Introduction

Essence financial management

1 The role of financial management in managing an organization

2 Objectives of financial management

3 Functions of financial management

Basic concepts and essence of financial management

Conclusion

List of used literature

Introduction

Financial management is aimed at managing the movement of financial resources and financial relations arising between economic entities in the process of movement of financial resources. The question of how to skillfully manage these movements and relationships is the content of financial management. Financial management is the process of developing financial management goals and influencing finances using methods and levers of the financial mechanism to achieve the goal. One of effective methods is the use of the Haskell test, which allows short time identify weak sides in financial management.

Thus, financial management includes management strategy and tactics. Strategy in this case refers to the general direction and method of using means to achieve a goal. This method corresponds to a certain set of rules and restrictions for decision making. Strategy allows you to concentrate efforts on solution options that do not contradict the adopted strategy, discarding all other options. After achieving the goal, the strategy as a direction and means of achieving it ceases to exist. New goals pose the challenge of developing a new strategy. Tactics are specific methods and techniques for achieving a goal under specific conditions. The task of management tactics is to select the most optimal solution and the most acceptable management methods and techniques in a given economic situation.

1. The essence of financial management

Financial management is the management of a company’s finances, aimed at achieving the strategic and tactical goals of the company’s functioning in the market.

The main issues of financial management are related to the formation of enterprise capital and ensuring its most effective use.

Currently, the concept of “financial management” implies a variety of aspects of financial management of an enterprise. A number of areas of financial management have received in-depth development and emerged as relatively independent scientific and academic disciplines:

higher financial computing;

the financial analysis;

investment analysis;

risk management;

crisis management;

assessment of the company's value.

Short story financial management

Financial management as a scientific direction originated at the beginning of the last century in the USA and in the first stages of its formation it mainly considered issues related to the financial aspects of creating new firms and companies, and subsequently - financial investment management and bankruptcy problems.

It is generally accepted that this direction was started by G. Markowitz, who developed in the late 1950s. portfolio theory, on the basis of which W. Sharp, J. Lintner and J. Mossin a few years later created a model for estimating the return on financial assets (CAPM), linking the risk and return of a portfolio of financial instruments. Further development of this area led to the development of the concept of an efficient market, the creation of a theory arbitrage pricing, option pricing theory and a number of other models for valuing market instruments. Around this time, intensive research began in the field of capital structure and the price of sources of financing. Main contribution by this section was made by F. Modigliani and M. Miller. The year of publication of their work “Cost of Capital. Corporate finance. Investment Theory" 1958 is considered a milestone when FM emerged as an independent discipline from applied microeconomics. Portfolio theory and capital structure theory can be called the core of financial management, since they allow us to answer two main questions: where to get money from and where to invest it.

1.1 The role of financial management in managing an organization

Management is a system for managing a certain object, including a set of principles, methods, forms and techniques of management. The development of management decisions is based on the collection, transmission and processing necessary information.

The formation of financial resources, their effective allocation and use is impossible without a clear and competent financial management system for the company.

IN modern conditions transition to market economy Financial management is the most complex and responsible link in the management system of various aspects of an enterprise’s activities, playing a connecting role and ultimately determining the enterprise’s position in the market, its competitiveness, sustainability, and profitability.

Financial management is carried out through a financial mechanism, which can be defined as a system of financial methods, expressed in the organization, planning and stimulation of the use of financial resources.

There are four main elements of the financial mechanism:

State legal regulation financial activity of the enterprise.

Market mechanism for regulating the financial activities of an enterprise.

Internal mechanism for regulating the financial activities of the enterprise (charter, financial strategy, internal standards and requirements).

A system of specific techniques and methods used at an enterprise in the process of analysis, planning and control of financial activities.

Finance is a system of economic relations associated with the formation, distribution and use of funds in the process of their circulation. The market environment and the expansion of independence in making management decisions have led to a sharp increase in the importance of financial management in the management of any economic structure.

The concept of “management” can be viewed from three sides:

as a system economic management company;

as a governing body;

as a form of entrepreneurial activity.

The development of market relations in our country, which has given enterprises the opportunity to independently accept management decisions and manage the final result of the activity, together with radical change banking system, the emergence financial market, introduction of new forms of ownership, improvement of the system accounting, led to an awareness of the importance of financial management as a scientific discipline and the possibility of using its theoretical and practical results in the management of Russian enterprises and organizations.

1.2 Objectives of financial management

The main goals of financial management:

increase in the market value of the company's shares;

increase in profits;

consolidating a company in a specific market or expanding an existing market segment;

avoiding bankruptcy and major financial failures;

improving the well-being of employees and/or management personnel;

contribution to the development of science and technology.

In the process of achieving the set goals, financial management is aimed at solving the following tasks:

Reaching high financial stability company in the process of its development. This task is achieved through the formation of an effective policy for financing economic and investment activities company, managing the formation of financial resources from various sources, optimizing financial structure company capital.

Optimization of company cash flows. This task is achieved by effective management solvency and absolute liquidity. At the same time, the free balance of cash assets should be minimized in order to reduce the risk of depreciation of excess cash.

Ensuring that the company's profits are maximized. This task is implemented by managing the formation of financial results, optimizing the size and composition of the financial resources of the company’s non-current and current assets, and balancing cash flows.

Minimizing financial risks. This goal is achieved by developing effective system risk identification, quality and quantification financial risks, identifying ways to minimize them, developing an insurance policy.

Some goals and criteria for company financial management

Goals Increasing the welfare of the company's owners Consolidation in the market, financial balance Maximizing current profits Economic growth Criteria Increasing the market value of shares. Increasing return on equity Positive dynamics and stability of liquidity indicators, financial independence and sustainability Increasing indicators of profitability of turnover and assets. Growth in business activity indicators Positive dynamics and stability in the growth rate of capital, turnover and profit. Increased economic profitability. Stability of financial stability indicators

1.3 Functions of financial management

Financial management includes the following aspects activities:

organization and management of the enterprise’s relations in the financial sector with other enterprises, banks, insurance companies, budgets of all levels;

formation of financial resources and their optimization;

placement of capital and management of the process of its functioning;

analysis and management of company cash flows.

Financial management includes management strategy and tactics.

Management strategy is the general direction and method of using means to achieve a goal. This method corresponds to a certain set of rules and decision-making constraints. Management tactics are specific methods and techniques for achieving a goal within the framework of certain conditions economic activity of the enterprise in question.

Financial management functions:

Planning function:

development of the company's financial strategy; formation of a system of goals and main indicators of its activities for the long term and short term; carrying out long-term and short-term financial planning; drawing up a company budget;

formation pricing policy; sales forecast; analysis economic factors and market conditions;

tax planning.

Function of forming the capital structure and calculating its price:

determining the overall need for financial resources to support the organization’s activities; formation and analysis of alternative sources of financing; formation of an optimal financial capital structure that ensures the value of the company;

calculation of the price of capital;

formation effective flow reinvested profits and depreciation charges.

investment analysis;

Investment policy development function:

formation of the most important areas for investing the company’s capital; assessment of the investment attractiveness of individual financial instruments, selection of the most effective of them;

formation of an investment portfolio and its management.

Working capital management function:

identifying the real need for certain types of assets and determining their value based on the company’s expected growth rate;

formation of an asset structure that meets the company’s liquidity requirements;

increasing efficiency of use working capital;

control and regulation monetary transactions; cash flow analysis;

Financial risk analysis function:

identification of financial risks inherent in the investment and financial and economic activities of the company;

analysis and forecasting of financial and business risks;

Evaluation and consultation function:

formation of a system of measures to prevent and minimize financial risks;

coordination and control of the execution of management decisions within the framework of financial management;

organizing a system for monitoring financial activities, implementing individual projects and managing financial results;

adjustment financial plans, budgets of individual departments;

holding consultations with heads of company departments and developing recommendations for financial matters.

Information support for financial management

Specific indicators of this system are formed from external and internal sources, which can be divided into the following groups:

Indicators characterizing the general economic development of the country (used when making strategic decisions in the field of financial activities).

Indicators characterizing the financial market conditions (used when forming a portfolio of financial investments and making short-term investments).

Indicators characterizing the activities of competitors and counterparties (used when making operational management decisions).

Regulatory indicators.

Indicators characterizing the results of the financial activities of the enterprise (balance sheet, profit and loss statement).

Regulatory and planned indicators.

2. Basic concepts and essence of financial management

IN modern economy financial flows are the main object of management in any enterprise, since every business decision is directly or indirectly related to cash flow. Therefore, most managers in one way or another have to interact with financial services in the process of implementing their functional tasks.

In this regard, knowledge of the basics of financial management today is necessary for every middle and senior manager for a deeper and more comprehensive understanding of the problems facing his enterprise and the effective performance of his functions.

Finance is a specific area of ​​economic relations related to the formation, distribution (redistribution) and use of funds of funds.

Money, as the material basis of financial relations, plays a vital role in a market economy, expressing and coordinating the interests of its participants, as well as acting as a general value equivalent.

The fund of funds is understood as a separate part of them that has a specific purpose. The funds held in such funds are called financial resources.

Currently, financial resource management is one of the main and priority tasks challenges facing any enterprise. The priority of this direction in the system of enterprise management goals is due to the fact that finance is the only type of resource that can be transformed directly and with the shortest time interval into any other: means and objects of labor, labor etc. The rationality, expediency and effectiveness of such a transformation largely determine the economic well-being of the enterprise, as well as all entities interested in its functioning: owners, employees, contractors, the state, society as a whole.

The key role of financial resources in a market economy makes it necessary to separate the functions of their management into an independent field of activity - financial management.

Financial management is the management of financial resources and financial activities of an economic entity, aimed at achieving its strategic and current goals.

Being broad and multifaceted in its content, financial management can be considered in various contexts:

as a scientific discipline;

as a financial management system for a business entity;

as a type of entrepreneurial activity.

Financial management as a scientific discipline is a system of theoretical knowledge, concepts, models and applied methods, techniques, and tools developed on their basis, used in the process of making management decisions.

The theory and practice of financial management are in continuous development, responding to various changes occurring in the economic environment.

The most important theoretical principles modern science financial management are:

Cash flow concept;

The concept of time value of money;

Concept of risk and return;

Hypothesis about the efficiency of markets;

Portfolio theory and asset pricing models;

Theories of capital structure and dividend policy;

Agency relations theory, etc.

Let us consider the essence of the listed provisions, relying on some well-known everyday wisdom.

Cash flow concept

Any company (company, corporation, etc.), regardless of the type and scale of activity, financially represents a kind of “black box” or “apparatus” for the production of money. In the simplest case, a certain amount of money or a time-distributed flow of such amounts received from one or more sources is supplied to the input of such a device.

The amount of money withdrawn from the output of the device depends on various factors, including the properties and characteristics of its constituent elements, the efficiency of the processes occurring in it, the state of the environment, etc. However, it is obvious that investing in such a device makes sense only if, as a result, the cash flows at the output will exceed the input, and in a volume sufficient to cover all costs associated with the operation of the mentioned device and satisfying the goals of the recipient. Accordingly, the difference between the output and input cash flows for the corresponding period of time will represent the result obtained from the operation of this apparatus (equipment, enterprise, business).

Thus, the value of the device is determined by the cash flows that it is capable of creating for its current or potential owners. A famous aphorism says: “You can never have enough money!”

Time value of money concept

"Time is money!" Who among us has not uttered this phrase at least once in our lives, perhaps without thinking particularly about its essence. Meanwhile, the principle of time-value of money is one of the fundamental principles in financial management. According to this principle, the money we have at different times has unequal value. Moreover, in business and in everyday life, the time of receiving money plays no less a role than the amount of money itself. For example, a ruble today is more valuable than a ruble that will arrive some time later, since it can already be spent on meeting current needs or invested (invested) with the prospect of receiving additional income in the future.

Let's return to our metaphor with the apparatus for producing money. Whatever the value of the cash flow output, it will only be received after a certain period of time. However, the money necessary to receive the specified flow must be “put in” into the device now. When deciding on the advisability of such investments, you need to be able to assess future cash flows from the perspective of the current point in time, i.e. determine their present value (PV). To estimate the present, or current, value of future amounts, financiers use a special technique known as discounted cash flows.

Risk and return concept

Entrepreneurial activity in market conditions is inextricably linked with risk. It is known that “he who does not risk does not win!” However, the higher the risk of a particular operation, the higher the chances of obtaining not only useful, but also negative results.

The concept of risk and profitability focuses the manager’s attention on the need to assess not only the possible results of a business operation, but also the risks associated with obtaining them. According to this concept, taking a risk is justified only if the expected income is possible and acceptable and the occurrence of a risk event will not lead to negative consequences for the business. Thus, it is possible to achieve significant results and ensure the prosperity of the company in the future only by correctly assessing risks and taking timely and adequate measures to reduce them.

4. Portfolio theory and asset pricing models

The essence of the theory of an investment portfolio is quite accurately reflected in the well-known everyday principle: “Don’t put all your eggs in one basket!” Its manifestation in the business sphere lies in the fact that the distribution of funds among various assets, enterprises and types of activities, i.e., the formation of an investment portfolio from them, as a rule, is associated with a lower overall risk compared to their concentration in a certain one direction. For example, investing money simultaneously in the oil business and in retail trade will be less risky than investing the same amount in one of these activities, since a decrease in cash receipts from one of them can be offset by an increase in their income from the other.

In turn, various asset pricing models (CAPM, APT, etc.) make it possible to identify the main risk factors of an investment portfolio and assess their impact on its value and profitability.

Theories of capital structure and dividend policy

“Where to get it and how best to share?” - this eternal question has worried humanity at all times and eras, under any socio-political system and continues to remain relevant to this day. Nothing human is alien to the financial manager, and among the most important problems that he has to face are the main ones: from what sources should the company obtain the capital it needs? Should it resort to borrowed funds or is it sufficient to limit itself to its own resources? The search for scientifically based answers to these very difficult questions is the subject of research in the theory of capital structure. Studying the fundamental provisions of this theory allows us to better understand the factors that must be taken into account in the decision-making process regarding the financing of a company's activities.

No less important and closely related to the previous one is the problem of distribution of profits received, considered within the framework of dividend policy. The key problem of dividend policy is to find the optimal ratio between payments in favor of the owners of the company who provided capital and that part of the profit that is allocated to further development business.

Agency theory

“Your shirt is closer to your body!” This famous proverb serves as a reminder that when entering into economic relations, subjects always strive to act in their own interests, although their interests may not coincide. Agency relationships are understood as relationships between two participants, one of whom (customer, principal) transfers its functions to the other (agent). From a financial management perspective, the most important agency relationships are those between owners and managers, and between creditors and shareholders. For example, situations often arise in business when capital owners delegate management decisions to hired managers (agents). However, managers, in order to maintain their jobs, develop their careers, and grow wages etc. can make decisions that benefit them personally, to the detriment of the interests of business owners. Economists call conflicts arising from principal-agent relationships agency problems, or agency conflicts. The theory of agency relations studies the essence and causes of such conflicts, and also develops methods and tools to overcome or reduce them Negative consequences.

From a practical point of view, financial management can be considered as a system for managing an enterprise’s funds and their sources.

Like any control system, it includes an object and a subject, i.e. managed and control subsystems:

The control object here is cash enterprises and their sources, as well as financial relations arising between it and other participants in economic activities, various links financial system.

The subjects of management in the financial management system are the owners, financial managers, relevant services and organizational structures, constituting its control subsystem. In this case, the main subject of management is the owner of the enterprise.

In general, the management subsystem can include legal, organizational, methodological, personnel, information, technical and software.

The functioning of any management system in the economy is carried out within the framework of the current legal framework, which includes laws Russian Federation, decrees of the President of the Russian Federation, resolutions of the Government of the Russian Federation, regulations ministries and departments, licenses, as well as statutory documents, regulations and instructions regulating the work of a particular enterprise:

Organizational support sets general structure financial management system at a particular enterprise, and also determines within its framework the functions and tasks of the relevant services, departments and individual specialists.

The basis methodological support financial management is a complex of general economic, analytical and special techniques, methods and models designed to ensure effective management of the financial resources of an economic entity.

The central element of the financial management system is staffing, i.e. a group of people ( financial directors, managers, etc.), which, through special techniques, tools and methods, ensures the development and implementation of targeted control actions on the object.

Management of any economic entity is inextricably linked with the exchange of information between its structural elements and environment. Timeliness, completeness, accuracy and reliability of this information are one of the key factors determining success in modern business. In this regard, the most important and integral element modern system financial management is its information support.

In a broad sense, information support in financial management can include any information used in the process of making management decisions, which, depending on the sources of formation, can be divided into internal and external. Internal information includes information received during the operation of an enterprise by its various divisions: accounting, production departments, logistics, sales, marketing, etc.

Since such information arises, circulates and is consumed within the enterprise, it must always be available to the financial manager in full and with any degree of detail. The volumes, forms, degree of detail and frequency of its receipt are determined by the relevant provisions and instructions regulating the work of a particular enterprise.

Given the absolute importance of internal information for the financial management of a business entity, the success and efficiency of its functioning in market conditions is largely determined by the ability to adapt to external environment. In this regard, a significant share of the information needs of a financial manager falls on information external to the object of management: data on market conditions, suppliers, customers, competitors, interest rates, macroeconomic indicators, quotes valuable papers, changes in legislation, etc.

The availability, objectivity and timeliness of obtaining such information will depend on various factors, the most important of which include the level of development of the information market and its infrastructure, as well as the used technical support And vocational training manager in the field of information technology.

With the development of forms of business organization, financial management has become an independent type of entrepreneurial activity. The separation of ownership from management contributed to the emergence and development of firms specializing in professional financial management of enterprises.

Conclusion

financial management risk profitability

The goal of financial management is to maximize profits and the welfare of the enterprise through rational financial policies. Objectives of financial management:

Providing the most effective use financial resources.

Optimization of cash flow.

Cost optimization.

Ensuring minimization financial risk at the enterprise.

Assessment of the potential financial capabilities of the enterprise.

Ensuring the profitability of the enterprise.

Challenges in the area crisis management.

Ensuring the current financial stability of the enterprise.

The basic principles of financial management are:

Financial independence of the enterprise.

Self-financing of the enterprise.

Material interest of the enterprise.

Material liability.

Covering risks with financial reserves.

List of used literature

1.Kovalev V.V. Introduction to financial management. - M.: Finance and Statistics, 2009.

2.Financial management: theory and practice: Textbook / Ed. E.S. Stoyanova. - M.: Perspective, 2007.

.Kreinina M.N. Financial management. - M.: Business and Service, 2009. Submit your application indicating the topic right now to find out about the possibility of receiving a consultation.

In the formation and development of financial management as a science, four stages can be distinguished.

First stage. The need for conscious, purposeful activities to manage economic processes in the West arose a long time ago.

However, it began to be implemented in theory and practice only in the 1850s. (this time can be considered the beginning of the history of financial management). Eugene Brigham, a famous American specialist in the field of financial management, associates its emergence as an independent scientific discipline with the 1860s.

Until the 1860s The finances of the companies were managed by practitioners. Their experience could not be effectively applied in all industries, nor used in every situation without exception. Knowledge was empirical. The development of the sphere of management was slow. After the beginning of the first stage of the formation of financial management, the place of experimental scientific instruments was gradually taken by science. With its help, it was necessary to organize the use of limited amounts of capital to identify effective ways management of certain types of resources.

The separation of financial management into an independent scientific discipline was caused by a number of prerequisites. The main ones are listed below:

In the second half of the 19th century. the economic development of business entities increasingly began to acquire mass features. Large enterprises experienced an urgent need to use new

new approaches to the formation and distribution of resources, organization of financial divisions and services;

By this time, theories of finance and the firm had been created, which became the basis for the formation of a new science.

The tasks of financial management at this stage of development were the development of general principles for analyzing the activities of enterprises, the creation of tools for effective production management, the development of mechanisms for motivating personnel, managing receivables and inventories, identifying sources and forms of attracting capital in the process of creating new firms and companies.

So, in the West, financial management at the initial stage of its formation did not take into account the specifics of companies and their development. Only scientific approaches and the most general methods solving key financial management problems.

The development of financial management as a science in Russia began in the 1990s. During this period, domestic theorists and practitioners tried to adapt Western financial management methods for use in the economy of transition.

Second phase. The beginning of the second stage of development of financial management in the West was characterized by the completion of industrialization. The growth rate of enterprises accelerated. It was necessary to make systematic changes in the use of resources. New methods of financial management were constantly being developed. Therefore, the main tasks of financial management during the transition from the first stage to the second included the development of criteria, indicators and guidelines that could ensure the effective use of resources. These criteria were initially the most general character and allowed enterprise management to determine the general principles of the financial management development strategy.

At the turn of the XIX-XX centuries. serious reasons have appeared (for example, the growth of economic potential in developed countries, accumulation of capital and acceleration of its concentration, centralization in the hands of large monopolies), which highlighted the need to search for forms and methods of maneuvering financial resources.

Due to active expansion joint stock companies and by strengthening the role of financial capital at this time, the financial market received a powerful impetus for development.

This has led to the need to expand and deepen the forms of financial relations between enterprises and the main subjects of this market, and to master new mechanisms of financial relations with them.

The result of all of the above was a change in approaches to solving problems of personnel motivation. As a result of the concentration of capital, a number of large enterprises appear in which motivating employees is a difficult task. New developments by scientists in the field of personnel motivation are coming to the fore.

It is worth noting that the task of finding effective methods of motivating personnel is common to all stages of the development of financial management, however, approaches to solving it have changed depending on changes in the economic situation and the development of science.

So, at the turn of the XIX-XX centuries. the first attempt was made to scientifically summarize the accumulated experience in the field of management, and the formation of the foundations of scientific management of companies began, which is associated with the names of Frederick Taylor and Henri Fayol, whose work was devoted to the development of scientific approaches to effective motivation of personnel.

At the second stage of development of financial management, such areas as the School of Statistical financial analysis(Ratio Statisticians School) (1860-1880) and the Multivariate Modellers School (1870-1890). The main idea of ​​the representatives of the first direction was that analytical coefficients calculated from data financial statements, are useful only if there are criteria with whose threshold values ​​these coefficients can be compared. Adherents of the school of multivariate analysts proceeded from the idea of ​​​​building a conceptual framework based on the existence of an undoubted connection between partial coefficients characterizing the financial condition and efficiency current activities companies.

At the second stage of development of financial management, various theories were developed, for example the concept of discounted cash flow analysis (Discounted Cash Flow Analysis Theory), authored by John Williamson and Myer Gordon. In the West at that time it was used to manage corporate finances. Thus, at the second stage of development of financial management, the fundamentals of financial analysis of companies were developed and put into practice. Also at this time, much attention was paid to finding the relationship between individual types of resources through financial management. This task included such areas as optimizing the relationship between fixed and working capital,

production capital and liquid assets, own and borrowed funds.

Innovations were not accepted by all enterprises at the same time. Leading organizations solved them faster than others. When the bulk of Western enterprises began to solve problems that were relevant at that time, the transition to the next stage in the development of financial management began.

We can conclude: in the West, during the second stage of development of financial management, the conceptual framework of management was developed different types business in different situations. The range of tasks solved by financial management has expanded. The emphasis has shifted to assessing the effectiveness of investing financial resources in various areas of business development. Effective relationships between fixed and working capital were found.

In Russia, it is difficult to identify the second stage of development of financial management. As for financial management as it is understood in economically developed countries, this direction could not take shape in a socialist economy due to many reasons, in particular due to the lack of a securities market and financial independence (in in every sense this word) enterprises. Therefore, today some, sometimes quite large Russian enterprises solve problems similar to those that Western companies faced at the second stage of development of financial management.

Third stage. In the early 1930s. in the West, financial management gradually moved to the third stage of its development. World crisis of the 1930s. caused serious economic difficulties for many economic entities in most countries: decline in production, bankruptcy. Many small, medium and even large enterprises faced financial difficulties, and the number of financial obligations for which they could not meet payments grew. This period was characterized by high inflation rates, massive bankruptcy of enterprises, and low investment activity of business entities. In an era of economic turmoil, the problems of “survival” of enterprises in conditions of increased competition and serious crisis phenomena have come to the fore. Many of these problems had to be solved through the skillful use of monetary resources, optimization of the volume and structure of costs, property, capital, and activation of financial incentives. Many financial and industrial groups are faced with problems of cash shortages, high costs of servicing capital,

tala and other problems in the new economic situation. Existing approaches to financial management did not optimize the capital structure and did not focus on cash flow management, as a result of which many enterprises found themselves on the verge of bankruptcy.

The most important goals of managing the financial activities of companies during this period were, on the one hand, to bring companies out of crisis and prevent their bankruptcy, and, on the other hand, to restore their activity as subjects of the financial market. An objective need has arisen for conscious management of financial processes at the level of lower-level managers, making decisions that are sometimes risky, but subsequently bring positive results.

At the third stage of development of financial management, coefficients were found with the help of which it was possible to optimize the relationships between individual types of resources. But these ratios were determined for periods of relatively stable, non-crisis economic development. Ratios and coefficients found empirically should change depending on circumstances, technology development, and increasing production growth rates. This gives rise to the next problem. It turns out that with a sharp change in economic conditions, the most important financial indicators and compliance, under which the company's business will be relatively successful and safe. Therefore, at this stage, the task of finding and justifying methods for managing all economic resources through financial management in crisis conditions was solved. Risk management was also given great importance. It was necessary to develop a strategy for managing financial resources in unfavorable risk conditions and a changing macro- and microeconomic situation.

Scientific developments in the field of financial management were reflected in a number of legal acts of that time. In particular, on their basis, the United States adopted the Securities Act (1933), the Banking Act (1933), the Stock Exchange Act (1934), and the Holding Company Act. "(1935), the Law "On Bankruptcy" (1938), which laid the foundation for the modern government regulation financial activities of companies.

At the third stage of development of financial management, such important theoretical concepts and models such as the Cost of Capital Theory (John Williamson, 1938), the Capital Structure Model (Franco Modil-

Jani and Merton Miller 1958), the concept of the time value of money (Time Value of Money Model) (Irving Fisher 1930), the concept of the relationship between the level of risk and profitability (Frank Knight, 1921).

In Russia, problems and tasks of financial management similar to those described above appeared at the beginning of the transition period, in the 1990s. At this time, many enterprises were on the verge of bankruptcy, which is why the importance of cash flow management and optimization increased

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asset and capital structures. Thus, Russian financial management in the early 1990s. I immediately encountered a whole host of problems that gradually arose in the West as science developed. Many Russian enterprises, finding themselves on the verge of bankruptcy in the 1990s, have not yet mastered the theories discovered in the West during the first and second stages of the development of financial management. Therefore, solving such complex problems as managing an enterprise during a crisis was a particularly serious problem for domestic companies. It must also be said that this stage of development of financial management in Russia began much later than in the West. When some Russian enterprises were faced with the need to manage during a crisis, an acute shortage of qualified specialists began to be felt. Initially, cash flow management and capital structure optimization in Russia were carried out by specialists in the field of enterprise economics, planners and accountants-analysts.

Thus, one of the main tasks of the third stage of development of financial management was the development of methods and methods for predicting risks in various industries. In Russia, this problem was most acute in the early 1990s. It was relevant only for those enterprises that by that time had mastered the theories and methods of financial management used in the first and second stages of the development of financial management in the West. In the West, the need to predict risks was caused by the crisis of the 1930s. At that time, the task was to manage risks and carry out their analysis, but there were no ways to assess risks. Such a financial management tool as risk insurance has not yet been developed.

Modern stage. In the Western economy in the 1950s. changes have occurred that have created the prerequisites for the transition of financial management to modern stage. The intellectual revolution, the rise of the economy in many developed countries, which began in the 1950s, as well as the further development of social processes, science and market infrastructure created the prerequisites for the formation of a holistic scientific

systems for managing the financial activities of enterprises. This was largely facilitated by such processes as the expansion of financial transactions in the field of economic activity of enterprises, the emergence of new and modernization of previously existing financial institutions, modification of accounting, reporting, development and implementation of more progressive forms and methods of calculations, forecasting, planning, analysis and other forms control.

The current stage is characterized by progressive economic development most countries, active integration of individual national economies into the global system economic economy, the beginning of the processes of globalization of the economy. The role of financial markets in activity large companies and industrial and economic complexes has increased sharply. Previously, financial resources acted as an intermediary in the process of exchange or acquisition of economic resources. Financial markets now have a strong influence on all aspects of the activities of large companies. On the other hand, the ability to effectively manage finances and carry out transactions in financial markets makes it possible to form important qualitative characteristics of the use of economic resources, which over time become key factors in the competitiveness of companies.

Financial management of large companies and their operations in financial markets are becoming a powerful tool with which the following results are achieved:

optimization of the relationship between liquidity, profitability and risks;

quickly ensuring a match between the company's financial resources and the sustainable rate of its growth;

optimization of management of various types of production and commercial risks through transactions with financial assets.

Let's call modern methods financial management: Balanced Scorecard (BSC), developed by David Norton and Robert Kaplan; financial support model sustainable growth enterprises (A Model of Optimal Growth Strategy) (James Van Horn 1988, Robert Higgins 1997); Capital Asset Pricing Model (William Sharp, 1964); Option Pricing Model (Fisher Black, Myron Scholes, 1973), etc.

While in the West the modern stage of development of financial management is already coming to an end, in Russia only a few leading enterprises, mainly in the raw materials industries, have reached it (there are practically no companies operating in new business areas among those that have passed the third stage). The management of the most developed enterprises understands the need for rapid changes in management, including financial management. This can be achieved using systemic principles and systems approach. Leading enterprises are developing financial policies aimed at strategic growth.

More on topic 1.3. DEVELOPMENT OF FINANCIAL MANAGEMENT AS A SCIENCE:

1. 2. The essence, prerequisites for the emergence and directions of development of the science of “Financial Management”
2. 3. Financial management as a management system. Subjects and objects of management.
3. 1.1. CONCEPT OF FINANCIAL MANAGEMENT. FINANCIAL MANAGEMENT AS A MANAGEMENT SYSTEM
4. 2.1. History of the development of financial management in Russia. Evolution of financial management goals
5. § 2.1. The concept of financial law. Subject and method of financial law. Financial law in the system of Russian law. Financial law as a science and academic discipline

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Identification of any science in its most concentrated form is carried out by formulating its subject and method.

The subject of financial management, that is, what is studied within the framework of this science, are: capital (both the form of its existence and the sources of its formation); financial (cash) flows, i.e.

E. movement of capital, including changes in the form of its existence; financial relations, i.e. the rules in accordance with which the movement of capital occurs.

Capital (German: kapital) is key concept in financial management. There are three main approaches to formulating the essential interpretation of this category: economic, accounting and financial.

Within economic approach the physical concept of capital is being implemented, which considers capital as a set of resources that are a universal source of income for society, and is divided into: a) personal; b) private and c) public unions, including the state. Each of the last two types of capital, in turn, can be divided into real and financial. Real capital is embodied in material goods as factors of production (buildings, machines, vehicles, raw materials, etc.); financial - in securities and cash. In accordance with this concept, the amount of capital is calculated as the total of the balance sheet for the asset.

Within the framework of the accounting approach implemented at the level of an economic entity, capital is interpreted as the interest of the owners of this entity in its assets, i.e. the term “capital” in this case is synonymous with net assets, and its value is calculated as the difference between the amount of the subject’s assets and the amount of its liabilities. This view is known as the financial concept of capital.

The financial approach is essentially a combination of the two previous approaches and uses modifications of the physical and financial concepts of capital. In this case, capital as a set of resources is characterized simultaneously from two sides: a) directions of its investment and b) sources of origin. In this regard, in financial management the term “financial resources” is often synonymous with the term “capital”. Such resources from the point of view of the direction of their use are called assets of the organization, and from the point of view of the sources of their formation - liabilities.

The assets of an organization are very diverse and can be classified according to various criteria. In particular, these are long-term tangible, intangible and financial assets.
assets, inventories, accounts receivable, and cash and cash equivalents. Naturally, we are not talking about their material representation, but about the advisability of investing money in certain assets and their ratio. The task of financial management is to justify and maintain the optimal composition of assets, i.e., the resource potential of the enterprise, and, if possible, to prevent unjustified loss of funds in certain assets. Liabilities reflect the sources of funds available to the organization, their purpose, ownership and payment obligations.

Thus, the capital of an organization is the financial resources invested in the organization for the purpose of making a profit.

It should be noted that there are differences in understanding the sources of an organization's funds. Thus, in Russian financial practice, as mentioned above, the organization’s funds, considered from the point of view of the sources of their formation, are called liabilities. In foreign practice, there is a position according to which liabilities are understood only as obligations of the organization. From this point of view, the organization's funds should be considered as a combination of its own funds and liabilities. For example, in many translated textbooks there is the following formula relating to the account of an individual or legal entity on the stock exchange: own funds, remaining at the disposal of the account owner, is equal to the difference between the assets and liabilities of the account. IN Russian practice An analogue of this formula will be the balance sheet equation: assets are equal to the sum of equity and liabilities. These differences in the understanding of the term “liabilities” should be taken into account when studying the discipline “Financial Management” using textbooks from various authors.

Since in financial management capital is considered from the point of view of its monetary expression, it is necessary to clearly define the following terms: “cost”, “price” and “value”, which allow one to characterize objects in monetary terms.

Cost (English cost) - costs.

Price is the ability of a thing to be exchanged for other things, expressed in money or, in other words, what a thing can be sold or bought for. It should be noted that often cited in domestic literature economic literature Karl Marx’s definition “price is the monetary expression of value” is essentially not a definition, but the quintessence of classical economic theory, dating back to Adam Smith and David Ricardo, who believed that price is ultimately determined by value, i.e., the cost of producing a thing. The concept of classical political economy, and therefore the definition given by Marx, is not entirely adequate to the currently dominant ideas, according to which price represents an equilibrium between supply and demand, the theory graphic model which is the “Marshal’s cross”.

Value (English value) - usefulness, importance of a thing for its specific owner.

The differences in the terms “cost”, “price” and “value” can be illustrated with the following example. An engagement ring has a cost, i.e. the cost of its production. It has a price, that is, the numbers that are indicated on the price tag in the store, and value for its owner, which may be incommensurate with the price or cost of the ring. It should be noted that value is the key point when making a decision by a financial manager. In this case, most often the value of an object is determined based on the ability of this object to generate income.

When studying financial literature, it is necessary to take into account the fact that in the Russian economic language the word “value” is practically not used, i.e. instead of three economic terms “cost”, “price”, “value” two are used: “cost” and “price” "

This situation is caused by the long-term dominance in the Russian economic school of the ideas of Karl Marx, who identified the concepts of “cost”, “price” and “value”.

This terminological problem should be taken into account both when studying the works of domestic scientists on financial management, and when reading translations into Russian of books on financial management by foreign authors.

Financial (cash) flows are a reflection of the movement and transformation of capital, financial resources, financial liabilities, receipt (positive financial flow) and expenditure (negative financial flow) of finances in the process of the organization’s activities. The difference between positive and negative financial flow is called net financial flow.

Financial relations are understood as relationships between various entities (individuals and legal entities), which entail a change in the composition of the assets and (or) liabilities of these entities. These relationships must have documentary evidence (agreement, invoice, act, statement, etc.) and, as a rule, be accompanied by a change in the property and (or) financial status of the counterparties. The words “as a rule” mean that, in principle, financial relationships are possible, which, when they arise, are not immediately reflected in the financial position due to the adopted system for their implementation (for example, concluding a purchase and sale agreement). Financial relationships are diverse; these include relations with the budget, counterparties, suppliers, buyers, financial markets and institutions, owners, employees, etc. Management of financial relations is based, as a rule, on the principle of economic efficiency.

Method (from the Greek methodos - path of research, theory, teaching) - a set of techniques or operations for the practical or theoretical development (cognition) of reality. In the broad sense of the word, the method of financial management as a science is a set of basic techniques that allow for effective financial management of an organization.

The main techniques of the financial management method are:

1. Techniques for studying the influence of the financial regulation system.

State regulatory and legal regulation of the financial activities of the organization. The adoption of laws and other regulations regulating the financial activities of organizations is one of the directions for implementing the internal financial policy of the state. The legislative and regulatory framework of this policy governs the financial activities of the organization in various forms;

Market mechanism for regulating the financial activities of the organization. This mechanism is being formed primarily in the financial market in the context of its individual types and segments. Supply and demand in the financial market form the level of prices (interest rates) and quotes for individual financial instruments, determine the availability of credit resources in national and foreign currencies, identify the average rate of return on capital, determine the liquidity system of individual stock and monetary instruments used by the organization in the process of its financial activities;

An internal mechanism for regulating certain aspects of the organization’s financial activities. The mechanism of such regulation is formed within the organization itself, accordingly regulating certain operational management decisions on issues of its financial activities. Thus, a number of aspects of financial activity are regulated by the requirements of the organization’s charter. Some of these aspects are regulated by the financial strategy and target financial policies developed in the organization for certain areas of financial activity. In addition, the organization can develop and approve a system of internal standards and requirements for certain aspects of financial activities.

2. Techniques for providing external support for the financial activities of an organization.

State and others external forms financing the organization. This element characterizes the forms of finance
simulating the development of the organization from the state budget system, extra-budgetary (trusted) funds, as well as various other non-state funds for promoting business development;

Credited organizations. This element is based on the provision of various forms of credit to an organization by various credit institutions on a repayable basis for a specified period at a certain percentage;

Leasing (rent). This element is based on the provision of complete property complexes for the use of the organization, individual species non-current assets for a specified fee for a specified period. The main forms of leasing used in modern financial practice are operational leasing and financial leasing;

Insurance. The insurance method is aimed at financial protection of the organization’s assets and compensation for its possible losses in the event of the realization of certain financial risks (the occurrence of an insured event). There are internal and external insurance of financial risks;

Other forms of external support for the financial activities of the organization. These include its licensing, state examination investment projects, Seleng, etc.

3. Techniques of influence through a system of financial levers on the process of making and implementing management decisions in the field of financial activities:

Percent;

Profit;

Depreciation deductions;

Net cash flow;

Dividends;

Penalties, fines, penalties, etc.

4. Financial techniques, consisting of the main methods by which specific management decisions are justified and controlled in various fields financial activities of the organization:

Method of technical and economic calculations;

Balance method;

Economic and statistical methods;

Economic and mathematical methods;

Asset depreciation methods, etc.

5. Use of financial instruments:

Payment (payment orders, checks, letters of credit, etc.);

Credit (loan agreements, bills, etc.);

Deposit (deposit agreements, certificates of deposit, etc.);

Investments (shares, investment certificates, etc.);

Insurance (insurance contract, insurance policy, etc.), etc.

By international standards In accounting, a financial instrument should be understood as any agreement between two counterparties, as a result of which one counterparty has a financial asset, and the other has a financial liability of a debt or equity nature (participation in capital). In practice, it is important to prevent the exclusion of certain techniques from unified system financial management of the organization. Ignoring this condition will inevitably lead to a loss of financial balance of the business entity.

More on the topic Subject and method of financial management:

1. 5. 1 Guidelines for writing coursework in the discipline “Theoretical Foundations of Financial Management”
2. 1.4.1. Optimization methods of intra-company management
3. 1.6. Specifics of an economic entity and the relevance of models and methods of intra-company management
4. 1.4.1. Optimization methods of intra-company management.
5. § 3. Theoretical and legal grounds for the inclusion of monetary and exchange rate policy in the subject of the science of financial law
6. 2.1.1. Assessment of corporate performance using financial analysis methods
7. The role of financial management in financial management of organizations. Purpose, objectives and functions of financial management.

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Financial management is the science of financial management, which involves the development of methods to achieve the goals of the enterprise, the ultimate of which is to ensure its strong and sustainable financial condition. Financial management can be considered as: ♦ a system of economic management; ♦ governing body; ♦ form of entrepreneurial activity.

The main object of management is the cash flow of the enterprise as a continuous flow of cash payments and receipts passing through the current and other accounts of the enterprise. Managing cash flow means foreseeing its possible state, being able to determine the volume and intensity of cash receipts and expenditures in the short and long term. In order to determine the expected volume and intensity of money turnover, it is necessary to analyze the conditions for the implementation of money turnover, the process of circulation of the enterprise's capital, the movement of financial resources, the state of the enterprise's financial relations with all participants in business activities.

The subject of management is the financial directorate and its departments, as well as financiers and financial managers.

The objectives of financial management are aimed at achieving the set goal:

1. ensuring the formation of a sufficient amount of financial resources in accordance with the development objectives of the enterprise in the coming period (the need for financial resources; determining the feasibility of forming one’s own financial resources; the maximum volume of attracting one’s own resources from internal sources; managing the attraction of borrowed financial resources);

2. ensuring the most efficient use of the generated volume of financial resources (optimization of the distribution of the generated volume of financial resources involves establishing the necessary proportionality in their use for the purposes of production and social development enterprises);

3. optimization of cash flow (the result of such optimization is minimizing the average balance of free monetary assets, ensuring a reduction in losses from their ineffective use and inflation);

4. maximizing the enterprise’s profit at the envisaged level of financial risk (this can be achieved through: effective asset management; involvement of borrowed funds in economic turnover; selection of the most effective areas of operating and financial activities; maximizing not taxable, but net profit);

5. minimizing the level of financial risk at the expected level of profit (this can be achieved through: prevention and avoidance of certain financial risks; diversification of the investment portfolio; effective forms of internal and external insurance);

6. ensuring the constant financial balance of the enterprise in the process of its development (such balance is characterized by a high level of financial stability and solvency of the enterprise at all stages of its development).

Methodological basis for making financial decisions. Techniques, methods and models used in financial management

Regulatory, information and personnel support for financial management. External tax and legal environment

Basic Financial Management Concepts

1. Subject and main categories of financial management as a science. Essence and types of financial instruments, derivative financial instruments

Financial management is, on the one hand, an independent scientific field, and on the other, a purely practical activity. In the system of economic sciences, it represents a specific part of the discipline “management” and has many of the features of this science. At the same time, this discipline has managerial and financial aspects inherent in a number of applied sciences(enterprise finance, securities market, accounting).

Financial management is interconnected with many sciences. As an independent direction, it was formed within the framework of modern finance theory by supplementing its basic sections with analytical sections of accounting and the conceptual apparatus of management theory.

Financial management as a science has its own subject of study, categorical apparatus and research methods.

Subject of financial management are financial relations of business entities, financial resources and their flows.

Financial management method includes the following elements:

scientific instruments;

system of basic concepts;

principles of managing the financial activities of business entities.

Categories of financial management – the most general key concepts of this science. It includes such concepts as factor, model, rate, interest, discount, financial instrument, risk, leverage, cash flow and others.

Basic concepts are theoretical constructs that serve as a methodological basis for describing the logic of financial decision-making. These include concepts such as the concept of the time value of money; cash flow concept; the concept of trade-off between risk and return; concept of cost of capital; market efficiency concept; opportunity cost concept; concept of agency relations; concept of information asymmetry.

Scientific tools are a set of general scientific and specific scientific methods for managing the financial activities of business entities. The scientific tools include techniques, methods and models of financial management developed by various scientists and specialists in the field of financial management.

The principles of financial management represent guidelines, basic rules and guidelines for managing the financial activities of business entities. Among the basic principles of financial management of companies are integration with the general management system of the company; the complex nature of decisions made in the field of financial management; high control dynamism; variability of approaches to the development of individual financial solutions; focus on the strategic goals of company management.

Let's look at the key elements of the financial management method in more detail.

Factor- a cause, a driving force of a phenomenon, determining its character or one of its main features. In financial management, this concept is used within the framework of financial analysis when constructing models of factor systems. For example, the DuPont factor model establishes a relationship between a company's return on assets and factors such as asset turnover and return on sales.

Model– a system used to gain insight into a process. In financial management, mathematical formulas (and a set of conditions for their application) are often used as such systems, expressing the relationship between various phenomena (model of optimal delivery lot size (EOQ); model of a certain size of average cash income.

Bid– a relative indicator by which the profitability of a financial transaction is determined. Rates can be presented in the form of a percentage or a discount.

Cash flow– a set of valuable payments or cash receipts distributed over time. Cash flow is one of the basic categories of financial management.

Risk– the danger of future unfavorable outcomes of decisions made today. Management of risks arising during the functioning of an economic entity is allocated to a separate subsection of financial management - risk management.

Leverage- literally means the action of a small force (lever), with which you can move objects. In financial management, the concept of leverage is used to evaluate the relationship between profits and the valuation of the costs of assets or funds incurred to generate those profits.

Financial instruments

There are different approaches to the interpretation of the concept of “financial instrument”. Initially, financial instruments were understood as: cash in hand and in a current account; credit instruments (bonds, loans, deposits); methods of participation in the authorized capital of an enterprise (shares and shares).

With the advent of new types of financial assets and transactions with them (forward and futures contracts), it became necessary to distinguish the instruments themselves from the financial assets and liabilities that they manipulate.

Currently under financial instrument is understood as a financial transaction that takes the form of a contract under which there is a simultaneous increase in the financial assets of one enterprise and an increase in the financial liabilities of a long-term or short-term nature of another enterprise.

Financial assets include: cash, the right to receive cash or other financial assets from another enterprise, the right to exchange financial assets with another enterprise on potentially favorable terms.

Financial liabilities include: contractual obligations, payments of cash or financial assets to another enterprise, exchange of financial assets with another enterprise on potentially unfavorable terms.

Almost all financial instruments currently take the form of securities. A security is a document certifying, in compliance with the established form and required details, property rights, the exercise and transfer of which are possible only upon presentation.

There are two possible options for carrying out a financial transaction:

the contract reflects the acquisition of ownership of a financial asset (or the emergence financial liability), which is realized at the time of conclusion of the transaction. Such contracts take the form of primary financial instruments.

the contract reflects the acquisition of ownership of a financial asset (or the emergence of a financial liability) that will be realized in the future. These contracts are called forward transactions and take the form of secondary or derivative financial instruments.

The classification of financial instruments depending on the degree of urgency of financial transactions is presented in Figure 2.

Fig.2. Classification of financial instruments

Financial instruments

primary