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Enterprise

financial activities

It mainly includes financing channels and methods, the raising of equity funds, the raising of stocks and debt funds, etc. These activities are an important part of the production and operation activities of the enterprise and are crucial to the normal operation and development of the enterprise.

Edited at 2024-02-08 21:21:57

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financial activities

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Outline

financial activities

Financing channels and methods

Financing channels refer to the objective sources from which enterprises obtain funds.

National fiscal funds, bank credit funds, non-bank financial institution funds, other legal person funds, employee and private funds, internal funds of enterprises, foreign investors and funds from Hong Kong, Macao and Taiwan

Financing method is a subjective behavior of the enterprise when writing how to obtain funds.

absorb direct investment

It is conducive to enhancing the strength of the enterprise, reducing financial risks, and forming production capacity as soon as possible, but the cost of capital is high, which can easily lead to the dispersion of corporate control rights.

issue stock

The lack of fixed dividend burden and maturity date can enhance corporate credibility, but high capital costs can easily lead to the dispersion of control rights.

Commercial credit

Financing is convenient, low cost, and has few restrictions, but the term is short and the risks are high

bank loan

Financing is fast, the procedures are simple, the capital cost is low but the financial risks are high, there are many restrictions, and financial leverage may be a side effect

issue bonds

Low capital costs will not affect shareholders' control over the company, but financing risks are high and there are many restrictions. The amount of funds raised is limited and may have side effects

finance lease

Being able to raise capital quickly reduces the risk of equipment achievement. The financial risk is small and it has a tax deductible effect, but the cost is high. It will bring greater pressure to the enterprise and it will not be able to enjoy the residual value of the equipment.

Raising equity funds

Sincerity is also called sovereign capital or own funds. Its amount is the total owner's equity in the balance sheet, also called net assets.

Including capital received, capital reserves, surplus reserves and undistributed profits

Channels: national financial funds, other legal person funds, employees and private funds. Foreign investors and funds from Hong Kong, Macao and Taiwan

Financing method: absorb direct investment and issue retained earnings of stocks

stock

It is a certificate that investors own shares in a company. It represents the shareholder’s ownership in the company.

Type of stock

Whether to register is divided into registered and anonymous

There are different investment entities, which are divided into state shares, legal person shares, individual shares and foreign shares.

The issuance objects and listing regions are different, and they are divided into A shares, B shares, H shares, N shares and S shares.

Shareholders have different rights and obligations and are divided into ordinary shares and preferred shares.

Ordinary shares have the right to operate and manage the company, have priority in subscribing when new shares are issued, and have a higher profit level than preferred shares.

Preferred shares have priority in the distribution of remaining property and dividends, without the right to operate and manage the company, and the profit level is fixed.

Raising debt funds

It refers to the source of funds that an enterprise raises and uses in accordance with the law and repays it on schedule.

Including various loans and accounts payable, notes payable, accounts received in advance, etc.

Investment method

Commercial credit

The forgone cash discount cost rate is equal to the cash discount rate divided by 1 - the cash discount rate multiplied by 360 divided by the credit period minus the discount period

Bank loan

issue bonds

Par issue: the issue price is equal to the face value

Discounted issue: the issue price is less than the face value

Premium issuance: the issue price is greater than the face value

finance lease

The total rent payable is equal to the purchase cost plus the leasing cost plus the leasing fee.

The rent payable in each period is equal to the present value of the total rent payable divided by the annuity present value coefficient

current assets

Concept: refers to assets that can be realized or consumed within one year or within one operating cycle of more than one year.

Features: fast turnover and strong capabilities, large volatility, and diverse forms

According to the strength of liquidity, it can be divided into quick action and non-quick action.

Quick assets: monetary funds, accounts receivable, notes receivable, short-term investments

Non-quick assets: Inventories and pending current asset losses

Divided into profitable and non-profitable according to different profitability

Profitability: short-term investment commodities accounts receivable

Non-earnings: Cash, other receivables, non-merchandise inventory, pending property losses

operating income

It refers to the economic power formed in daily activities such as selling goods.

Income from the sale of goods, service income, interest income, royalty income, rental income, dividends and other income, but does not include payments collected for third parties.

Divided into main business income and other business income according to importance

Decreasing items in operating income

Sales Returns, Sales Responsibilities, Sales Discounts

Profit composition

operating profit

Operating profit equals operating income less operating costs less economic surcharges less three major period expenses plus investment income

The total profit

Total profit equals operating profit plus non-operating income minus non-operating expenses

net profit

Net profit equals total profit minus income tax expenses

profit distribution principle

1Principle of distribution according to law

2. The principle of equal emphasis on distribution and accumulation

3. Principle of reciprocity between investment and income

4. The principle of taking into account the interests of all parties

Profit distribution order

1 Make up for previous losses

2Withdrawal of statutory surplus reserve fund

3Withdraw any provident fund

4Distribute profits to investors

dividend distribution policy

residual dividend policy

Stable or Steady Growth Dividend Policy

Fixed dividend payout rate policy

Fixed dividend plus additional dividend policy

Dividend payment form

cash dividend

stock dividends