or services;
when issuing and distributing shares of an enterprise, mutual lending, equity participation;
between enterprises and individual workers in the process of using income;
between legal entities, individuals and the banking system;
between enterprises and foreign partners when using the currency board.

Enterprise finance is the basis of the state's financial system, since enterprises are the main link of the national economic complex. The state of the enterprise’s finances influences the provision of national and regional monetary funds with financial resources. The dependence here is direct: the more stable the financial position of enterprises, the more secure the national and regional monetary funds are, the more fully socio-cultural and other needs are satisfied.

That is why, in a market economy, it is necessary to learn to combine the complete independence of enterprises and regions with government regulation of the economy and finance. These tasks must be solved by a financial mechanism functioning at one or another stage of development of society.

The financial mechanism includes:

The dependence of wages on the usefulness of the product or service produced and on the receipt of payments for it;
reasonable distribution of profits between the enterprise, trade and banks, in which the majority should go to the manufacturer;
the objective reality of standards for the distribution of profits between enterprises and budgets of various levels, as well as extra-budgetary funds, implying long-term and stability;
the validity of deductions for accumulation (production development) and consumption;
sufficiency of funds for social needs, for research and development, for personnel training and other purposes.

The financial activities of an enterprise cover the following main aspects of financial management:

Organization of financial services;
financial planning;
accounting for the movement of cash resources;
control and analysis of the effectiveness of the use of financial resources;
stimulating growth in sales, profits and profitability of the enterprise.

The structure of the financial service depends on the size of the enterprise, the nature of its activities, financial strategy, the availability of technical financial management tools, etc. In a small enterprise, one accountant handles all financial issues. In a large enterprise, the financial service is headed by a financial director and includes various professionals.

The main tasks of the financial service are to ensure the solvency of the enterprise and increase capital.

The meaning of the financial result

The main goal of any enterprise operating in a market environment is to obtain a positive financial result, which is profit. This economic category characterizes the efficiency of the company, the quality of the products produced (sold) or services (works) that it provides.

Increasing profits and improving their quality is a prerequisite for expanding the scale of the enterprise, as well as meeting the material and social needs of employees and founders (shareholders) of the organization. Positive financial results provide an opportunity to improve financial condition and business activity. In addition, due to profits, deductions are made to the budget of our country, while the revenue part of the state budget is formed, which leads to an increase in the economic development of the country and its individual regions, and ultimately, an increase in the living standards of the population.

Financial results are studied using absolute and relative indicators. Absolute indicators include indicators such as gross profit, sales profit, profit from other activities, total accounting profit, net and retained earnings. Relative indicators for assessing financial results are calculated in order to form an economically sound assessment of changes in financial results over time. These indicators include indicators of profitability of income and expenses, which are relative values ​​of intensity, the main group of which consists of indicators of profitability of sales: return on sales by profit from sales, return on sales by profit before tax, return on sales by net profit.

The importance of analyzing financial results lies in the formation of an economically sound assessment of their dynamics and structure, as well as the identification of internal reserves for improving financial results and improving their quality.

There are various classifications of financial results, of which the most common are the following:

By composition of elements: marginal profit, gross profit, net or retained profit;
- by main types of activity of enterprises: profit from current, investment, financial activities;
- by formation period: financial result of the previous period, reporting period or future period;
- by the nature of taxation: taxable profit and profit that is not subject to taxation.

Thus, financial results play a special role in the economic development of a company, since they are the final indicators of the performance of any organization.

Importance of financial activities

So, the financial activity of the state is the implementation of its functions for the systematic formation (formation), distribution and use of monetary funds (financial resources) in order to implement the tasks of socio-economic development, ensure the defense capability and security of the country, as well as the use of financial resources for the activities of government bodies .

The financial activities of municipalities, carried out through local government bodies, are aimed at solving problems of local importance determined by the legislation on local government. It represents the implementation of functions for the systematic formation (formation), distribution and use of municipal (local) monetary funds in order to implement socio-economic tasks of local importance and provide financial resources for the activities of local governments.

The financial activities of state authorities and local self-government are connected by a general focus on the needs of society and are of a public nature, although they differ in specific tasks. The main, defining goal of this activity should be, according to the Constitution of the Russian Federation (Part 1, Article 7), the creation of conditions that ensure a decent life and free development of people.

The content of the financial activities of the state and municipalities is expressed in numerous and varied functions that operate in the general directions mentioned above: education (formation), distribution and use of state or municipal (local) monetary funds*. An integral element of each of them is the control function, which follows from the essence of finance. This control is also financial in accordance with the content of all this activity.

The variety of functions is due to the multi-link nature of the financial system and the uniqueness of its links. In this regard, the state and municipalities carry out activities to create, distribute and use various types of monetary funds: budgetary and credit resources, insurance monetary funds, financial resources of economic sectors, state and municipal enterprises, organizations and institutions.

In addition to this point of view on the content of financial activity, which is widespread in the legal and economic literature, another view has been expressed, according to which it is limited only to the functions of the formation and distribution of monetary funds, excluding their use. Subsequently, the named author somewhat softened his position, recognizing the presence in the composition of financial activities of an element of organizing the use of monetary funds. However, such a restriction seems unfounded. After all, it is precisely in the use of financial resources in accordance with the tasks facing the state that ultimately lies the meaning of financial activity. And the relationships that arise in the process of this activity can be served, in addition to financial law, by other branches of law.

The financial activities of the state and municipalities act as an important and necessary component of the social management mechanism. This is expressed in the fact that the financial resources accumulated during its course are directed to sectors of the economy, social and other spheres, taking into account the priority of the financed activities at the relevant stages of the country’s development, its external and internal conditions. At the same time, the state and municipalities undertake to provide those necessary public services that cannot be the subject of private entrepreneurship.

The implementation of effective financial activities of the state is a factor necessary for the implementation of a fair social policy, which, in the context of the transition to a market economy, requires the elimination of the negative aspects of the latter (instability of the financial situation of members of society with a significant gap in income levels, unemployment, etc.).

Through financial activity, the material basis necessary for the functioning of government and administrative bodies, law enforcement agencies, and ensuring the defense capability and security of the country is created.

The influence of the state and municipalities on socio-economic processes is carried out not only in the form of direct financial support, allocation of funds for certain plans, programs, etc., but also indirectly - through the provision of tax benefits, the use of low interest rates when lending or the provision of interest-free loans, deferrals of tax payments, etc. in order to stimulate any activity recognized by the state as a priority. On the contrary, restrictive measures may be applied.

Financial activity influences the development of federal relations and local government. An important aspect of it is the distribution of financial resources between federal bodies and subjects of the Federation, as well as municipalities, which is important for regulating and coordinating the production and development of the socio-cultural sphere throughout Russia, as well as at the corresponding territorial levels. Regional policy in the Russian Federation should be aimed at equalizing the conditions for the socio-economic development of regions while creating a single economic space.

As an integral part of the mechanism of public administration and regulation of socio-economic processes, financial activity contains broad opportunities to influence the development of market relations. The American scientist R. Klitgaard drew attention to the need for such a role for the state, noting that an effective market is not created by itself, but is, in particular, a product or result of reasonable legislation and government policy. “The success of market reforms,” he believes, “depends to a decisive extent on public administration. This lesson comes as a surprise to those who welcomed the government's withdrawal from economic management."

Recently, government authorities of the Russian Federation have been developing measures to increase the role of the state in regulating the market economy, including the field of finance.

The financial activities of the state have their own organizational and legal features:

Firstly, unlike other areas of state activity, it is intersectoral in nature, since the accumulation, distribution and use of financial resources affects all sectors and areas of public administration. In addition, in the process of financial activity, the state controls the work of government bodies, as well as enterprises, organizations, and institutions in implementing their tasks.
Secondly, the implementation by the state of financial functions occurs (depending on their content, role, scale of action) in the form of activities of both representative and executive authorities (government bodies). For example, the distribution of budget funds in the main areas of life of the Russian Federation or its constituent entities is carried out by representative bodies, and the distribution of financial resources within sectors of the economy is carried out by executive authorities.
Thirdly, the sphere of financial activity falls under the jurisdiction of both federal bodies and constituent entities of the Federation, as well as local governments. In addition, there is an area of ​​joint jurisdiction of the Federation and its subjects.

As a control system, financial activities are carried out using a variety of methods. Their choice depends on a number of factors: the tasks of the state or municipalities at a particular stage; sources of their income; on the purpose of using funds; on the ratio of the volume of financial resources available to the state or municipality and the need for funds, on the state of the country’s economy; priority of activities, etc.

Thus, to attract funds to the budget system, extra-budgetary state and municipal trust funds, methods of mandatory and voluntary payments are used. They cover several types of payments, each of which is unique. For example, the main obligatory payments to the state or local budget are taxes, fees, and state duties from legal entities and individuals. There are mandatory payments and deductions that are credited to targeted extra-budgetary funds. The method of mandatory payments is also used for state insurance (compulsory passenger insurance, etc.). Due to mandatory contributions from banks, required reserves are deposited in the Central Bank (Bank of Russia).

Along with this, voluntary methods are also used to form state and municipal monetary funds: lotteries, loans, donations from legal entities and individuals, deposits in banks, etc.

When distributing public funds, two main methods are used: financing, i.e. their irrevocable and gratuitous provision, and lending, meaning the allocation of funds on the basis of remuneration and repayment. Both of these methods are divided into several types depending on the purpose of using funds, their sources, the organizational and legal characteristics of the entities involved in these relations, and other factors. State and municipal organizations receive state funds through both financing and lending, non-state organizations - mainly through lending (for example, providing loans on preferential terms to farms).

In the process of financial activities, the receipt of funds at the disposal of the state, legal entities and individuals, as well as their use, is carried out through settlement transactions. They are made by non-cash payment methods in various forms and cash payments.

Payments by enterprises, institutions, organizations, state bodies and local governments are made mainly by non-cash payments, payments by the population - mainly in cash. However, in the latter case, non-cash payments are also used (for example, when collecting income tax, insurance payments from the wages of workers and employees). The state promotes the expansion of the sphere of non-cash payments, which is important for stabilizing the monetary system and more efficient use of the money supply.

In external economic, scientific, cultural and other relations, various forms of international payments are used and foreign exchange transactions are carried out.

The methods of financial activity of the state and municipalities changed in accordance with their tasks at each stage of development. Significant changes in them have occurred at the present stage of the transition to market relations. They became more diverse and filled with new content. Thus, the number of taxes and other mandatory payments and voluntary methods of raising funds has increased significantly. In the financing of institutions, a normative method is used, based on the performance of certain work (patient treatment, training of specialists, etc.), and not on the number of staff units. New methods have entered into credit relations, where banks become partners of business entities, interest rates for loans are actively used, etc.

The financial market is developing, acquiring new features, as an area for the sale of securities - shares, bonds and others, as well as credit. It is used to form funds of enterprises, organizations, as well as to replenish the financial resources of the state and local governments. Legislation protects the financial market from monopolism.

To a certain extent, the securities market existed in the country even before market reforms (distribution of government bonds, credit), but in a limited area. Now the types of securities have diversified significantly, the range of entities issuing and purchasing them has increased, and the scope of application of bank credit has expanded.

When characterizing the financial activities of the Russian Federation at the present stage, it is important to note that it is carried out in the conditions of economic cooperation with the CIS countries. Russia proceeds from the tasks of strengthening and developing equal and mutually beneficial economic relations with these states and developing integration relations with them. To regulate and develop such cooperation, a special body has been created - the Ministry of Affairs of the Commonwealth of Independent States (Ministry of Commonwealth of Russia). Within the CIS there is an Interstate Economic Committee, consisting of deputy heads of government and is a permanent body of the Economic Union.* Agreements are also concluded on certain issues of financial activity (for example, on the avoidance of double taxation and the prevention of tax evasion).

Foreign economic relations are also carried out by the constituent entities of the Russian Federation within the powers granted to them by the Constitution of the Russian Federation and federal legislation, as well as agreements between federal authorities and constituent entities of the Russian Federation. The general procedure for coordinating these relations is established by a special federal law.

The importance of financial stability

Financial stability is a characteristic that indicates a stable excess of income over expenses, free maneuvering of the enterprise’s funds and their effective use, uninterrupted production and sales of products. Financial stability is formed in the process of all production and economic activities and is the main component of the overall sustainability of the enterprise.

An analysis of the stability of the financial condition as of a particular date makes it possible to find out how correctly the enterprise managed financial resources during the period preceding this date. It is important that the state of financial resources meets the requirements of the market and meets the development needs of the enterprise, since insufficient financial stability can lead to the insolvency of the enterprise and a lack of funds for the development of production, and excess financial stability can hinder development, burdening the enterprise’s costs with excess inventories and reserves. Thus, the essence of financial sustainability is determined by the effective formation, distribution and use of financial resources.

Its external manifestation is solvency.

Solvency is the ability to fully fulfill your payment obligations arising from trade, credit and other payment transactions in a timely manner.

The solvency assessment is given as of a specific date. However, one should take into account its subjective nature and the fact that it can be performed with varying degrees of accuracy.

Solvency is confirmed by the following data:

Availability of funds in current accounts, foreign currency accounts, short-term financial investments. These assets must be of optimal size. The larger the amount of funds in the accounts, the more likely it is to say that the company has sufficient funds for current settlements and payments. However, the presence of insignificant balances in cash accounts does not always mean that the company is insolvent: funds can be transferred to settlement accounts, foreign currency accounts, or the cash register within the next few days; short-term financial investments can easily be converted into cash. A constant crisis lack of cash leads to the fact that the enterprise turns into “technically insolvent”, and this can already be considered as the first step on the path to bankruptcy;
about the absence of overdue debts and delays in payments;
untimely repayment of loans, as well as long-term continuous use of loans.

Low solvency can be either random, temporary, or long-term, chronic. The reasons for this may be:

Insufficient financial resources;
failure to fulfill the product sales plan;
irrational structure of working capital;
late receipt of payments from contracts;
surplus goods in safekeeping.

In the process of analyzing solvency during financial planning for the future, a balance of non-payments is compiled in the assets of which indicators of non-payments are reflected: short-term debt on loans and settlement documents of suppliers, arrears to the budget and other non-payments (non-payment of wages, etc.).

There are two sections in the liability side of the balance sheet. In the first - “Reasons for non-payments” - the lack of own working capital is indicated; excess inventories of inventory items; goods shipped but not paid for on time by buyers; goods in custody of buyers due to refusal of acceptance; immobilization of working capital for capital construction, etc. The second section - “Sources that ease financial tension” (IOFN) - reflects temporarily free funds (own funds of the reserve and special funds), borrowed funds (excess of normal accounts payable over accounts receivable); bank loans for temporary replenishment of working capital.

In the economic literature, it is recommended to define the solvency ratio as the ratio of the balance of cash and bank accounts, as well as short-term financial investments to the amount of urgent payments for wages, the bank for loans, the budget, and suppliers for purchased inventories. If an organization draws up Form No. 4 “Cash Flow Statement”, then the solvency ratio can be calculated as the ratio of the amount of cash balance at the beginning of the year and cash receipts to spent funds.

The highest form of sustainability of an enterprise is its ability to develop. To do this, the enterprise must have a flexible structure of financial resources and the ability, if necessary, to attract borrowed funds, i.e. be creditworthy.

An enterprise is creditworthy if it has the prerequisites for obtaining a loan and the ability to timely repay the loan taken with the payment of interest due from its own resources.

Using profits, the company not only pays off its obligations to banks, the budget, insurance companies and other enterprises, but also invests in capital costs. To maintain financial stability, it is important not only to increase the absolute value of profit, but also its level relative to the invested capital or costs of the enterprise, i.e. profitability. It should be remembered that high profitability is associated with higher risk, which means that instead of income, the company may suffer significant losses and even become insolvent.

Thus, the financial stability of an enterprise is the state of its financial resources, their distribution and use, which ensures the development of the enterprise based on the growth of profits and capital while maintaining solvency and creditworthiness under conditions of an acceptable level of risk.

The financial stability of an enterprise is influenced by a huge variety of factors, such as:

The position of the enterprise in the product market;
production and release of cheap, in-demand products;
its potential in business cooperation;
degree of dependence on external creditors and investors;
presence of insolvent debtors;
efficiency of economic and financial transactions, etc.

Let us present the classification of factors given by V.M. Rodionova and M.A. Fedotova:

By place of origin - external and internal;
according to the importance of the result - main and secondary;
by structure - simple and complex;
according to the time of action - permanent and temporary.

Internal factors depend on the organization of the enterprise itself.

Let's look at the main ones.

The sustainability of an enterprise primarily depends on the composition and structure of products and services provided, and production costs. Moreover, the relationship between fixed and variable costs is important.

Another important factor in the financial stability of an enterprise, closely related to the structure of products and production technology, is the optimal composition and structure of assets, as well as the correct choice of management strategy. The art of managing current assets is to keep in the accounts of the enterprise only the minimum necessary amount of liquid funds that is needed for current operational activities.

The more financial resources an enterprise has, primarily profits, the more stable its position. In this case, not only the total amount of profit is important, but also its distribution, especially the share that is directed to the development of production.

Funds additionally mobilized on the loan capital market have a great influence on the financial stability of the enterprise. The more funds a company can attract, the higher its financial capabilities, but the financial risk also increases - will the company be able to pay its creditors on time?

Here, a large role is given to reserves as one of the forms of financial guarantee of the solvency of an economic entity.

So, internal factors affecting financial stability are:

Industry affiliation of the business entity;
structure of manufactured products (services), its share in total effective demand;
the amount of paid authorized capital;
the magnitude and structure of costs, their relationship with cash income;
the state of property and financial resources, including stocks and reserves, their composition and structure.

In addition, internal factors include the competence and professionalism of enterprise managers, their ability to take into account changes in the internal and external environment.

External factors include the economic conditions of business, the prevailing technology and equipment in society, effective demand and the level of income of consumers, tax and credit policies of the government of the Russian Federation, legislative acts to control the activities of the enterprise, foreign economic relations, the value system in society, etc.

Importance of the financial system

With the disintegration of feudalism and the gradual development of the capitalist mode of production, monetary income and expenditure of the state began to acquire increasing importance; the share of in-kind fees and duties decreased sharply. This process intensifies with the expansion of the sphere of commodity-money relations, the growth and complexity of the functions of the state.

In the early stages of the development of the state, there was no distinction between the resources of the state and the resources of its head: the monarchs disposed of the country's funds as their own property. With the separation of the state treasury from the personal treasury and property of the monarch, the concepts of state finance, state budget, and state credit arise.

Under the conditions of the capitalist mode of production, commodity-money relations are most widely developed. They cover all spheres and functions of the public economy. In turn, finance, which expresses the movement of value, is playing an increasingly important role in the life of the state. In its essence, finance is economic relations associated with the formation, distribution and use of funds of funds in the process of distribution and redistribution of national income.

The financial system is a set of financial links designed to ensure the state carries out its political and economic functions, and consists, on the one hand, of public finance, and on the other, of the finances of private enterprises, corporations, and monopolies.

In the era of pre-monopoly capitalism, the state financial system had two links - the state budget and local finance. They made it possible to form funds of funds with the help of which the state performed its functions. Under the influence of the development of productive forces and profound changes in the economy, the structure of the financial system is changing. New financial units are being identified and developed, and their independence is increasing.

At the present stage, the state financial system in developed foreign countries includes four parts: the state budget; local finance; special off-budget funds and finance of state enterprises. The leading link in public finance is the state budget. In terms of its material content, it is the main centralized fund of funds of the state.

The state budget is the main means of redistributing national income. Through this link in the financial system, up to 40% of the country’s national income is redistributed. The state budget concentrates the largest revenues and the most politically and economically important national expenditures. The main financial institutions - taxes, internal loans, expenses - are organically linked in it.

The main income of the state budget is taxes, amounting to 70 to 90% or more of the total amount of its income. The main taxes assigned to the state budget in countries with developed market economies are personal income tax, corporate income tax, excise taxes, value added tax, and customs duties. The state budget also makes the main expenses for: military purposes, intervention in the economy, maintenance of the state apparatus, social expenses, subsidies and loans to developing countries.

The state budget, due to its position, is closely connected with other parts of the financial system. It acts as a coordinating center that provides the assistance they need in a market economy. This assistance in the form of budget subsidies, loans, and guarantees ensures the normal functioning of the remaining parts of the financial system and their solution of the tasks assigned to them.

The next most important financial link is the local finance system. In modern conditions, under the influence of the development of productive forces, scientific and technological progress, the role and influence of local authorities is increasing. The scale of local economies, their connection and dependence on large capital are growing, and the functions of local authorities are expanding and becoming more complex. All this enhances the importance of local finance, increasing their role and share in the financial system. Local finances cover a wide group of secondary taxes (mainly property taxes), a system of local credit, and special funds. The central place in this link belongs to local budgets, which are not part of the state budget and have a certain independence. The structure of local finances is determined by the state structure and the corresponding administrative division of the state.

In modern conditions, this link of the financial system is increasingly used for economic purposes and to regulate economic processes. To this end, a significant portion of local budget funds is allocated to the development of economic and social infrastructure.

A special financial link is formed by special government funds, which have a certain independence, are separated from the state budget and are managed directly by the central, and in some cases, local authorities. These include social insurance funds, various trust funds, as well as state and semi-state financial and credit institutions.

The initial task of these funds was to finance individual targeted activities. Subsequently, they acquire the value of a reserve to which governments resort in cases of financial difficulties, i.e. are used to increase the flexibility of the financial system. Unlike government budgets, special funds are subject to much less parliamentary control, which makes them easier to use and makes governments more committed to their growth. An independent financial unit is formed by the finances of state enterprises. Its emergence is associated with the development of the public sector in the economies of a number of Western European countries (Great Britain, France, Italy, Germany, Austria) - a process that became most widespread after the Second World War. Its main task is to provide support to the private economy by preserving and developing important industries, which, due to their specific nature, have low profitability and are therefore unprofitable for business (railway, air transport, electricity, gas, coal industries, etc.). State-owned enterprises thus represent an attempt to resolve the tension between private enterprise interests and national economic problems. At the same time, the finances of state-owned enterprises are a link in the financial system through which the state participates in the primary distribution of national income, accumulating in its hands part of the income generated by these enterprises.

State-owned enterprises have fixed and working capital assigned to them, are independently budgeted and carry out legally regulated relationships with the state budget. Depending on the type of enterprise, they have varying degrees of autonomy, production and financial independence.

The second sphere of the financial system of developed foreign countries is the finance of private enterprises, corporations, monopolies, which arise in the course of economic activity and ensure the process of production and profit. They materialize in the form of monetary capital, various monetary funds of the enterprise.

Due to the fact that the activities of enterprises are carried out on the basis of the individual circulation of capital, these monetary funds are of a separate, decentralized nature. At the same time, the state has a direct relationship with the finances of private enterprises. They are expressed in the form of collecting payments to the state budget, forming a depreciation fund, regulating credit relations, and providing government subsidies.

Private enterprises make up the vast majority of material production, accounting for the main share of the gross domestic product and national income created. Therefore, the state uses various methods (including financial) to stimulate the activities of these enterprises, the growth of their savings, various funds associated with accelerating scientific and technological progress, creating reserves, and improving the skills of workers. The state establishes a preferential income tax regime, a system of accelerated depreciation, provides budget loans in some cases, and provides other forms of financial support. In turn, private enterprises, through their payments, participate in the formation of the revenue base of the state budget and other state funds.

Taking into account the above, we can expand the definition of the financial system. Each link of the financial system represents a certain sphere of financial relations, and this system as a whole is a set of various spheres of financial relations, in the process of which funds of funds are formed and used.

In other words, the financial system is a system of forms and methods of formation, distribution and use of state and enterprise funds.

Meaning of Financial Statements

The main requirement for financial statements is that they must give a reliable and complete picture of the property and financial position of the organization, its changes, as well as the financial results of its activities.

Accounting (financial) statements of organizations (except for budgetary ones) consist of:

– balance sheet;
– profit and loss statement;
– appendices to them, in particular the cash flow statement, appendices to the balance sheet and other reports provided for by the regulations of the accounting regulatory system;
– explanatory note;
– an auditor’s report confirming the reliability of the organization’s financial statements (if they are subject to mandatory audit in accordance with the law).

Numerical indicators in the financial statements are given for at least two years - the reporting year and the one preceding the reporting year (except for the report compiled for the first year).

Open joint stock companies, banks and other credit organizations, insurance organizations, stock exchanges, investment and other funds created from private, public and state funds (contributions) are required to publish annual financial statements no later than June 1 of the year following the reporting year.

The publicity of financial statements consists of their publication in newspapers and magazines accessible to users of financial statements, or the distribution among them of brochures, booklets and other publications containing financial statements, as well as their transfer to territorial bodies of state statistics at the place of registration for provision to interested users.

The annual accounting (financial) statements of the organization (except for budget ones) are open to interested users. The enterprise must provide an opportunity for users to become familiar with it.

External users of accounting (financial) statements are banks, investors, creditors, suppliers and contractors, buyers and customers working at the enterprise, authorities, public organizations and others. External users can review the annual financial statements and receive copies of them with reimbursement for the cost of copying.

Internal users of financial statements include executives, managers at various levels, founders, participants and owners of enterprise property.

All of them have some kind of need for information about the enterprise in order to study it.

Banks, creditors, lenders are interested in information that allows them to determine the feasibility of providing loans, the conditions for their provision, and assess the risk of repayment of loans and payment of interest. Lenders providing long-term loans are interested not only in the liquidity of the enterprise for short-term obligations, but also in the solvency of the enterprise from the standpoint of its stability in the future, i.e. I am also interested in information that allows me to judge the profitability of the business.

Investors (including potential owners) are interested in assessing the risk and profitability of ongoing and proposed investments, the ability of the enterprise to generate profits and pay dividends.

Suppliers and contractors are interested in whether the company will be able to pay them on time for its obligations, i.e. balance sheet liquidity and financial stability as a factor of partner stability.

Buyers and clients are interested in information that indicates the reliability of existing business relationships and determines the prospects for their further development.

Employees are interested in information about the profitability and stability of the enterprise as an employer, in order to have guaranteed payment for their labor and a workplace.

Authorities are interested in information to carry out their functions, conduct statistical monitoring and others. According to the financial statements of the enterprise, the Russian Federal Service for Insolvency and Financial Recovery and its territorial agencies analyze and assess the financial condition of the enterprise from the point of view of establishing an unsatisfactory balance sheet structure in order to prepare decisions on insolvent enterprises. Tax authorities use reporting data to exercise their right (as well as the debtor, creditor and prosecutor), provided for by the Federal Law on Insolvency (Bankruptcy), to apply to an arbitration court to declare the debtor bankrupt due to failure to fulfill monetary obligations. The criterion for determining the unsatisfactory structure of the balance sheet of insolvent enterprises is the liquidity and financial stability of the enterprise.

Shareholders and owners of the enterprise are also interested in the size of dividends, the profitability of the enterprise in the future, its liquidity and financial stability from the point of view of the riskiness of the invested capital.

Internal users (executives, managers), based on financial statements, analyze and evaluate the indicators of the financial condition of the enterprise, determine trends in its development, and prepare an information base for financial statements that provides all interested users.

Financial reporting information serves as the basis for making decisions on investment, financial and operating activities.

Internal analysis is aimed at forecasting the expansion of production activities, the selection of sources and the possibility of attracting investments in certain assets, maintaining the liquidity of the enterprise or the likelihood of its bankruptcy. The accounting (financial) statements themselves can serve as an assessment of the work of managers (using coefficients characterizing the financial situation, external users can judge the work of managers). In addition, the enterprise itself is interested in reliable partners and turns to reading their reports and the reports of future potential counterparties.

Providing users (primarily external ones) with complete and objective information about the financial position and financial performance of business entities is the most important task of international standards, in accordance with which the concepts for the development of modern Russian accounting and reporting are built.

According to the adopted concept, the Ministry of Finance of the Russian Federation has currently approved accounting regulations (standards) regulating the procedure for generating accounting information and the procedure for disclosing information in accounting (financial) statements. The practical use of information disclosure requirements in accounting (financial) statements provided for by the relevant provisions (standards) provides a more complete information base for an objective and comprehensive analysis of the financial condition of the enterprise and its sustainable development.

Thus, the information in which all users are interested should make it possible to assess the ability of the enterprise to reproduce cash and similar assets, generate profits, operate stably, and also make it possible to compare information over different periods of time in order to determine trends in indicators of interest to users and financial situation in general.

Economic importance of finance

Finance is a product of the economic development of society, which was formed in the process of formation of the state and the development of commodity-money relations.

The reason for the emergence of finance was the need of economic entities and the state for the financial resources necessary to support their activities.

The science of finance studies the socio-economic essence of finance through the study of the totality of financial relations that arise in the process of formation and use of monetary income and funds at different levels of the economic system: national (macro level), regional (level of administrative-territorial units) and at the level of individual subjects of jurisdiction farms (micro level). International finance is highlighted separately.

In modern financial and economic literature, finance is considered as a system of socio-economic relations that arise regarding the distribution and redistribution of the value of the gross domestic product, and, under certain conditions, national wealth with the aim of generating financial resources for economic entities and the state, using them for expanded reproduction, satisfaction of other public interests and needs.

Finance is a set of monetary relations that are associated with the formation, mobilization and placement of financial resources, as well as with the exchange, distribution and redistribution of the value of the gross domestic product created on the basis of the use of finance, and, under certain conditions, national wealth.

Main features of finance:

Exchange-distribution nature;
- movement of value from one subject to another;
- monetary form of relations;
- generating income and making expenses;
- equivalent (by purpose) nature of exchange and distribution and unequal by redistribution.

Finance is a complex, multifaceted social phenomenon, which is characterized by different essential features and forms of manifestation. An important feature of finance is its monetary nature. Financial resources act as material carriers of financial relations.

The use of financial resources occurs mainly through funds for special purposes, therefore there is also a definition of finance as an economic category that reflects the creation, distribution and use of funds of financial resources to meet the needs of economic activity, the provision of various services to the population by the state, and ensuring that the state fulfills its functions.

The socio-economic essence of finance in a market economy is most fully reflected in its functions.

The meaning of financial leverage

The financial leverage ratio is calculated as the ratio of debt to equity:

Financial leverage ratio = Liabilities / Equity

Both the numerator and the denominator are taken from the liability side of the organization's balance sheet. Liabilities include both long-term and short-term liabilities (i.e., whatever remains after subtracting equity from the balance sheet).

Normal value

The optimal ratio, especially in Russian practice, is an equal ratio of liabilities and equity capital (net assets), i.e. the financial leverage ratio is equal to 1. A value of up to 2 may be acceptable (for large public companies this ratio may be even higher). At large values ​​of the coefficient, the organization loses its financial independence, and its financial position becomes extremely unstable. It is more difficult for such organizations to attract additional loans. The most common ratio in developed economies is 1.5 (i.e. 60% debt and 40% equity). A too low value of the financial leverage ratio indicates a missed opportunity to use financial leverage - to increase the return on equity by involving borrowed funds in activities.

Like other similar coefficients characterizing the capital structure (autonomy coefficient, financial dependence coefficient), the normal value of the financial leverage coefficient depends on the industry, the scale of the enterprise and even the method of organizing production (capital-intensive or labor-intensive production). Therefore, it should be assessed over time and compared with the indicators of similar enterprises.

The Importance of Public Finance

In its economic essence, public finance is a set of distribution relations that arise in the process of formation and use of the state’s financial resources.

They are intended to provide the state with its functions.

Public finance is a science that is at the intersection of economics and politics, studying the income and expenses of government authorities, as well as their relationship.

With the help of the country's finances, the state distributes and redistributes GDP.

The subjects of state finance are, on the one hand, the state, and on the other, the population and business entities.

They cover 80% of all monetary resources and include a variety of financial institutions through which the state carries out its activities.

Composition of public finances:

1. The totality of all state budgets.
2. Centralized and decentralized funds for special purposes.
3. Finance of enterprises and organizations of various forms of ownership.
4. State credit.

State, personal, property insurance.

The functioning of public finances is inseparable from the state. Their necessity is due to the fact that in any type of economic system the main purpose of the state is to provide financial resources for those needs that cannot be satisfied through the market mechanism, as well as personally by each person.

Needs:

Environmental protection;
- conducting scientific research;
- secondary education;
- occupational safety and health;
- structural transformations of the economy;
- law and order.

Based on this, the power builds its financial policy and determines the level of intervention in economic activities and social security of citizens. These factors determine what portion of GDP should be concentrated in financial institutions created by the state.

For the first time, the functions of the state and public finance in a market economy were formed in 1978 (Theory and Practice of Public Finance - R. A. Musgrave).

Functions of public finance:

1. The provision of public goods and services, or the regulation of the process in relation to which limited production factors (labor, capital) are distributed between the public and private sectors.
2. Adjustment of income and property distribution.
3. Maintaining a high level of employment and ensuring price stability.

The state can influence the distribution of limited resources using methods:

1. Exercise of property rights.
2. Direct administrative orders with corresponding penalties for their violation (building standards, determination of the maximum achievable level of environmental pollution, military service, administrative methods in the field of the labor market and foreign trade).
3. Direct provision by the state of certain benefits, which are financed by general taxes and fees (state orders for scientific research).
4. Use of fees and taxes to control production or consumption (fees for water treatment, tax incentives for investment in environmental protection).
5. Formation of a tax system taking into account economic and structural policies (tax incentives for savings).
6. State subsidies for enterprises, cheaper loans from budget funds, provision of public goods at preferential prices.
7. Partial financing by the state of entrepreneurial risk by providing guarantees.

The state influences the distribution and redistribution of income and property of citizens using the following tools:

1. Taxes (income tax, property tax).
2. Direct provision of public goods without user participation in costs (free education, healthcare).
3. Providing various types of monetary assistance (subsidies for housing and utilities).
4. State subsidies.

The state is taking measures aimed at better use of production resources.

An analysis of theoretical concepts and practice in developed countries shows that in a market economy, the state takes upon itself the solution of those problems that cannot be solved by the private sector, i.e. The state is needed for society to be viable.

The Importance of Local Finance

1. Distribution function - manifests itself in the order of formation of income and expenses of local budgets, trust funds of local governments. Funds are initially accumulated in local budgets and trust funds, and then distributed and used to meet a variety of local needs. Through the system of interbudgetary relations, resources are redistributed between individual administrative and territorial units in order to ensure financial equalization.
2. Control Function - is implemented by monitoring the drafting of the local budget, its consideration and approval, as well as the implementation of local budgets, and monitoring the reporting of this implementation. The scope of the control function includes various funds of funds and, in general, financial resources at the disposal of local governments. The control function sets the main task of ensuring the proportions of distribution and redistribution of financial resources, their targeted and economic use.
3. Stimulating function - consists in creating conditions under which local governments are directly interested in increasing budget revenues, additionally attracting national and local tax revenues, as well as searching for alternative sources of income, efficient use of financial resources, i.e. The implementation of the stimulating function consists in the formation of local budgets’ own revenues.

Local finance plays a large role in the economic system of each state, where financially efficient local government is recognized and operates.

Local finance in the economic system of the state:

Affect:

For the socio-economic development of the country;
- financial security of the state;
- financial stability of economic development;
- welfare of the population;
- development of democracy in society.

Used as a tool:

Redistribution of gross domestic product;
- state regulation of territorial development;
- economic, including financial policy;
- state regional policy.

Define:

Volume and quality of provision of local public services to the population;
- the state and development of the local economy;
- financial base of local government;
- provision of constitutional guarantees to the population;
- state of financial alignment.

Local finances play a significant role in ensuring the financial security of the state, which is one of the most important components of the country’s economic security. Financial security is of decisive importance in the functioning of the economic system; in general, it affects areas of public life; without ensuring it, it is impossible to achieve both current and future national development goals.

The main indicators of financial security include:

The degree of implementation of the consolidated and state budget;
- state budget deficit and its financing;
- formation and use of extra-budgetary funds;
- the level of redistribution of gross domestic product through the consolidated budget.

In this way, local finance, as an integral and complex system of economic relations, acquires an important role in reforming the domestic economy, creating the foundations of a market economy, and forming a democratic, socially oriented state.

Modern changes in the field of local finance are aimed at their further improvement in order to achieve the following goals:

1. stabilization of the economic system;
2. adaptation of business entities, in particular small and medium-sized enterprises, to market transformations;
3. implementation of tasks of state regional policy;
4.stimulating entrepreneurship and investment activity;
5. solving social, demographic, environmental, national and other problems of the regions.

The meaning of the financial market

The financial system does this by:

Mobilization of budgetary resources through taxes and their allocation in accordance with the needs of the government;
a financial market that mobilizes savings on a voluntary basis and provides loans or investments in response to market conditions.

In a market economy, the subjects of economic relations are the state, enterprises, and the population. In the process of managing, some have a need for funds to finance their activities, while others have surplus financial resources that can be used for investment. The financial intermediaries of such a circulation are various financial institutions (commercial banks, insurance companies, pension funds, investment funds, etc.).

Thus, there is a need for the existence of a market for financial resources. The financial market is a monetary relationship that develops in the process of buying and selling financial assets under the influence of supply and demand.

The financial market performs a number of functions:

Provides interaction between buyers and sellers, as a result of which prices for financial assets are set in such a way that they balance supply and demand for them (balanced price, or market clearing price). Differences between sellers and buyers remain; they give rise to changes in price, which culminate in the agreement of the two parties to the act of buying and selling money capital.
Introduces a mechanism for repurchasing financial assets and thereby increases their liquidity. Financial intermediaries (market dealers) provide redemption of financial assets from investors.
Helps to find a counterparty to the agreement, significantly reduces transaction costs and information costs, as well as corresponding investment risks.

The importance of the financial market is to ensure the distribution of resources for expanded reproduction on a commercial basis. It also has certain features in contrast to markets for manufactured products (goods and services), and the labor market. Firstly, the main instrument of turnover is money capital - a specific product; secondly, the activities of market participants are reduced to one denominator - efficiency; thirdly, only professionals can work in this market.

Using the mechanism of functioning of the financial market, the volume and structure of demand for financial assets is determined.

Financial market participants are:

State (central and local authorities and management, central bank).
Non-financial institutions (enterprises, agricultural partnerships, institutions, etc.).
Population.
Foreign market participants (international organizations, foreign governments, corporations, financial institutions, individuals).
Professional market participants:
a) financial institutions (commercial, investment and savings banks, savings and loan associations, credit unions, investment, insurance companies, pension funds, etc.);
b) infrastructure institutions (trade organizers - exchanges and over-the-counter systems, clearing centers, depositories, registrars, information and rating agencies, specialist training centers, production of securities forms).

The financial market consists of the money market, credit market, securities market (stock market), foreign exchange market and insurance market.

Short-term investing is carried out in the money market. In this market, financial assets are in circulation, the turnover period of which does not exceed one year: treasure and commercial bills, certificates of deposit, bankers' acceptances. The credit and stock markets are a capital market designed for long-term investment in fixed capital. In the capital market, medium- and long-term loans are provided, medium- and long-term debt securities are in circulation, as well as property instruments - shares, for which the turnover period is not established.

The domestic foreign exchange market is separate and strictly regulated regarding foreign exchange control, rules for the circulation of foreign currency on the territory of Ukraine, the fundamentals of the functioning of the interbank foreign exchange market, etc.

The insurance market of Ukraine constitutes a special sphere of economic relations related to the development of the insurance business.

A special place in the structure of the financial market is occupied by the securities market (stock market). It is an important element of market infrastructure.

The primary market is the market for first and re-issues, where the initial placement of financial assets among investors and the initial investment of capital in various sectors of the economy are carried out.

Previously issued financial assets have a turnover on the secondary market. Transactions in the secondary market do not increase the total number of financial assets and the total volume of investment in the economy. Important features of the secondary market are liquidity, the ability to absorb large volumes of financial assets in a short time at low costs, and speculative operations associated with increasing income. The financial market as a historical category appeared simultaneously with finance and with the development of commodity-money relations it was transformed into a special sphere of economic relations. The development of commodity production at a certain stage became the reason for the emergence of an urgent need among its participants for additional capital necessary for further expansion of production. This capital is called investment capital and is used to create jobs, purchase tools and objects of labor, new technologies and other elements of production.

Financial market as an economic category. Investment, as indicated, is provided through a developed financial market. Let's find out how this market and its segments differ from others. In the economic literature there is no single interpretation of the economic essence of the concept of “financial market”. It is often identified with the money, credit or investment market.

The concept of “financial market” is very broad, since it covers not only financial connections, but also many forms of property relations and their redistribution (transformation).

The financial market is a system of economic relations during which the country’s financial assets are distributed and redistributed under the influence of supply and demand for them from various economic entities. These economic relations are determined by objective economic laws and the financial policy of the state, which, in principle, form the essence of the financial market, that is, connections and relationships both directly in the market and with other economic categories.

Functions of the financial market.

The essence of the financial market and its role in the state’s economy are most fully revealed in its functions, the main of which are the following:

Motivated mobilization of savings of individuals, private businesses, government agencies and foreign investors and transformation of accumulated funds into borrowed and investment capital;
realizing the value embedded in financial assets and bringing financial assets to consumers (buyers, investors);
redistribution of enterprise funds on mutually beneficial terms in order to use them more efficiently;
financial use of participants in the economic circuit and financial support for the processes of investment in production, expansion of production and share participation based on determining the most effective areas for using capital in the investment sphere;
impact on cash flow and acceleration of capital turnover, which contributes to the activation of economic processes;
formation of market prices for certain types of financial assets;
insurance activities and creation of conditions for minimizing financial and commercial risks;
operations on export-import of financial assets and other financial transactions related to foreign economic activity;
lending to the government, local governments by placing government and municipal securities;
distribution of state credit resources and their placement among participants in the economic circuit.

The importance of financial policy

Changing the goal of economic development necessitates changes in financial relations in its industries and areas of activity; the sources of formation of financial resources and the forms of their use are revised. Under these conditions, the state develops an appropriate financial policy, which is a set of targeted state measures in the field of using finance in order to determine the most effective measures that meet modern conditions to create a financial basis for the implementation of the state’s economic policy.

The subjects of financial policy are the legislative (representative) and executive authorities, which determine and approve the main directions for the development of financial relations, develop specific ways of organizing them in the interests of business entities, the population and the state.

The object of financial policy is the totality of financial relations and financial resources that form the spheres and links of the state’s financial system.

Development of a scientifically based concept of financial development;
determining the main directions for using finances for the future and the current period;
development of specific ways to implement the main directions of using finance for the future.

The development of a scientifically based concept of financial development is carried out in order to identify the objective need for the implementation of planned financial policy measures and to justify changes in the existing mechanism for the implementation of financial relations. In modern conditions, the financial policy of most states is based on various concepts of state regulation of the economy. Depending on the stage of the economic cycle (economic recession, depression (stagnation), recovery, economic recovery) at which the country’s economy is located, government officials use contractionary or stimulating (stabilization) financial policies.

In conditions of economic recession and depression, there is a reduction in trade turnover, a decrease in the effective demand of the population, a decrease in the income of business entities, a decrease in the investment activity of investors, an increase in the unemployment rate, and an increase in the inflation rate. At these stages of the economic cycle, the state uses a stabilization financial policy, which is associated with stimulating the business activity of business entities by reducing taxes and increasing government spending to support strategically and socially significant sectors of the economy. In these conditions, the state mobilizes additional financial resources in the financial market, therefore, increased attention should be paid to the policy in the field of managing state debt obligations.

At the stages of economic revival and recovery, the business activity of business entities increases, the real volume of their income grows, trade turnover increases, and social tension in society decreases. The state gets the opportunity to increase the amount of mobilized income, repay existing debt obligations ahead of schedule, and pursue an active investment and innovation policy. Financial policy in these conditions is of a contractionary nature, which implies a reduction in government spending at the stages of economic recovery and recovery and an increase in the tax burden at the stage of economic recovery to prevent overheating of the economy and a decrease in the rate of economic growth.

To achieve stable economic development, the functioning of the economy can be ensured based on the action of built-in stabilizers, which include automatic changes in tax revenues and transfer payments depending on the stage of the economic cycle. If financial policy is built taking into account the action of built-in stabilizers, then when developing it, special attention should be paid to drawing up forecasts for the economic and social development of the state, building models for the development of tax and budget systems, and the internal financial market, depending on the stage of the economic cycle.

The determination of the main directions for the use of finance for the future and the current period is based on the goals and objectives of the state’s economic policy, the identification of priority sectors in the economy, the determination of the conditions for the development of the social sphere, the composition of the powers of state and municipal authorities in the financial and budgetary sphere, the assessment of domestic and international state provisions. Taking these factors into account makes it possible to develop a financial policy that meets the conditions of economic development of the state. Developing specific ways to implement the main directions of using finance involves developing ways to solve the set goals and objectives that will contribute to the implementation of the main directions of financial policy over a certain period of time. So, for example, if its task is to reduce the volume of public debt of the Russian Federation, then possible ways of achieving this task must be determined, among which are early repayment of existing debt obligations, reducing the volume of borrowings on the domestic and foreign financial markets, negotiating with creditors on possibility of writing off part of the debt. However, it should be taken into account that the development of a mechanism for implementing the above-mentioned measures for managing the public debt of the Russian Federation and its legal regulation do not relate to financial policy, but to its implementation, respectively, in the financial mechanism and the norms of financial law.

Financial policy can be classified not only according to its content, but also according to other criteria:

According to the territorial criterion, national (federal), regional and local financial policies are distinguished. The development of financial policy at each level of management allows us to further provide a financial basis for the development of both the state as a whole and each territorial and municipal entity;
According to the time criterion, financial policy is divided into financial strategy and financial tactics. The financial strategy includes large-scale goals and objectives of financial policy that influence the development of society as a whole, the implementation of which always has a long-term nature.

Currently, the financial strategy includes the development, in conditions of an economic recession, of a system of anti-crisis measures to stabilize and further develop the state’s economy, including reducing the tax burden on business entities, especially in the field of medium and small businesses; additional financial support from the state for socially vulnerable and low-income segments of the population; further reform of pension, health and social insurance in the context of an economic downturn; review and search for new sources and mechanisms of financing both the economy as a whole and priority sectors for the state, which determine the specialization of the Russian economy in the global economic system and allow the realization of national competitive advantages.

Financial tactics combine the tasks and measures of financial policy that relate to a certain stage of economic development and must be implemented in a specific financial period. An example of financial tactics is reducing tax rates for certain types of taxes, improving the procedure for applying special tax regimes by small businesses, expanding the possibilities of using accelerated depreciation of technological equipment, regular indexation of social payments, increasing the efficiency of social benefits and guarantees for socially vulnerable, low-income segments of the population. At the same time, financial measures of a tactical nature must be carried out within the framework of the financial strategy and cannot contradict it in order to avoid the occurrence of negative consequences of their impact on the functioning of the financial system and the economy as a whole; depending on the objects of influence, financial policy in the field of finance of business entities and financial policy in the field of state and municipal finance are distinguished. The latter includes budget policy and policy in the field of state social insurance.

The state's budget policy is the main component of financial policy, since it determines the conditions and principles of organizing financial relations in the formation of the revenue base of budgets, in the course of budget expenditures, and in the organization of inter-budgetary relations.

Budget policy directly affects the size and proportions of financial resources centralized by the state and determines not only the current structure of budget expenditures, but also the prospects for using budget funds for the development of the economy and social sphere. In addition, budget policy predetermines the organization of financial relations between business entities and the state in the course of implementing tax policy, carrying out state investment policy, and when developing budget policy in relation to priority sectors and types of activities.

The main goals and objectives of budget policy for the current financial year and the medium term are determined in the annual Budget Message of the President of the Russian Federation to the Federal Assembly.

When developing the goals and objectives of the state's social policy, an important place is given to the development of policy in the field of state social insurance on principles that correspond to market economic conditions. At the same time, the state assesses the possible degree of participation of business entities in its implementation, determines its own financial capabilities for the implementation of social guarantees to the population, adjusts the directions of development of state social insurance, methods of mobilization and forms of spending funds from state social extra-budgetary funds in accordance with the current conditions of the functioning of the economy. Policy in the field of state social insurance makes it possible to smooth out the impact of unfavorable factors affecting the working capacity of the population, stimulate the creation of safe living and working conditions, achieve an improvement in the health of the nation and smooth out the adverse impact of market economic conditions on socially vulnerable segments of the population.

Financial policy in the field of finance of business entities includes the development of (Main measures in the field of state depreciation policy, development of priority activities, regulation of business activity of business entities in accordance with the goals of economic development of the state.

The significance of financial policy lies in the results that can be obtained during its implementation, both during the financial year and in the longer term.

In the course of developing and implementing the goals and objectives of financial policy, its effectiveness is influenced by the following factors:

A scientific approach to developing the concept of financial policy, which must meet the conditions of economic development of the state, the stage of the economic cycle and the provisions of financial science, taking into account the laws of social development;
forecasting the possible consequences of the implementation of proposed activities when determining the main directions of using finances for the future and the current period and in the course of developing specific ways to implement the main directions of using finances. The validity of the proposed measures and upcoming decisions on financial issues of the country's development should be supported by appropriate calculations that make it possible to determine not only the total cost of state expenditures on the implementation of the goals and objectives of financial policy, but also to evaluate their financial consequences;
taking into account the accumulated experience during the implementation of financial policy in the previous period in order to identify both its positive results and negative consequences that may negatively affect the further development of the state’s economy;
a clear definition of macroeconomic indicators that should serve as a guide for assessing the effectiveness of financial policy, which presupposes the implementation of financial policy aimed at results;
taking into account national and geographical characteristics that have a direct impact on the effectiveness of policy in the field of interbudgetary relations and the choice of policy priorities in the field of budget expenditures at the regional and municipal levels;
an integrated approach to the development and implementation of financial policy, which involves coordination of the goals and objectives of budget policy, policy in the field of state social insurance, financial policy in the field of finance of business entities, and their interrelation. At the same time, all the constituent elements of financial policy must be focused on achieving the common goal of economic development, and the financial policy itself must be coordinated and interconnected with other components of the state’s economic policy - monetary policy, pricing policy, insurance policy, foreign exchange policy of the state;
multivariate financial policy, built taking into account possible changes in the operating conditions of the state’s economy. In modern conditions, much attention is paid to the development of financial forecasting and medium-term financial planning; they are considered as a tool for scientific foresight, option analysis, and obtaining additional information when developing financial policy;
taking into account the internal situation and international positions of the state, which determine the features of its economic development. The state’s financial policy is based on competition in world markets, provides for financial support for its own producers and exporters, protection of the interests of national companies abroad, and the possibility of attracting foreign investment into the state’s economy.

The implementation of financial policy should also provide for the growth of financial resources at the disposal of business entities, contribute to the creation of a solid financial basis for the activities of government bodies to implement the tasks and functions assigned to the state, and ensure the stability of social production in order to improve the economic situation of the state and social protection of the population.

The type of economy also influences the construction of the state's financial policy. Thus, in a centrally planned economy, when using an administrative-command management system, financial policy is carried out with the aim of maximizing the possible mobilization of financial resources at the macro level and subordinating the financial and economic activities of business entities to the interests of the state. Financial policy is built under the conditions of directive financial planning and centralized distribution of financial resources between economic sectors and organizations in accordance with the main indicators of the state plan.

In a market economy, the main goals of financial policy are to smooth out the unfavorable consequences of market business conditions for business entities and the population, to ensure the development of economic sectors (for example, education, culture, national defense) and activities that are of strategic importance, but cannot develop in the conditions competitive environment, achieving a balance of financial interests of state authorities, local governments, business entities and the population. The listed goals are also typical for the modern financial policy of the Russian Federation.

The importance of municipal finance

Municipal finances include:

Off-budget municipal funds;
- funds from local budgets;
- municipal and state securities that belong to local governments;
- other funds that are in municipal ownership.

The fundamental principles of municipal finance are:

Financial government support;
- the principle of independence;
- the principle of transparency.

The essence of municipal finance is as follows: money circulation is the material basis of finance. Real money turnover is an economic process that causes the movement of value and is accompanied by a flow of settlements and cash payments. Financial resources, which are the source of financing reproduction, are the object of real money turnover.

Municipal and state finances identify economic relations that are associated with the provision of centralized sources of financing for the municipal and state sectors of the economy, the most significant programs for the development of the public sector and production, institutions and organizations of the public sector, and so on. Their functioning is entirely aimed at achieving universal goals for the development of a socially oriented market economy.

Municipal and state finances operate within the boundaries of the financial state system and are directly the central link.

Finance largely depends on the perfect transformations in the relations between various parts of the financial system. First of all, this refers to the connections between micro-level finance and macro-level finance. Finance at the macro level, and above all municipal and state budgets, is based on the financial prospects of enterprises. Finance largely contributes to achieving the goals of overall economic development, so its optimal organization is necessary. The chosen method of organization largely determines the quality of finance. The use and distribution of financial resources in the state is carried out using an integrated system for managing financial flows.

The process of municipal finance management is divided into three stages:

1. financial planning process;
2. budget process;
3. evaluation of the results obtained.

The goals and nature of activities at each of these stages are significantly different.

Determining the role of municipal finance is of particular importance in reforming the Russian economy.

Reform of municipal finances is an integral part of the overall reform of local governments. The provision of municipal organizations with material and financial resources largely determines the effectiveness of local self-government. To fulfill the assigned tasks, municipalities are required to have sufficient and necessary financial and material resources, as well as the right to independently manage these resources.

In accordance with the new legislation, a new budget level is allocated in the structure of the budget systems of the constituent entities of the Federation. The system of local budgets includes the budgets of the city district, the budgets of settlements (urban and rural) and the budgets of municipal districts. Bodies of all types of executive power of municipalities (urban districts, municipal districts, rural and urban settlements) are endowed with legislatively established expenditure and revenue powers.

The Importance of Financial Planning

Without a business plan, it is impossible to effectively manage not only a large, but also a relatively small enterprise. The future of any organization without it is uncertain and unpredictable. Therefore, management personnel need to be able to draw up a business plan.

A business plan is a document that describes the main aspects of the future of a commercial organization, analyzes all the risks that it may face, determines ways to solve possible problems and ultimately answers the question: is it worth investing in this project at all and will it bring he is the income that will cover the costs.

Typically a business plan includes the following sections:

Overview section (summary);
description of the organization (enterprise);
description of products (goods, works, services);
market analysis;
production plan;
sales plan (marketing activities);
financial plan;
project sensitivity analysis;
environmental and regulatory information;
applications.

Thus, the financial plan is the most important component of a business plan, which can be drawn up both to justify specific investment projects and programs, and to manage all current and strategic activities of the organization. The financial plan can be considered as a task for individual indicators, as well as a financial document that ensures the linking of the organization’s development indicators with the financial resources available for this.

Financial planning as an integral part of business planning is aimed, on the one hand, at preventing erroneous actions in the field of finance, and on the other, at identifying reserves and mobilizing untapped opportunities. Having a business plan is an important factor when deciding whether to provide financial support to an organization from external investors.

The main objectives of financial planning in an organization are:

Providing the necessary financial resources for the enterprise’s activities;
determining ways to effectively invest capital, assessing the degree of its rational use;
identification of intra-economic reserves for increasing profits through the economical use of funds;
establishing rational financial relations with the budget, extra-budgetary funds, banks and counterparties;
respecting the interests of shareholders and other investors;
control over the financial condition, solvency and creditworthiness of the organization.

The importance of financial planning for an organization is that it:

Translates developed strategic goals into the form of specific financial indicators;
provides financial resources for the economic development proportions laid down in the production plan;
provides opportunities to determine the viability of financial projects;
serves as a tool for obtaining financial support from external investors.

Financial planning is closely related to and relies on the marketing, production and other plans of the enterprise, and is subordinate to the mission and overall strategy of the enterprise. It should be noted that no financial forecasts will gain practical value until production and marketing decisions have been worked out. Moreover, financial plans will be unrealistic if the set marketing goals are unattainable, if the conditions for achieving target financial indicators are unfavorable for the enterprise in the long term.

The importance of financial resources

Financial resources are the most important source of expanded reproduction and socio-economic development of society. Increasing the volume of financial resources is one of the most important tasks of the state’s financial policy. A decrease in the volume of financial resources has a negative impact on the development of society, leads to a reduction in investment, a decrease in consumption funds, and creates imbalances in the distribution of the social product and national income. The composition and volume of financial resources depend on the level of economic development of the state and on the efficiency of production. Economic growth serves as the basis for increasing the volume of financial resources, and the amount of financial resources allocated to the expansion and development of production helps to increase its efficiency.

It is necessary to distinguish between centralized financial resources of the state and decentralized financial resources of enterprises. Decentralized financial resources are formed in the form of various national funds, primarily the budget and extra-budgetary funds, the funds of which are used to implement the most important functions of the state, such as the development of the national economy, financing of socio-cultural events, meeting defense needs and maintaining the political superstructure of society. The sources of centralized financial resources are national income and partially national income in the case of its involvement in economic circulation and effective use, borrowed and raised funds.

The main sources of financial resources of enterprises are profit and depreciation, borrowed and raised funds. The volume of decentralized financial resources depends on the same factors as the volume of centralized ones, but their value is also influenced by the degree of centralization. The emergence and development of the financial market gives business entities new opportunities to expand the composition of financial resources and increase their volume by issuing securities, using borrowed funds from various credit institutions and commercial loans, placing temporarily free funds on deposits with commercial banks, etc.

The formation and use of financial resources can be carried out not only in fund, but also in non-fund form. Centralized financial resources are formed and used primarily in the form of cash funds, which include, for example, the budget, social insurance fund, road fund, fund for the reproduction of the mineral resource base and other extra-budgetary and special funds consolidated in the budget. At the enterprise level, financial resources can be created and used in both stock and non-stock form.

The volumes of financial resources of the state and enterprises are directly dependent, since the source of the formation of state budgetary and extra-budgetary funds is the gross domestic product created by economic entities.

The subject of money as a system of currency relations is considered to be the monetary resources of the state. The definition of “financial resources” is one of the fundamental ones in monetary science and the main object of research in corporate finance. In a more general sense, “resource” in dictionaries is considered as a reserve, which acts as a source of satisfying needs and creating funds. Financial capabilities are the totality of funds at the disposal of the state, enterprises, organizations, and other coordination systems of various types of property. Monetary opportunities (cash and non-cash funds) can be spent on replenishing coordination costs, purchasing material resources, paying for staff activities and other costs. Expanding the volume of financial resources is one of the important tasks of the state’s monetary policy.

In modern conditions of transition to a commercial economy, strengthening and expanding their positions in the market of goods and services is considered a significant task for corporations and firms. In a commercial economy, economists more often operate with the concept of “capital,” which for a financier is a real object, which he can constantly influence to acquire new earnings for the enterprise.

The formation and development of the financial market gives the dominant entities new opportunities to increase the composition of monetary resources and increase their volume by issuing valuable securities, using credit from various credit companies and commercial loans, placing temporarily free finance on deposits in commercial banks, etc. In countries with a federal federal according to the structure, government monetary resources are divided into resources of the federation and resources of the subjects of the federation; They are aware of this, the sources of income and channels of expenditure of each of these types of resources are identified in full amounts or in parts of funds.

As you know, an enterprise is a fundamental link in the economy, and the financial resources of an enterprise indicate its viability or insolvency. The capital of a corporation is considered to be the share of monetary resources invested in production and providing income at the end of circulation. Financial resources of organizations represent a system of monetary relations combined with the formation and use of monetary funds and increases in organizations for general economic purposes, financing the costs of the enterprises themselves, social. Necessities and financial incentives for employees. The use of monetary resources by an enterprise is important in many areas, the basic of which are: payments to companies of the monetary and banking system in connection with the implementation of financial obligations (payment of taxes to the budget, payment of interest to banks for the use of loans, repayment of previously received loans, insurance payments); investment of monetary resources in securities of other enterprises purchased on the market; directing monetary resources to the formation of monetary funds of an incentive and social nature; use of financial resources for charitable purposes, sponsorship.

The main source of formation of the enterprise's monetary resources is determined by the proceeds from the sale of goods (work, services) related to the work under the enterprise's charter. The corporation's own financial resources are profits and depreciation charges. It should be borne in mind that the main and ring funds (with the exception of cash) of an enterprise can be converted into monetary resources, but this requires some time.

Part of the monetary resources involved in the enterprise's turnover and providing income is considered the capital of the enterprise.

The monetary resources of firms are characterized by features that describe the political nature of the funds in general. In real life, income and borrowed capital are closely related. Unlike entrepreneurial capital, credit capital is not invested in the company, but is transferred to it for temporary use in order to receive interest.

Household monetary resources also include social transfers (social payments) (in the SNA – current transfers). 2 Social payments are considered an important financial resource for a household in the Russian Federation. Certain types of public payments are pensions, scholarships, social benefits, subsidies for housing and communal services, and other funds from the budgets of the budget system. Social Payments according to the time criterion can be one-time, periodic, or sustainable. Payments may be noted or estimated. Fixed payments represent a certain amount of financial resources, which is the same for all categories of recipients, separate from the amount of earnings of consumers. Each type of public payment has a different calculation method.

The functioning of financial means is based on such tasks of financial means as a means of payment, a means of storage, global finance. A means of payment is a function in which finance serves the repayment of all kinds of debt obligations between subjects of economic relations that arise during expanded reproduction. A means of storage is a function in which money serves the accumulation of value in its general theoretical form during expanded reproduction. Global money is a function where finance serves the movement of value in international legal circulation and ensures the implementation of relationships between powers.

Monetary capabilities act as financial carriers of financial relations. A depreciation asset is a currency intended for ordinary and increased reproduction of fixed assets. The composition and volume of monetary resources depend on the level of economic development of the state and on the productivity of production. With the exception of financial resources, credit resources, individual foreign exchange earnings of the people, etc. also work in monetary form. The process of concentration of capital is a necessary condition for the reliability of economic development and the main goal of any business entity. The specifics of the influence of economic laws determine both the scope of operation and the purpose of the enterprise’s financial resources, as well as the impact of the most important environmental criteria. Proceeds from property occupy a small share in the financial resources of Russian household enterprises.

The sources from which unified assets of financial resources are formed also include contributions from dominant entities to state public insurance, economic and individual insurance, to budgetary and extra-budgetary funds. In every society, financial opportunities do not exist on their own; they always have an owner or a person to whom the owner has transferred the rights to dispose of them. A decrease in the volume of financial resources limits the possibilities for the targeted impact of financial resources on the development of the economy, entails a reduction in investment parameters in the production and social spheres, a decrease in the consumption asset in the composition of the used state income, an imbalance in the natural and value system of social production, and all kinds of imbalances.

Funds from the authorized capital are used to receive basic funds and the formation of reverse funds, targeted financing and other sources, the depreciation fund of the enterprise, in addition to its own funds, by banks and other organizations, the redistribution and use of earnings of the enterprise, due to the fact that it does not always have the opportunity to compensate their needs are only realized by the account of their sources, part of the benefit of the enterprise goes to reimbursement of invested costs, purchase of materials, organization of authorized capital, part of the benefit of the enterprise goes to reimbursement of invested costs, purchase of materials.