Introduction

Conclusion

Bibliography

Introduction

The theory of capital is one of the most complex and controversial in economic theory. This applies to the definition of the very concept of capital, and to the units of its measurement, and to the income generated by capital, i.e. percent.

Elements of the doctrine of capital as the accumulation of wealth, especially in the form of money, are found even in Aristotle. Then the concept of "capital" becomes the subject of analysis by mercantilists, physiocrats, and classics.

It was first analyzed in the most consistent and systematic way by K. Marx, who revealed the essence of capital on the basis of the doctrine of surplus value. However, his concept did not become exhaustive in resolving all the complex issues of the theory of capital. With a more general approach to the concept under consideration, it turned out that capital is by no means always associated with the creation of surplus value, and hence with the exploitation of hired labor.

The category capital has a double meaning. Usually, in everyday life, capital is understood as wealth, a state in monetary or property form. The presence of capital in a certain circle of people in life is clearly visible and understandable, and people have always strived for wealth. However, the presence of wealth, including a substantial amount of money, in the scientific sense does not mean that their owner is a capitalist. Political economy interprets capital as a value that brings surplus value to its owner. From this point of view, the capital can be called the production assets of the enterprise, and land, and securities, and a deposit in commercial bank, and "human capital" (accumulated professional knowledge), etc. All of these benefits generate a stream of income in various forms: in the form of rent, interest payments on deposits, dividends on securities, land rent, wages, etc.

The total capital requirement is based on the need for current and non-current assets.

Capital is the basis for the creation and development of an enterprise and, in the process of functioning, ensures the interests of the state, owners and personnel. Any organization that conducts production or other commercial activity must have a certain capital, which is a combination of material values ​​and cash, financial investments and costs for the acquisition of rights and privileges necessary for the implementation of its economic activities.

At present, the study of the formation, functioning and reproduction of capital is becoming especially relevant. the possibility of becoming entrepreneurial activity and her further development can only be realized if the owner reasonably manages the capital invested in the enterprise. This is the relevance of this topic.

The purpose of the course work is to consider the essence, structure and forms of capital, as well as to analyze the modern capital structure of enterprises of the XXI century and the role of the state in the formation and increase of capital.

Chapter 1. Theoretical Foundations of the Problem of Capital

1.1 Treatment of capital in classical political economy

One of the first definitions of capital is found in the works of mercantilists, who identify capital with one of its functional forms - money, the object of their analysis is, first of all, trading capital. Representatives of the physiocratic school, studying the movement of commodity capital and the process of accumulation of capital, already distinguish between the categories of capital and income. Thus, they form the basis for understanding its role in the production process, but the latter is limited to Agriculture.

Representatives of the classical paradigm made a significant contribution to the study of capital. W. Petty was the first to explore economic relations in connection with the relations that develop in the process of social production, which subsequently made it possible to form a classical approach based on the concept of capital circulation and the creation of surplus value. A. Smith substantiated the principles of the emergence, formation and functioning of capital. At the same time, characterizing capital as an accumulated stock of things or money (accumulated wealth), he considered it in a static position, not paying due attention to its movement. D. Ricardo interpreted capital as a means of production, at the same time, developing the ideas of A. Smith, he made significant progress in studying the profit on capital and the redistribution of capital.

Representatives of the classical approach correlated capital with value that brings surplus value, while relying on the concept of creating a surplus product. Most systems approach to the study of capital was reflected in the works of K. Marx and F. Engels. Using the principles of materialistic dialectics in the study of processes economic development society, K. Marx, unlike his predecessors, considered capital as a social category. Describing capital as a self-increasing value that creates surplus value, K. Marx considered the labor of hired workers to be the source of surplus value. In this interpretation, capital was presented as a production relation, primarily between wage workers and capitalists, that is, a relation of exploitation. In the works of K. Marx, the process of capital reproduction is revealed and the dynamic nature of this category is shown. K. Marx wrote that "capital can only be understood as movement, and not as a thing at rest." If we abstract from social sharpness, the characterization of capital as an economic relationship that arises between economic entities, as well as a self-increasing value, has scientific value in our time.

Economists of the classical school understood capital differently than it was perceived by ordinary consciousness: “people who are completely unaccustomed to thinking about this subject,” wrote J. St. Mill, they believe that capital is a synonym for money. For Smith and, following him, for Mill, capital is “a stock of products of various kinds, sufficient to support him (man) and supply him with the materials and tools necessary for his work” during the entire period of production and sale of the product of his labor.

Capital is the factor of production responsible for all that "current labor must obtain from past labor and the product of past labour."

Thus, in the system of concepts of classical political economy, Capital is characterized by three essential features:

capital is a product of past labor, in contrast to the natural factors of production: labor and land (nature);

capital is a production or commodity stock, as opposed to stocks for direct consumption;

capital is a source of income, unlike the accumulation of luxury goods.

1.2 The essence and forms of capital in modern economics

Capital in the market of factors of production is understood as physical capital, or production assets. The latter can be called capital goods. Capital goods include, first, residential buildings; secondly, production facilities, machinery, equipment, infrastructure; third, inventories.

Capital can be broadly defined as a value that generates a stream of income. From this point of view, the production assets of an enterprise, and land, and securities, and a deposit in a commercial bank, and “human capital” (accumulated professional knowledge), etc. can be called capital. All of these benefits bring a stream of income in various forms : in the form of rent, interest payments on deposits, dividends on securities, land rent, etc.

Thus, we can talk about three segments of the capital market: first, the capital goods market, where production assets are bought and sold; second, the capital services market, where these funds can be rented out for a fee. To buy and sell capital goods, subjects need cash. Therefore, thirdly, one more segment of the capital market can be distinguished - the market for borrowed funds, or loan capital. The income generated by loan capital is called interest.

Economic theory distinguishes:

Physical (technical) capital is a set of material resources. Which are used in various phases of production and increase the productivity of human labor (machines, buildings, computers, etc.);

Financial (monetary) capital - a set of cash and securities at certain prices;

Legal capital - a set of rights to dispose of certain values, and these rights are given to their owners without the corresponding labor costs;

Human capital are those investments that increase the physical or mental abilities of a person.

Forms of capital. These include the following forms:

Economic;

Physical;

Cultural;

Human;

Social;

Administrative;

Political;

Symbolic.

Each type of capital also has its own stratification system - a special type of social stratification and a method of its reproduction. The initial form is economic capital. In his objectified

(proper) state it includes:

Money capital (financial resources);

Production capital (means of production);

commodity capital ( finished products).

Some difficulties are caused by the definition of production capital, which includes means of labor (machinery and equipment, buildings and structures) and objects of labor (raw materials and materials). Economic capital may include any assets used in economic activity and having a certain liquidity. In this case, it also covers the liquid part of household property - durables, real estate, which are used in domestic work.

Characteristics of physical capital. Physical capital is associated with the state of health, the level of efficiency of economic agents, as well as their external physical data, which can be used to mobilize other types of resources. The differences in physical capital are determined by the ability to work. His objectified

the form is represented by physical and mental qualities that allow the labor force to realize its purpose in the labor process. The result is achieved by combining the physical abilities of a person with other types of capital, as well as with the means of production as the most important part of economic capital. The institutionalization of physical capital is carried out by issuing medical reports confirming the formal status of the labor force in the form of verdicts of “practically healthy” or “unable to work”. This type of capital underlies the physical-genetic stratification system. Here, the attitude towards a person or group is determined by the level of health, ability to work and the presence of certain physical qualities - strength, beauty, dexterity. In this case, inequality is affirmed by the reproduction of differences in the ability to work. Physical capital is an attribute of an individual, and a significant part of it is a product of genetic codes, i.e. inherited biologically. It is not transmitted in any other way. But this kind of capital is also reproduced and accumulated in the process of physical education and care of one's own body. The level of physical capital is measured through standard assessments of the level of health and working capacity.

Labor power as the ability to work is by no means reduced to the physical and mental qualities of a person. Other forms of capital are incorporated in the body of the worker and his connections with other economic agents. Cultural capital plays a special role here. This capital is embodied in practical knowledge that allows a person to recognize the strategies and principles of action of other economic agents. Its accumulation is associated with the skills of socialization in a certain social environment - the assimilation and partial internalization of institutional restrictions that allow one to act according to the rules adopted within the framework of a particular economic order. Moreover, the use of this capital makes it possible to follow not only formally prescribed norms, but also implicit conventional agreements. In its objectified state, cultural capital appears in the form of "cultural goods", which are not just physical objects, but contain specific signs and symbols in their material form, which make it possible to recognize the meaning of relationships and decipher cultural codes. They can be observed in a wide range of objects - from the decoration of a business office to the clothes of its owner, from the way work is organized to the brand of purchased products. The signs and symbols contained in cultural products help to understand the social origin and status positions of this or that economic agent. The accumulation of cultural capital contributes to the distinction between individuals and groups, among which, as it were, “automatically” people from noble or ordinary families, countrymen or strangers are recognized, a division is made into “us” and “they”. As a result, the possession of this kind of capital allows you to enter into successful communication, to build relationships with acquaintances and strangers. This type of capital underlies the cultural-normative stratification system. In it, differentiation is built on differences in respect and prestige arising from comparative assessments of lifestyles and norms of behavior followed by this person or group. Ways of organizing work, consumer tastes and habits, manners of communication and etiquette, a special language (professional terminology, local dialect, criminal jargon) - all this indicates multiple boundaries of cultural and normative inequality. Next comes the form of human capital. This concept came to economic sociology straight from neoclassical economic theory. In its incorporated state, human capital is a set of accumulated professional knowledge, skills and abilities obtained in the process of education and advanced training, which can subsequently generate income in the form of wages, interest or profit. Unlike cultural capital, in the case of human capital we are dealing with reflexive knowledge that has a logical structure. Human capital is directly related to the socio-professional stratification system, in which groups are divided according to education and professional qualifications, conditions and content of labor, forming the boundaries between professions and specialties. We add that socio-professional groups, as a rule, are the initial basis for most other stratification constructions. Like cultural capital, human capital is not transferred overnight, certificates are not exchanged or transferred from one person to another. The accumulation of human capital requires a relatively long process of education. Although the process of transferring knowledge from person to person is more streamlined and standardized than the process of cultural education.

One of the forms that is most actively discussed in the social sciences is social capital. It is associated with the establishment and maintenance of relations with other economic agents. Social capital is the totality of relationships that generate action. These relationships are associated with the expectations that other agents will fulfill their obligations without the imposition of sanctions. This simultaneous concentration of expectations and obligations is expressed by the general concept of trust. Unlike cultural and human capital, social capital is not an attribute of an individual. Its objectified structural basis is formed by social networks that are used to transmit information, save resources, mutually teach rules of conduct, and form reputations. Based social networks, which often tend to be relatively isolated, the institutional basis of social capital is formed - belonging to a certain social circle, or membership in a group. At the same time, the latter can be supported by formal statuses - for example, a member of an association or a club. In its material form, social capital can be embodied in such "simple" things as lists of addresses and telephones. the right people". The transfer of an address or phone book can help a beginner or an outsider understand the composition and configuration of some social network, but it will not help much to enter this network. The transfer of social capital is also impossible directly through the transmission of knowledge, stories about networks. Here, acquaintances and recommendations of insiders belonging to this circle are needed. In this sense, social capital is not alienable from the people who possess it. And we are talking not about a separate carrier of acquaintances, but about a certain community intertwined with stable ties. And social capital can be measured only through the degree of involvement in certain networks, as well as through the characteristics of these networks themselves - their size and density, strength and intensity of network connections. Unlike the horizontal construction of social networks, administrative capital mobilizes, rather, vertical connections. In an incorporated state, it is associated with the ability of some economic agents to regulate access to resources and activities of other agents, using special positions of power and authority. In an objectified state this species capital is embodied in organizational hierarchical structures. We are talking about corporate-type organizations in which the formal positions of superiors and subordinates, who have or do not have the right to make certain decisions, are clearly fixed. And in the institutional state, it manifests itself in the structure of official positions, each of which is charged with a certain range of rights and obligations. A vivid example of the formal institutional fixation of the structure of administrative capital was, for example, party nomenklatura lists of the Soviet era. This type of capital is associated with the corporate stratification system, where differentiation between groups is based on their formal positions in organizational hierarchies. These positions provide various opportunities for mobilizing and distributing resources, as well as regulating access to resources of other agents. Thus, the bearer of administrative capital is not an individual person, this type of capital is rather tied to a place in a corporation and therefore is relatively easily alienated from a person.

And this resource is transferred along with the official position by appointing a candidate by higher officials. Administrative capital is heavily intertwined with political capital. Political capital means the incorporated capacity to mobilize and participate in collective action. It also implies the ability of a person to represent the interests of other agents (individuals and groups) who delegate to him the rights to represent their interests. The presence of political capital means the usurpation of the right to speak and act on behalf of other agents (including hiding behind their name to implement their own strategies). In its objectified state, political capital is represented by parties and social movements that are ready for collective action. Its institutional form is recognized leadership structures. Their authority, of course, can be supported by the resources of administrative capital in the form of positions in the formal hierarchy (and strive for such reinforcement). However, unlike administrative capital, political capital is incorporated in the agents themselves rather than in organizational structures, is less formalized and, therefore, its alienation from one person in favor of another is objectively difficult. It is transferred (formed) by way of nomination (including self-nomination) of leaders, delegates, deputies, other leaders and is preserved as they are active. This type of capital is associated, respectively, with the political stratification system. It is difficult to overestimate the importance of symbolic capital, which denotes a person's ability to produce opinions. In the incorporated state, it means the presence of legitimate competence - the recognized right to interpret the meaning of what is happening; to say “what is really” (for example, what is the “true value” of this or that capital). It is also the ability to impose certain understandings on other agents. Manipulation plays an important role in its functioning. different ways assessments of available and potential resources (symbolic violence). In this respect, all other types of capital depend on symbolic capital. In what material forms is this type of capital objectified? V different kind programmatic, strategic documents and ideologically loaded texts explaining how, for example, to carry out reforms and “which way to go to the temple.” In an institutionalized state, symbolic capital is embodied in the structure of authorities who have the right to nominate (name). The holders of such rights, who have received recognition from some communities, are considered experts, teachers, gurus. We add that their rights can be supported by an official nomination, for example, educational diplomas, i.e. institutionalized human capital resources. Relevant this type capital stratification system is called cultural-symbolic. In it, differentiation arises from differences in access to socially significant information, unequal opportunities for its interpretation, abilities to produce truth, to be a bearer of sacred knowledge (mystical or scientific). This type of capital is transmitted by explaining the meanings and techniques of their production.

capital corporation economic

Chapter 2. Characteristics of the structure and main forms of capital

2.1 Fixed and circulating capital, fixed and variable capital: their common and difference

The capital structure is the ratio of own and borrowed funds used in the financial activities of the enterprise. Since the immediate goal of capital is not to obtain a one-time profit, but to systematically increase it, the movement of capital is not limited to one circuit. The circulation of capital, considered not as a single act, but as a constantly repeating process, is a circulation of capital. In the process of turnover, capital functioning in production is divided into fixed and circulating capital.

Fixed capital is that part of productive capital which, over a long period of time, participates entirely in production, but transfers its value to finished products gradually and returns to the owner in monetary form in installments. It includes the means of labor - factory buildings, machines, equipment, etc. They are bought immediately, and their value is transferred to the created product as they wear out.

Unlike fixed capital, circulating capital is that part of productive capital (first of all, objects of labor and labor force) that, while participating entirely in production, transfers its value to the newly created product immediately. In practice, working capital includes wages, since the money spent on wages is returned in one circuit in the same way as the value of the objects of labor.

The structure of sources of formation of assets (funds) is represented by the main components: equity capital and borrowed (attracted) funds.

Table 1

Fixed and working capital

Organization's equity as legal entity v general view determined by the value of property owned by the organization. These are the so-called net assets of the organization. They are defined as the difference between the value of property (active capital) and borrowed capital. Of course, equity has a complex structure. Its composition depends on the organizational and legal form of the economic entity.

Own capital consists of authorized, additional and reserve capital, retained earnings and targeted (special) funds (Fig. 1). Commercial organizations operating on the principles market economy, as a rule, own collective or corporate property. The owners are legal and individuals, a collective of contributors-shareholders or a corporation of shareholders. The authorized capital, which has developed as part of the share capital, most fully reflects all aspects of the organizational and legal foundations for the formation authorized capital.

Rice. 1. Forms of functioning of the enterprise's own capital

All sources of equity capital formation can be divided into internal and external (Fig. 2).

Equity capital is characterized by the following main positive features:

1. Ease of attraction, since decisions related to increasing equity capital (especially through internal sources its formation) are accepted by the owners and managers of the enterprise without the need to obtain the consent of other business entities.

2. Higher ability to generate profits in all areas of activity, tk. when using it, the payment of loan interest in all its forms is not required.

3. Ensuring the financial sustainability of the development of the enterprise, its solvency in the long term, and, accordingly, reducing the risk of bankruptcy.

Rice. 2. Sources of equity capital formation

Borrowed capital is a part of the value of the organization's property acquired on account of the obligation to return money or valuables equivalent to the value of such property to the supplier, bank, other lender. In the composition of borrowed capital, short-term and long-term borrowed funds, accounts payable (borrowed capital) are distinguished. The structure of borrowed capital is disclosed in Figure 3.

Long-term borrowings are loans and borrowings received by an organization for a period of more than a year, the maturity of which is not earlier than one year. These include tax credit debt; debt on issued bonds; debt on financial assistance provided on a repayable basis, etc. Credits and loans attracted on a long-term basis are used to finance the acquisition of non-expendable property.

Rice. 3. Structure of borrowed capital

Short-term borrowings - liabilities, the maturity of which does not exceed one year. Among these funds, one should single out current accounts payable, which arises as a result of commercial and other current settlement transactions. It includes: payroll arrears to staff; debt to the budget and off-budget funds for mandatory payments; advances received; advance payment for orders and products; debt to suppliers and other types of debt. Short-term credits and loans and accounts payable are the sources of formation of current assets.

Borrowing is a fairly common practice.

Surplus value is created by the worker by spending more labor on the production of commodities than his labor power is worth. But in order to be able to expend this labor, it is necessary to have raw materials, fuel, tools, etc., i.e., all kinds of means of production.

The capitalists' outlays on production therefore consist of two parts: 1) outlays on the wages of workers, and 2) outlays on the purchase of means of production. When production is completed and the finished goods are sold on the market, then in the hands of the capitalists, in addition to reimbursement of all these costs, there is also a certain surplus value. From the point of view of a capitalist who does not delve particularly deeply into the essence of that social order where he lives, the situation is quite simple. He spent on production, for example, 1,000,000 rubles, including all the necessary costs. This million rubles is his capital. As a result of the production and sale of goods, he had, in addition to this capital, another 200,000 rubles. surplus value. He does not ask what is the hidden source of this surplus value. The possession of a million rubles eventually gave him 200,000 rubles. income. Capital, as it were, generated income on its own.

However, it is known from the foregoing that such a view of things is completely wrong and that the real source of surplus-value is the surplus-labor of wage-workers. But in this case, we no longer have the right to consider capital as a single whole, all parts of which play exactly the same role in the creation of surplus value. That part of the capital which is expended in the purchase of the means of production is of great importance for the production of products which, after all, cannot be made. with bare hands without raw materials and tools. However, it does not play any role in the formation of the surplus value contained in these products. If, for example, out of a million rubles of capital spent on production, 800,000 rubles. represent the costs of the means of production, then these 800,000 rubles. they are simply transferred to finished products, but do not add a penny to the cost of these products. The creation of surplus value is served by another part of the capital, namely that which is expended on the purchase of labor power, since it is only workers who create values ​​that exceed the value of their own labor power. If, for example, out of a million rubles of capital, 200,000 rubles. spent on hiring workers who create value equal to 400,000 rubles, then the surplus value of 200,000 rubles. represents, essentially speaking, the result of the expenditure of 200,000 rubles. capital, although in order to make this result possible, it was necessary to spend another 800,000 rubles. to the means of production.

So, in all the capital expended on production, two main parts must be distinguished - the value of the means of production and the value of labor power. The value of the means of production is simply transferred to the products produced with their help, but does not create any increase, no change in value. It is therefore called constant capital. On the other hand, the value of labor power is not simply transferred to the product, but instead of it, the living labor of the worker appears, creating a new value and, moreover, a higher one. Through the use of labor power, the value invested in production changes and increases. Therefore, that part of the capital which is spent on the purchase of labor power is called variable capital. The greater the variable capital, the greater the surplus value.

The concepts of "permanent" and "variable" capital should not be confused with the concepts of "fixed" and "circulating" capital often used in the literature and in everyday life. By fixed capital is meant the value of those means of production which serve for a number of production periods and only gradually wear out. This, therefore, includes the value of machines, buildings, etc., but does not include the value of raw materials, fuel and other means of production, which are consumed without a trace during one production period. As for the rest of the capital, it is called, in contrast to the main part, circulating capital, because it is turned over in its entirety during one production period. Thus, fixed capital is always less than permanent capital, since it does not include the cost of raw materials, fuel and other rapidly consumed means of production. Circulating capital, on the other hand, is always greater than the variable, because it includes, in addition to the cost of labor power, the cost of these rapidly consumed means of production (raw materials, fuel, etc.). The division of capital into fixed and variable is of paramount importance, since it serves to clarify the source of surplus value on which the entire capitalist economy rests. The division of capital into fixed and circulating capital aims to establish more secondary differences - differences but in the degree of speed of turnover of the various components of capital.

2.2 Capital management and optimization of its structure

The activity of the company is subject to certain life cycles. To assess the structure of the equity capital of an enterprise and make a decision on its optimization, it is necessary to understand what stage of development the company is currently experiencing.

The most dynamic stage of business development and diversification is when decisions about investments and their sources have to be made. To get an answer to the question of which source is more profitable to invest, financial modeling methods help. In practice, most often there is a situation where the use of credit resources can significantly reduce the period for achieving the economic effect, because the accumulation of profit for projects is a long process, and time, as you know, is money. Ultimately, time savings lead to faster company growth and profit maximization.

At the stage of stabilization, the need for long-term loans may simply not arise. For this stage, the capital structure is normal, in which the share of borrowed capital is minimal.

During a recession or crisis, plans are developed for the further activities of the company. As a rule, at this moment, anti-crisis measures are discussed or a decision on liquidation is made. If a plan is planned to bring the company out of the crisis, then at this stage profitability indicators deteriorate, financial stability decreases. In this situation, the company gets into debt and the ratio of equity to borrowed capital is very low (which indicates a crisis situation). Here, it is not the capital structure as such that becomes more significant, but the trends in the financial portfolio and future indicators calculated on the basis of a plan for overcoming the crisis.

There are no universal criteria for the formation of an optimal capital structure. The approach to each company should be individual and take into account both the industry specifics of the business and the stage of development of the enterprise. What is typical for the capital structure of a company specializing in real estate management, for example, is not entirely appropriate for a company from the trade or services sector. These companies have different needs for their own working capital and different capital intensity. One should also take into account such a factor as publicity: non-public companies with a narrow circle of founders (shareholders) are more mobile in making decisions on the use of profits, which allows them to quite easily vary both the size and capital structure.

The capital structure reflects the ratio of debt and equity capital raised to finance the company's long-term development. The success of the implementation depends on how the structure is optimized. financial strategy the company as a whole. In turn optimal ratio borrowed and own capital depends on their value.

There is a common misconception in the Russian business environment that equity capital is considered free. This forgets an obvious fact: the payment for equity is dividends, and almost always this makes equity financing the most expensive. For example, if a business owner has the opportunity to receive dividends, say, at the level of 40%, the cost of equity becomes higher than the cost of raising loans.

As world practice shows, development only at the expense of one's own resources (that is, by reinvesting profits in a company) reduces some financial risks in a business, but at the same time greatly reduces the rate of increase in the size of a business, primarily revenue. On the contrary, attracting additional borrowed capital with the right financial strategy and high-quality financial management can dramatically increase the income of company owners on their invested capital. The reason is that an increase in financial resources, when properly managed, leads to a proportional increase in sales and often net profit. This is especially true for small and medium-sized companies.

However, the leveraged capital structure imposes excessively high demands on its return, as the probability of non-payment increases and the risks for the investor increase. In addition, the company's customers and suppliers, noticing the high leverage, may start looking for more reliable partners, which will lead to a drop in revenue. On the other hand, too low leverage means underutilization of a potentially cheaper source of financing than equity. This structure leads to more high costs on capital and inflated requirements for the return on future investments.

The optimal capital structure is such a ratio of own and borrowed sources that ensures the optimal ratio between the levels, that is, the market value of the enterprise is maximized. When optimizing capital, it is necessary to take into account each part of it.

In Russia, with its rapidly developing economy, there are many companies with high growth rates and large cash flows (for example, mobile operators). They can independently carry out capital investments without resorting to external sources of financing. But a decrease in the debt burden leads to a weakening of the so-called disciplining function of debt. It is the burden of servicing debt that usually pushes company managers towards optimal business decisions. If the leverage is low, management has less incentive to look for the most efficient investment opportunities.

The main condition for the long-term financial success of the company is that the return on capital (assets) should be greater than the cost of raising capital. It follows from this that in unprofitable types of business it is unprofitable to have a lot of own funds (real estate, transport, etc.), since the cost of raising capital for such assets will significantly exceed the return on them, leading the company to an economic and financial minus. Not only unprofitable, but also all other companies should consider the possibility of using outsourcing schemes for secondary business processes, and also do not forget the rule - unprofitable and non-core assets should be disposed of by any means and as soon as possible.

The scale of the business also matters in this case. In a small business, it is usually not a question of acquiring funds in ownership. In big business, this is seen as the norm, especially in the manufacturing sector. The average business is located in the frontier area, and here the decision depends on the ratio of rental payments over the long term and the costs of acquiring and maintaining property. In any case, with such decisions, the financial service must make the most accurate and reasonable calculations.

Risks come with businesses of all types and sizes. A direct relationship is always observed - the higher the level of profitability in a business, the higher the level of risks, and the lower the level of risk managers and owners are willing to accept, the lower the level of income they can count on.

The creation of reserves (the accumulation of a certain amount of assets in the form of investments in mutual funds, precious metals, shares, deposits) is part of the financial and investment strategy. Any without reserve serious problem in the market or in the economy puts the business on the brink of survival. Unfortunately, many managers of Russian companies forget about this, completely distributing all the profits received for dividends and reinvestment (or investments in other projects). Thus, by conducting one or more types of activities (for example, stable and developing), companies that do not create reserves increase risks both in their core business and in new projects.

To minimize financial risks, I recommend that owners and managers of companies, after paying dividends to shareholders, create real reserves in sufficient volumes from the received annual profit. To do this, you need to make accurate calculations. The most frequently obtained corridor of values ​​is 3-10% of assets, depending on general level business risk. Then the remaining profit can be invested in the business, and first in the main (donor), maintaining its stability and growth, and only then - in new projects.

Effective management of reserves requires competent specialists (for example, in securities).

2.3 Capital of corporations and analysis of its size and structure

At the turn of the 21st century, the theory of brand capital as the basis of capitalization is rapidly developing. social relations between firms and consumers. Deepening research into the content and forms of manifestation of capital is fundamentally changing the understanding of the purpose and structure of the capital of modern firms.

Well-known American business researchers G. Mine and D. Schneider were among the first to propose a new theory of the capital structure of traditional and modern companies. On fig. Figure 8 shows the fundamental changes in the capital structure of traditional and electronic businesses in B2B (business to business) industries.

Rice. 8. Capital structure of traditional and modern firms

A business revolution starts with fundamental changes capital structure, which is reflected in the form of an inverted pyramid, showing the new ratio of physical, working, human and brand capital. The purpose of each type of capital, the very nature of business processes, is also changing.

The pyramid on the left shows the capital structure of traditional companies that prevailed in the last 20, and in fact - all 100 years of the 20th century. The companies had a powerful material base. The difference in assets was determined by the difference in business technologies: manufacturing centers, distribution centers, financial institutions, hospitals or medical institutions stores, telecommunications companies, cable television systems, entertainment centers. Efficient Management assets required a focus on building or integrating national and global operations of companies, simplifying supplier-buyer relationship chains, integrating with suppliers and distribution networks, standardizing and improving business processes, improving overall performance and improving business efficiency. In parallel, financial managers focused on increasing return on capital, return on investment, asset turnover and other indicators of the effectiveness of enterprise management. The processes of industrial concentration, among other things, led to the consolidation of physical capital at the national and global levels in order to ensure the growth of production volumes and the expansion of market power.

In the 90s, the attention of companies was focused on the more efficient use of working capital (components, raw materials, stocks, work in progress, finished goods) in order to increase inventory turnover, reduce current costs of inventory storage, as well as to increase the efficiency of executive systems for reduce product obsolescence and increase demand. The key indicators were productivity, inventory turnover, capital efficiency, including working capital.

Much of the attention paid in the 1990s to working capital efficiency was the result of the economic shifts that had taken place in the previous decade. Until the 1980s, the real cost of capital was zero or negative for several decades. Essentially, the real return on capital, equal to the difference between nominal returns and inflation, was close to zero or negative due to high inflation. Under these conditions, working capital was in a certain sense free, and managers did not pay enough attention to improving working capital management and other measures that were implemented in the 90s to reduce and better manage working capital.

The business process model of most companies was intuitively or consciously built on the concept of an enterprise as a pyramid, based on physical capital and built for the production and sale of products. Recent developments in the field of management technologies (for example, enterprise resource planning systems ERP (Enterprise Resource Planning) and customer relationship management - CRM (Customer Relationship Management) have been aimed at developing this particular model and finding tools for its better understanding and use.

The financial performance of traditional companies is far below those of companies that have successfully applied electronic business technologies. For the most part, CEOs now feel the urgent need to move from the traditional business model to the decapitalized e-business model shown in Figure 1. 8 right. In an effort to increase capital gains and focus on core business, brand companies rely less and less on their physical capital. Their strategy is to transfer the components of the production process associated with physical capital to external structures and distribute them along the supplier-consumer chain. The same applies to auxiliary functions. The B2B e-business model thus divides companies into two groups: those with relatively little capital but owning a brand, and those that cluster around branded companies, forming networks of external structures.

Brand companies with small capital, working in close cooperation with a network of external structures, are a new phenomenon in business, which G. Mine and D. Schneider call the “value added community”.

The trends are already clearly visible. So, in the last decade, for many organizations, regardless of their size, it has become customary to search for an answer to the question: “What is more profitable to acquire property or take it on a lease or lease?” Comparing alternatives to "buy" or "rent" has become commonplace. A large proportion of the physical capital that corporations have always had is now leased out. In high-tech and network companies most of equipment is rented. Microsoft is the most capitalized company in the world, with fixed assets worth only a few million dollars.

Capital structure analysis largest companies reveals a trend towards brand equity as part of the difference between market capitalization and asset size.

In the minds of top managers of companies, in the minds of legislators and politicians-economists, the materialistic approach to understanding capital as the sum of tangible assets continues to dominate.

There is practically no awareness of the role and assessment of real human capital. The financial capital market is in complete disarray and the vast majority of corporate securities are not taken into account. The crisis deep state of business relations of most enterprises leads to negative values ​​of brand capital.

Thus, it turns out that the most stable and well-predictable source is income from property rental. But in the vast majority of cases, this is to the detriment of the main production. In pursuit of "easy" money and out of selfish motives, production areas with unique equipment are used as rental areas, which are dismantled and practically never used after that.

Bringing the size of the authorized capital to a really necessary level can help the newly created enterprise to start its statutory activities and increase the confidence of third parties in the enterprise, and as a result, in the possibility of attracting the necessary resources at lower prices.

Chapter 3. The role of the state in the formation and increase of capital

Modern capitalism, called the petty-bourgeois mode of production, is going through hard times. Rather, we can talk about his last days.

First of all, it is the state, labor, capital. An analysis of their interaction and mutual influence, their features, characteristic of them by the end of the 20th - beginning of the 21st century, lead to new conclusions and generalizations.

The modern state of the philistines and townsfolk owes its dizzying career to growing capital.

The fact that the system of commodity production needs a higher authority that guarantees compliance with the limits of competition, the general legal framework for the protection of property and the prerequisites for creating value determined the need for a modern state apparatus.

The state is a product of the irreconcilability of class opposites. It has a repressive apparatus in case the human material exploited by capital proves one day too obstinate for the petty-bourgeois mode of reproduction.

In the mature form of mass democracy of the philistines, the state was forced in the 20th century to take upon itself the solution of the growing socio-economic tasks.

The state, as an owner, must think in terms of long-term categories and, through its actions, contribute to the realization of the interests of society as a whole. For him, the value of a business, unlike a private investor, should primarily be determined by the structure and condition of the company's assets, as well as the dynamics of these indicators. Therefore, in view of the need to reform and modernize the Russian economy, the policy of state intervention in the economy and its regulation on the basis of its participation in capital seems to be the most appropriate.

Participation in capital is necessary because it allows you to get access to management reporting, keep abreast of the state of affairs in the company, increase the flexibility and speed of making management decisions, and exercise not only subsequent, but also preliminary control. The state, as the owner, should play the most active role in the implementation of the proposed approach, since it is it, in the light of the magnitude of the problem, that should be the initiator of its implementation in practice and its active supporter, since management from the standpoint of the proposed approach improves the efficiency of the functioning of state shared ownership and contributes to the achievement of state goals. This is especially important in view of the need to modernize, increase the competitiveness of its economy, switch it to the path of innovative development, and pursue an effective anti-cyclical policy.

At the same time, a clear and precise definition of the goals of state participation in the capital of an individual company is necessary, which is necessary to optimize the scale of state share ownership in the economy and a clear understanding of its role in it. In this regard, the question arises of determining the criteria that characterize the achievement of the goals of state participation in the capital of the company and the necessary pace of development of the company, as well as their normative values. It is on the basis of these criteria and their normative values ​​that it is possible to make managerial decisions aimed at ensuring an increase in the value of a business, taking into account the goals of the state. The criteria in this case are various financial and economic indicators that characterize the financial and economic activities of the company: profitability, capital productivity, the share of the company's profits directed to investments, the rate of investment in the company's fixed capital, and others.

Based on the goal or goals of the state's participation in the capital of the company, a key indicator or several indicators are selected, on the basis of which management decisions will be made and a conclusion will be drawn about the effectiveness or inefficiency of the functioning of the state's shared ownership in this organization, about achieving the goals of state participation in it.

The value of the standard for the selected indicator or indicators that are criteria for achieving the goals of state participation in the capital is established. The value of the standard is set using either approach, or using both approaches and subsequent weighting of the results. The value of the norm, if it is observed, should, as mentioned, ensure the achievement of the goal of state participation in the capital, expressed in a qualitative or quantitative indicator.

The most important component of state property is the blocks of shares in joint-stock companies (JSC) remaining in state ownership: specially fixed, based on the requirements of the State privatization programs, and residual, i.e. those that, according to different reasons were not sold for vouchers or real money. They are also joined by companies whose authorized capital included a "golden share", which gave the state certain opportunities to influence the activities of JSCs.

For example, in total, according to the data of the Russian Federation for 1993-1999, in the course of privatization in Russia, more than 4,800 joint-stock companies appeared with one form or another of state participation in the capital. Of great interest is the distribution of enterprises with state-owned blocks of shares and a "golden share" in the regional and sectoral context.

Conclusion

Thus, the essence and concept of capital were identified and substantiated, its main forms and types were analyzed, capital management and its optimization. This is important for any enterprise, since its successful operation depends on the rational structure of capital and the efficiency of its use.

We can conclude that capital is a certain stock of values ​​(goods) in monetary or non-monetary form, which brings income to its owner, providing self-expansion of wealth, especially in the form of money.

The concept of "capital" or "investment resources" covers all produced means of production, that is, all types of tools, machines, equipment, factories, warehouses, vehicles and distribution network used in the production of goods and services and their delivery to the final destination. consumer. Individual capital can make a circuit, passing through three stages, changing its form in the following sequence, monetary-productive-commodity-monetary. This transformation of capital is called the turnover of capital. For a business to be efficient, the turnaround time must be as short as possible. Capital is divided into two types: fixed and circulating. The fixed capital is called long-term capital, the circulating capital is the one that is spent during one circuit. Each entrepreneur seeks to develop his production, the means for this are savings. Savings are divided into production (equipment, reserves), which are called investments, and non-productive (housing funds, medical care), that is, investments in human capital.

Enterprises in Ukraine mainly use attracted capital for this (in the form of a bank loan). Fixed assets are used, as a rule, inefficiently, due to the lack of interest in large and long-term investments. The main trend in the use of capital at the present time is to accelerate the speed of its use.

List of used literature

1. Radaev V.V. The concept of capital, Forms of capital and their conversion, 2010 - p. 22-29

2. E.Ya. BREGEL, R.M. KABO "Working book on social science. Political economy" Gosizdat, M-L, 1929, Surplus value and capital.

3. G.N. Malginov The state as a shareholder in the conditions of the Russian transitional economy.

4. Blank I.A. Management of capital formation. - K .: "Nika-Center", 2000. - 512 p.

5. Gates B. Business at the speed of thought. Ed. 2nd, rev. - M.: Eksmo Publishing House, 2002.

6. Sources of capital attraction. Economics course, textbook, 2nd edition / Ed. B.A. Reisberg. - M.: INFRA - M, 1999.

7. Mine G., Schneider D. Metacapitalism and the e-business revolution: what will companies and markets look like in the 21st century / Per. from English. - M.: Alpina Publisher, 2001.

8. Economic analysis: Textbook for universities / Under. ed. L. T. Gilyarovskaya. – M.: UNITI-DANA, 2001.

9. Brigham Yu., Gapensky L. Financial management: Full course: In 2 vol./ Per. from English. ed. V.V. Kovalev. St. Petersburg: School of Economics, 2001. Vol.1. - 497 p.

10. Teplova T.V. Financial decisions: strategy and tactics: tutorial. -M.: IChP "Minister Publishing House", 1998.

11. Kamaev V.D. and coll. Auth. Economic theory: Textbook - M.: Humanit. Ed. Center VLADOS, 1998.

12. Course of economic theory: textbook. - 5th rev., add. and reworked. edition. - Kirov: ASA, 2005.

Internet sources

13. Online textbook on economics, December 9, 2009 // http://www.study-economics.ru/sushhnost-kapitala/.

14. Fixed and working capital // http://bank.forekc.ru/27/index_124.htm.

15. ABS News: Sources of Own Financial Resources, April 21, 2010 // http://www.absnews.ru/Rubriki/Finansy/sources-of-own-financial-resources.html.

16. Financial-lawyer // Financial Lawyer Information Agency // http://www.financial-lawyer.ru/newsbox/economistu/financial_management/132-528144.html.

17. Meshchansky method of production: a dead end, 2011 // http://polz.spb.ru/vybory/msp/msp_2.html.

18. State participation in capital as a tool for modernizing the Russian economy,

Fixed and working capital http://bank.forekc.ru/27/index_124.htm

Sources of formation of own financial resources http://www.absnews.ru/Rubriki/Finansy/sources-of-own-financial-resources.html

Classification of borrowed funds

http://www.absnews.ru/Rubriki/Finansy/sources-of-own-financial-resources.html

G.N. Malginov State as a shareholder in the conditions of the Russian economy.

Today we will discuss the role of capital in the economy. The meaning of this term will be given below. The conversation will also touch on the importance of this phenomenon in the production of services and goods and in a market economy.

Definition

So, now we will talk in detail about the definition of this term - the first thing you should pay special attention to. This phenomenon is called net assets. The term originates from the word capitalis (it is of Latin origin). This concept can be translated as "main".

Capital in economics is a term that refers mainly to property. They are also a group of goods that are used to make a profit and, as a result, to achieve wealth.

Let us give a narrower definition. According to him, capital in the economy is a source of profit, which takes the form of means of production. Most detailed this definition disclosed in terms of net physical assets.

Specialists also allocate monetary capital. It is the amount of money. With its help, physical capital is acquired. Money and material values ​​are continuously invested in the economy of an individual state. This phenomenon is called investment. It is also defined as an investment. Note that net assets are not consumed resources.

In science

Capital in the economy is the resources that are used in the provision of services or the manufacture of goods. It plays a special role in this. It becomes physical capital. The means of production are assets only in combination with the owner of a certain labor power.

An example would be a metal cutting machine. The unit itself is not able to bring any income to the owner. Equipment becomes part of own funds when a worker is hired. It is he who will operate the machine. The owner can also rent the unit.

Physical assets appear in the economy when the owner of the funds finds a labor force. As a result, he hires a person to operate the equipment that he owns. Capital is not an object or a thing. In fact, we are talking more about the production equivalent embodied in the object. It is assigned specific characteristics.

Capital is an indispensable element of a market economy. This resource needed for production. Own funds include material values, as well as property. Among them, one should name raw materials for the creation of the final product, structures, equipment, units. Capital is an economic resource that brings income to the owner. Simplifying economic theory, own funds can be called all resources that allow you to make a profit. Most often, the cash equivalent is used to assess the amount of capital. With the help of your own funds, you can create a business in order to subsequently receive profit and income.

Net assets are also used to increase production volumes by existing enterprise. The source of change and the emergence of capital are accumulations. They are of great importance.

Organization

We should also discuss "Russian Capital" as a proper name. In this case, we are talking about a bank. It provides services to all types of clients. Russian Capital Bank was established in 1993. It is part of the deposit insurance system. The activity of the organization is controlled by the Central Bank of the Russian Federation. Yu. O. Isaev is the Chairman of the Board of Directors.

Authorized capital

In this case, we are talking about companies. Different business entities have personal initial funds. They are called the statutory fund. It is formed thanks to the contributions of the founders of the company. The capital of the organization includes various assets. In particular, it may include financial resources allocated by local or state authorities; share deposits; founders' investments; stock. Reserve and additional funds can also work and be formed.

Maternal capital

We are talking about a certain form of assistance to families with children. It comes from the state. In Russia, such financial support has been practiced since 2007. It is allocated to families with two or more children. At the same time, one of the parents is awarded the appropriate certificate. Such a document allows you to receive state assistance. Funds are transferred only by bank transfer. Parents receive the right to dispose of the child's money only after the child reaches the age of three. In special circumstances, consent can be obtained for the use of these funds immediately after the birth of the baby.

In conclusion, we can say that capital in the economy is its integral part and one of the main resources.

1. The capital of the organization (enterprise).

2. Property of the organization (enterprise).

The capital of the organization (enterprise).

financial capital- a source of company funds received from financial instruments (stocks, bonds and long-term loans), as well as from the effective operation of the company (in the form of retained earnings).

According to the form of investment, they distinguish:

Entrepreneurial capital (own capital)- this is the capital invested in various enterprises through direct or portfolio investment with the aim of obtaining profit and rights to manage the enterprise.

Direct investments:

Investments invested directly in the production and marketing of products;

Investments that ensure the possession of a controlling stake.

Portfolio investments:

Investments in securities, formed in the form of a portfolio of securities.

Small investments that cannot provide their owners with control over the enterprise.

Credit capital (borrowed capital) - this is the money capital provided on credit on the terms of repayment, urgency and payment. Unlike entrepreneurial, it is not invested in the enterprise, but is transferred to another entrepreneur (investor) for temporary use to receive interest. Credit capital acts as a commodity, and its price is interest. A loan taken at a low interest rate is "cheap money", at a high interest rate - "expensive money". A loan taken for a period of less than 14 days is "short money", and for a period of less than a day (that is, for several hours) - "ultra-short money".

Capital has its price. The price, or cost, of capital is the weighted average price of the components of capital:

C \u003d Cs * C + C * Z + Cp * P \ 100, where

C- price of capital, rub.;

Cs- price of own capital, rub.;

WITH -specific gravity own capital in the total amount of capital,%;

Tsz- price of borrowed capital, rub.;

W- share of borrowed capital in the total amount of capital, %;

CPU - price of attracted capital, rub.;

P- share of attracted capital in the total amount of capital, %;

The price of capital means how much you have to pay to receive this amount of capital.

Equity price is the amount of dividends on shares for share capital or the amount of profit paid on shares and related costs.

Cost of borrowed capital- this is the amount of interest paid for the received credit (loan) or the amount of interest on issued bonds and related costs.

Cost of capital raised is the value of accounts payable. It represents the amount of penalties for accounts payable not repaid within a period of not more than 3 months after the occurrence or within the period established by the contract (for example, wages)

Authorized capital (storage, authorized fund)- originally invested capital. It is understood as the value of property contributed by the owners or shareholders (participants) at the time of the creation of an economic entity (contributions of the founders, the cost of fixed assets, intangible and other assets), necessary to ensure its statutory activities. The authorized capital may change.

Additional capital- own capital of the organization, formed as a result of additional contributions by the owners of funds in excess of the registered authorized capital, changes in the value of assets.

Spare capital (fund) is formed at the expense of a part of the organization's profit and is used to cover losses resulting from extraordinary circumstances, the payment of dividends and income in case of insufficient profit.

Undestributed profits- part of the profit of the organization, remaining at its disposal as a source of financing.

Reserves for future expenses are created by organizations in order to evenly include in the expenses of the reporting period the costs of paying employees' holidays, paying bonuses for long service, and repairing fixed assets.

Special-purpose financing how the source of asset formation comes from the outside (the state and other organizations) is used to cover the costs associated with the implementation of targeted activities.

Raised capital- these are the obligations (debts) of this organization to other organizations and persons. Organizations and persons that have provided this organization with a loan of assets are called creditors, and the obligations that have arisen in connection with their receipt are called creditors. accounts payable.

The evolution of the concept of capital

Remark 1

The concept of "capital" is one of the most complex and controversial in economic sciences.

The scientific knowledge of capital cannot be separated from the historical evolution of society. With the development of history, the idea of ​​capital as a fundamental economic category has also changed.

The first milestone can be considered mercantilism. The mercantilists considered money represented by precious metals to be the source of wealth, and foreign trade was the sphere of their growth. Monetary capital played the role of a measuring instrument, evaluating new, added value. In addition, capital was assigned a more significant role, with which it could not fully cope: not only to evaluate new, added value, but also to create it.

The next step was taken by the Physiocrats, who considered wealth not money, but "products of the earth." According to them, wealth is created only in the field of agriculture, and not in industry or trade.

Representatives of the classical school of political economy (XVIII-XIX centuries) (D. Riccardo, A. Smith) considered capital as "embodied wealth, previously produced by man."

Karl Marx, when considering the material structure of capital, noted that it is made up of raw materials, tools, material products, means of subsistence, a certain amount of goods, exchange values. Also, capital in the Marxist doctrine is interpreted as the ratio of materialized labor to living, as accumulated labor.

The modern concept of capital

The problem of defining the concept of "capital" has not been solved even today, in modern economic science there is no generally accepted opinion. Let's consider several options.

Definition 1

Capital is a set of monetary, tangible and intangible assets of an economic entity that are mobilized from various sources and participate in operational investment processes in order to generate income and/or maximize the market value of the enterprise's assets.

Definition 2

Capital is a part of financial resources, money in circulation, generating income from this turnover. The turnover of money is carried out by investing them in objects of entrepreneurial activity, lending money, renting it out. The capital of the company in this interpretation is a set of long-term sources of financing. Long-term sources of financing the company's activities can be divided into equity and debt capital.

So, in general, the following approaches to the definition of capital can be distinguished:

• the economic approach considers capital as a set of resources that are a universal source of income for the organization. It is largely theoretical in nature and is difficult to implement in practice;
• the accounting approach defines capital as the share of the organization's owners in total financial resources, and it is calculated as the result of the third section of the balance sheet "Capital and reserves";
• the financial approach considers capital as the totality of all financial resources invested in the assets of the organization. In this case, it is measured as the total of the liability or the total of the asset balance.

Reflection of capital in financial statements

The liability of the balance characterizes the sources of capital and is divided according to the criterion of ownership:

• equity capital expresses the total value of the organization's funds, which belong to it by right of ownership and are used to form a certain part of the assets, primarily non-current ones;
• borrowed capital characterizes cash and other property values ​​attracted on a repayable basis.

It can be seen that such a division of capital differs from the sources of funds grouped into three sections of the liability of the balance sheet. However, this contradiction is not of a fundamental nature and is caused by the needs of capital management. In essence, the fourth and fifth sections of the balance are combined here. From the point of view of financial management and management of own and borrowed capital, this is primarily the management of raising capital to ensure the activities of the organization. Fundamentally different are the sources of attraction.

Types of capital

Capital can be classified on various grounds:

According to the ownership of the company, the capital is divided into:

• own (investment - provided by the owners,
• accumulated - created in the process of functioning of the organization),
• borrowed (long-term and short-term).

1. According to the object of investment, fixed and working capital is allocated. Fixed capital includes fixed assets and intangible assets, various long-term investments. Working capital participates in the circulation;

2. According to the form of being in the process of circulation, capital is:

   • monetary,
   • commodity,
   • productive.

3. According to the purpose of use, capital can be divided into:

   • loan,
   • speculative,
   • productive.

Capital in the broad sense of the word- it any resource created for the purpose of production a large number economic benefits. Obtaining a certain flow of goods and services in the future implies the presence in the production process of a certain stock of durable resources, i.e. capital. From this position, securities, human capital, and production assets of an enterprise can be called capital.

However, in the market for factors of production, capital is understood as production funds. This is the resource used to produce more goods and services.

As a special factor of production, capital is a set of production resources created by people in order to use them to produce economic goods for profit. The composition of capital includes: buildings, structures, communications, machine tools, equipment, tools, technologies and developments, software products, materials, raw materials, semi-finished products.

The above definition of capital contains three main points:

Capital is the resources created by people.

· Capital is the items used for production activities.

The purpose of production in which capital is used is profit.

The evolution of the theory of capital in economics includes the following interpretations:

ü working capital (A. Smith);

ü capital of durable goods (Walras);

ü any form of physical or human asset that has the ability to operate a regular part of income (Böhm-Bawerk);

any capital stock that brings a stream of wealth (Fischer)

The role of capital in the economic system of society:

· Provision for public use of funds that generate income in the form of interest.

Organization of a business that generates income in the form of normal profit.

· Stimulating the development of a market economy.

Distinguish two main forms of capital :

ü physical(material) capital (machines, buildings, structures, raw materials, etc.) and

ü human capital(general and special knowledge, work skills, work experience, etc.).

Human capital is a special kind of labor resources. Therefore, capital in the proper sense of the word usually means only physical, material factors.

Physical capital is divided, in turn, into fixed and working capital.

to the main capital relate real non-expendable assets, such as buildings, structures, machinery, equipment, etc. Capital is called that part of productive capital which, taking a full part in production, transfers its value to the product not all at once, but in parts, over a number of periods of production. This is part of the capital spent on the construction of buildings and structures, on the purchase of machinery and equipment.

Main capital advance immediately for the entire duration of its validity, but its value is returned in cash in installments. The elements of fixed capital serve the purposes of production, usually for many years; they wear out to a certain extent every year and, in the end, turn out to be unsuitable for further use. This is physical deterioration machines, equipment.

Along with physical wear and tear, tools of production are also subject to obsolescence. A machine that has served for 5-10 years may still be strong enough, but if by that time another, more advanced, more productive or cheaper machine of the same kind has been created, then this leads to the depreciation of the old machine.

Figure 13.1 - Depreciation of fixed capital

Depreciation there is gradual compensation in monetary form of the value of fixed capital by means of periodic deductions corresponding to its depreciation. Part of the depreciation expense is spent on overhaul, that is, for partial reimbursement of worn-out equipment, tools, industrial buildings etc. The main part of the depreciation deductions is kept in cash in order to, when necessary, buy new cars to replace old ones or build new buildings to replace those that have fallen into disrepair.

working capital called that part of the productive capital, the value of which is completely transferred to the commodity during one period of production and wholly returned in the form of income when the commodity is sold. This is the part of the capital spent on the purchase of labor power, raw materials, fuel and auxiliary materials. Circulating capital is completely consumed during one production cycle, and its value is included in the cost of production in its entirety, in contrast to fixed capital, the value of which is taken into account in costs in parts.

A feature of working capital is its volatility. Working capital is used once in production and quickly changes its original form, turning from raw materials into finished products, and then into money.

Table 13.1 - Differences between fixed and working capital