Ways of Financing the Activities of the Enterprise

The main source of financing is the income of the enterprise. However, due to the uneven receipt of income and the uneven occurrence of payment obligations, cash gaps arise. What can cause temporary insolvency.

In this regard, enterprises always raise the question of the need for external sources of financing. Consider the main requirements for external sources of funding:
- low cost of attracted financial resources;
- certainty in return forms;
- convenience of payments;
- long-term;
- ease of obtaining a loan;
- high availability.

Due to the variety of requirements, there is a variety in the choice of external sources: short-term (months) and long-term (over).

These two sources have different purposes:
- short-term - to finance cash gaps, i.e. to maintain the solvency of the enterprise;
- long-term - designed to increase profitability and to maintain financial stability through the restructuring of liabilities.

Short-term sources are usually cheaper than long-term ones.

Short term sources:
- commercial loans;
- bank loans;
- factoring.

Long-term funding sources:
- issue of shares, attraction of additional capital (the most expensive and dangerous as it can violate the "status quo" of the company);
- issue of bonds;
- bank loans;
- commodity credit (widely used, the cheapest);
- rent, leasing;
- target external financing;
- Creation of joint ventures.

Thus, as a result of the operating (current) activity, the income of the enterprise is formed, which are spent as a result of the financial activity (FA) of the enterprise.

The essence of financial activity is the allocation of funds to replenish the expended resources and meet the financial interests of the main subjects of the enterprise.

The main financial document is the balance sheet - which is formed as a result of accounting. Bookkeeping is associated with the legal form of the enterprise (limited or full liability): if full, then accounting. accounting is not required.

An erroneous FD, despite successful operating activities, leads the enterprise to bankruptcy. FD is responsible for solvency. Therefore, the financial condition of the enterprise is its most important characteristic, therefore, it is necessary to carefully plan, constantly take into account and control how successful the enterprise's FD is.

For this, financial planning takes place at enterprises and accounting is maintained, as a result of which financial statements (FR) are formed. FD - is a reflection of the FD of the enterprise. The main documents of the FD are:
- balance;
- profit and loss statement;
- cash flow statement.

The balance sheet shows the financial condition of the enterprise, i.e. solvency and financial stability at a certain point in time by identifying relationships between items.