The concept of working capital

In the conditions of market relations, working capital acquires a particularly important

meaning. After all, they are part of the productive capital,

which transfers its value to the newly created product completely and

returns to the entrepreneur in cash at the end of each circuit

capital. Therefore, working capital is an important criterion in

determining the profit of the enterprise.

Working capital is the funds that serve the process of activity,

participating simultaneously in the production process and in the sales process

products. In ensuring the continuity and rhythm of the production process and

treatment is the main purpose of the working capital of the enterprise.

The materialized means of production are called the capital of the enterprise. Capital,

how the means of production is divided into means and objects of labor, which

participate in the creation of products and services, but differ in their functions in

production process. The means of labor constitute the material content

fixed production assets, i.e. fixed capital, objects of labor -

circulating production assets, i.е. working capital. Regardless

whether the company's capital is divided into equity, debt, fixed

or negotiable, permanent or variable, it is in progress

continuous movement, taking only different forms depending on

particular stage of the cycle.

The peculiarity of working capital is that it is not spent,

not consumed, but advanced into various types of current costs

business entity. The purpose of the advance is to create the necessary

inventories, backlogs of work in progress, finished products

and conditions for its implementation.

Advance means that the funds used are returned

enterprise after the completion of each production cycle or

circulation, including: production of products - its implementation - receipt

proceeds from the sale of products. It is from the sales proceeds that

reimbursement of the advanced capital and its return to the initial value.

Thus, the working capital intended to provide

continuity of the production process and sales of products, can be

characterized as the totality of funds advanced for

creation and use of circulating production assets and funds

appeals.

Composition of working capital

By functional purpose, or role in the production and circulation process,

the working capital of an enterprise is divided into working capital

funds and circulation funds. Based on this division, working capital can be

be characterized as funds invested in working capital production assets and

funds of circulation and making a continuous circulation in the process

economic activity.

Revolving production assets of enterprises consist of three parts:

Inventory is the object of labor

necessary to start the production process, consisting of raw materials,

basic and auxiliary materials, fuel, fuel, spare parts and

component parts;

Work in progress (objects of labor that entered

in manufacturing process: materials, parts, assemblies and products) and

semi-finished products own production;

Prepaid expenses are intangible items

working capital assets, including the costs of preparation and

development of new products.

Along with the listed material elements involved in

inventories or work in progress, current

production assets are also represented by deferred expenses,

necessary for creating backlogs, installing new equipment, etc.

Thus, circulating production assets serve the sphere

production, fully transfer their value to the newly created product,

while changing their original shape. And all this - within one

production cycle or circuit.

Another element of working capital is circulation funds. They are not directly

participate in the production process. Their purpose is to provide

resources of the circulation process, in servicing the circulation of enterprise funds

and achieving unity of production and circulation. The circulation funds include:

finished products in warehouses, goods in transit, cash and funds in

settlements with consumers of products, in particular, accounts receivable.

Combining circulating production assets and circulation funds into a single

reproduction is the unity of the production process and the implementation process

products. Elements of working capital continuously move from the sphere

production into the sphere of circulation and are again returned to production. In-

secondly, the elements of working capital and circulation funds have the same

the nature of the movement, the circulation, which is a continuous process.

The role of working capital in providing financial resources to the enterprise

The target setting of working capital management is to determine the volume and structure of working capital, the sources of their coverage and the ratio between them, sufficient to ensure long-term production and efficient financial activities of the enterprise.

The formulated target setting is of a strategic nature; no less important is the maintenance of working capital in the amount that optimizes the management of current activities. From these positions, the most important financial and economic characteristic of an enterprise is its liquidity, i.e., the ability to "turn assets into cash and pay off its payment obligations." For any enterprise, a sufficient level of liquidity is one of the most important characteristics of the stability of economic activity. The loss of liquidity is fraught not only with additional costs, but also with periodic stops in the production process.

With a low level of working capital, production activities are not properly supported, hence the possible loss of liquidity, periodic disruptions in work and low profits. At some optimal level of working capital, profit becomes maximum. A further increase in the amount of working capital will lead to the fact that the company will have at its disposal temporarily free, inactive current assets, as well as excessive financing costs, which will lead to a decrease in profits (Figure 3).

Thus, the strategy and tactics of working capital management should provide a compromise between the risk of loss of liquidity and performance. This boils down to two important issues.

The risk of loss of liquidity or decrease in efficiency, due to the volume and structure of working capital, potentially carries the following phenomena:

The most significant events that potentially carry the risk of inability to finance include the following.

1. High level of accounts payable. When an enterprise acquires inventories on credit, accounts payable with certain maturities are formed. It is possible that the business has "bought" more inventory than it needs in the near future or at an inflated price, and therefore, with significant credit and idle excess inventory, the business will not have enough cash to pay the bills, which , in turn, leads to non-fulfillment of obligations.

2. Suboptimal combination between short-term and long-term sources of borrowed funds. Despite the fact that long-term sources are usually more expensive, in some cases they can provide a greater overall efficiency with a smaller increase in liquidity. The art of combining different sources of funds is comparatively new problem for most Russian managers.

3. High share of long-term debt capital. In a stable economy, this source of funds is relatively expensive. Its relatively high share in the total amount of sources of funds also requires large expenses for its maintenance, i.e. leads to lower profits. This is the other side of the coin: excessive short-term accounts payable increases the risk of loss of liquidity, and an excessive share of long-term sources - the risk of reducing profitability. Of course, the picture may change under certain circumstances - inflation, specific or preferential lending conditions, etc.

In the theory of financial management, various criteria for the effective management of working capital and the sources of its formation have been developed. The main ones are the following:

The working capital financing models developed in the theory of financial management, on the one hand, proceed from the fact that the management policy should ensure a compromise between the risk of loss of liquidity and work efficiency, on the other hand, when selecting sources of financing, a decision is made that takes into account the period of their attraction and usage costs.

Y. Brigham described the following three options for the policy of forming the working capital of an enterprise:

- "Calm", in which there is a relatively large level of inventory, receivables and cash. It is associated with a minimum level of risk and profit.

- "Restraining", in which the level of working capital is minimized. It is able to bring the greatest profit, but also the most risky.

- "Moderate" - the average option.

E.S. Stoyanova in her works considers the policy of integrated operational management of current assets and current liabilities, which combines the policy of managing current assets with the policy of managing current liabilities. Its essence is, on the one hand, in determining the sufficient level and rational structure of current assets, on the other hand, in determining the size and structure of sources of financing current liabilities.

Depending on the size of the share of current assets in the composition of all assets, the following options for the current asset management policy are distinguished, in fact, similar to those described above:

Aggressive. Its main features are the maintenance of a high share of current assets and, accordingly, their low turnover. It provides a sufficient level of liquidity, but low return on assets.

Conservative. Its main feature is restraint of growth and low level of current assets, but carries a high risk of loss of liquidity due to desynchronization of receipts and payments, therefore it is carried out either in conditions of sufficient predictability of receipts and payments, sales volume and stocks, or with strict savings.

Moderate is a compromise. Her parameters are at the average level.

Each type of such policy should be accompanied by a funding policy. Depending on the size of the share of short-term liabilities, the following policy options for managing short-term liabilities are distinguished as part of all liabilities.

Aggressive. Its main feature is the predominance of short-term liabilities.

Conservative. The main sign is low specific gravity.

Moderate is a compromise. Average level of short-term credit.

Thus, the interpretation of the policies for the formation of the working capital of an enterprise by Western and domestic authors are similar in essence, so there is no need to focus on the differences in these approaches.

Working capital(current assets) is a part of the capital of the enterprise invested in its current (current) assets, which are renewed with a certain regularity to ensure current activities and at least once turned over during the year or one production cycle. Working capital occupies the second place in terms of its value after fixed capital in the total amount of resources that determine the economy of an economic entity. A feature of working capital is that they are not consumed, but are advanced. This ensures the continuity of the process of buying and selling goods. Unlike fixed capital, circulating capital during one production cycle completely transfers its value to the newly created product, is reimbursed after each circuit in cash, and then in kind. Part of the working capital changes its natural-material form (raw materials), part disappears without a trace as waste energy, gas.

Working capital - a set of funds advanced for the creation of working capital and circulation funds, ensuring a continuous circulation of funds. Working capital during one production cycle completely transfers its value to the newly created product, is reimbursed after each circuit in cash, and then in natural-material form. Part of the working capital changes its natural material form in the process of circulation (raw materials and materials), part disappears without a trace as waste energy, gas. Working capital is the movable part of assets. In each circuit, working capital goes through three stages: preparatory, production and marketing. At the first stage, the company's funds are used to purchase raw materials, materials, fuel, components, etc., necessary for the implementation of production activities. The production stage is a direct production process, at this stage the cost of used production stocks, the costs of wages and related expenses are additionally advanced, as well as the cost of fixed assets is transferred to production products. The production stage of the circuit ends with the release of finished products, after which the stage of its implementation begins. At the third stage of the circuit, the product of labor continues to be advanced ( finished products) in the same size as in the production stage. Only after the transformation of the commodity form of the cost of production into cash, the advanced funds are restored at the expense of the proceeds received from the sale of products. The rest of the amount is made up of cash savings, which are used in accordance with the plan for their distribution in terms of savings (profit) intended for expanding working capital attached to them and making subsequent cycles of turnover with them.

The monetary form that current assets take at the third stage of their circulation is at the same time the initial stage of the circulation of these funds. Working capital is simultaneously at all stages and in all forms of production, which ensures its continuity and uninterrupted operation of the enterprise.

Working capital in its composition is divided into two components: circulating production assets and circulation funds.

Circulating production assets are objects of labor, raw materials, basic materials, semi-finished products, auxiliary materials, as well as means of labor with a service life of not more than 1 year or a cost of not more than 50 times the established minimum size wages per month (low-value or wearing items and tools); work in progress and deferred expenses. Work in progress and semi-finished products of own production - parts, assemblies and products that have not passed all stages of processing, assembly and testing, staffing and acceptance, as well as objects of labor, the manufacture of which is completely completed in one workshop and is subject to further processing in other workshops of the same enterprise.

Deferred expenses - expenses for the preparation and development of new types of products produced in a given period, but subject to repayment in the future.

The second part of fixed capital is circulation funds. Funds of circulation - the funds of the enterprise invested in stocks of finished products, goods shipped, but unpaid, as well as funds in settlements and cash on hand and in accounts. Circulation funds do not participate in the formation of value, but are carriers of already created value. The main purpose of circulation funds is to ensure the rhythm of the circulation process with money.

The value of fixed capital, which is part of the circulation funds, is determined by the marketing of research, the conditions for the sale of products, the system of commodity circulation, and the methods of payment for products.

After the end of the production cycle, the manufacture of finished products and its sale, the cost of working capital is reimbursed as part of the proceeds from the sale of products (works, services). This allows you to systematically resume the production process, which is carried out through a continuous circulation of enterprise funds.

The ratio between separate elements working capital, expressed as a percentage, is called the structure of working capital. In various industries, it has significant differences and expresses the specific features of the production process, technology, organization of production and conditions for the sale of products, saving material resources. To do this, it is necessary to ensure strict observance of the rules for the storage and transportation of products, rationally prepare fuel, raw materials, materials for further processing in the production process, increase the attention of labor collectives to issues of the quality of work and manufactured products, structural production costs.

The structure of working capital in inventory items by different enterprises different. The highest proportion of inventories is in light industry enterprises (raw materials and semi-finished products predominate - 70%; the share of deferred expenses in the chemical industry is high - 9%. In mechanical engineering, compared with industry as a whole, the share of inventories is lower, and work in progress and semi-finished products of own production is higher.This is due to the fact that in mechanical engineering the production cycle is longer than the industry average.For the same reason, at enterprises of heavy power and transport engineering, the share of completed production is much higher than the industry average.The amounts of working capital presented in production stocks at various enterprises and organizations are the predominant working capital placed in the production sector, accounting for more than 70% of the total working capital.

According to the sources of formation, working capital is divided into:

Own;

Borrowed.

Own working capital - funds that are constantly at the disposal of the enterprise and formed at the expense of its own resources (profits, etc.) In the process of movement, own working capital can be replaced by funds that are, in fact, part of their own, for example, advanced for wages, but temporarily free ( due to the lump sum payment wages and other payments). These funds are called equal to own or stable liabilities.

Borrowed working capital is bank loans, credit debt (commercial credit) and other liabilities.

The classification of working capital according to the degree of its liquidity in the degree of financial risk characterizes the quality of the company's funds in circulation.

According to the degree of manageability, working capital is divided into:

Normalized;

Non-standardized.

Normalized funds include all working capital assets, as well as part of the circulation funds, which is in the form of balances of unsold finished products in warehouses. Non-standardized funds include the remaining elements of circulation funds. The absence of norms does not mean that the size of these elements of working capital can change arbitrarily and without limit, and that there is no control over them. Normalized working capital are reflected in financial plans enterprises, while non-standardized working capital is practically not an object of planning.

The grouping of working capital according to the method of reflection in the balance sheet of the enterprise allows us to distinguish the following groups:

a) material circulating assets in stocks. This includes inventories, low-value and consumable items, work in progress, prepaid expenses, finished goods, goods, and other inventories.

b) accounts receivable. It includes goods shipped, settlements with debtors, advances given to suppliers and contractors, and other current assets.

c) short-term financial investments.

d) cash. This includes the following items: cash, current account, foreign currency account, other cash.

The working capital of enterprises is designed to ensure their continuous movement at all stages of the circulation in order to meet the needs of production in monetary and material resources, ensure the timeliness and completeness of settlements, and increase the efficiency of the use of working capital.

All sources of financing of working capital are divided into own, borrowed and attracted. Own funds play a major role in organizing the circulation of funds, since enterprises operating on the basis of commercial calculation must have a certain property and operational independence in order to conduct business profitably and be responsible for decisions made.

The formation of working capital occurs at the time of the organization of the enterprise, when its authorized capital is created. The source of formation in this case is the investment funds of the founders of the enterprise. In the process of work, the source of replenishment of working capital is the profit received, as well as the so-called stable liabilities equated to own funds. These are funds that do not belong to the enterprise, but are constantly in its circulation. Such funds serve as a source of formation of working capital in the amount of their minimum balance. These include: the minimum monthly wage arrears to employees of the enterprise, reserves to cover future expenses, the minimum carry-over debt to the budget and extra-budgetary funds, creditors' funds received as an advance payment for products (goods, services), buyers' funds for pledges for returnable packaging, carry-over balances of the consumption fund, etc.

To reduce the total need of the economy in working capital, as well as to stimulate their effective use, it is advisable to attract borrowed funds.

Borrowed funds are mainly short-term bank loans, which are used to satisfy temporary additional needs in working capital. The main directions of attracting loans for the formation of working capital are:

Crediting of seasonal stocks of raw materials, materials and costs associated with the seasonal production process;

Temporary replenishment of the lack of own working capital;

Implementation of settlements and mediation of payment turnover.

With the transition to a market system of economic management, the role of credit as a source of working capital at least has not decreased. Along with the usual need to cover the excess need for working capital of enterprises, new factors have appeared that increase the importance of bank credit. These factors are primarily related to the transitional stage of development experienced by the domestic economy. One of them was inflation. The impact of inflation on the working capital of an enterprise is very multifaceted: it has a direct and indirect effect. The direct impact is characterized by the depreciation of working capital during their turnover, i.e. after the completion of the turnover, the enterprise actually does not receive the advanced amount of working capital as part of the proceeds from the sale of products.

The indirect impact is expressed in the slowdown in the turnover of funds due to the crisis of non-payments, largely due to inflation. Other causes of the non-payment crisis include a decrease in labor productivity; extreme inefficiency of production; the inability of individual leaders to adapt to new conditions; look for new solutions, change the product range, reduce the material and energy intensity of production by selling redundant and unnecessary assets; finally, the imperfection of the legislation, which allows not to pay debts with impunity.

In order to combat non-payments and provide financial support, significant funds are allocated to replenish the working capital of enterprises. However, the allocated funds are not always used for their intended purpose, which also has a strong inflationary effect.

These reasons determine the increased interest of enterprises in borrowed funds as a source of replenishment of working capital frozen in long-term receivables. In this situation, the question arises of the limits of the use of credit as a source of working capital. This issue is related to the dual effect that the use of credit has on the financial position of the enterprise in general and on the state of working capital in particular.

On the one hand, without attracting credit resources into circulation in the face of a shortage of own funds, an enterprise needs to reduce or completely suspend production, which threatens with serious financial difficulties up to bankruptcy. On the other hand, the solution of the problems that have arisen only with the help of loans causes an increase in the dependence of the enterprise on credit resources due to an increase in loan debt. This leads to increased instability financial condition, own working capital is lost, passing into the ownership of the bank, since enterprises do not provide a rate of return on invested capital, given in the form of bank interest.

Accounts payable refers to unscheduled attracted sources of working capital formation. Its presence means the participation in the turnover of the enterprise of the funds of other enterprises and organizations. Part of the accounts payable is natural, as it follows from the current settlement procedure. Along with this, accounts payable may arise as a result of violation of payment discipline. Enterprises may have accounts payable to suppliers for goods received, to contractors for work performed, to the tax inspectorate for taxes and payments, for deductions during off-budget funds. It should also highlight other sources of working capital formation, which include enterprise funds that are temporarily not used for intended purpose(funds, reserves, etc.).

The correct ratio between own, borrowed and borrowed sources of working capital formation plays an important role in strengthening the financial condition of the enterprise.

Thus, working capital is a cost estimate of the totality of material assets used as objects of labor and acting in kind, as a rule, during one production cycle.

Capital is one of the factors of production. Capital is often interpreted as the amount of money, investment resources used in the production of goods and services, their delivery to the consumer.

Externally, capital is represented in specific forms- means of production (productive capital), money (cash), goods (commodity).

Part of the productive capital (building, structures, machinery, equipment) is called fixed capital .

Another part of productive capital (raw materials, materials, energetic resources etc.) are working capital.

Fixed capital participates repeatedly in the production process and transfers its value to the finished product in parts, gradually.

The circulating capital is used up in production only once and transfers its entire value to the finished product.

The process of movement of fixed, circulating and total productive capital, covering its advance payment, its use in production, the sale of manufactured products and the return of capital to its original monetary form, is called the circulation of capital.

Fixed and working capital goes through a cycle of circulation and returns to the company at different times. Fixed capital costs cannot be recovered quickly.

Composition of fixed capital.

Each type of fixed capital (funds) has a specific purpose and scope. Modern large and medium-sized firms carry out a variety of activities, which leads to the need for different types of fixed assets.

First of all, fixed assets by purpose and scope are divided into production and non-production.

Production fixed assets are used to produce specific products. Non-production fixed assets are concentrated in the infrastructure of the company (social sphere, consumer services, etc.).

The production process consists of a large number of different stages, operations, and requires certain conditions. Therefore, a detailed classification of fixed assets for production purposes is built taking into account their functions in production.

In Russia, the following standard classification of fixed assets is used:

Structures.
Transfer devices.
Cars and equipment.
Vehicles.
Tools, production and household inventory and other types of fixed assets.

The ratio of various groups of fixed assets to their total value is called structure of fixed assets .

Objects of fixed assets differ not only in their role in the production process, but also in design features, origin, service life, and other characteristics. This allows you to evaluate the production potential of the company.

Depending on the specific role in the process of creating a product, the main production assets are divided into active and passive parts. The assignment of objects to the active or passive part depends on the specifics of the industry.

The total amount of fixed assets, due to the variety of their types, can only be determined in monetary terms. For this, various methods of assessing fixed assets are used, depending on the time of their acquisition (manufacturing) and condition.

Variants of valuation of fixed assets can be presented in the form of the following scheme of types of valuation of fixed assets.

Composition of working capital.

The source of formation of fixed capital is long-term financial investments, and a distinctive feature is a sufficiently long period of use of funds invested in fixed capital in order to make a profit; working capital - These are financial resources invested in objects, the use of which is carried out by the company either within the framework of one reproduction cycle, or within a relatively short calendar period of time (as a rule, no more than one year).

For convenience and simplification of intra-company accounting, items included in working capital include items that have a service life of not more than a year, regardless of their cost, as well as items (tools, inventory, equipment) with a value below the established limit (currently 500 thousand rubles) regardless of the cost. In the balance sheet of the company, all such items are reflected in the account "Low-value and wearing items".

In the composition of working capital, which forms a more or less significant part of the entire property (assets) of the company, first of all, material and material elements of property (current assets), cash and short-term financial investments (bonds and other valuable ones; deposits; loans provided to counterparties of the company) are distinguished. ; bills issued to customers, etc.), which, in principle, can be a source of additional income for the company - the owner of these financial investments.

It is this criterion that makes it possible to distinguish short-term financial investments from the elements included in the company's working capital in the form of funds in settlements, the balances of which in the corresponding accounts are reflected in the assets of the balance sheet, as well as from the balances of the company's own funds (cash on hand, non-cash in checks , letters of credit, settlement and other bank accounts).

Focusing on the structure of the current chart of accounts of accounting, the composition of the company's working capital for more or less consolidated classification positions can be represented as the following diagram.

Sources of formation of elements of the company's working capital are in all cases financial resources. They include their own funds (which are part of the authorized capital, special funds and formed at the expense of profit) and borrowed funds. The borrowed funds include loans (credits) received from commercial banks, commercial loans, accounts payable to suppliers and attracted funds from legal entities and individuals.

Structure of fixed and working capital

Based on the financial statements (balance sheet) and the composition of fixed and working capital determined earlier, we will show and analyze their structure. But before that, we will group the balance sheet items to allocate fixed and working capital:

There are two main features that determine the need and expediency of conducting a structural analysis of the financial assets of an enterprise:

1. The transition to relative indicators makes it possible to compare the economic potential and performance of a number of enterprises that differ in the amount of resources used and other volumetric indicators.

2. Relative indicators, to a certain extent, smooth out the negative impact of inflation on the absolute indicators of financial statements.

The structure of the cost of fixed and working capital gives some idea of the financial condition of the enterprise and reflects the specifics of its activities.

By table 1-3 (Attachment 1) and diagrams 1,2 (application 2), as well as rice. one, which shows the structure of fixed and working capital for 1995 and its change, it is clear that during the year there were strong changes both in the structure of fixed and in the structure of working capital. The share of work in progress (+14.66%) and receivables (+25.12%) increased significantly, which is a negative trend. There was a redistribution - with a decrease in cash and other assets, inventories and costs increased. Increased, and significantly, long-term financial investments (+77.07%), decreased the share of fixed assets (-25.32%).

By table 1-4 (Attachment 1), diagrams 3,4 (application 2) and rice. 2 it can be seen that during 1996 there were minor changes in the structure of fixed and working capital. The share of fixed assets slightly increased (+8.09%), the share of receivables decreased (-2.01%), but still remains at a sufficient level. high level(23.12%). The share of funds has decreased.

Picture 1.

Figure 2.

The composition and structure of working capital also reflect industry specifics. Statistics for Russian Federation indicate that the largest share of stocks of all types in the composition of working capital is observed in agriculture(71.9%), in second place - industry (28.6%), the share of stocks in working capital trade enterprises significantly lower (17.6%). The changes indicate an increase in the efficiency of market relations, an acceleration in the sale of products and the "resorption" of excess inventories at enterprises.

The working capital of an enterprise exists in the sphere of production and in the sphere of circulation. Circulating production assets and circulation funds are divided into various elements, constituting the material structure of working capital.

The structure of working capital is the proportion of the distribution of resources between the individual elements of current assets. The structure of working capital reflects, in particular, the specifics of the operating cycle, as well as what part of current assets is financed by own funds and long-term loans, and which part is financed by borrowed funds, including short-term bank loans.

The size and structure of own working capital may reflect the duration and characteristics of the financial cycle.

The structure of working capital depends on:

Industry specifics of the enterprise and the nature of products, technological and organizational features of production. With an increase in the duration of the cycle of manufacturing products, the share of work in progress increases, the development of the production of complex, science-intensive products leads to an increase in the share of expenses for future periods. In the structure of working capital of enterprises with short product manufacturing cycles, for example, in light and Food Industry, the share of inventories is large;

Competitiveness of the company's products. With low demand for products, the share of finished products in warehouses increases;

The level of use of the achievements of scientific and technological progress in the enterprise. With the introduction of non-waste and resource-saving technologies, the share of production reserves is reduced;

The level of organization and management of production;

The level of concentration, specialization, cooperation and combination of production;

Terms of supply and sale.

The composition and structure of working capital are shown in Figure 1.2.1.

Working capital assets include:

Items of labor (raw materials, basic materials and purchased semi-finished products, auxiliary materials, fuel, containers, spare parts);

Means of labor with a service life of not more than one year or a cost of not more than 100 times (for budgetary organizations - 50 times) the established minimum wage per month (low-value consumable items and tools);

Rice. 1.2.1. The composition of the working capital of the enterprise

Work-in-progress and semi-finished products of own production (objects of labor that entered the production process: materials, parts, assemblies and products that are in the process of processing or assembly, as well as semi-finished products of own production that are not completely finished by production in some workshops of the enterprise and are subject to further processing in other workshops the same enterprise)

Deferred expenses (non-material elements of working capital, including the costs of preparing and developing new products that are produced in a given period, but are attributed to products of a future period; for example, costs for the design and development of technology for new types of products, for rearranging equipment).

The circulation funds include: enterprise funds invested in stocks of finished products, goods shipped, but not paid for; funds in settlements; cash on hand and in accounts.

The amount of working capital employed in production is determined mainly by the duration of production cycles for the manufacture of products, the level of development of technology, the perfection of technology and the organization of labor. The amount of circulation funds depends mainly on the conditions for the sale of products and the level of organization of the system of supply and marketing of products.

The monetary form that current assets take at the third stage of their circulation is at the same time the initial stage of the circulation of funds. The circulation of working capital occurs according to the scheme:

D - T ... P ... T` - D`, (1.2.1.)

where D - funds advanced by an economic entity;

T - means of production;

P - production;

T` - finished products;

D` - cash received from the sale of products and includes realized profits.

Points (...) mean that the circulation of funds is interrupted, but the process of their circulation continues in the sphere of production.

Circulating assets in motion are at all stages and in all forms. This ensures a continuous production process and uninterrupted operation of the enterprise.

Circulating capital is the objects of labor that participate in production once, while being completely consumed and fully and immediately transferring their value to the value of the product produced.

The composition of working capital - a list of its elements. Working capital includes:

1) stocks (raw materials and materials, animals for growing and fattening, costs in work in progress, finished products and goods for resale, goods shipped, deferred expenses);

3) accounts receivable;

4) short-term financial investments - securities up to a year, loans to other organizations for the same period, deposits in banks;

5) cash;

6) other current assets.

The structure of working capital is determined by the ratio of its individual elements, which reflects the specifics of the production process.

Classification features of the composition and structure of working capital:

2. functional role in the production and sale of products. According to this feature, working capital can be divided into working capital and circulation funds. Circulating production assets - part of the working capital, entirely spent on the manufacture of products and the change in natural-material form and the transfer of value in full to the finished product. These include raw materials, work in progress, deferred expenses. Funds of circulation - part of the working capital used to finance the production and economic activities of the enterprise. This includes finished products, goods shipped, VAT, receivables, short-term financial investments, cash;

2) material content. Working capital is divided into funds in stocks, funds in production, finished products, cash and cash claims;

3) degree of planning. Working capital is normalized (you can calculate the need for it) - about 85%; non-standardized (you can only predict the need for it) - about 15%. Normalized working capital includes working capital assets of the enterprise and finished products in stock, non-standardized - receivables and free cash.

4) degree of liquidity. Working capital is divided into slow-moving assets, fast-selling and the most liquid current assets.

Working capital - part of the capital placed in current assets used, consumed and sold during the year or one production cycle. The movement of circulating capital, taken as a process of constant repetition and renewal, is called the circulation of circulating capital.

In a formalized form, the circuit: D - T ... P ... T * - D *, where

D - money; T - means of production; P - production; T* - finished products; D* - the amount of money received after the sale of goods.

At the first stage (D - T), working capital goes into the form of inventories. Its completion interrupts commodity circulation.

The second stage (C - P - C *) consists in creating a new product by transferring material assets and other production reserves to production and in ensuring the connection of means and objects of labor with the labor force.

The third stage (T* - D*) is the sale of products and receipt of revenue. In this case, working capital again takes the form of cash. Thus, working capital makes a continuous circulation. D*>D - this means the formation of a positive financial result at the enterprise. The circuit is a unity of three stages.

The circulation of capital is called the successive transformation of capital from one form to another, its movement, covering three stages. Of these stages, the first and third take place in the sphere of circulation, and the second in the sphere of production. Without circulation, that is, without the transformation of commodities into money and the reverse transformation of money into commodities, capitalist reproduction, that is, the constant renewal of the production process, is unthinkable.

All three stages of the circulation of capital are closely related and depend on each other. The circulation of capital proceeds normally only under the condition that its various phases pass without delay into one another.

If capital lingers in the first stage, this means the aimless existence of money capital. If the delay occurs at the second stage, then this means that the means of production lie in vain and remain without the use of work force. If capital encounters a delay in the third stage, then unsold goods accumulate in warehouses and overwhelm the channels of circulation.

Of decisive importance in the circuit of industrial capital is the second stage, when it is in the form of productive capital; at this stage there is the production of goods, value and surplus value. In the other two stages, however, value and surplus value are not created; there is only a change in the forms of capital.

The three stages of the circulation of capital correspond to three forms of industrial capital:

1) money capital,

2) productive capital and

3) commodity capital.

Each capital exists simultaneously in all three forms: while one of its parts is money-capital, which is being transformed into productive capital, another part is productive capital, which is being transformed into commodity capital, and the third part is commodity-capital, which is being transformed into money capital. Each of these parts in turn assumes and discards all these three forms one by one. This is the case not only with all capital taken separately, but also with all capitals taken together, or, in other words, with the total social capital. Therefore, Marx points out, capital can only be understood as movement, and not as a thing at rest.

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