Asset Management

The primary goals and principles of asset management companies. The return of bank loans. Funds that are used as a working capital. Management perfection by material resources. Planning of purchases of necessary materials. Uses of modern warehouses.

Рубрика Менеджмент и трудовые отношения
Вид реферат
Язык английский
Дата добавления 13.05.2013
Размер файла 14,4 K

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Asset Management

management companies capital material

Perizat Kozhayeva

Fundamentals of Finance



Money, if to dispose them correctly, can make profit for the owner. Any person, who has at his disposal large funds, aspires not only to keep them, but also to increase. However not everyone knows how properly manage money. Firstly, I would like to say that Asset Management is the activity of a commercial organization for profitable (minimum risk) placement of own and borrowed funds. There are management of current assets, working capital management, the transformation of liquid assets in the factors of production and management of fixed assets (fixed capital), the distribution of demand for new equipment and the effectiveness of the acquisition. Using the services of asset management is a rational solution for investors who seek to find profitable ways of investing money but not willing to spend time and effort to analyze the market situation and independent investment decisions. The main objective of asset management is to achieve the highest outcome for rational use of all types of assets.

The primary goals and principles of asset management companies:

· Increase in assets. Any increase in assets means use of funds

· Reduction of liabilities. Liabilities include everything that it owes to another: bank loans, payments to suppliers and taxes. Funds derived by an enterprise may agree to reduce liabilities, for example, the return of bank loans.

· Current assets are used as a working capital. Funds that are used as a working capital pass a certain cycle.

· Efficient use of working capital. Any funds which are not used for working capital can be directed to the payment of liabilities. Besides, they can be used for acquisition of fixed capital or are paid in a type of income to owners.

In the current economic conditions of the economic activity of each subject's attention is the subject of an extensive range of participants of market relations that are interested in the results of its operations.

One of ways of economy of working capital consists in management perfection by material resources (stocks) by means:

Planning of purchases of necessary materials;

Introductions of rigid industrial systems;

Uses of modern warehouses;

Perfection of forecasting of demand;

Fast delivery

The second way to reduce working capital requirements is to reduce accounts receivable by tightening credit card policies, the assessment of unnecessary funds that could be used for other purposes, in assessing the accounts payable requirements.

The third way to reduce the costs of working capital is the best use of cash. On bank accounts, on which firms hold their liquid assets, the percentage shall not be paid.

- One of the main responsibilities of the financial manager of the company is the choice of the use of available funds: the acquisition of capital or an increase in current assets, or reduction of liability, or payment to the owners. When making the decision, we need to compare the cost of new capital value-added or the size of spending cuts, which will use it. The decision on the acquisition of capital formed in the process of estimating investment and payback. This is a complicated process because the "pluses" of additional fixed assets usually appear after a few years. The fact that the main thing for financiers is a capital and this should not distract them from the need for effective property management.

There are several types of strategies for investing:

ь Aggressive strategy. In long-term prospect profitableness of such investment, considerably exceeds the market. Such strategy concerns to high risks, but in case of favorable developments, are capable to significantly increase your capital.

ь The market strategy focused on the factor of profitableness of the share market. As it is known, asset is the most profitable investment. Such strategy is an ideal variant for the far-sighted investor, preferring to invest for years and decades. A perfect example of such an investment - private pension contributions.

ь Average risk strategy, combining intelligent and strict control of risk and profit, depending on the profitability of the market. Such strategy in long-term prospect allows controlling the risks ahead of the pace of inflation and the average rate on deposits.

ь Low-risk strategy, whose main objective is to preserve capital gains and some during curing to achieve a high degree of reliability of the result.

In the current economic conditions of the economic activity of each subject's attention is the subject of an extensive range of participants of market relations that are interested in the results of its operations. To ensure the survival of the enterprise under modern conditions, management staff must be able to realistically assess the financial condition of the enterprise as well as the existing potential competitors.

Financial condition is the most important characteristic of the economic activity of the enterprise. It determines the competitiveness, the potential in business cooperation, estimates in what degree economic interests of the enterprise and its partners are guaranteed in financial and production levels. However, a real ability to assess the financial condition is not enough for the successful operation of the business and to achieve their goals. The competitiveness of an enterprise can provide just the right motion control of financial resources and capital which are available.

The main priorities in asset management:

· Deep understanding. Customer Asset Management is the concept of a more complex and extensive than the classic asset management. Managing both financial and non-financial assets can be considered as a continuous process, which includes, but not limits to search, evaluate, purchase, structuring and the protection of an asset with the help of finance, which is carried out under the asset, sale of asset, etc.

· Reasonable management of risks. One of the key priorities in the management of client funds is a balanced and reasonable approach to managing risks.

· Trust management. The investment into trust management creates the source of the income which is not demanding for its formation direct participation of the investor.

Assets are economic resources, which generate revenue. The ability to generate revenue in the process of operating and investing activities is one of the most important characteristics of the assets of the entity as an object of economic governance. These income assets generate primarily as economic resources, which have a performance. Assets used in the operating process and in real investment, this characteristic is inherent in the complex of their population, while the assets used in operations or implementation is not in the process of financial investment, it is inherent and specific to species, each capable of generating their own income. The potential ability of assets to generate income is not realized automatically, and is provided only in their effective use. Formation of such conditions is one of the most important tasks of asset management.

In conclusion, I would like to say that assets represent the value of the property companies that have value. The concept of the value of assets is based on their value to the enterprise as an economic resource. The concept of cost of actives would be useful in the practical relation if it was impossible to measure its level. Therefore, adding this characteristic of assets, they are treated as property values that have not a direct cost, but cost, which is measured. The level of assets is the sum of costs of production factors in their creation, the period of use, compliance with the objectives of the economic use of market conditions and objects of labor. Accordingly, the methods of definition of level of cost of assets and the form of their representation have various characters.

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