Abstract:

Decrease in consumer demand for products created tough economic conditions for Russian commodity producers, which resulted in the underutilization of production capacities in Russian industry and agriculture. In the current situation in the majority of cases, the shortage of circulating capital of economic entities is an obstacle when implementing the mechanisms for the jump-start of the economy. Under these conditions, non-current assets become obsolete, worn out and outdated. They do not participate in the production process and are a source of alternative losses. Scarcity of financial resources leads to the necessity to find internal reserves for a more effective use of circulating capital. Rational generation and effective use of circulating capital has a significant impact on the smooth production flow, enterprise financial results and its financial status, allowing achieving success with the minimum necessary resource level under current conditions. In this case, released material and financial resources are an additional internal source for further investments. On the basis of the analysis given in the article it was found that circulating capital must be managed for the effective functioning of an enterprise, planning and forecasting are initial stages of this process. Implementation of the proposed circulating capital planning model will enable an enterprise to streamline the delivery schedule and the process of circulating capital rationing.