Analysis of Efficient Use at The Enterprise

investment decision made by modern managerial teams and predetermines their rationality and topicality in the long run. Without solid knowledge of capital and capital policy it is quite difficult to manage the performance of the firm on the financial and money markets as well as almost impossible to build financial and investment strategy in order to outline the objectives of all the shareholders and managers to increase and grow their future wealth continuously and in a stable way.

In that light, their basic objective is to construct a technology of managing the capital. The balance of the company is used as a basis of the analysis Technology that is applied is the technology of synthesis of the firm’s assets and liabilities, without which it is impossible to create a contemporary point of view regarding capital as well as the financial and capital structure of a company. The position upheld is that financial synthesis of the balance sheet gives the opportunity to draw up the basic components of the financial balance of the firm. This balance is the basis of analyzing the theoretical financial equilibrium and the net working capital of the company capital or almost impossible to carry in its effective management.

Thus, the concrete objectives of the present specialty project are related to:

• Presenting a concept about capital and its importance – the need and the role of assets and liabilities that will give the opportunity for more efficient use of capital at the enterprise;

• Investigating and characterize the capital structure – the thesis that has been defended is that financial balance with its four basic elements: long-term and short-term capital(the liabilities) and the long-term and short-term investments(the assets) is a major prerequisite for constructing the mechanism for efficient use of capital at the enterprise

• Defining factors that are influencing capital structure and formulating the criteria for capital structure selection – a firm’s capital structure (or financial structure) refers to the specific mixture of long-term debt and equity the firm uses to finance its operations;

• Analysis of joint-stock company capital structure which involves the influence of financial and economic risk – major instruments of that analysis are the economic and financial leverage-instruments that give the opportunity for estimation of the results of the usage of equity and borrowed capital. On that basis, special attention is drawn to the theories of capital structure;

• Defining the determinants of the capital structure at joint-stock entity “Piscicola Costesti” – My research is directed mainly towards the determinants of the policy related to capital structure of joint-stock company “Piscicola Costesti” regarding the choice factors of debt financing, issue of shares, methods of pricing the cost of capital, optimizing the structure of capital and its financing sources, analysis of size and evolution of owner’s equity.

This project comprises two chapters. The first one is about theoretical concepts of capital and its importance at the enterprise and characteristics about capital structure and the second one relies on the general analysis of efficient use of capital, financing sources and financial structure on the basis of balance sheet at the joint-stock company “Piscicola Costesti”.

It has to be taken into consideration that the offered technology of research and the efficient use of company capital is a solid foundation for further and more precise studying of financial and capital structure. Naturally, using a new approach of analyzing and managing capital together with the suggested proposals related to theoretical financial equilibrium, working capital as well as the theory of capital markets has been aiming at fulfilling definite goals and tasks – formulating a technology of rational and efficient capital usage.

Chapter I Theoretical concepts of capital and its importance at the enterprise

1.1 Notion, concept, history and importance of capital.

Capital is a major source of funding for new investment and scientific research. Therefore long-term capital which will be allocated for investment in the company will depend both on the value of fixed assets and the value of long-term funding for some of the current assets. Long-term and short-term capital is an important element of the financing of a company. Its rational management s frequently connected with optimizing the two main elements – equity and debt.

However, it is necessary to create a logical sequence of the terminology used in advance. Besides that the basic approaches for evaluation and analysis of capital structure have to be formulated and differentiated. The operation of firms largely depends on a set of techniques for raising and exploiting capitals. The efficiency of a company’s performance depends on the volume, contents and structure of capitals. It would be difficult to discuss efficiency, though, without outlining the logics behind capital formation and analysis, the logics that requires financial interpretation and synthesis of the balance sheet.