Sukhova L.F.Stavropol Institute of Cooperation, Branch of Belgorod University of Cooperation, Economics and Law, Stavropol, Russian Federation suhova.lilia@yandex.ru
Importance When a capital turnover is properly and effectively managed, it will expedite the return on capital or investing it in financial and business activities of the entity. It will also minimize financial needs in terms of volume and scope. The research focuses on factors of managing a capital turnover. Objectives The article scientifically substantiates the need to consider new factors of managing a capital turnover. First, I strive to prove that there is a broader spectrum of capital turnover management factors, rather than those indicated in the economic theory. Second, I propose methods for analysis, quantitative and qualitative evaluation of new factors and their effect on capital turnover rates. Methods Using the systems approach to examining the working capital turnover, I consider the relation and mutual dependence of capital turnover rate and economically reasonable procedure for raising funds that are needed to form the main items of the working capital. The systems approach, in fact, helps treat capital turnover management not only from the economic theory perspectives, but also in terms of the corporate finance theory, as the main subsystems of the corporate governance system. Results I find new capital turnover management factors (revenue, profitability of sales, depreciation, capital structure) and methods for assessing their effects on cash flow processes. Conclusions and Relevance Capital stock or working capital is managed effectively provided that decisions on streamlining its turnover contribute to capital growth or at least maintain the existing turnover rate of advanced capital. The results of the research provide a scientific approach to making managerial decisions that would be appropriate for business practices and their economic reasonableness.
Keywords: formula, calculation, capital, index, return on capital, turnover, working capital, management factor
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