Fiscal policy provided specific (financial) ideology, aimed at achieving the main goal of economic activity of the enterprise - profit.Short-term and long-term financial policy are the structural elements of a common financial policy entity.At the same time they are responsible for different areas of the company.
long-term fiscal policy essentially completely covers the entire life cycle of a complete description of its phases of growth, decline, maturity and withdrawal of capital in the most appropriate place.Long-term cycle is divided into a large number of short-term periods, the duration of which is equal to a single financial year.For each year formed their own short-term financial policy of the enterprise.
These two types of policies have their own, different from each other by the application.The long-term financial policy focuses on investment activity of the enterprise (long-term financial and capital investments), the short term the focus is on the current activities of a business entity.
There are differences between these two components of fiscal policy in linking the strategic directions in the market.Short-term fiscal policy contributes to the solution of problems on the settlement proposals of goods and services within a year, long-term fiscal policy should provide us a place in the market, on the basis of changes in the quality, quantity and assortment of the same goods and services.
Working capital management in the long term is reduced to solving two major problems:
- definition of optimality in the structure and the amount of current assets liabilities;
- provision by the various forms of financial resources to cover working capital needs.
long-term fiscal policy in comparison with the short-term has a variety of facilities management.Fiscal policy in the short term, manages the working capital and long-term - the basic, which can be represented by a set of negotiable and non-current capital.
From the standpoint of performance criteria, these two concepts are competing with each other.Short-term fiscal policy considering achieving the maximum level of earnings as a measure of efficiency, and long-term - the maximum benefit from the investment.
These criteria give rise to differences between short and long-term fiscal policy in determining the strategic objectives.Thus, the implementation of the latter is considered to be the main strategy for achieving performance, increased capacity and fixed assets, as well as the capital is not considered from the perspective of finance, as in physical form, which can be measured as production capacity.
Short-term policies in the field of Finance is responsible for the implementation of production tasks within the available capacity while providing flexible funding, the formation and accumulation of their own financial resources and working and non-current capital.
Along with the above differences in the two financial policies, there is a connection between them.Short-term can be considered "built" part of the long-term fiscal policy.After all, the direction of expansion of production activities, the release of available funds for further investment the manufacturing process, which are a major factor in long-term planning, are formed in the course of business entity.
