Financial management as a component of an effective management system for an agricultural enterprise in today's challenging environment


Keywords: financial management, agricultural enterprise, management system

Abstract

Modern trends in financial management, the highest goal of the activity determine the growth of the value of the enterprise and the income of its owners. From this point of view, the financial manager should be seen as an intermediary between the enterprise and the investors, and the entity acts as the “client” of the investors. The concept of financial management combines two categories of “finance” and “management” and directly relates to the business entity. in times of financial crisis, rational management of capital is required, which will enable the use of new management tools that take into account the possibilities of using innovations. In financial management, management aimed at financial recovery of an agricultural enterprise is a system of principles and methods of development and implementation of a set of special management decisions that prevent and overcome the financial crisis, as well as minimize its negative consequences. Financial management of an agricultural enterprise is based on three basic concepts: the concept of present (present) value, the concept of entrepreneurial and the concept of cash flows. Any business can be given as an interconnected system of movement of financial resources caused by management decisions. the content of financial management is the effective use of the financial mechanism - a system of financial management, designed to organize the interaction of financial relations and monetary funds in order to optimize their impact on the final results of the enterprise, which will achieve its strategic and tactical goals. The main tasks of financial management, the scientist refers to: identification of financial sources of production development; definition of effective directions of investment of financial resources; rationalization of operations with securities; establishing optimal relations with the financial and credit system, economic entities. Financial management as a part of the system of effective management of an agricultural enterprise envisages observance of the following principles: adaptability, ie the ability of the financial management system to react actively to changes in the internal and external environment (the principle of dynamism) and to adapt its own activity in accordance with these changes; manageability, that is, subordination to decisions made at the highest level of management; consistency, ie determination of all financial management processes at all levels; optimality, which implies such construction of information flows, organizational support of financial management, which would ensure optimal decision-making process. The defining provisions of the concept of financial management are considered appropriate to include: achievement of maximum social, personal and collective effect; application of synthesis of approaches to the construction of financial management system; allocation of financial management subsystems based on financial management methods; separation of functions of financial management from the point of view of financial resources management; providing a mechanism for close interaction between subsystems and financial management functions; management based on the regulation of a system of balanced indicators characterizing the operation of subsystems and the performance of functions of financial management of an agricultural enterprise

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Published
2020-06-26
How to Cite
Myniv, R. (2020). Financial management as a component of an effective management system for an agricultural enterprise in today’s challenging environment. Scientific Messenger of LNU of Veterinary Medicine and Biotechnologies. Series Economical Sciences, 22(94), 3-8. https://doi.org/10.32718/nvlvet-e9401