working capital - these are the financial resources that are advanced in the circulating capital (the sphere of production), as well as handling the funds (the sphere of circulation).In turn, the circulating assets consist of inventories, work in progress and semi-finished products of own production and prepaid expenses.
Any enterprise engaged in production activities, working capital is required to ensure continuity of production and sales of these products.
These financial resources of the company are temporarily in stocks of commodity and material assets, securities, receivables, cash, short-term liabilities and in one production cycle (or calendar year) can be converted into cash.
working capital in content include the objects of labor, which are involved in the production process with the ultimate goal of production.Their absence or deficiency can lead to interruptions or stop production.
Unlike current assets are in constant motion.They commit the circuit to ensure continuity of production processes.
Current assets are 3 stages of the circuit 1 - monetary, 2 - Manufacturing 3 - heading.
the first stage with the help of the working capital financing occurs inventory production, which contributes to the rhythm of technological processes.Then (the second stage) Working capital flow directly into production with a view to advancing semi-finished products, work in process and finished goods, as well as prepaid expenses.In the third stage of the circuit the funds arrive in the sphere of circulation and resulting sales again acquire cash.
All three stages are interrelated.The correct ratio steps turnover means accelerates and increases efficiency.The monetary difference between the amount of funds in the first and last stage of the turnover shows the financial results of the company.
performance of the enterprise depends on the size and structure of working capital.It is important to determine the optimal need for them to be able to make a profit with minimal costs.Understatement of the size of working capital can lead to instability of the financial condition of the company, and overstatement - to inefficient use them.
floating assets are formed primarily from the authorized capital.The size of the company sets the standard at the level of their own, which means they are minimal, but sufficient for the volume of industrial activity.
largest share current funds allocated for the maintenance of production processes and the initial stages of production.This part of the funds which are the subject of special attention and constant monitoring of financial services companies.
Working capital resumed with some regularity.According to the source
education floating assets are divided into the following groups: own, borrowed and borrowed.
working capital enterprises play a major role in the circulation of funds and property and ensuring the operational independence of the enterprise.This part of the funds generated during the creation of the enterprise (statutory fund).Further, they can be replenished through profits and stable liabilities.
funds are borrowed in order to reduce the overall needs of the economy in the media, as well as to promote their effectiveness.These funds are formed from short-term bank loans.
funds may also be formed by attracting funds (foreign investment).
All groups working capital must be properly correlated with each other to ensure the financial independence of the company.
