Methodical approaches to the justification of a source selection of corporations financing

The question of a source selection of financing of organization activity is key for each subject of market economy as determines stability and success of its further functioning. In the given work the financing question is considered from the point of view of corporation, as a participant of market relations. The term "corporation" in domestic science is treated in two major important aspects: as the alternative name of a joint stock company and as a designation of consolidation of juridical persons. The author prefers the first variant. The corporation represents scientific interest as differs variety of versions of sources of financing (for example, participation financing is possible only within the limits of this category), and also liberty of choice and possibility of formulation of the unified approaches. In the field of the source selection of corporation activity financing and their structure optimization it is possible to name theoretic and methodological developments extensive enough both at the level of the western science, and at the level of Russia. The basic part of developments belongs to the western scientists, and the Russian concepts in the majority grow out of correction and adaptations foreign with accent on development of algorithm or concrete recommendations. The author offers the interpretation of algorithm of a source selection of financing which looks as follows:1..Revealing of requirement for financial resources and their specificity. In each specific case financial managers should realize accurately what quantity of financial resources it is necessary for the company and for what purposes;2.Source selection of financing on the basis of the analysis of criterion of its availability, specificity and its limit. It is necessary for financial manager to find out what sources of means are accessible for the companies at present taking into account all factors, and also to carry out the analysis by comparison of necessary quantity of financial resources and the purposes of their use to the limits of accessible sources and their specificity;3.Source selection of financing on the basis of use of various criteria. The criterion choice is in each specific case determined by the organization independently on the basis of its subjective preferences. It is possible to use various indicators as criteria, such as: weighted average cost of capital, financial stability of the company, bankruptcy risks and other financial indicators.Application of the given algorithm will allow corporation to facilitate essentially the financing source selection, and also to generate sets of sample decisions concerning company financing that finally will be reflected in stability and success of its functioning

Keywords

Authors

References