Classification of sources of financing for business activities. Internal and external sources of investment financing

Coursework in enterprise economics

"External and internal sources

financing the activities of the enterprise"

Saint Petersburg

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

CHAPTER 1. Financial resources of the enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . .4

CHAPTER 2. Classification of sources of financing. . . . . . . . . . . . . . . . . . 7

2.1. Internal sources of financing of the enterprise. . . . . . . . . . . . . . . . 8

2.2. External sources of financing for the enterprise. . . . . . . . . . . . . . . . . .12

CHAPTER 3. Managing sources of financing. . . . . . . . . . . . . . . . . . .16

3.1. The ratio of external and internal sources

in the capital structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

3.2. The effect of financial leverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

List of used literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Introduction

Company is a separate technical, economic and social complex designed to produce benefits useful to society in order to make a profit. During its creation, as well as in the process of managing it, various issues are resolved, one of which is financing the activities of the enterprise, that is, providing the necessary financial resources for the costs of its implementation and development. Business entities receive these resources from various sources, without which no enterprise can exist and operate. And, therefore, it is not surprising that the issue of possible sources of financing is relevant today for many business entities and worries many entrepreneurs.

The purpose of the work is to study existing sources of funds, their role in the process of the enterprise’s activities and its development.

Setting priorities among sources of financing and choosing the most optimal sources is a problem for many organizations today. Therefore, this work will consider the classification of sources of financing the activities of an enterprise, the concept of financial resources, which is closely related to these sources, as well as the ratio in the capital structure of equity and borrowed funds, which has a significant impact on the financial and economic activities of the enterprise.

Consideration of these aspects will allow us to draw conclusions regarding a given topic.

CHAPTER 1. Financial resources of the enterprise

The concept of financial resources is closely related to the concept of sources of financing the activities of an economic entity. Financial resources of the enterprise- this is a combination of own funds and receipts of borrowed and raised funds intended to fulfill financial obligations, finance current costs and costs associated with the expansion of capital. They are the result of the interaction of receipt, expenditure and distribution of funds, their accumulation and use.

Financial resources play an important role in the reproduction process and its regulation, distribution of funds according to areas of their use, stimulate the development of economic activity and increase its efficiency, and allow monitoring the financial condition of an economic entity.

Sources of financial resources are all cash income and receipts that an enterprise or other economic entity has at its disposal in a certain period (or as of a date) and which are used to make cash expenses and deductions necessary for production and social development.

Financial resources generated from various sources enable the enterprise to timely invest funds in new production, ensure, if necessary, expansion and technical re-equipment of the existing enterprise, finance scientific research, development, their implementation, etc.

The main areas of use of an enterprise’s financial resources in the process of its activities include:

Financing the current needs of the production and trading process to ensure the normal functioning of production and trading activities of the enterprise through the planned allocation of funds for main production, production and auxiliary processes, supply, marketing and sales of products;

Financing administrative and organizational measures to maintain a high level of functionality of the enterprise management system through its restructuring, allocation of new services or reduction of the management staff;

Investing in the main production in the form of long-term and short-term investments for the purpose of its development (complete renovation and modernization of the production process), creation of new production or reduction of certain unprofitable areas;

Financial investments are the investment of financial resources for purposes that bring the enterprise higher income than the development of its own production: the acquisition of securities and other assets in various segments of the financial market, investments in the authorized capital of other enterprises in order to generate income and obtain rights to participate in the management of these enterprises, venture financing, provision of loans to other companies;

The formation of reserves is carried out both by the enterprise itself and by specialized insurance companies and state reserve funds at the expense of regulatory contributions to maintain a continuous circulation of financial resources and protect the enterprise from unfavorable changes in market conditions.

Financial reserves are of great importance to ensure uninterrupted financing of the production process. In market conditions their role is significant. These reserves are capable of ensuring a continuous circulation of funds in the reproduction process even in the event of huge losses or the occurrence of unforeseen events. The enterprise creates financial reserves from its own resources.

Financial support for reproduction costs can be carried out in three forms: self-financing, lending and government financing.

Self-financing is based on the use of the enterprise's own financial resources. If its own funds are insufficient, it can either reduce some of its expenses or use funds mobilized in the financial market through transactions with securities.

Lending is a method of financial support for reproduction costs in which costs are covered by a bank loan provided on the basis of repayment, payment, and urgency.

State funding is provided on a non-repayable basis from budgetary and extra-budgetary funds. Through such financing, the state purposefully redistributes financial resources between production and non-production spheres, sectors of the economy, etc. In practice, all forms of cost financing can be applied simultaneously.

CHAPTER 2. Classification of sources of financing

The financial resources of an enterprise are transformed into capital through appropriate sources of funds. Today their various classifications are known.

Sources of financing can be divided into three groups: used, available, potential. The sources used represent a set of such sources of financing the activities of the enterprise that are already used to form its capital. The range of resources that are potentially real for use are called available. Potential sources are those that theoretically can be used for the functioning of commercial enterprises, in conditions of better financial, credit and legal relations.

One of the possible and most common groupings is the division of sources of funds by timing:

Sources of short-term funds;

Advanced capital (long-term).

Also in the literature there is a division of funding sources into the following groups:

Own funds of enterprises;

Borrowed funds;

Involved funds;

Budget allocations.

However, the main division of sources is their division into external and internal. In this version of the classification, own funds and budgetary allocations are combined into a group of internal (own) sources of financing, and external sources are understood as attracted and (or) borrowed funds.

The fundamental difference between the sources of own and borrowed funds lies in the legal reason - in the event of liquidation of an enterprise, its owners have the right to that part of the enterprise’s property that remains after settlements with third parties.

2.1. Internal sources of financing of the enterprise

The main sources of financing the enterprise's activities are its own funds. Internal sources include:

Authorized capital;

Funds accumulated by an enterprise in the course of its activities (reserve capital, additional capital, retained earnings);

Other contributions from legal entities and individuals (targeted financing, charitable contributions, donations, etc.).

Equity capital begins to form at the time of creation of the enterprise, when its authorized capital is formed, that is, the totality in monetary terms of contributions (shares, shares at par value) of the founders (participants) to the property of the organization upon its creation to ensure activities in the amounts determined by the constituent documents. The formation of authorized capital is associated with the peculiarities of the organizational and legal forms of enterprises: for partnerships it is share capital, for joint-stock companies - share capital, for production cooperatives - a mutual fund, for unitary enterprises - an authorized fund. In any case, the authorized capital is the start-up capital necessary to start the activities of the enterprise.

The methods of forming the authorized capital are also determined by the organizational and legal form of the enterprise: by making contributions by the founders or by subscription to shares, if it is a joint-stock company. Contributions to the authorized capital can be money, securities, other things or property rights that have a monetary value. At the moment of transfer of assets in the form of a contribution to the authorized capital, ownership of them passes to the economic entity, that is, investors lose property rights to these objects. Thus, in the event of liquidation of an enterprise or withdrawal of a participant from a company or partnership, he has the right only to compensation for his share within the residual property, but not to the return of objects transferred to him at one time in the form of a contribution to the authorized capital.

Since the authorized capital minimally guarantees the rights of the enterprise’s creditors, its lower limit is limited by law. For example, for LLCs and CJSCs it cannot be less than 100 times the minimum monthly wage (MMW), for OJSCs and unitary enterprises - less than 1000 times the minimum monthly wage.

Any adjustments to the size of the authorized capital (additional issue of shares, reduction of the par value of shares, making additional contributions, admitting a new participant, joining part of the profit, etc.) are allowed only in cases and in the manner provided for by the current legislation and constituent documents.

In the process of activity, an enterprise invests money in fixed assets, purchases materials, fuel, pays workers, as a result of which goods are produced, services are provided, and work is performed, which, in turn, are paid by customers. After this, the money spent is returned to the enterprise as part of the sales proceeds. After reimbursement of costs, the enterprise receives a profit, which goes to the formation of its various funds (reserve fund, accumulation funds, social development and consumption) or forms a single enterprise fund - retained earnings.

In a market economy, the amount of profit depends on many factors, the main one of which is the ratio of income and expenses. At the same time, the current regulatory documents provide for the possibility of certain regulation of profits by the management of the enterprise. These regulatory procedures include:

Accelerated depreciation of fixed assets;

Procedure for valuation and amortization of intangible assets;

The procedure for assessing participants' contributions to the authorized capital;

Choosing a method for estimating inventories;

The procedure for accounting for interest on bank loans used to finance capital investments;

The composition of overhead costs and the method of their distribution;

Profit is the main source of formation of the reserve fund (capital). This fund is intended to compensate for unexpected losses and possible losses from business activities, that is, it is insurance in nature. The procedure for the formation of reserve capital is determined by regulatory documents regulating the activities of an enterprise of this type, as well as its charter documents. For example, for a joint-stock company, the amount of reserve capital must be at least 15% of the authorized capital, and the procedure for the formation and use of the reserve fund is determined by the charter of the joint-stock company. The specific amounts of annual contributions to this fund are not determined by the charter, but they must be at least 5% of the net profit of the joint-stock company.

Accumulation funds and a social fund are created at enterprises at the expense of net profit and are spent on financing investments in fixed assets, replenishing working capital, bonuses for employees, paying wages to individual employees in excess of the wage fund, providing financial assistance, paying insurance premiums for additional medical programs insurance, paying for housing, purchasing apartments for employees, organizing meals, paying for transport travel and other purposes.

In addition to funds formed from profits, an integral part of the enterprise’s own capital is additional capital, which, according to its financial origin, has different sources of formation:

Share premium, i.e. funds received by the joint stock company - issuer when selling shares in excess of their nominal value;

Amounts of additional valuation of non-current assets arising as a result of an increase in the value of property during its revaluation at market value;

Exchange rate difference associated with the formation of the authorized capital, i.e. the difference between the ruble valuation of the founder’s (participant’s) debt on the contribution to the authorized capital, assessed in the constituent documents in foreign currency, calculated at the rate of the Central Bank of the Russian Federation on the date of receipt of the amount of deposits, and the ruble valuation of this contribution in the constituent documents.

Additional capital funds can be used to increase the authorized capital; to repay losses identified based on the results of work for the year; for distribution among the founders. Regulatory documents prohibit the use of additional capital for consumption purposes.

In addition, enterprises can receive funds for the implementation of targeted activities from higher organizations and individuals, as well as from the budget. Budget assistance can be provided in the form of subventions and subsidies. Subvention– budget funds provided to a budget of another level or to an enterprise on a free and irrevocable basis for the implementation of certain targeted expenses. Subsidy– budget funds provided to another budget or enterprise on the basis of shared financing of targeted expenses.

Targeted funding and revenues are spent in accordance with approved estimates and cannot be used for other purposes. These funds are part of the organization’s equity capital, which expresses the residual rights of the owner to the property of the enterprise and its income.

2.2. External sources of financing for the enterprise

An enterprise cannot cover its needs only from its own sources. This is due to the peculiarities of cash flows, in which the moments of receipt of payments for goods, services and work for the enterprise do not coincide with the terms of repayment of the enterprise's obligations, and unexpected delays in payments may occur. An additional need for sources of financing may also be due to inflation, when the funds received by the enterprise in the form of sales proceeds depreciate and cannot satisfy the enterprise's increased need for funds due to rising prices for raw materials. In addition, expansion of the enterprise's activities requires the involvement of additional resources. Thus, borrowed sources of financing appear.

Borrowed capital, depending on the terms of the loan, is divided into long-term (long-term liabilities) and short-term (short-term liabilities). Long-term liabilities, in turn, are divided into bank loans (repayable in more than 12 months) and other long-term liabilities.

Short-term liabilities consist of borrowed funds (bank loans and other loans to be repaid within 12 months) and accounts payable of the enterprise to suppliers and contractors, to the budget, for wages, etc.

An important source of financing the activities of an enterprise is a bank loan. Previously, many enterprises (especially industry and agriculture) could not take advantage of loans from commercial banks, since the cost of loans (interest rates) was high. But now they have the opportunity to pursue a more active policy of attracting borrowed funds, since in 2002-2003. the level of interest rates fell sharply. Foreign loans poured into Russia. By offering businesses lower rates and longer loan terms than Russian commercial banks, foreign banks have seriously asserted themselves in the Russian credit market.

From 2001 to 2004 refinancing rates have decreased by almost 2 times, but it’s not just the size of the rates; an important trend is the extension of the terms of lending to enterprises, which is predetermined by the long-term stabilization of the political and economic situation in the country and the improvement in the maturity of the banking system’s liabilities.

In accordance with the Civil Code of the Russian Federation, all loans are issued to borrowers subject to the conclusion of a written loan agreement. Lending is carried out in two ways. The essence of the first method is that the issue of granting a loan is decided each time on an individual basis. A loan is issued to meet a specific target need for funds. This method is used when providing loans for specific periods, i.e. term loans.

In the second method, loans are provided within the lending limit established by the bank for the borrower - by opening a line of credit. An open line of credit allows you to pay with a loan any settlement and monetary documents provided for in a loan agreement concluded between the client and the bank. The credit line is opened mainly for a period of one year, but can also be opened for a shorter period. During the term of the credit line, the client can receive a loan at any time without additional negotiations with the bank or any formalities. It is open to clients with a stable financial situation and good credit reputation. At the request of the client, the credit limit may be revised. The credit line can be revolving and non-revolving, as well as targeted and non-targeted.

Enterprises receive loans on the terms of payment, urgency, repayment, intended use, secured (guarantees, pledge of real estate and other assets of the enterprise). The bank checks the loan application for legal creditworthiness (legal status of the borrower, size of the authorized capital, legal address, etc.) and financial creditworthiness (assessment of the company’s ability to repay the loan in a timely manner), after which a decision is made to grant or refuse the loan .

The disadvantages of the credit form of financing are:

The need to pay interest on the loan;

Complexity of design;

The need for provision;

Deterioration of the balance sheet structure as a result of borrowing, which can lead to loss of financial stability, insolvency and, ultimately, bankruptcy of the enterprise.

Funds can be obtained not only by taking out loans, but also by issuing bonds and other securities. Bonds is a type of security issued as debt. Bonds can be short-term (for 1-3 years), medium-term (for 3-7 years), long-term (for 7-30 years). At the end of the circulation period, they are redeemed, that is, the owners are paid their nominal value. Bonds may be coupon bonds that pay periodic income. Coupon is a tear-off coupon on which the date of interest payment and its amount are indicated. There are also zero-coupon bonds that do not pay periodic income. They are placed at a price below par and are redeemed at par. The difference between the placement price and the par value forms a discount - the owner's income. The disadvantage of this method of financing is the presence of costs for issuing securities, the need to pay interest on them, and deterioration in the liquidity of the balance sheet.

In addition, the source of financing the activities of the enterprise is accounts payable, i.e. deferment of payment, as a result of which funds are temporarily used in the economic turnover of the debtor enterprise. Accounts payable- this is the debt to the personnel of the enterprise for the period from the calculation of wages to its payment, to suppliers and contractors, debt to the budget and extra-budgetary funds, to participants (founders) for income payments, etc.

The golden rule of accounts payable management is to maximize the debt repayment period without possible financial consequences. In this case, the company uses “other people’s” funds as if for free.

Using accounts payable as a source of financing significantly increases the risk of loss of liquidity, since these are the most urgent obligations of the enterprise.

CHAPTER 3. Managing sources of funding

The financial policy strategy of an enterprise is a key point in assessing the acceptable, desired or predicted rates of increasing its economic potential.

To finance its activities, an enterprise can use three main sources of funds:

Results of own financial and economic activities (reinvestment of profits);

Increase in authorized capital (additional issue of shares);

Raising funds from third-party individuals and legal entities (issuing bonds, obtaining bank loans, etc.)

Of course, the first source is a priority - in this case, all earned profit, as well as potential profit, belongs to the real owners of the enterprise. In the case of attracting second and third sources, part of the profit has to be sacrificed. The practice of large Western companies shows that most of them are extremely reluctant to issue additional shares as a permanent part of their financial policy. They prefer to rely on their own capabilities, that is, on the development of the enterprise mainly through reinvestment of profits. There are several reasons for this:

Additional issue of shares is a very expensive and time-consuming process.

The issue may be accompanied by a decline in the market price of the issuing company's shares.

As for the relationship between own and attracted sources of funds, it is determined by various factors: national traditions in financing enterprises, industry, size of the enterprise, etc.

Various combinations of using sources of funds are possible. If an enterprise focuses on its own resources, then the main share of additional sources of financing will fall on reinvested profits, and the ratio between sources will change towards a decrease in funds attracted from outside. But such a strategy is hardly justified, therefore, if an enterprise has a well-established structure of sources of funds and considers it optimal for itself, it is advisable to maintain it at the same level, that is, with the growth of its own sources, increase in a certain proportion the size of attracted ones.

The pace of increasing the economic potential of an enterprise depends on two factors: return on equity and the profit reinvestment ratio. These factors provide a generalized and comprehensive description of various aspects of the financial and economic activities of an enterprise:

Production (output of resources);

Financial (structure of sources of funds);

Relationships between owners and management personnel (dividend policy);

The company's position in the market (product profitability).

Any enterprise that operates sustainably over a certain period has well-established values of the selected factors, as well as trends in their change.

3.1. The ratio of external and internal sources

financing in the capital structure

In the theory of financial management, two concepts are distinguished: “financial structure” and “capitalized structure” of the enterprise. The term “financial structure” means the method of financing the activities of the enterprise as a whole, that is, the structure of all sources of funds. The second term refers to a narrower part of financing sources - long-term liabilities (own sources of funds and long-term borrowed capital). Own and borrowed sources of funds differ in a number of parameters.

The capital structure influences the results of the financial and economic activities of the enterprise. The ratio between sources of own and borrowed funds serves as one of the key analytical indicators that characterize the degree of risk of investing financial resources in a given enterprise, and also determines the organization’s prospects in the future.

The issues of the possibility and feasibility of managing the capital structure have long been debated among scientists and practitioners. There are two main approaches to this problem:

1) traditional;

2) Modigliani-Miller theory.

Followers of the first approach believe that: a) the price of capital depends on its structure; b) there is an “optimal capital structure.” The weighted price of capital depends on the price of its components (equity and borrowed funds). Depending on the capital structure, the price of each source changes, and the rate of change is different. Numerous studies have shown that with an increase in the share of borrowed funds in the total amount of sources of long-term capital, the price of equity capital is constantly increasing at an increasing pace, and the price of borrowed capital, remaining practically unchanged at first, then also begins to increase. Since the price of borrowed capital is on average lower than the price of equity capital, there is a capital structure called optimal, in which the weighted price of capital indicator has a minimum value, and, therefore, the price of the enterprise will be maximum.

The founders of the second approach, Modigliani and Miller (1958), argue the opposite - the price of capital does not depend on its structure, that is, it cannot be optimized. When justifying this approach, they introduce a number of restrictions: the presence of an efficient market; no taxes; the same interest rates for individuals and legal entities; rational economic behavior, etc. Under these conditions, they argue, the price of capital always equalizes.

In practice, all forms of cost financing can be applied simultaneously. The main thing is to achieve the optimal ratio between them for a given period. There is an opinion that the optimal ratio between equity and borrowed funds is a ratio of 2:1. In other words, one’s own financial resources must be twice as large as borrowed ones. In this case, the financial position of the enterprise is considered stable.

3.2. Financial leverage effect

Nowadays, large enterprises usually have a debt-to-equity ratio of 70:30. The greater the share of own funds, the higher the financial independence ratio. When the share of borrowed capital increases, the probability of bankruptcy of the organization increases, which forces lenders to increase interest rates for loans due to increased credit risks.

But at the same time, enterprises with a high share of borrowed funds have certain advantages over enterprises with a high share of equity in assets, since, having the same amount of profit, they have a higher return on equity.

This effect, which arises in connection with the appearance of borrowed funds in the amount of capital used and allows the enterprise to obtain additional profit on its own capital, is called the effect of financial leverage (financial leverage). This effect characterizes the effectiveness of the enterprise's use of borrowed funds.

In general, with the same economic profitability, the profitability of equity capital depends significantly on the structure of financial sources. If the organization has no debts to pay and no interest is paid on them, then an increase in economic profit leads to a proportional increase in net profit (provided that the amount of tax is directly proportional to the amount of profit).

If an enterprise with the same total amount of capital (assets) is financed from not only its own, but also borrowed funds, profit before tax is reduced due to the inclusion of interest in costs. Accordingly, the amount of income tax is reduced, and return on equity may increase. As a result, the use of borrowed funds, despite their cost, allows you to increase the profitability of your own funds. In this case, we talk about the effect of financial leverage.

Financial leverage effect- is the ability of borrowed capital to generate profit from investments of equity capital, or to increase the return on equity through the use of borrowed funds. It is calculated as follows:

E fr = (R e – i)*K s,

where R e is economic profitability, i is the interest for using the loan, K c is the ratio of the amount of borrowed funds to the amount of equity, (R e – i) is the differential, K c is the leverage.

The financial leverage differential is an important information impulse that allows you to determine the level of risk, for example, for granting loans. If economic profitability is higher than the level of interest on the loan, then the effect of financial leverage is positive. If these indicators are equal, the effect of financial leverage is zero. If the level of interest on a loan exceeds economic profitability, this effect becomes negative, that is, an increase in borrowed funds in the capital structure brings the enterprise closer to bankruptcy. Therefore, the larger the differential, the lower the risk and vice versa.

Leverage carries fundamental information. High leverage means significant risk.

The effect of financial leverage is higher, the lower the cost of borrowed funds (interest rate on loans), and the higher the income tax rate.

Thus, the effect of financial leverage allows us to determine the possibilities of attracting borrowed funds to increase the profitability of our own and the associated financial risk.

Conclusion

Any enterprise needs sources of financing for its activities. There are various sources of funds. Internal sources include: authorized capital, funds accumulated by the enterprise, targeted financing, etc. External sources are bank loans, issues of bonds and other securities, accounts payable. It should be noted that internal and external sources of financing are interrelated, but not interchangeable.

Today, an important task of an enterprise’s financial policy is to optimize the structure of liabilities, that is, to rationalize sources of financing. The greater the share of equity capital, the higher the coefficient of financial independence of the enterprise, but business entities with a high share of borrowed funds also have certain advantages. Borrowed funds for an enterprise, although they are a paid source of financing. Practice shows that their use is more effective than our own.

Each enterprise independently determines the structure and methods of financing its activities, this depends on the industry characteristics of the enterprise, its size, the duration of the production cycle of products, etc. The main thing is to correctly prioritize among sources of financing, calculate the capabilities of the enterprise and predict possible consequences.

List of used literature

1. Large economic dictionary / ed. Azriliyan A.N. – M.: Institute of New Economics, 1999.

2. Ermasova N.B. Financial Management: Exam Guide. – M.: Yurayt-Izdat, 2006.

3. Karelin V.S. Corporate finance: Textbook. – M.: Publishing and trading corporation “Dashkov and K”, 2006.

4. Kovalev V.V. Financial analysis: Capital management. Choice of investments. Reporting analysis. – M.: Finance and Statistics, 1998.

5. Romanenko I.V. Enterprise finance: lecture notes. – St. Petersburg: Publishing house Mikhailov V.A., 2000.

6. Selezneva N.N., Ionova A.F. The financial analysis. Financial management: Textbook for universities. – M.: UNITY-DANA, 2006.

7. Modern economics: Textbook / Ed. prof. Mamedova O.Yu. – Rostov-on-Don: Phoenix Publishing House, 1995.

8. Chuev I.N., Chechevitsyna L.N. Enterprise Economics: Textbook. – M.: Publishing and trading corporation “Dashkov and K”, 2006.

9. Economics and management in SCS. Scientific notes of the Faculty of Economics. Issue 7. – St. Petersburg: St. Petersburg State Unitary Enterprise Publishing House, 2002.

10. Economics of an enterprise (firm): Textbook / Ed. prof. Volkova O.I. and Assoc. Devyatkina O.V. – M.: INFRA-M, 2004.

11. http://www.profigroup.by

Application

Table "Key differences"

between types of sources of funds"

Scheme “Sources and movement

financial resources of the enterprise"

Financial resources– funds in cash and non-cash form.

Venture funding– investing capital in projects with a high level of risk and at the same time high profitability.

Cm.: Application, diagram “Sources and movement of financial resources of an enterprise.”

Share capital– the totality of contributions of participants in a general partnership or limited partnership made to the partnership for the implementation of its economic activities.

Unit trust– the totality of share contributions of members of a production cooperative for joint business activities, as well as those acquired and created in the process of activity.

Authorized fund– a set of fixed and working capital allocated by the state or municipal authorities by a state and municipal enterprise.

Refinancing rate– the amount of payment made by bank clients when repaying old loan debt by replacing them with new loans.

Cm. Application, table “Key differences between types of sources of funds.”

Economic profitability of the enterprise is determined by the ratio of economic profit (that is, profit before interest on the use of borrowed and raised funds and taxes) to the assets of the organization.