MINISTRY OF EDUCATION AND SCIENCE RUSSIAN FEDERATION

PLEKHANOV RUSSIAN UNIVERSITY OF ECONOMIC

International business school

THESIS

Current asset management in the enterprise

Student: Luchkiv L. A

Supervisor: Prof. Fedunin A.S.

Moscow

2011

Executive summary

The crisis of 2008 still affects business-to-business companies. Many of them have problems with current assets in general and with accounts receivable in particular. In a given paper a field research is conducted on the example of a telecommunication equipment producer. The goal of the research is to develop recommendations to improve the efficiency of current assets for the specific example of Russian business-to-business company.

The first part is devoted to theoretical background of current assets management and represents the findings of desk research conducted.

The second part represents field research or analysis of the company’s financial performance. There were used such methods as horizontal and vertical analysis of financial statements, methods, techniques and tools of mathematical statistics: collection and grouping of statistical data analysis and comparison of time series. In the practical part of the research there were used computational and analytical methods, the methods of structural and dynamic analysis, grouping and comparison of modeling techniques.

The third part is mainly devoted to recommendations on how to improve the management of current assets at the enterprise. In order to get a competent opinion an interview with a specialist concerning the research and recommendations was conducted.

Table of contents

Executive summary 1

Introduction 3

Chapter 1. Theoretical background of current assets organization and management 5

1.1. Essence, constitution, structure and functions of current assets 5

1.2. Operating cycle of the enterprise and its relationship to current assets 10

1.3. Strategies of financing current assets 12

Chapter 2. Analysis of current assets management of SPETSSTROY-SVYAZ Ltd 15

2.1. Characteristics of SPETSSTROYSVYAZ Ltd activity 15

2.2. The analysis of solvency and liquidity of SPETSSTROYSVYAZ Ltd balance 18

2.3. Analysis of company’s current assets for the previous periods 24

2.4. Identification and evaluation of external factors affecting the formation of the optimum amount of current assets 29

2.6. Analysis of Cash flows 33

2.7. Analysis of accounts receivable 36

Chapter 3. Recommendations for the management of current assets on of SPETSSTROY-SVYAZ Ltd 43

3.1. Ways to improve the cash management 43

3.2. Ways to optimize the management of accounts receivable 48

3.3. Implementing the components associated with payment of goods sold to the motivating system of managers. 52

3.4. Conducting an interview with a competent specialist 54

Conclusion 56

APPENDIX 1. The listof SPETSSTROY-SVYAZ’ES debtors and related accounts receivable 57

APPENDIX 2. THE Balance shit of SPETSSTROY-SVYAZ ltd 58

APPENDIX 3. Current Assets structure 59

APPENDIX 4. Profit and loss statement 60

APPENDIX 5. Vertical and Horizontal analysis of cash flows 57

Bibliography 58