Management of Loan Capital in Financing Structure of The Enterprise: Theoretical and Methodical Foundations

Authors

Keywords
loan capital, borrowed capital, loan capital formation, loan capital management, direction of loan capital management, principles of the loan capital management in company

Summary
In the article are explained the essence of the concepts of "loan" and "borrowed" capital. We considered that the loan capital of company characterizes part of the financial resources of the enterprise what is temporarily involved in economic activities and they can be sent to the capital market for additional income from the investment. It is advisable to understand that the borrowed capital is the financial resources of the enterprise, not belonging to him by right of ownership, but raised them in economic activities from different sources and in different forms on terms of maturity, repayment and interest payment in order to fulfill the objectives of the program of its activities.

The theoretical and methodical principles of borrowed capital management have been investigated, in particular: the directions of management (planning and capital employed, assessing the efficiency of capital employed, monitoring the timely servicing and repayment of debt); characterized by the principles on which is based capital management (accounting principle prospects of development of business, the principle of matching amounts of borrowed capital and the formation of the assets of the enterprise, the principle of optimality of capital structure from the standpoint of its effective function, the principle of ensuring the efficient use of capital employed in the course of economic activity).

Criteria of optimization of the borrowed capital to calculate its weighted average cost and term borrowings have been proposed.

A formula procedure for determining the weighted average cost of borrowed capital employed, which is based on the approximation of streaming method has been developed.

JEL: C8, P121
Pages: 14
DOI: 

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