Financial resources of the enterprise: characteristics and main sources

Financial resources are cash receipts and incomes of entrepreneurs that are intended to expand and provide production, to implement material incentives, to satisfy needs and so on. They are a real embodiment of economic relations.

Sources of financial resources

The most important of these is the value of GDP in the country, which consists of profits, wages and capital.

Their sources at the macro level are:

• Income from foreign economic activity (foreign economic activity) ;
• GDP;
• Borrowed resources (loan);
• National wealth.

The sources at the micro level are the following:

• Borrowed funds (a loan, funds from the sale of bonds, shares, etc.);
• Finance, which are received by the company in the order of distribution (insurance replenishment and so on);
• Own funds and those that are equated to them (vacation pay and staff salaries).

Financial resources represent working capital and fixed capital. Their
Formation occurs at the initial level, at the time of the formation of the enterprise, when the share capital appears. It is about the property of the organization, which is created with the help of constituent deposits. Consequently, financial resources are those funds that are available to the management after the current costs of covering expenses and paying salaries have been made.

Financial resources are organized, planned and stimulated by a special mechanism, which consists of a set of interconnected elements. Let's consider them in more detail:

• Economic methods are methods of influencing the production process. Thanks to their action, financial resources are formed and applied.
• Legal support "works" on the basis of legislative acts, decisions, orders and other legal documents.
• Financial leverage is a technique that "launches" financial resources.
• Normative support means rules, orders, instructions, norms, methodological explanations, directions, tariff rates and so on.
• Information support is various commercial, economic, financial support. It also includes information on financial solvency and the stability of competitors and partners, the value of goods, rates, percentages, dividends in the markets (stock, commodity, currency), the situation on the exchange, the commercial activities of entities, and so on.

Financial resources are usually used in the following areas:

1. Ensure the production process (costs of investment, repairs, acquisition of intangible assets, payment of bonuses to stimulate employees, financing of the reserve fund).
2. Application for the needs of defense, security, state authorities and law enforcement agencies.
3. Expenses for the performance of monetary obligations to investors, founders, shareholders and so on.

Financial resources are formed and used taking into account a special management system. It's about management, whose activities are aimed at achieving the tactical and strategic goals of this organization.

For optimal management of the management it is necessary:

• Organize and manage the company's relations in the economic sphere with other enterprises, insurance companies, banks, budgets of any level, as well as financial relationships within the organization itself;
• To generate financial resources, to predict their receipt and to make optimization;
• Allocate capital and accompany the process of its functioning;
• Analyze and direct cash flows.