The composition of the property of the enterprise is all that is necessary for a legal entity to conduct a correct and successful business. It is customary to allocate intangible property and tangible. The latter includes land and buildings, materials and goods, finance and technology. But intangible elements are formed while the company is operating. This includes the reputation and audience interested in the products of the enterprise, name, decals, managerial skills and qualifications of employees, patents, innovations and innovations, contracts.
Attention will be enough
The property included in the enterprise attracts the attention of a wide range of disciplines. This topic is considered by economists and financiers, law officers pay attention to the legal aspects of ownership of a particular asset and liability. Their area of activity is how rights are transferred and whether they are protected.
The economic activity of an enterprise is also an important discipline that attracts attention primarily of economists. It examines how efficiently the company applies everything that it has at its disposal. Accountants are involved in the movement of positions, as well as the sources from which they are formed. But in general terms, the property that is part of the enterprise is most interesting for the economy as a science.
Nothing will be left unaccounted for
The property of the enterprise includes:
- land;
- buildings;
- equipment;
- consumable components;
- finished and semi-finished products;
- cash resources;
- deposits
- finance placed in insurance, securities;
- patents;
- authorship rights;
- intellectual property;
- reputation.
How does this happen?
Initially, property is formed from those positions that are invested in the company by its founders. These can be various types of contributions. Volumes are increasing in the working process, while at a sufficiently successful organization the dynamics of the structure of the property structure of the enterprise is high-speed. They help to increase the volume of business operations and production directly.
All types of property included in the enterprise may participate in transactions, be mortgaged objects, alienated. In most enterprises, the property of the company is a separate column, not related to the ownership of founders, owners, employees. The organization’s resources are necessary for the firm to be considered capable of meeting debt obligations. If partners, creditors direct claims against a certain business, they form them on property. Therefore, a company that has not fulfilled its obligations risks losing its liabilities and assets listed above.
Bankruptcy
In some cases, the organization is officially declared insolvent, that is, declared bankrupt. If this happens, specialists analyze the composition of the property of the enterprise, on the basis of which they identify those positions that can be used to satisfy the requirements of creditors. The current legal standards come to the rescue, describing the procedures in accordance with which interaction with creditors takes place.
If the property of the enterprise (the concept and composition are given above) turned out to be quite capacious, after settlement with creditors the bankrupt may still have some liabilities and assets. Those formally come at the disposal of those founders who have rights or obligations. Under applicable laws, this applies:
- to production cooperatives;
- economic communities, partnerships.
If we are talking about a municipal, unitary, subsidiary legal entity, then here the founders have property rights.
Where does it come from?
If you do not form all the factors of production necessary for the correct conduct of business, the company will not be able to fully work. The composition and structure of the property of the enterprise largely determine the specifics of its activities. That is, what is in the possession of the company is closely interconnected with the selected industry and the production process. Type of ownership, production organization have an impact on how property is formed.
The composition of the sources of property of the enterprise:
- mutual contributions;
- contributions;
- deals;
- mortgages;
- alienation.
Capital and property
Our society is ruled by a market economy. She recommends such an assessment of the property of the enterprise, which involves accounting for it as capital. At the same time, real capital is allocated, that is, one that is functioning, and a financial component. The first is production capabilities and means, the second is the money needed to purchase new equipment, materials, and also spent on meeting the needs of the enterprise.
The composition and structure of the property of the enterprise consider money capital as:
- borrowed;
- own.
The first is formed from those funds that were obtained from third-party sources. These are various help and loans, pledges and other opportunities. But your own is determined by the valuation of the property owned by the company, while taking into account those amounts that have been issued to debtors and have not yet been claimed from them. In calculating equity, current obligations are also included here. The following capital is formed:
- from donations;
- contributions;
- charter;
- arrived.
Capital is different
In addition to the previously mentioned division, the composition of the property of the enterprise involves the classification of its monetary component:
- on negotiable;
- main.
The main one combines production factors that are designed for a long time, negotiable - those elements that are involved only for one production cycle. It is customary to include:
- fuel;
- materials;
- salary.
Analysis of the composition and structure of the property of the enterprise allows you to select the following sources of fixed capital:
- funds;
- long-term capital investments;
- unfinished construction projects.
Charter and money
The composition of the sources of formation of the property of an enterprise always includes the charter of the organization, which spells out how much should be the authorized capital. This amount is fixed and does not change until the meeting of the founders decides to amend the charter of the company. The law regulates the procedure for fixing the amount of the authorized capital and mechanisms for its change.
How the authorized capital is formed depends on the legal and organizational form of activity. If we are talking about a state-owned enterprise, then they evaluate the property that was assigned to the enterprise. If the company is registered as an LLC, then the shares of all owners are summed up. When choosing in favor of OJSC, the authorized capital is formed as the nominal total price of shares. For a production cooperative, the value will be determined by the assessment of the property that the founders provided in the possession of the enterprise to conduct activities.
How do we change?
Since the composition of the property of an enterprise undergoes changes in the process of the organization’s activity, the authorized capital also changes with it. The following mechanisms are distinguished:
- decrease in amounts associated with depreciation of property;
- reduction caused by accidents, disasters;
- obsolescence caused by scientific and technological progress;
- decrease in demand for products associated with the deterioration of the economic situation in the country, which leads to the transfer of property from sphere to sphere;
- allocation of funds from the authorized capital to pay off costs associated with the fact that the sale of goods does not cover the costs of its production.
Why is this needed?
Why is an organization in need of share capital? Main functions:
- the possibility of registering a new enterprise, since by law it is impossible to open a company without an authorized capital;
- guarantor of financial stability;
- collateral, allowing in a crisis situation to cover the requirements of counterparties.
Assets and liabilities
The composition of the property of the enterprise also considers the concept of balance arising when there is a separate property. Balance combines liabilities and assets of the enterprise. In this case, the monetary expression of the authorized capital is a liability, the production form will be the active part. It is important that there is a balance between them.
An asset is that element of property owned by the enterprise that is used in the course of business, which leads to economic benefits and increased capital. Assets are usually divided into several groups, analyzing participation in production and the speed and speed of revolutions.
It is important!
Current assets lead in liquidity. Those are needed to carry out operational activities. They are usually used for 12 months. Non-current assets are less liquid. The level of mobility is directly related to how large the percentage of current assets is relative to the overall indicator. In the worst case, it is zero, in the other extreme - one.
The closer the parameter is to zero, the less mobility and the ability to turn into money, if it suddenly became necessary. However, there are certain positive qualities in proximity to zero, as this indicates that fixed assets make up an impressive percentage of the property, that is, production is established with increased efficiency. This means that regular production costs and costs will be minimized. If the market conditions are favorable, in such conditions you can count on maximum profit.
Analysts and experts agree that this is optimal when the ratio is close to 0.5. Thus, the indicator of mobility guarantees high turnover, which provokes an increase in income and an increase in profit. Moreover, the enterprise is not so much dependent on fuel and raw materials.
Company liabilities
Liabilities are called property that finances assets and activities conducted by the enterprise. From the liabilities you can see:
- the amount of capital allocated to economic activity;
- level of participation in property.
Liabilities are capital, reserves, loans, payables. The state of liabilities directly affects how large the sources of funds are, as well as how this value relates to equity. The dynamics of changes in liabilities reflects what is changing the property of the enterprise in a given period of time.
Assets and liabilities are closely related. A specific group of liabilities is always determined by assets. Example: to replenish turnover, you need to take a short-term loan. To increase turnover and non-current assets, it is necessary to take on long-term obligations. At the same time, current assets are necessary to repay a short-term loan, but in part they are also used to pay off long-term programs. If there remains a third, unused part, then the organization’s capital is replenished from it.
Property Valuation
Economic analysis very actively uses the comparison tool, comparing objects and determining whether they have similar and different features. When it comes to analyzing the property of an enterprise, several comparison methods are used here.
The simplest option is to compare the results that have been achieved in the current period with the indicators obtained earlier. For example, you can match two days, two months, or two years.As a result, we can draw conclusions about the rate of increase or decrease in property, its change. Against the background of the results, conclusions are drawn about the patterns, trends inherent in the organization.
Another comparison technique involves the availability of information about real indicators and identifying the difference between them and the planned ones. This works if a production plan has been drawn up in advance. As a result, it is possible to identify whether there are reserves that are not yet used, and draw conclusions about the possibilities for further development.
Intercompany Analysis
This method of economic analysis is considered one of the most important when studying the property of an enterprise. The study compares the indicators of the selected organization and the companies leading in the same field. At the same time, companies that work in uniform economic conditions are chosen.
The analysis allows you to find new opportunities for production and determine the zest, due to which the leading internationally known companies are leading. The method makes it possible to identify reserves, with which you can increase the production activity of the organization. The most relevant is the comparison of the property of the company with its competitors.
What does it mean?
If you have identified indicators for which you need to analyze the property of the enterprise, and managed to get some values during the comparison, we can talk about the relative dynamics. It will be one of the main tools for analysts, economists and planners in the company, as it allows us to draw conclusions about the current prioritization, as well as about development prospects. Dynamic values are calculated by dividing indicators for the current period by elapsed time parameters. As a result, growth rates are obtained. Typically, these are usually expressed as coefficients or as a percentage.
Dynamic relative values are basic, chain - this is determined by the period with which the comparison was carried out. Structural indicators allow us to calculate the specific gravity of some studied part. Such parameters make it possible to analyze the structure of the enterprise’s property and, in particular, highlight the percentage of managerial reserves or, for example, the ratio of various production capacities to general indicators.
To summarize
For any enterprise, the concept of property is extremely important. It is from this resource that not only opportunities in the present tense follow, but also development prospects.
You should know what constitutes property, of what elements it consists. To plan effective activities, you need to own the basic mechanisms of analysis and structuring of property, which will allow you to build a development strategy for the organization as a whole.