3713

Current asset management in the enterprise

Курсовая

Менеджмент, консалтинг и предпринимательство

Current asset management in the enterprise The crisis of 2008 still affects business-to-business companies. Many of them have problems with current assets in general and with accounts receivable in particular. In a given paper a field research is co...

Английский

2012-11-05

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33 чел.


Current asset management in the enterprise

The crisis of 2008 still affects business-to-business companies. Many of them have problems with current assets in general and with accounts receivable in particular. In a given paper a field research is conducted on the example of a telecommunication equipment producer. The goal of the research is to develop recommendations to improve the efficiency of current assets for the specific example of Russian business-to-business company.

The first part is devoted to theoretical background of current assets management and represents the findings of desk research conducted.

The second part represents field research or analysis of the company’s financial performance. There were used such methods as horizontal and vertical analysis of financial statements, methods, techniques and tools of mathematical statistics: collection and grouping of statistical data analysis and comparison of time series. In the practical part of the research there were used computational and analytical methods, the methods of structural and dynamic analysis, grouping and comparison of modeling techniques.

The third part is mainly devoted to recommendations on how to improve the management of current assets at the enterprise. In order to get a competent opinion an interview with a specialist concerning the research and recommendations was conducted.


Property of business entity consists of fixed and current assets, representing its actual assets, due to which the company carries out its economic activities and by which it has the ability to grow and expand. The state and effectiveness of fixed and current assets are one of the main conditions of success of the enterprise. The development of market relations in our country defines new terms of their organization. High competition, the need to quickly and effectively adapt to rapidly changing market conditions are forcing companies to change its policies toward working capital, search for additional reserves of their efficiency, increase turnover, forcing the company to optimize the structure and volume of current assets.

The problem of lack of current assets becomes the primary concern of financial services and enterprise management. Now it depends on them, how properly and efficiently current assets of the enterprise are organized, how effective are the methods used when working with suppliers, customers, how well planned and supported are reserves, controlled by the collection of receivables, and so on.

The aim of this work is to develop recommendations to improve the efficiency of working capital for the specific example of the Russian company.

To achieve the aim the following has been done:

  1.  Theoretical background of organization and management of current assets have been studied;
  2.  Various options of working capital formation and current assets financing have been explored;
  3.  Analysis of current assets management in the specific entity has been performed
  4.  Recommendations to improve the efficiency of working capital according to peculiarities of firm activity and its current assets condition have been developed.

Theoretical and methodological basis for the study consists of classical and contemporary works of Russian and foreign economists in the field of working capital management, legislation and regulatory materials.

Methodological basis of graduate research consists of methods of financial analysis: the horizontal and vertical analysis of financial statements, methods, techniques and tools of mathematical statistics: collection and grouping of statistical data analysis and comparison of time series. In the practical part of the research there were used computational and analytical methods, the methods of structural and dynamic analysis, grouping and comparison of modeling techniques.

Information base for research are data of financial and management reporting, information from periodicals, monographs and textbooks of domestic and foreign experts in the field of financial management.

SPETSSTROY-SVYAZ is the leading company of the Taganrog-based Proton-SSS Science Production Enterprise Holding, Russia's largest developer and producer of digital telecommunication equipment. The company was founded in the city of Taganrog on October 1, 1996, and has been the exclusive exporter of the Proton-SSS telecommunication platform for more than 14 years.

The main product of the company is a telecommunication platform Proton-SSS. The telecommunication platform Proton-SSS is self-developed hardware-software complex with using electronic components that are produced by the leaders of telecommunication and computer market.

Like all business-to-business companies, SPETSSTROY-SVYAZ faces problems concerning accounts receivable. The findings obtained in the course of the research provide evidence that in order to increase its liquidity SPETSSTROY-SVYAZ should implement the components associated with cash and accounts receivable to the management system of its current assets.


Chapter 1. Theoretical background of current assets organization and management

1.1. Essence, constitution, structure and functions of current assets

Current assets are assets that serve the process of current economic activity, while participating in the production process and in the process of product selling. The main purpose of current assets is in ensuring the continuity and rhythm of the production and turnover.

The economic essence of current assets is determined by their role in ensuring the continuity of the reproduction process, during which current assets pass through all stages of production and turnover, changing its form and completely transferring its value to the goods produced.

In literature, along with the term "current assets" it is also used the term "working capital".  It is believed that under the working capital it should be understood the monetary value of current assets, current assets themselves have a natural form of expression2. Within this framework, it is considered possible to ignore this distinction, because it there will be discussed assets in kind and their value, and both terms will be used in the paper without regard to this distinction. Under the working capital within this work will be understood cash advances for working capital, they refer to the liabilities of the balance sheet and are a source of financing of current assets.

Current assets perform a continuous circulation in the process of current economic activities of an enterprise. By functions, i.e. by their role in the process of production and turnover current assets are divided to current operating funds and funds of turnover. Current operating funds service the sphere of production, they materialize in the objects of work (raw materials, etc.) and partly in the means of work (inventory of little value, etc.), goods in progress, semi-finished products of own manufacture. Circulating productive assets also include prepaid expenses of non-natural forms, such as reserves for future production of goods.

Another element of working capital, turnover funds are not directly involved in the production process. Their purpose is to provide the resources of the reproduction process and to maintenance circulation of funds. Funds of turnover include finished goods and cash.

Circuit of funds of enterprises begin with advance payments in cash for the purchase of raw materials, fuel and other means of production - the first stage of circulation. As a result, the money takes the form of industrial stocks, expressing the transition from the sphere of circulation in the sphere of production. The cost is not spent, and is advanced, as after the completion of circulation, it is returned. The second stage of the circulation occurs during the manufacturing process, where labor is productive consumption provides the means of production, creating a new product that carries a deferred and re-created value. The advanced value again changes its form - from the productive, it becomes the commodity. The third stage is to implement the circulation produced finished goods (services) and cash is received. At this stage, working capital once again passes from the sphere of production into the sphere of circulation. Interrupted commodity circulation is resumed, and the cost of the commodity-form moves into the money. The difference between the amount of money spent on the production and sale of goods (works, services), and received from the sale of manufactured goods (works, services), is the accumulation of cash businesses.

Thus, current assets are advances in the form of money for the systematic formation and use of production assets and current operational funds and funds of turnover in the minimum required amount to ensure the implementation by an enterprise of the production program and the timeliness of payments. Since current assets include both tangible and monetary resources on their organization and efficiency depends not only on the process of material production but also the financial stability of the enterprise.

By the nature of the financial sources current assets are divided for gross, net and own ones.

  1.  Gross current assets characterize their overall volume formed from both own and borrowed capital.
  2.  Net current assets (or net working capital) characterize the portion of their volume, which is formed due to own and long-term debt capital.

Amount of net current assets (net working capital) is calculated as follows:

NWC = CA – CL,         (1.1.1)

where NWC - net working capital, CA – total current assets, CL – current liabilities.

  1.  Own current assets that characterize their part, which is formed with equity capital of the enterprise.

Amount of own current assets of the business is calculated by the formula:

OCA=CA – LD – CL,         (1.1.2)

where OCA – own current assets, CA – total current assets, LD – long-term debt, CL – current liabilities.

Consider now types of current assets. On this basis they are classified in the practice of financial management as follows:

  1.  Inventories of raw materials and intermediate products. This type circulating assets characterizes the volume of input material flows in the form of stocks, providing productive activities of the enterprise.
  2.  Stocks of finished products. This form of circulating assets is usually added to the volume of work in progress (with an assessment of the coefficient of its completeness for particular products in general).

Often in the literature on financial management stocks of raw materials and finished product inventories are combined into a group of "inventories". Effective inventory management makes it possible to reduce the duration of the production and the entire operating cycle, reduce the level of current costs of storage, reduce transaction costs for their purchase, free from the current economic turnover part of funds, reinvesting them in other assets.

In the process of inventory control there should be already included measures to accelerate their integration into direct operational process (manufacture or sale). This ensures release of part of financial resources, as well as reduction of the size of losses of inventory in the process of their store.

  1.  Current receivables. Under the current accounts receivable are understood debts of businesses and individuals of certain amounts of cash and cash equivalents to an enterprise, which occurs during the normal operating cycle or provided to maturity in a period of one year. It characterizes the amount of debt in favor of the company, estimated for the goods, works, services, issued advances, etc.

The largest volume of current receivables of enterprises falls on receivables for goods, works and services. Effective management of current accounts receivable is connected first of all with the optimization of size and provision of customers debt collection for goods and services.

  1.  Cash assets and their equivalents. These include not only cash balances in national currency (in all its forms) but also short-term highly liquid investments, freely convertible into cash and characterized by insignificant risk of changes in value.

Management of cash assets or the balance of cash and cash equivalents, being constantly at the disposal of an enterprise, is an integral part of the functions of general management of current assets. The size of the balance cash assets, which the company operates in the process of economic activity determines the level of its absolute ability to pay (readiness to pay the company immediately to all its immediate financial obligations), affects the amount of capital invested in current assets, as well as characterizes to a certain extent its investment opportunities (enterprise’s investment potential of short-term financial investments).

The main purpose of financial management in the management of cash assets is to ensure permanent solvency.

Along with this main goal an important task of financial management in the management of cash assets is to ensure the effective use of temporarily free funds, as well as to form their investment balance.

Operational (or transactional) cash balance of assets is formed to provide current payments related to operating activities of an enterprise: the purchase of raw materials and semi-manufactures; earnings; taxes; payment to third-party organizations, etc. This type of cash balance is the core part of the total cash assets of an enterprise.

Insurance (or reserve) cash balance of assets is formed for insurance against the risk of delayed receipt of funds from operations due to worsening market conditions for finished products, slow payments and to other reasons. The necessity of forming this kind of balance is due to the requirements of maintaining a constant solvency. Investment (or speculative) cash balance of assets is formed to carry out effective short-term financial investments in the favorable situation in selected segments of money market.

Requirements to ensure continuing solvency of the enterprise determine the need for a high amount of cash assets, i.e. pursue the goal of maximizing their average balance in the financial capabilities of the enterprise. On the other hand, the cash assets of the company during their storage are vulnerable to loss of real value by inflation; in addition, cash assets lose their value over time, which determines the need to minimize their average balance. These conflicting requirements must be taken into account in the management of cash assets, which therefore becomes an optimization in nature.

By the nature of participation the operational process current assets are differentiated as follows:

  1.  Current assets, serving the production cycle of the company (they are a set of current assets of the enterprise in a form of stocks of raw materials and semi finished products, the volume of unfinished goods and finished goods inventories);
  2.  Current assets, serving the financial (money) business cycle (they are a collection of all inventory and the amount of current receivables net of payables).

By period of operation of current assets there are distinguished following types:

  1.  Constant part of current assets. It is a unwavering part of their size, which is not dependent on seasonal and other fluctuations of the company. In other words, it is regarded as irreducible minimum of liquid assets required for the implementation of enterprise operations.
  2.  Variable part of current assets. It represents a varying portion, which is associated with the seasonal increase in production volume and sales. As part of this kind of current assets there are usually distinguished maximum and average parts of them.

Thus, the current assets of the enterprise are assets that characterize set of property assets of the enterprise, serving the current industrial and commercial activity, the value of which is determined by its scale and the nature and depends on the duration and specifics of production and sales cycle, the state of the fixed assets of the enterprise, its relationship with contractors.

A qualitative analysis of internal and external factors affecting the value and condition of the working capital allows to timely detect hidden reserves in the management process of working capital, to take measures on their use and, finally, to detail through the budgeting process the impact of each factor in a specific financial performance .

Management of financing of current assets of an enterprise is subordinated to the goals of the necessary requirements for their respective financial resources and optimization of sources of formation structure of these resources. With this goal financial management of current assets of the enterprise is based.


1.2. Operating cycle of the enterprise and its relationship to current assets

Movement of current assets during cycle goes through four basic stages consistently changing its forms.

Management of current assets of an enterprise is due to the specific design of its operating cycle. Operating cycle is a period of total turnover of entire amount of current assets in which there is a change of their individual species. He characterizes the period between the acquisition of inventory and receiving cash from sales generated from these products.

The most important characteristic of an operational cycle, significantly influencing the volume, structure and utilization of current assets is its duration. It includes the period time from the moment of spending money to purchase input inventories of assets to the receipt of money from the debtors for products sold to them.

Duration of operating cycle is calculated as follows:

OC = AI + CP,         (1.1.3)

where OC – operating cycle, days; AI – age of inventories, days; CP – collection period, days.

The age of Inventory shows the number of days that inventory is held prior to being sold.

In the process of current assets management within the operating cycle there are distinguished two major components:

  1.  Production cycle of enterprise;
  2.  Financial cycle (or series of cash flow) of enterprise.

The production cycle of the company characterizes the period of total turnover of the material elements of current assets used to maintain the production process, starting from receipt of raw materials and semi finished products on enterprise and ending by the point of the shipment manufactured finished products to customers.

The duration of the production cycle of enterprise is determined by the following formula:

PC = RM + WIP + FP,          (1.1.4)

where PC – production cycle, days; RM – raw materials and semi-finished goods average turnover, days; WIP – work in progress average turnover, days; FP – finished products stock average turnover, days.

Financial cycle (cash flow) of enterprise is a period of time between the beginning of payment to suppliers of raw materials received from them, and materials (satisfaction of accounts payable) and the beginning of cash receipts from customers for goods supplied to them (collection of receivables).

The financial cycle (cash flow) of an enterprise is determined by the following formula:

CF = PC + CP – CAP,         (1.1.5)

where CF – cash flow, days; PC – production cycle, days; CP – collection period, days; CAP – current accounts payable satisfaction, days.


1.3. Strategies of financing current assets

An important role in organizing circulation of funds of enterprise plays working capital providing property and operational independence, which determine the financial sustainability of the enterprise. Initially, the formation of equity capital is carried out at the time of creation of a company. It provides fixed and current assets necessary to carry out commercial activities in the amount determined by the constituent documents.

Under conditions of complete economic independence, when businesses have broad powers at the disposal of their own property, at their turnover may be other personal funds, for example, temporarily unused funds of cash in the form of depreciation, bonus, stock maintenance and other specific sources of working capital are profitable investments of temporarily free financial resources.

In addition to its own sources of financing working capital of the enterprise funds are available equated to its own. These are stable liabilities which do not belong to the organization, but are constantly in circulation and used for the current financing. To sustainable liabilities relate:3

  1.  Minimum turning wages payable arising due to timing differences in calculating the date of payment;
  2.  Budget debt for payment of taxes, charge of which occurs prior to payment;
  3.  Minimum debt reserve to cover future expenses and payments;
  4.  Debts to suppliers of goods and services, payment term for which is yet to come;
  5.  Due to advances to customers and a partial payment for products. Stable liabilities are a source for coverage of working capital only in the amount of increase, i.e. difference between the value of the end and beginning of the period. This source of funds is also called the proposed accounts payable.

In the turnover of the company, apart from its own and similar financial resources, there are also borrowed funds that are based on short-term loans from banks and other creditors. The literature also refers to as “long-term liabilities.”

Policy of current assets financing reflects the overall philosophy of company financial management from the standpoint of a reasonable ratio between the level of profitability and risk of financing activities. Depending on the choice of sources to cover the fixed and variable parts of the working capital economists such as E. Brigham, J. Van Horn, V. Teryokhin, G. Polyak, A. Horin and others identify the following models for financing working capital:

  1.  Aggressive;
  2.  Conservative;
  3.  Moderate (compromise, optimum, coherent).

In the economic literature is also found the concept of “ideal” model of financing of current assets, which leads to the equality of current assets and short-term liabilities.

The choice of a financing strategy boils down to release of the corresponding shares of the capital that is considered as a source of coating of current assets.

Conservative approach to the formation of current assets includes not only the satisfaction of current needs in all types of current assets, ensuring the normal course of operations, but also the creation of high amount of reserves for unforeseen difficulties. This approach ensures the minimization of commercial and financial risks, but also adversely affects the efficiency of current assets - their turnover and the level of profitability.

Conservative model assumes that the range of current assets is also covered by long-term liabilities (debt capital). In this case, there are no short-term liabilities, and therefore there is no risk of loss of liquidity. Net working capital is equal to current assets. This model is an artificial one.

It is believed that from the liquidity position conservative strategy is the least risky and at the same time it is accompanied by relatively low current returns, as the enterprise is forced to bear the additional cost of maintaining surplus inventory. Conservative model, in principle, is economically infeasible and from the point of view that in this case, the enterprise refuses from accounts payable, in some sense being a free source of funding.

An aggressive approach to the formation of current assets is to minimize all forms of insurance reserves for certain types of assets. In the absence of failures during the operating activities such an approach to the formation of current assets provides the highest level of efficiency.

Aggressive model means that the long-term capital is a source of coverage of noncurrent assets and system part of current assets, i.e. their minimum necessary to carry out economic activities. In this case net working capital is exactly equal to this minimum. Varying part of current assets fully covered by current liabilities. It is considered that from the liquidity position this strategy is risky because permanent sources of funding in this case are sufficient only to cover the minimum current assets, but in peak season the company might not find free resources to finance the additional requirements in industrial stocks. In other words, there will be a relatively high current income (as the costs of maintaining the current inventory is minimal) and a high risk of potential losses from business interruption and possible non-receipt of income during the rapid increase in demand for products.

Moderate approach to the formation of current assets is aimed at ensuring the full satisfaction of current needs in all their forms and the establishment of normal insurance reserves. With this approach the average ratio between the level of risk and level of effectiveness of current assets is provided.

This model is most realistic. In this case, non-current assets, the system part of current assets and approximately half of varying part of current assets are financed by long-term sources. Net working capital is equal in volume to the sum of the system part of current assets and half of varying part.

In certain moments of time the company might have excess current assets, which negatively affects the profits, though it is considered as payment for the maintenance of liquidity risk at the proper level.


Chapter 2. Analysis of current assets management of SPETSSTROY-SVYAZ Ltd

2.1. Characteristics of SPETSSTROYSVYAZ Ltd activity

In the telecommunications market the company is positioning itself as a system integrator, designer and builder of turnkey telecommunications networks, a developer and manufacturer of telecommunications equipment under the brand name of "Proton-SSS", as well as a specialized center for performing any installation and commissioning works of communications equipment and as well-known center of personnel training.

The main activity of the company is design, pilot production and sale of digital communications equipment under the brand name of "Proton-SSS" and the development of integrated solutions. It offers its customers either ready-made or specially designed projects tailored to their specific interests.

Range of equipment of "Proton-SSS" is constantly expanding, which meets the needs of customers in the development of communication networks. "Proton-SSS" DATS have a long list of certificates of RF Ministry of Communications, which allows their use as a support-city transit exchanges, substation PSTN, ATS office-industrial, rural exchanges (terminal, hub, central office and site-rural suburb of communication). Equipment “Proton-SSS” is also a subscriber digital hub, a device of secondary trunking, switches, digital streams, converters, alarms, primary multiplexers, IP-telephony gateway.

SPETSSTROYSVYAZ received a license of the State Technical Commission under the President to carry out works related to creation of information security, and license of the FSB of Russia for works using information constituting a state secret.

The company provides its warranty, spending a full range of activities: pre-testing and consulting, project design, supply and installation of hardware and software integration with existing systems, training and advice to staff, round the clock technical support.

Directions of business:

  1.  Development of telecommunications equipment and software.
  2.  Production of telecommunications equipment.
  3.  The full range of design and exploration work;
  4.  Performing a full range of works at customer sites:
  5.  The technical audit;
  6.  advice and assistance in the formulation of the problem;
  7.  Preparation of technical solutions (assignments);
  8.  design and survey works, project documentation;
  9.  Selection, acquisition and supply of necessary equipment and materials;
  10.  supply, installation and configuration software;
  11.  Integration with existing communication systems and data networks
  12.  construction and erection and commissioning;
  13.  Submit the object;
  14.  Training of customer personnel;
  15.  After-sales warranty and support.

Telecommunication facilities Proton-SSS are successfully maintained in all regions of the Russian Federation, more than in 500 cities and settlements of Russia and the CIS (there are more than 600.000 ports).

Telecommunication platform Proton-SSS is used by several big system integrators.

The company is developing business relationship with the enterprises which are the part of the holding company Svyazinvest. The company completed bilateral cooperation agreements with some subsidiaries of this operator. According to them the RDS SPETSSTROY-SVYAZ serves as an authorized system integrator.

Proton-SSS commutation platforms are the basis of the departmental network of the Department of Justice in the Russian Federation. Proton-SSS is successfully maintained for a few years as the central exchange of the whole network in the headquarters of the Department of Justice.

Public corporation “Russian Railroads” uses a big amount of telecommunication systems, including the railways Gorkovskiy and North-Caucasus.

The network of interbasin connection of the inland water transport of the Transport Ministry Service is being built on the basis of the telecommunication platform Proton-SSS where RDC SPETSSTROY-SVYAZ is the general contractor of the project.

Power engineering specialists are also interested in our platforms. Departmental communication network of public corporation OAO RAO “UES of Russia” in several regions are built on the platform. These are Rostov, Volgograd, Smolensk, Bryansk, Volga regions and Yakuty, Krasnoyarsk Territory, Bashkiria. The equipment of Proton-SSS is installed in big nuclear power plants in Bilibinsk and Volgodonsk.

Different agencies of the Department of Defense in Russian Federation such as headquarters and regiments of the air force, signal office centers of naval bases and small fleet, local military commissariats know commutation platforms Proton-SSS as a high-quality product. Proton-SSS is used in the study process and research scientific work in educational institutions of High Military education, including Military Academy of Communication.

Net of offices of the Ministry of Internal Affairs in Chechen Republic is built on the telecommunication platform Proton-SSS.

A lot of communication statements use Proton-SSS equipment to realize a “Universal service” project.

The company fulfills its obligations according to the federal program aimed at “Social development of villages up to 2010”.


2.2. The analysis of solvency and liquidity of SPETSSTROYSVYAZ Ltd balance

Financial condition of the organization can be assessed in short and long term. In the first case assessment criteria are the liquidity and solvency of enterprise, i.e. ability to timely and fully perform payments of short-term obligations. Examples of these operations are payments to employees for wages, to suppliers for the received material assets and services rendered, with bank for loan, etc.

There are different methods of analysis of financial condition. In our country a method based on calculation of a system of ratios and its use in a space-time analysis is broadly used. Ratios can be calculated directly according to the financial statements. Analysis of financial ratios implies comparison of their values ​​with the baselines, as well as studying of their dynamics during the reporting period and for several years4. Financial ratios used to assess the financial sustainability of the enterprise are largely based on indicators of financial profitability of the organization, management efficiency and business activity. 5

Table 2.2.1. Financial ratios used to assess the financial sustainability of the enterprise

Ratio

Calculation method

Recommended value

2005

2006

2007

2008

2009

Equity Capital/Total Assets ratio

U1=Equity/Total Assets

Min 0,4

0,28

0,35

0,29

0,13

0,19

Total Debt ratio/Equity Capital

U2=(LTL+STL)/Capital

U2<1,5

2,55

1,82

2,45

6,74

4,21

Availability of internal funds ratio

U3=(Capital-NCA)/CA

U3>0,1

-0,1

0,15

0,15

-0,02

0,01

Margin of financial safety

U4=(Capital+LTL)/Balance

U4>0,6

0,51

0,45

0,67

0,27

0,47

Equity Capital/Total Assets ratio shows the share of equity in the total amount of all assets of the company. Minimum threshold should be at the level of 0.4. This restriction shows that all the obligations of the organization may be covered with their own funds. In considered business, this ratio in 2006 was approaching the threshold, but in 2008 (because of the crisis) fell to its lowest value (0.13). Analysis of this factor shows that the activities of the enterprise are largely dependent on borrowing. Figure 2.2.1. Dynamics of main financial coefficients for 2005-2009 and their recommended values

Total Debt/Equity Capital ratio shows how much debt a company has attracted to 1 ruble invested in the assets of its own funds. The maximum recommended value should not exceed the value of 1.5. Exceeding the specified limits means the company’s reliance on external sources of funds, loss of financial stability (autonomy). In this enterprise, this factor in the last considered reporting period exceeded the recommended value in 2.8 times.

Availability of internal funds ratio illustrates the existence of the company's own working capital needed for its financial stability. The higher the value, the better the financial condition of the company is, so the greater its capacity is to conduct an independent monetary policy. In 2009, this ratio was 10 times less than the allowable threshold.

Margin of financial safety shows how much of an asset is financed by sustainable sources. Recommended value is not less than 0.6. Since the company was during the reviewed period in the long-term lending, rate of financial stability was within the realm of valid values.

Liquidity assessment

Under the liquidity of an asset the ability to transform into cash is to be understood. The degree of liquidity depends on duration of the time period during which this transformation can be carried out. The shorter the period, the higher is the liquidity of the asset.

The liquidity of the commercial organization usually means that it has current assets in the amount theoretically sufficient to repay short-term debt even though the violation of maturity under the contract. Liquidity is quantitatively characterized by special relative indicators - liquidity ratios.

Solvency means that there is enough cash and cash equivalents in a commercial organization to accounts payable, requiring the immediate redemption. Thus, the main features of solvency are:

  1.  Availability of sufficient funds on the account;
    1.  Lack of overdue debts.

Liquidity and solvency are not identical to each other. Liquidity ratios can characterize the financial situation as satisfactory, but in essence this assessment may be misleading if the current assets have a significant share in the illiquid assets and overdue receivables.

Balance sheet liquidity is defined as the degree of coverage of the organization liabilities by its assets, the term of transformation to money of which matches obligations maturity.

Depending on the degree of liquidity, i.e. rate of conversion into cash, assets are divided into the several groups represented in Table 2.2.2.

Table 2.2.2. Assets structure

Assets group

2005

2006

2007

2008

2009

Group A1. Most liquid assets with a minimum term of monetization. These include: cash on hand and funds to the account, which can be used to meet current payments instantly. This group also includes the short-term investments.

6 224

7 617

26 061

12 399

1 165

Group A2. Quickly sold assets for circulation in cash takes some time. This group includes accounts receivable, payments are expected within 12 months after reporting date

17 045

52 180

56 393

82 065

72 560

Group A3. Slowly sold the assets. The least liquid assets - it's inventories, receivables, payments to be received in more than 12 months after the reporting date, the value added tax on acquired assets, and other current assets

13 296

9 017

18 096

13 847

14 069

Group A4. Illiquid assets. Assets that are intended for use in business for a long time. This group includes articles of Section I of the asset balance of "Non-current assets"

19 296

22 072

19 118

19 166

19 379

In turn, the liabilities are grouped by the term of their payment as shown on Table 2.2.3:

Table 2.2.3. Liabilities structure

Liability group

2005

2006

2007

2008

2009

Group L1. Most urgent liabilities

27 329

50 111

39 014

86 630

52 341

Group L2. Current liabilities

0

0

0

6 000

4 676

Group L3. Long-term liabilities

12 803

8 513

45 957

18 376

29 570

Group L4. Permanent liabilities or stable

15 729

32 262

34 697

16 471

20 586

To repay current obligations various kinds of assets with different turnover, i.e. the time required to turn them into cash, can be used. So depending on what types of current assets are taken into account the liquidity is evaluated using different ratios. The general idea of such an assessment is to compare current liabilities and assets used for the repayment. Current assets (liabilities) include those with maturity up to one year.

Table 2.2.4. Financial liquidity ratios

Ratio

Calculation method

Recommended value

2005

2006

2007

2008

2009

Current ratio

L1=(А1+0,5*А2+0,3*А3)/(L1+0,5*L2+0,3*L3)

≥1

0,55

0,57

0,92

0,45

0,45

Cash ratio

L2 = А1/(L1+L2)

>0,2-0,7

0,23

0,15

0,67

0,13

0,02

Quick ratio

L3 = (А1+А2)/(L1+L2)

Acceptable - 0,7-0,8, desirable ≥ 1,5

0,85

1,19

2,11

1,02

1,29

Acid test ratio

L4 = (А1+А2+А3)/(L1+L2)

Not less than 2,0

1,34

1,37

2,58

1,17

1,54

Current assets to equity ratio

L5 = А3/((А1+А2+А3)-(L1+L2))

The decrease in dynamics - a positive fact

1,44

0,48

0,29

0,88

0,46

Own funds ratio

L6 = (L4-А4)/(А1+А2+А3)

Not less than 0,1

-0,1

0,15

0,15

-0,02

0,01

On the basis of data (see appendix 2) analysis it can be concluded that considered enterprise is not able to make payments for all types of obligations - both immediate and in remote (Current ratio <1).

Current Ratio characterizes the company's solvency in the light of forthcoming earnings from debtors. It shows how much of the current liability organization can cover in short term provided the full repayment of debts. The growth rate in the dynamics is regarded as a positive feature of financial-economic activity. However, too much of its value is not desirable, because it may indicate an inefficient use of resources, expressed in slowing the turnover of funds invested in inventory, undue increase in accounts receivable, etc.

Using its own funds the company can repay in short term through cash only 2% of the debt (Cash ratio = 0.02). However short-term obligations can be fully repaid from the proceeds of the calculations (Quick> 1). The acid test ratio in 2009 is equal to 1.54. This means that the company can pay current liabilities, mobilizing all the current assets. Analysis the own funds ratio shows that since 2008 the enterprise has virtually no working capital for its financial stability.

For normalization of work of the enterprise and exit of the crisis situation the company needs to undertake a number of institutional arrangements. The main factors of liquidity and solvency of the organization are the state and efficiency of using circulating assets. One of the things that should be paid special attention of the company's management is management of current assets, reduction of losses in the production and financial cycle of current assets.


2.3. Analysis of company’s current assets for the previous periods

Consider the structure of the company's balance sheet (see Appendix 2), namely, the proportion of current assets to total assets of the enterprise.

As it can be seen at the figures 2.3.1 and 2.3.2, proportion of current assets in balance sheet structure is more than 70%, with the largest portion of current assets of accounts receivable. This can be explained by the fact that state and departmental businesses constitute the bulk of customers of the enterprise.

Figure 2.3.1. Structure of balance sheet of SPETSSTROY-SVYAZ Ltd for 2005-2009

Figure 2.3.2. Structure of current assets of SPETSSTROY-SVYAZ Ltd for 2005-2009

In order to study the structure of current assets the total structure (the proportion of stocks in total assets, receivables in current assets, cash in current assets, etc.) and internal (the proportion of stocks of work in progress in the overall value of stocks, long-term receivables debt in the total value of accounts receivable, etc.) are to be evaluated.

In 2005 the largest share in total current assets took receivables (short term). In 2006 this indicator increased by 62%. This shows that the organization increased its sales over the period. Favorable here is that the receivables are short-term (current). However at less significant change in the proportion of the absolute value of receivables in the coming years has increased. And in 2009 it was 426% of the amount in 2005, with sales in 2009 amounted to 157% of sales in 2005.

For a more detailed analysis it is necessary to investigate the quantity, composition, structure and dynamics of its individual species, their turnover. Analyzed production requires stocks, as evidenced by the share of stocks in the total value of current assets.

Figure 2.3.3. Dynamics of change of the proportion of components of current assets

It can be observed at figure 2.3.3 that in 2007 the largest changes referred to the share of cash. When considering sales for a calendar year seasonality can be observed. In the first quarter customers form a portfolio, and in the fourth quarter there are the highest sales. In 2007, a large amount of cash was received in the last days of the year, making it difficult to use it.

It can also be noticed that in 2008 great changes have taken place in the dynamics of proportion change of work in progress. In 2007 in the enterprise there was implemented a new type of activity, development activities (R & D). Residues in progress - is an incomplete implementation phase of R&D. Since this type of activity is on average 5% in total sales the figures for the unfinished product does not have a major impact on the turnover of working capital.

The primary measure of effectiveness of working capital is the rate of turnover. Calculation of turnover of any assets is held by dividing the revenue of the period by the average value of these assets over the period. Since the company's revenue is formed as cumulative total for the year and the cost of an asset is the torque figure (i.e. the value on the balance sheet date), the comparison of turnover indicators for different time intervals (for example, a year and the first quarter) is incorrect. In this regard, an analysis of turnover indicators based on annual data for 2005-2009 is held.

Table 2.3.1. Main turnover ratios

Turnover ratio

Calculation

2005

2006

2007

2008

2009

Revenues from sales

R

174 518

224 694

231 177

300 786

273 712

Rate of turnover of current assets

d3=R/CA

4,77

3,27

2,3

2,78

3,12

Rate of turnover in inventories

d4=Сosts/Reserves

12,13

19,54

9,74

16,13

14,03

The average time of turnover of accounts receivable

d5=365/d6

35,64

84,69

89,02

99,46

96,82

Accounts receivable turnover

d6 = В/(LTAR+STAR)

10,24

4,31

4,1

3,67

3,77

The average time of turnover of material resources

d7=365/d4

30,09

18,68

37,47

22,63

26,02

Duration of turnover of accounts payable

d9=365/d8

74,19

120,07

82,77

142,58

97,07

Turnover ratio reflects the turnover rate of the material resources of the company during the analyzed period (how many rubles of turnover (revenue) account for every ruble of this type of asset).

Turnover of current assets or rate of turnover is a key indicator of the effectiveness of management, business activities and organization. Ratio characterizes the efficiency of use of all current assets, regardless of the source of their involvement, shows how much money units of products sold brought each monetary unit of current assets. In 2007-2008, the company increased revenue, but nonetheless turnover ratio of current assets has not increased. This is due to an increase in the average period of accounts receivable turnover. In 2008-2009, it was more than 3 months.

Inventory turnover ratio shows number of turns of reserves and expenses for the period analyzed. Ratio indicates the rate at which stocks move into the category of receivables resulting from the sale of finished products. Slow inventory turnover indicates the presence of obsolete stocks. Over the period 2007-2009 average period of turnover in inventories tended to decline, despite the fact that in 2009 supply of raw materials and increased.

Accounts receivable turnover indicates its rate of turnover. The term of receivables turnover indicates how many days on average takes debt repayment. At the end of 2009 term of turnover of receivables was 97 days. This figure increased by 2.7 times compared with 2005 despite the fact that revenues from sales for the period increased by only 1.6 times. This negatively characterizes the activities of the company.

Capital in process of production include: work in progress, semi-proper development and deferred expenses. Consider future expenditures:

Table 2.3.2. Proportion of future expenditures

Proportion

2005

2006

2007

2008

2009

Licenses

13,9

9,86

7,59

9,4

6,12

Certification

78,87

79,3

70,85

59,46

81,55

Costs for participation in govermental tenders

0

1,39

1,14

1,56

0,77

Insurance

1,05

2,96

3,36

3,93

2,8

Software

0

6,33

11,16

21,9

8,66

Figure 2.3.4. Future expenditures for 2005-2009

It can be seen in figure 2.3.4 that almost all kinds of future expenditures of the enterprise transfer their value to newly created products in the form overhead costs. The greatest share amounts to certification and licensing. The total share of these costs in revenue increased from 0.5% to 1% in 4 considered years. Large company's costs of certification and licensing of developed and manufactured products indicate that the state exercises strict control over the quality of wireline equipment in Russia.


2.4. Identification and evaluation of external factors affecting the formation of the optimum amount of current assets

The structure of the most important factors of the external financial environment of indirect impact to be assessed includes6:

• The level and pace of inflation in the country;

• The dynamics of exchange rates;

• The dynamics of interest rates;

• The dynamics of economic development;

• State regulation of activity of individual economies;

• Government policy in the field of taxation.

The structure of the most important factors of the external financial environment of the direct impact to be assessed includes:

• conditions and transparency of financial, credit and commodity markets;

• credit policies of commercial banks;

• composition of credit products of banks;

•nature, level and stability of commercial relationships with suppliers, customers, financial institutions.

Table 2.4.1. The main factors of external financial environment

 

2005

2006

2007

2008

2009

Inflation in Russia according to official data

10,90%

9%

11,90%

13,30%

8,80%

Pace of inflation in Russia

 

-17,43%

32,22%

11,76%

-33,83%

Refinancing rate at  December 31th

12%

11%

10%

13%

8,75%

Cost of credit resources for the organization

19%

13,20%

14,50%

15%

18%


Figure 2.4.1. The main factors of external financial environment

During the reporting period, according to official statistics, inflation in Russia amounted to 67%. In 2008, inflation reached the highest growth over the period. The prices for products of considered enterprise changed only by 25% while wage costs have increased.

The U.S. dollar and the Euro from 2007 to 2009 dropped by 20%. For the production of equipment manufactured by the enterprise, 80-90% of the components used are imported. Prices are very dependent on the aforementioned exchange rates. In the structure of prices, components occupy 30-40%, therefore it greatly influenced the turnover of inventories.

By 2009, the CBR refinancing rate had reached 13%. It is interesting to note that the cost of credit in 2009 increased by 20%, despite the fact that the CBR refinancing rate for 2009 decreased by 34%.

Table 2.4.2. Major economic indicators of Russia (according to statistics7)

Parameter

2007

2008

2009

Changes in real gross domestic product growth

8,5

5,2

-7,8

Dynamics of of industrial production, increase (decrease)

6,8

0,6

-9,3

Consumer price increase (decrease):

9

14,1

11,7

Unemployment rate (% of economically active population)

6,1

6,3

8,4

GDP growth rate

1,5

-1,3

-5,2

In the state regulation of high-tech economic activities it may be noted that in Russia there are manufacturers that can produce competitive on quality equipment. Nevertheless, state enterprises are purchasing mostly imported analogues even though they significantly exceed in price. On the other hand, the government encourages entrepreneurs to engage in scientific and technical developments, provides grants, but to use them it is nearly impossible. They are not designed for long term and often constitute a percentage of own investment of enterprises for the previous period, or cancel part of the interest already paid for the use of credit money if the loan is taken to carry out development activities or research. In this case, in the contract of subsidies company must undertake increase of the number of jobs or pay taxes to the budget in excess of the amount of subsidies.

During the considered period taxes did not significantly change (since 2009 income tax has decreased by 4%).


2.6. Analysis of Cash flows

Cash of the company is one of the most important aspects of its strategic financial management, since in the absence of it company cannot conduct business activity and will be forced to cease its existence. Cash is needed for purchase of raw materials, salary payments, implementation of investments, tax payment, dividends, etc. But itself cash not generate revenues, so the primary objective of the policy of cash management is maintaining it at the lowest appropriate level, sufficient for implementation of effective financial and economic activity.

But first of all it is necessary to conduct a retrospective analysis of the company's cash flow and find its value during the report timeframe, basic elements of cash flow, value of cash flows in the context of different activities.

In accordance with international standards, there are three main groups of cash flows: from operating, investing and financing activities.

Inflows from operating activity of the company are formed by revenues from the sale of goods (works, services), collection of receivables advances received from customer. Operating outflows consist of paid invoices of suppliers and contractors, paid salaries, payments to budgetary and extrabudgetary funds, current interest paid for the credit (in part, included in non-operating expenses), etc.

Cash outflows from investing activities include the cost of purchased fixed assets, investments to new construction, acquisition of companies or packages of their shares, loans and credits to other companies. Investment inflows are formed by revenues from sales of fixed assets or construction in progress, costs of sold shares of other companies, long-term debt repayments, the amounts of dividends received by the company during the ownership of shares or interest paid the debtor during the use of long-term loans and credits.

Inflows from financial activities include the amount of the proceeds from issue of new shares or bonds, short-and long-term loans obtained from banks or other businesses, targeted funding from various sources. Outflows include loan repayments, the repayment of bonds, redemption, and dividend payment. To finance also relate operations with short-term market instruments (short-term investments).

Information on the cash flows of the company is grouped in the “Statement of Cash Flows.” It gives the following information:

  1.  The organization's ability to get the increase in cash by ordinary course of business;
  2.  The ability of the organization to meet its financial obligations, pay dividends and be creditworthy now and in the future;
  3.  Impact on the organization's financial condition of its investment and financial transactions related and not related to the movement of cash; 
  4.  The value of anticipated external financing needs.

Below there is an analysis of cash flow by context of various activities conducted (see Appendix 5). Horizontal and vertical analysis of the statement of cash flows was carried out. Indicators of horizontal analysis are given by graphs 7-9.

Thus, for this period company received 365 million rubles. In this 88% of the total gross cash inflows accounted to current activity and 12% - to financial activities.

Vertical analysis data (graphs 10-12) allows the conclusion that up to 100% of gross cash inflow from operating activities was provided by revenues from customers and clients. A significant proportion of revenues from buyers and customers indicates that the analyzed enterprise receives income primarily from its core business.

Positive cash flow in the financial field to 100% is caused by increase of borrowed funds, obtaining loans. Cash outflows for all activities of the analyzed period are 377 million rubles. Of them current payments account for the largest portion - 94%, the financial - 6%.

Vertical analysis shows that 32% of all cash outflows by normal course of business amounts to payments for purchased goods (works, services, etc.), 68% - wages, including payments by state budget funds, payment of taxes and levies, dividends paid, interest paid, cash on account and other payments.

Return of loans amounts to 100% cash outflow for financing activities.

Total gross cash outflow exceeds inflow, resulting in overall decrease in cash flows.

Assessment of the movement of funds can be performed by using the calculation of liquidity cash flow (LCF) for rapid diagnostics of the financial state of the organization:

LCF = (FL1 + CL1 – CASH1) – (FL0 + CL0 – CASH0),    (2.6.1)

where FL1, FL0 - long-term loans at the end and beginning of the period;

CL1, CL0 - short-term loans at the beginning and end of the period;

CASH1, CASH0 - cash on hand, at current and currency accounts in banks at the end and beginning of the period.

Liquidity cash flow is an indicator of excess or deficit cash balances of the organization. Its difference from other indicators of liquidity consists in that liquidity ratios reflect the organization's ability to repay its obligations to external creditors, and liquidity cash flow characterizes the absolute value of the cash generated from its own activities. It is an internal indicator of the organization's performance and is important for both creditors and investors.

Table 2.6.1. Calculation of liquidity cash flow

 

LCF

FL1

FL0

CL1

CL0

CASH1

CASH0

2006

-1 867

8 500

12 500

0

0

4 111

6 244

2007

19 006

45 950

8 500

0

0

22 555

4 111

2008

-11 421

18 373

45 950

6 000

0

12 399

22 555

2009

21 107

29 570

18 373

4 676

6 000

1 165

12 399


2.7. Analysis of accounts receivable

In the national financial and economic literature, much attention is paid to analysis of the structure of current assets to the achievement of their equilibrium, to the identification of reserves for reduction accounts receivable, to rationalization of cash flows and inventory. However, in publications of scientific and educational nature there are insufficiently represented the theoretical and methodological approaches, based on systematic research into the causes and consequences of company's debtors for its products shipped and services rendered. In essence it comes to building management system of accounts receivable which would control the relationships with debtors and would regulate the size of debt within the limits that provide liquidity and financial security.

G. Chitaya8 offers a method of constructing a system of management of accounts receivable, including a statistical analysis of the effectiveness of the actual level of management and use of company's human resources capacity without the formation of a specialized organizational structure. The aim is to demonstrate the approach to improving working capital management on the basis of designing an effective system of enforcement, reduction and control of receivables.

Statistical analysis of the effectiveness of company's accounts receivable

Based on of data of company's receivables by major debtors there can be evaluated the effectiveness of management using the methods of statistical analysis of variations. These, above all, are such indicators as the weighted arithmetic mean, mode, median, concentration ratio and the uneven distribution of attribute (accounts receivable). In the latter case it comes to the legitimacy of using the Gini coefficient, Herfindahl, variations, as well as graphic illustrations of uneven distribution of debtors using the Lorenz curve.

Obtaining analytical statistical tables, which allows to determine the characteristics of the of the variation series of accounts receivable of the enterprise involves a series computational actions.

1. Determining the optimal number of groups for the collection of debtors.

At this stage, application of Sturges formula is appropriate:

r = 1 + 3,32 lg n = 1 + 1,44 ln n,        (2.7.1)

where n - number of population units (enterprises-debtors).

Since n = 45 (the number of debtors, according to Appendix 1)

r = 1 + 1.44 ln n = 1 + 1.44 ln (44) ≈ 6.45, number of groups can be taken as 6, i.e. r = 6.

Establishment of interval variational series of debtors

Intervals are set regarding to concentration of accounts receivable (see column A, table 2.7.1)

Table 2.7.1. The calculation of basic statistical characteristics of variational series of accounts receivable of the enterprise by major debtors

Accounts receivable, thousand rur

Number of debtors

Interval mean, xi

ximi

Cumulative frequencies Fi

Relative cumulative frequencies  Pi, %

Distribution density, %,

Proportion of acc. rec. of groups of debtors in total

Yk = wi /

xk – 1

xk

mi

in % to total, wi

/ xk

Cumulative, qi

А

B

1

2

3

4

5

6

7

8

9

10

11

0

10

14

31,1

5

70

14

31,1

3,11

0,0010

0,0010

0,000001

350,00

10

100

6

13,3

55

330

20

44,4

0,15

0,0046

0,0056

0,000022

18 150,00

100

500

12

26,7

300

3600

32

71,1

0,07

0,0507

0,0563

0,002571

1 080 000,00

500

1 000

4

8,9

750

3000

36

80,0

0,02

0,0423

0,0986

0,001785

2 250 000,00

1 000

10 000

8

17,8

5500

44000

44

97,8

0,0020

0,6197

0,7183

0,384051

242 000 000,00

10 000

30 000

1

2,2

20000

20000

45

100,0

0,0001

0,2817

1,0000

0,079349

400 000 000,00

Total

45

100

71000

1

0,46778

645 348 511,00

The calculation of the average characteristics of interval variations of the series: a weighted average, mode and median

The weighted average will be:

      (2.7.2)

Mode (Mo) for a series with unequal intervals is determined using a density distribution of (Yk). This is feature value that occurs most often in units of the aggregate. For a discrete series mode will be the option with the greatest frequency

Distribution density is the highest in group 1:

Yk = Y1 = 2,96.

 (2.6.3)

Median (Me) is a feature value falling in the middle of a ranked set (for ranged series with an odd number of individual values ​​of the median would be the value, which is located in the center of the series, in this case 44 / 2 = 22), is calculated using the cumulative frequency index:

   (2.7.4)

The same value is obtained if we use the cumulative relative frequency.

       (2.7.5)

Calculation of variation

Dispersion (D):

  (2.7.6)

Standard deviation:

       (2.7.7)

Coefficient of variation:

           (2.7.8)

Calculation of the Gini concentration coefficient (G)

This ratio is used to measure the degree of uneven distribution of population units (accounts receivable of the company in 2009). This ratio it is appropriate to define by formula:

      (2.7.9)

where Pi and Pi + 1 are consecutive values of the accumulated relative frequencies;

qi and qi + 1 are consecutive values ​​of the elements of column 9 table 1;

qi (i =) are calculated according to the cumulative elements of column 8 table 1.

The results of support the calculations required to obtain the value of the Gini coefficient are given in Table 2.7.2.

       (2.7.10)

Table 2.7.2. Intermediate estimates for the Gini coefficient of uneven distribution of accounts receivable of the company

Piqi+1

Pi+1qi+

29,5*0,0056=

0,164411076

43,2*0,0009=

0,039575

43,2*0,0563=

2,429945947

7,05*0,0056=

0,392057

70,5*0,0985=

6,941808209

79,5*0,0563=

4,476216

79,5*0,7183=

57,13672669

97,7*0,0985=

9,62896

97,7*1=

97,72727273

100*0,7183=

71,82903

Total:

164,4001646

Total:

86,36584

Establishing Herfindahl coefficient

This ratio indicates the total proportion of the dominant group among the debtors of the company (H) and is calculated as follows:

        (2.7.11)

In accordance with data in table 2.7.1. H (%) = 46,78%

The calculation of the asymmetry coefficient of Pearson (Kas)

     (2.7.12)

Using the Table. 2, there can be constructed Lorentz curve. On a horizontal axis there will be located cumulative relative frequency (Pi), and on a vertical there will be values of the parameters qi. Coordinates of the points the diagonal line correspond to equal values ​​of the pair (Pi, qi). They are increasing multiple of 100 / 6 = 16.67.

Lorenz curve of uneven distribution of accounts receivable of analyzed company in 2009 is shown in Fig. 2.7.1.


Figure 2.7.1. Lorenz curve of accounts receivable distribution for 2009

Statistical indicators for assessing the distribution of enterprise's debtors by value of their debt may be used to assess the effectiveness of current assets management, and above all, their most significant part - accounts receivable. Table 2.7.3 represents the main statistical indicators of efficiency assessment for accounts receivable management.

Table 2.7.3. Main statistical indicators of efficiency assessment for accounts receivable management for 2009

Indicator

Symbol

Value

Weighted average, thousand rur.

x

1 577,67

Mode, thousand rur.

Мо

1,743

Median thousand rur.

Ме

200

Variance

D

11 064 836

Standard deviation, mln rur.

3473,45

The coefficient variation,%

220,16

The Gini coefficient,%

G

0,78

Herfindahl coefficient,%

H

46,78

The asymmetry coefficient of Pearson

Кas

0,45

Weighted arithmetic average of accounts receivable was 1,613.64 rubles. For 44 debtors the value is small that is a consequence of the greater concentration of debt up to 1 million rur. This is evidenced by values of mode and median (1.743 and 200 thousand rubles., respectively). According to the value of Pearson coefficient, the asymmetry of the total debt debtors is dextral. From the general theory of statistics it is known that if the ratio  , where  and n is the number of debtors, then the asymmetry of distribution is reasonable, despite the heterogeneity of total debts. In given case, this ratio is 1.31 and indicates a moderate asymmetry of the aggregate. This is confirmed by the fact that the median is located between mode and a weighted average. It follows that the distribution of the receivables can be explained within the framework normal probability law, which, in turn, allows assessing the degree of predictability of debtors that is their controllability. The high value of standard deviation (3473.45 thousand rub.) indicates a large scatter in accounts receivable and indicates the existence of risk in dealing with collection of its expired parts.

The high level of variation coefficient characterizes the inhomogeneity of total receivables and a low degree of controllability. The Gini coefficient shows that the distribution of accounts receivable is uneven (78%) and most of the debt is concentrated in the dominant group, accounting for 46.78% (Herfindahl coefficient).

Identified patterns using statistical methods to a large extent demonstrate the risks and low accounts receivable management effectiveness and the feasibility of designing an improved system.


Chapter 3. Recommendations for the management of current assets on of SPETSSTROY-SVYAZ Ltd

3.1. Ways to improve the cash management

Cash flow planning

One of the stages of cash-flow management is the planning stage. Cash flow planning helps financial manager to identify the sources of funds and to assess their use as well to identify the expected cash flows, and hence the growth prospects of the organization and its future financial needs.

The main task of scheduling the movement of money is to check out the reality of income sources and validity of expenses, synchronicity of their of occurrence, to determine the possible need for borrowing. Plan of cash flow can be made in direct or indirect way.

In addition to the annual plan of the cash flow it is necessary to develop a short-term plan for short periods of time (month, decade) in the form of payment calendar.

Payment calendar is a plan for the organization of production and financial activities in which all sources of revenue and expenses over a certain period of time are calendar linked. It fully covers the cash flow of organization, provides an opportunity to link the cash receipts and payments in cash and cashless; helps to ensure constant solvency and liquidity.

Payment calendar is constituted by financial service of enterprises, with the targets of the budget cash flow divided by month and smaller periods. Dates are determined on the basis of the periodicity of the main payments of the organization.

In the process of payment calendar the following tasks are performed:

  1.  organization of accounting of time matching of receipts and future expenses of the organization;
  2.  creation of database of cash inflows and outflows;
  3.  daily records of changes in the information database;
  4.  analysis of non-payment and organization of activities for elimination of their causes;
  5.  calculation of the need for short-term financing;
  6.  calculation of temporary free funds of the organization;
  7.  analysis of the financial market from a position of the most reliable and profitable investment of temporarily free cash.

Payment calendar is compiled on the basis of real information database of cash flow of organization, which consists of: agreements with contractors; acts of verification of payments to contractors, invoices, bank documents on the flow of money to the accounts; money orders, products shipping schedules; schedules of salary payments, the state of settlements with debtors and creditors, the legally prescribed time of payments for financial obligations to the budget and extra budgetary funds, internal orders.

For effective calendar of payments preparation financial manager need to control information about the cash balances in bank accounts, money spent, average balances for the day, the state securities market of organization, planned receipts and disbursements for the period ahead.

The result of the development plan, cash flow can be either a deficit or excess of cash. Therefore, the final stage of cash flow management they are optimized by balancing the volume and in time, synchronizing their formation in time and optimizing the balance on current account.

Both deficit and excess of cash flow have a negative impact on enterprise. Adverse effects of the deficit cash flow appear in the reduction of liquidity and solvency, growth of overdue accounts payable to suppliers of raw materials, increase in the share of of overdue debt on received financial loans, delayed payment of wages, increase the duration of the financial cycle, and ultimately - in the reduction of profitability of use of its own capital and assets of enterprises.

Adverse effects of excess of cash flow occur in the loss of the real cost of temporarily unused cash by inflation, the loss of potential revenue from an unused part of the monetary assets in their short-term investments, which eventually also affects the level of return on assets and equity enterprise.

According to I. Yakovleva9, the amount of deficit of cash flow must be balanced by:

1) Attracting additional own or long-term debt capital;

2) Improving work with current assets;

3) Disposal of non-core fixed assets;

4) Reduction of the investment program of the enterprise;

5) Cost reduction.

The volume of excess of cash flow should be balanced by:

1) Increasing investment activity of the enterprise;

2) Expansion or diversification of activities;

3) Premature repayment of long-term loans.

In the process of optimizing of cash flows over time there are two basic methods - the alignment and synchronization. Alignment of cash flow is aimed at smoothing their volumes by separate intervals of the period of time. This optimization method allows to eliminate to a certain degree the seasonal and cyclical variations in the formation of cash flows (both positive and negative), to optimize parallel average cash balances and increasing liquidity. The results of this optimization method of cash flows over time are evaluated using standard deviation and variation coefficient that should be reduced in the optimization process.

Synchronization of cash flows is based on the covariance of positive and negative types. During synchronization there must be ensured improved correlation between these two types of cash flows. The results of this optimization method of cash flows over time are estimated using the correlation coefficient, which is in the optimization process, should aim to value of +1.

Tightness of correlation is improved by speeding up or slowing down of payments.

Payment transactions are accelerating by the following activities:

1) Increasing the size of discounts to debtors;

2) Reducing the term of trade credit extended to customers;

3) Tightening of monetary policy on the collection of debt;

4) Tightening procedures for assessing the creditworthiness of debtors with purpose in reducing the percentage of insolvent buyers of organization;

5) Use of modern financial instruments such as factoring, discounting bills, forfeiting;

6) Use of such types of short-term loans as overdraft and credit line.

The slowdown of payments may be carried out by:

1) Prolongation of trade credit granted by suppliers;

2) Acquisition of long-term assets through leasing, as well as transfer to outsourcing of strategically less significant parts of the organization;

3) Transfer of short-term loans into long-term;

4) Reducing the payments to suppliers in cash.

Cash as a form of current assets is characterized by certain attributes:

  1.  Routine - funds are used to pay current liabilities, therefore, between the incoming and outgoing cash flow there is always a gap in time. As a result, the company has to constantly earn free money to a bank account;
  2.  Precautions - activity of the company is not tightly regulated by nature, so cash is needed to cover unexpected of payments. For these purposes it is expedient to create a safety stock of cash;
  3.  Speculative - cash is necessary for speculative reasons, as there is always a little likelihood that suddenly there will appear an opportunity for profitable investment.

However, cash itself is a nonprofit asset, so the primary objective of the policy of its management is keeping it at the lowest appropriate level, sufficient for effective financial and economic activities of the organization, including:

  1.  Timely payment of suppliers' invoices, allowing to use offered discounts on the price of the goods;
  2.  Maintain a constant creditworthiness;
  3.  Pay unforeseen expenses arising in the course of commercial activity.

As noted above, if there is large money the current account organization suffers opportunity costs (refusal to participate to any investment project). With a minimum stock of cash there are costs for replenish the stock, so-called maintenance costs (selling and distribution expenses resulting from the purchase and sale of securities, or interest and other costs associated with the involvement of a loan to replenish the cash balance). Therefore, solving the problem of optimizing the balance of money to the account, it is useful to consider two mutually exclusive things: maintaining the current pay and receiving additional income from the investment of available cash.


3.2. Ways to optimize the management of accounts receivable

Accounts receivable is an important part of enterprise assets. It should be noted that its share in total assets of the analyzed company on 1 January 2010 was 63%. Therefore the construction of an effective management system accounts receivable and its stable functioning are among the most important areas of enterprise management.

Table 3.2.1. Dynamics of accounts receivable for 2005-2009

2005

2006

2007

2008

2009

Receivables

17 045

52 180

56 393

82 065

72 560 

Balance

55 861

90 886

119 668

127 477

107 173

Share of receivables in the balance sheet total

0.26

0.5

0.27

0.59

0.63

Receivables in the economy have two important features:

  1.  A source of free money for the debtor;
  2.  Increasing products and services market for the lender.

In real practice, it is impossible to reduce accounts receivable to zero but it is justified with respect to the expired part of it. In order to minimize the risk of expired accounts receivable, which may lead business to losses, it is needed to improve the system of management.


Figure 3.2.1. Schematic model of the accounts receivable control system of an enterprise

A generalized theoretical model underlying the establishment of management systems accounts receivable can be illustrated by Fig. 3.2.1. Controlled subsystem (object) is formed as a result of shipping products to customers and conduct payments, including advances to suppliers of material resources and components, as well as to partners for a variety of services rendered to it (the entrance to the control system). At the output there are formed accounts receivable including overdue. The process of regulatory impact is supported by three units: implementation of measurement functions, management and implementation of executive functions. Measuring unit based on the creation of a database on debtors determines the composition, size, structure, and statute of limitations of accounts receivable that is used by the control unit to develop a corrective management actions. For this control subsystem produces a target and functional structure of action based on the formulation of goals, objectives and principles of management, updating the composition and structure of the database on debtors, the expansion of theoretical knowledge and cumulated experience for management of accounts receivable, as well as taking into account the probabilistic nature of behavior debtors. As a result, developed set of means of impact is realized by the executive block which carries out correction of potential payments to debtors (input control). This completes a conventional management cycle of accounts receivable.

In projected control system emphasis is on reducing external receivables arising through the fault of suppliers of material resources and components, whom advance payments were carried out to, and they did not provide timely delivery in accordance with the terms of the contract.

Effectiveness of management of accounts receivable is expressed in ensuring timely repayment of money and conducting sustained and concerted work of involved in its structural divisions of enterprise. To clarify the management objectives of accounts receivable it is important to more clearly identify the detailed structure the subjects involved in its appearance and elimination of expired parts (Fig. 3.2.2).

Figure 3.2.2. Participants in the process of appearance and management of accounts receivable

The interaction organization between actors involved in the occurrence and regulation of accounts receivable, suggests respect for the fundamental principles that promote effective work of management system of accounts receivable (Fig. 3.2.3).

Figure 3.2.3. Principles of management of accounts receivable

The final stage of designing the management system is the development of accounts receivable its organizational and functional structure (Fig. 3.2.4). This scheme regulates the functional interaction between the structural subdivisions of enterprises directly involved in the occurrence and continuous control of accounts receivable, including overdue. In this case, such a control scheme does not require the introduction of additional staffing and involves the use of its own staff. Formed out of It committee on management of accounts receivable is permanent, it is an advisory body with functional responsibilities for development of managerial decisions, which meets at regular intervals. Developed by the Commission decisions are made and controlled by the Deputy Director General for Economy and Finance.

Figure 3.2.4. The organizational structure of accounts receivable management in the enterprise

3.3. Implementing the components associated with payment of goods sold to the motivating system of managers.

It is proposed to implement the following policy of receivables management:

Bonuses are aimed at strengthening the material interest and increase employees' responsibility to improve the performance of the company. The main criterion for assessing employee’s performance is the fulfillment of individual sales plan is established by parish funds.

  1.  Employees are eligible for current bonuses under the following conditions:
  2.  Fulfillment of the annual individual sales plan by more than 100%;
  3.  Reducing the value of accounts receivable;
  4.  Reducing the value of accounts payable for the supply of products, goods, works and services;
  5.  The observance of labor discipline;
  6.  Compliance with the requirements of the job, labor law, requirements for the protection and safety.
  7.  Lump-sum bonus payment can be made:
  8.  For qualitative and timely execution of critical tasks, and especially urgent work, occasional task of leadership;
  9.  On the basis of a successful employee performance.
  10.  The size of the current premiums is determined by the coefficient for the calculation of premiums:
  11.  0.0033 - for calculating premiums in the performance of individual sales plan within the more than 100% to 150%;
  12.  0.0066 - for calculating premiums in the performance of individual sales plan from 150% to 200%;
  13.  0.01 - for calculating premiums in the performance of individual sales plan of more than 200%.

Current premiums are charged to employees in accordance with the personal result of work of each employee as follows:

(AFP-P)*k – CP,          (3.3.1)

where:

AFP – actual sales plan fulfillment

P – individual sales plan

k – coefficient for premium calculation

CP – current premium accrued since the beginning of the year

Proposed policy can help the company to decrease its accounts receivable.


3.4. Conducting an interview with a competent specialist

In order to get a competent opinion an interview with finance director of SPETSSTROY-SVYAZ Ltd., Victoria Ivanilova, was conducted. She has been working in the company for more than 7 years starting from an accountant position.

  1.  How do you assess the financial condition of the company?

After the crisis of 2008, in my opinion, the economy is still at a low level. Orders of government and departmental enterprises and organizations, our main customers, have decreased. Furthermore creditworthiness of all customers has dropped significantly. In 2011, we have not yet reached the level of 2008 and even 2007 in sales. During the 2010 financial state of the enterprise deteriorated even compared with 2009.

  1.  Have the similar measures to reduce the accounts receivable been conducted before?

The company has attempted to reduce receivables, but in other ways, by offering leasing schemes, by working with our customers by security of the enterprise. Unfortunately, these measures have not brought significant results. Among the financiers of customers, unfortunately, there are few professionals who can appreciate the leasing operations. Employees of departments and state enterprises are "tied" to corporate foundations. In such organizations, even insignificant change in the form of contract is very problematic. However, they realize that sue to recover the debt is not in the interests of the supplier, because there is a high probability that this company will lose other orders from these contractors.

  1.  What are the problems regarding current assets faced by the industry?

Firstly, businesses that develop equipment of wire communication lose customers, not only because of the active market entry of services of mobile operators, but also because of the active "recommendations "of the Russian government for the similar equipment of European manufacturers, which is not always justified by the quality of their products.

Secondly, Russia produces very few components that meet modern requirements (e.g., chips at various levels).

Thirdly, regulatory framework that determines the equipment requirements for wire communication, as well as the quality management system is often interpreted by each department in its own way, and as a consequence, we are forced to incur substantial expenses. Thus there is no guarantee that these costs will be paid back.

  1.  What are your predictions for the financial condition of the enterprise for the next year or two?

The company today maintains an active policy to diversify the portfolio of sales, to reduce accounts receivable and enters the regime of austerity. So I hope that by 2013 the company will come out of crisis.


Conclusion

Current assets are assets that serve the process of current economic activity, while participating in the production and selling processes. The main purpose of current assets is ensuring the continuity and rhythm of the production and turnover. Due to rapidly changing market conditions companies have to change their policies toward current assets management, optimizing its structure and volume, increasing turnover and searching for additional reserves of their efficiency.

Nowadays, Russian telecommunication equipment market suffers because of high competition both in internal and external. Furthermore, producers face a lot of problems with payments of accounts receivable.

In this paper there was conducted a field research of financial performance of a specific example of Russian telecommunication equipment producer. There were used such methods as financial ratios analysis and mathematical statistical analysis. Furthermore there was conducted an interview to the company’s finance director, Victoria Ivanilova. The findings obtained in the course of the research show that the crisis has strongly affected the performance of SPETSSTROY-SVYAZ. The company’s main customers, governmental and departmental entities, have decreased their consumption. Other clients also do not represent high creditworthiness. Most of SPETSSTROY-SVYAZ’s accounts receivable is overdue. Thus the company cannot use its money for production and development what makes a vicious circuit. There has been made several attempts to improve the situation with accounts receivable, but, unfortunately, due to the peculiarities of the enterprise’s clients, these attempts have not brought much effect.

In this paper the following recommendations for improving company’s liquidity were given: to create a payment calendar in order to align and synchronize cash inflows and outflows by time periods, to speed up the cash flows. Also, there was proposed a model for receivables management, which could help to reduce the time of repayment. Besides these financial measures there was proposed a managerial one – a bonus policy. According to this policy, sales managers would get bonuses regarding their plan fulfillment. It is important, that managers’ performance is to be measured by money inflows. This policy is to increase the employees’ involvement in company’s economic activity.

APPENDIX 1. The listof SPETSSTROY-SVYAZ’ES debtors and related accounts receivable

#

Debtor

Debt, rur

#

Debtor

Debt, rur

1

Business-Svyaz

10.00

23

Dalsvyaz

155 827.59

2

Ryazan

74.00

24

Pishevye Ingredienty

163 119.00

3

Zorg

280.00

25

Universum telecom

166 805.60

4

Regional telesystems

300.00

26

Fortex

198 570.91

5

Connect plus

1 200.00

27

Sokol-ATS

203 244.73

6

Cheboksarsky Electroapp plant

1 907.00

28

Resurstorg

218 748.00

7

Smolenskenergo

2 000.00

29

SFU

232 932.00

8

Krasnodargazavtomatika

3 600.00

30

Agatelecom

315 318.40

9

FSI Volga GBD Informtechcenter

4 100.00

31

Intellect.com Tula

329 454.00

10

Dalsvyaz Magadan

4 460.00

32

Almaz SSS

773 363.46

11

BTK Bryansk

4 922.60

33

Proton-T

826 935.95

12

Mir Techniki

7 265.00

34

Tambov telecom

869 833.18

13

Volga-Don GBUVPiS

9 600.00

35

Zeta telecom

942 729.00

14

Radionet-t

12 440.00

36

PAKS

1 165 000.00

15

Yakutsk-energo

25 220.00

37

Proton-Yug

1 276 416.64

16

Gassystemaavtomatika

48 597.53

38

Utek

2 198 621.43

17

Priboi

62 021.75

39

Seti i Systemi

3 395 428.54

18

RN-Inform

62 100.00

40

Rusingeniering

5 555 834.73

19

Seti-complect

71 088.81

41

Technoserv

6 153 596.45

20

Transcor

112 387.50

42

Infospetsservis

6 519 088.00

21

Universum bit

121 441.60

43

IFC

6 789 204.99

22

DTN

125 771.49

44

Proton-SSS

27 170 308.78


APPENDIX 2. THE Balance shit of SPETSSTROY-SVYAZ ltd

Assets

Code

2005

2006

2007

2008

2009

I. Noncurrent assets

Intangible assets

110

51

67

70

62

73

Fixed assets

120

19 244

20 364

18 766

17 509

17 144

Unfinished construction

130

0

84

282

1 573

2 162

Deferred tax assets

145

1

1 557

-

22

Total I

190

19 296

22 072

19 118

19 166

19 379

II. Current assets

Reserves

210

11 089

7 792

17 660

13 736

14 024

including:

raw materials and other similar values

211

10 016

6 182

14 735

6 646

7 115

work in progress

213

575

4 015

3 648

prepaid expenses

216

1 073

1 610

2 350

3 075

3 261

Value-added tax on purchased goods

220

2 207

1 225

436

111

35

Accounts receivable (payments expected within 12 months after the reporting date)

240

17 045

52 180

56 393

82 065

72 560

including:

buyers and customers

241

14 309

45 234

31 939

75 592

67 083

Short-term investments

250

0

3 506

3 506

0

0

Cash

260

6 224

4 111

22 555

12 399

1 165

Total II

290

36 565

68 814

100 550

108 311

87 794

Balance

300

55 861

90 886

119 668

127 477

107 173

Liabilities

Code

2005

2006

2007

2008

2009

III. Capital and reserves

Owners' capital

410

4 000

4 000

4 000

4 000

4 000

Retained profit (loss)

470

11 729

28 262

30 697

12 471

16 586

Total III

490

15 729

32 262

34 697

16 471

20 586

IV. Long-term liabilities

Loans and credits

510

12 500

8 500

45 950

18 373

29 570

Deferred tax liabilities

515

303

13

7

3

0

Total IV

590

12 803

8 513

45 957

18 376

29 570

V. Short-term liabilities

Loans and credits

610

0

0

0

6 000

4 676

Accounts payable

620

27 329

50 111

39 014

86 630

52 341

including:

Suppliers and contractors

621

14 255

18 654

11 041

17 987

12 818

wages payable

622

1 051

1 642

4 570

4 204

10 151

debt to the state budget funds

623

717

560

870

1 260

1 778

taxes and fees

624

1 863

16 663

6 653

12 814

11 417

Other

625

9 443

12 592

15 880

50 365

16 177

Total V

690

27 329

50 111

39 014

92 630

57 017

Balance

700

55 861

90 886

119 668

127 477

107 173


APPENDIX 3. Current Assets structure

Indicators of structure

2005

2006

2007

2008

2009

Indicators of structural dynamics (chain method)

2006

2007

2008

2009

Total

The share of stocks in the the total value of current assets

30

11

18

13

16

37

164

72

123

The share of stocks of raw materials in the total current assets

27

9

15

6

8

33

167

40

133

Share of reserves of goods production in the total current assets

0

0

1

4

4

 

 

400

100

The share of future expenditures in the total current assets

3

2

2

3

4

67

100

150

133

Share of receivables in the the total value of current assets

47

76

56

76

83

162

74

136

109

The share of short-term receivables in the the total value of current assets

47

76

56

76

83

162

74

136

109

The proportion of cash in the total value of current assets

17

6

22

11

1

35

367

50

9

The share of short-term investments in the the total value of current assets

0

5

3

0

0

 

60

0

 

Internal 

The share of raw materials and a total value of stocks

90

79

83

48

51

88

105

58

106

The share of work in progress in the the total amount of reserves

0

0

3

29

26

 

 

967

90

The share of short-term receivables in the the total value of accounts receivable

100

100

100

100

100

100

100

100

100

The proportion of funds in the total value of cash funds

17

6

22

11

1

35

367

50

9



Name

Code

2005

2006

2007

2008

2009

Income and expenses from ordinary activities

Revenues (net) from sales

010

174 518

224 694

231 177

300 786

273 712

Cost of goods sold and services

020

-134 549

-152 279

-171 967

-221 544

-196 744

Gross profit

029

39 969

72 415

59 210

79 242

76 968

Management expenses

040

-27 918

-31 419

-48 355

-57 941

-63 021

Income (loss) on sales

050

12 051

40 996

10 855

21 301

13 947

Other income and expenses

Interest receivable

060

2

157

0

0

0

Outstanding interest

070

-524

-2 140

-2 808

-6 124

-4 066

Other income

090

110

4 902

655

3 707

89

Other expenses

100

-2 075

-6 866

-4 540

-8 745

-4 265

Income (loss) before taxation

140

9 564

37 049

4 162

10 139

5 705

Deferred tax assets

141

10

1

0

0

0

Deferred tax liabilities

142

-283

-290

-5

-4

-3

Current income tax

150

-95

-413

-733

-836

-1 593

Income tax and other similar mandatory payments

180

-2324

-8 892

-999

-2 433

0

Net income (loss) for the reporting period

190

6 872

27 455

2 425

6 866

4 109

REFERENCE:

Permanent tax liabilities (assets)

200

388

124

413

832

448

APPENDIX 4. Profit and loss statement


APPENDIX 5. Vertical and Horizontal analysis of cash flows


Index

Amount

Of total

%

% (vertical analysis)

 

Current activity

Investment activity

Financial activity

Total

Current activity

Investment activity

Financial activity

Current activity

Investment activity

Financial activity

1

(Thous rur)

3

4

5

6

7

8

9

10

11

12

Cash at beginning of year

12 399

 

 

 

 

 

 

 

 

 

 

Total cash received is total

365 475

321 948

0

43 527

100

88

0

12

100

100

100

Including:

 

money from buyers and customers

321 948

321 948

 

 

88

88

0

0

100

 

 

loans and borrowings

43 527

 

 

43 527

12

0

0

12

 

 

100

Directed cash flows - total

376 709

352 336

0

24 373

100

94

0

6

100

 

100

Including:

 

payments for purchased goods (works, services, of raw materials)and other non-current assets

112 133

112 133

 

 

30

30

 

 

31,83

 

 

labor costs

68 589

68 589

 

 

18

18

 

 

19,47

 

 

contributions to extra-budgetary state funds

28 726

28 726

 

 

8

8

 

 

8,15

 

 

on payment of taxes and levies

72 434

72 434

 

 

19

19

 

 

20,56

 

 

interest payments

4 068

4 068

 

 

1

1

 

 

1,15

 

 

for the grant of imprest

7 871

7 871

 

 

2

2

 

 

2,23

 

 

for the grant of advances

453

453

 

 

0

0

 

 

0,13

 

 

other expenses

54 847

54 847

 

 

15

15

 

 

15,57

 

 

acquisition of fixed assets Investments in tangible and intangible assets

3 215

3 215

 

 

1

1

 

 

0,91

 

 

repayment of loans (without interest)

24 373

 

 

24 373

6

 

 

6

0,00

 

100,00

Cash at end of period

1 165

-30 388

0

19 154

 

 

 

 

 

 

 


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Publications:

  1.  Батурина Н.А. Как оценить собственнае оборотные средства предприятия по данным бухгалтерского баланса // Экономика современного предприятия, №1, 2010
  2.  Батурина Н.А. Динамический анализ структуры оборотных активов// Справочник экономиста №5, 2009
  3.  Кистерева Е.В.. Индикаторы развития // Справочник экономиста , № 6, 2006
  4.  Моисеева Е.Г. Управление денежными потоками: планирование, балансировка, синхронизация.// Справочник экономиста, №5, 2010
  5.  Радионов Р.А. Новые подходы к нормированию оборотных средств на предприятии // Финансовый менеджмент, 2005, № 3.
  6.  Радионов А.Р., Радионов Р.А.  «Как в условиях рыночной экономики нормировать на предприятии оборотные средства; по всем балансовым статьям или только по их части» // Финансовый менеджмент, 2004г., №1, стр. 33-42.
  7.  Радионов А.Р.,  Радионов  Р.А.  «Управление  запасами  и  оборотными средствами в условиях рыночной экономики» // Финансовый менеджмент, №5, 2003г.
  8.  Читая Г.О. Методика анализа и построения эффективной системы управления дебиторской задолженностью на промышленном предприятии// Справочник экономиста, №11, 2007

2 Азрилиян А. Н., Азрилиян О. М. , Калашникова Е. В. и др. Большой экономический   словарь. P. 234

3 Финансовый менеджмент: / Под ред. проф. Г.Б. Поляка. - М.: Финансы, ЮНИТИ, 2005. P 130.

4Шеремет А.Д., Ионова А.Ф. Финансы предприяний. Менеджмент и анализ. 2004 – p. 449

5 Ibid, p.450

6 Яковлева И.Н. Справочник по финансовой стратегии и тактике / И.Н. Яковлева. - М.: Профессиональное издательство, 2009. P 53

7 http://www.gks.ru/ - Rosstat

8 Читая Г.О. Методика анализа и построения эффективной системы управления дебиторской задолженностью на промышленном предприятии// Справочник экономиста, №11, 2007

9 Яковлева И.Н. Справочник по финансовой стратегии и тактике / И.Н. Яковлева. - М.: Профессиональное издательство, 2009.


 

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