The financing is one of the three subranges of the financial system and covers all operational processes for the supply of the financial means, which are needed for an investment. Among them all measures from the procurement to the repayment of financial means as well as the associated organization of the payment, information, control and safeguard relations between enterprises and financial sources fall.

History

Initially one regarded the procurement of capital under the keyword financing only by expenditure of securities. The term became later around the and - regrouping up to the comprehensive "“supply of an enterprise with capital"” extended.

Arrangement of the financing

Due to the high relevance of the money origin the financing from view of the enterprise is subdivided in principle in interior and external financing.

Internal financing

Of internal financing one speaks, if enterprises gained its financing from capital make. In addition two conditions must be fulfilled:

• Liquid means from in-plant turnover and achievement process flow to the enterprise
• No payment-effective disbursements face the supply

A measure for the Innenfinanzierungspotenzial represents the cash flow characteristic number, simplifies the deposit surplus.

Financing with one's own means

Also in this point between two possible points of financing under one separates:

• open financing with one's own means: Profit accumulating capital: Formation of unappropriated earned surpluses
• covers financing with one's own means (financing with one's own means satisfies): Education of quiet reserves

During the open financing with one's own means the proven profits will retain either completely or at least to a part. If they will retain completely, the partners do without their profit, whereas finance companies may retain only one part. If the profit is paid and at the same time if a capital increase around the amount of the profit is accomplished, taxes can be saved as a function of the control system. This circumstances are well-known also under "“pouring drawing back back method"”.

The covered or quiet financing with one's own means is possible in two forms. On the one hand by the use of compelling profit accounting regulations (bspw. Writings-off, resetting) and on the other hand by the use of clearance the which is the basis balance system offers. Quiet reserves are considered as the "“fat"” of an enterprise. They result from the caution principle with the balance choice rights:

• Overestimation of liabilities
• Underestimation of active (moderated minimum value principle and preservation choice rights)
  • Nichtaktivierung of fortunes under utilization of the balance choice rights (e.g. Nichtaktivierung of inferior economic goods)
  • to low beginning of fortune articles (e.g. to high amortization records)
  • Omission of writing up (e.g. by initial costs/manufacturing cost upper limit in the balance)

The financing with one's own means applies in some situations as favourable, since through it taxes are saved, them the crisis firmness of an enterprise be increased and through being missing interest payments a riskier enterprise strategy be forced can. At the same time in addition, capital can not optimally be used and compared with the market alternatives could not it (possible costs by missing profits with financial assets) be comparably "“more expensive"”.

Regrouping

Regroupings within the fortune range take place, if material and/or intangible assets are transferred into liquid form. One speaks in this connection also of substitution financing. This regrouping takes place mainly via the turnover process.

Financing from resetting

Financial means are bound by the formation of resetting to an enterprise, which then for the financing from investments to the order. Thereby the Fristigkeit of the resetting is crucial, since only long-term resetting possess a sufficient financing effect. They are called also in-plant outside financing.

Of great importance one are in this connection pension resetting, particularly in the phase of new promises. They possess the character of own capital funds almost by their extraordinary long-termness.

Financing from writing-off return flows

Financing from writing-off return flows is based in principle on saved disbursements, since the purchase of the Investitionsgutes and possibly the associated disbursement already took place in an earlier period. Thus a financing effect occurs must the writing-off equivalents to the enterprise as deposits have flowed.

If the flowing back means are not needed for the replacement, then this is called capital setting free effect. If the free means are reinvested immediately again into tangible assets of same type and same acquisition and/or manufacturing costs, then from it the capacity extension effect follows.

See in addition: Lohmann Ruchti effect

Financing rules

Regarding an optimal capital structure, which means a cost-minimizing and concomitantly profit-maximizing interpretation of the financing, some financing rules minted themselves. These aim not only at an optimal indebtedness, but also at the preservation of the solvency, thus optimal liquidity. During the evaluation of the liquidity from the principle of the period congruence one proceeds. Most of the rules specified down in practice often prove as utopian, since they are not to at all hardly to be converted depending upon industry. In addition they, frequently to favour of the liquidity, decrease which however also, the better the rules make profitability possible are fulfilled to overcome longer economic periods of reduced circumstances. So seen an adjustment of the rigid rules is to be manufactured on each individual enterprise or at least on an industry necessarily around the practice purchase. A special role plays the Leverage effect, translated, the lever force of the outside capital.

Dependent on the position in the balance of the used in the calculations the Finanzierngsregeln is divided into horizontal and vertically:

Vertical financing rule

Unity unity rule

• Unity unity rule: Own capital funds should be at least as high according to this rule as the outside capital.

      \ frac {outside capital} {own capital funds} \ le 1 

This rule in the avoidance of insolvencies has the origin. In practice this rule is nearly insignificant in Germany, since German enterprises an average own capital funds portion of <20% have whereby American enterprises however a substantially higher average input clutch ratio to have (approx. 50%). Differences remain likewise unconsidered in the of different industries.

Horizontal financing rule

Exactly like the vertical financing rules also the following horizontal stand in the criticism. Liquidity statements are not hardly discharges like interest being e.g. seized possible there. Also by any means the immediate insolvency does not threaten with insufficient period congruence, since only a spare financing must become secured.

Golden bank rule

• Golden bank rule (applies to the bank range): Repayment date/order duration of the capital should cover themselves with the return flow time (period congruence)

      \ frac {own capital funds} {fixed assets} \ ge 1 

The golden bank rule means that the range and the maturity of the credits that granted by Kreditinstitut must correspond Kreditinstitut provided inserts. Meant that short term inserts may be lent only at short notice, during long-term inserts short, central and on a long-term basis to be lent it can do this.

In the reality the golden bank rule is under normal conditions not kept by the credit institutes. It instead provided for it for a sufficient Zahlungsbereitschaft precaution is only met. Banks actually obtain today even yields, by advancing consciously toward the golden bank rule. They operate then period transformation, by them a part of the lowinterest-bearing, short term inserts on a long-term basis and thus to higher interest check-out counters.

Also the golden bank rule is not undisputed in the political economy, since it does not consider the whole of the payments of a credit institute. Liquidity is given only if in one period the sum of the disbursements not influenceable of Kreditinstitut does not exceed the sum of the appropriate deposits.

Golden balance rule

• Golden balance rule (applies to the remaining industries): Financing of fixed assets (AV) by own capital funds (EK) or in the further version, financing of AV by EK and long-term outside capital

      \ frac {own capital funds + long-term outside capital} {fixed assets} \ ge 1 

Economical effects of financial decisions

All capital if needing restaurant subjects the capital are opposite placed to giving restaurant subjects, then it is from economical interest that the transfer of the capital from the capital offerers to that capital after questioners accompanies with as small a friction losses as possible. By minimization of the transaction costs, by e.g. more efficient financing possibilities at stock exchanges (direct financing) or with banks (scale effects the financialintermediate), therefore a welfare gain can be obtained.

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