Cash flows budgeting as an element of the mechanism of joint-stock companies valuation

Abstract

Strategic goals, objectives, business processes, overall efficiency and profitability of activities that determine the value of joint stock companies are related to the adequate compilation and strict implementation of budgets. The investigation of formation the double budget of cash flows taking into account the connection and interdependence between strategic and current budgets for the increase of the value of joint-stock companies is the purpose of the article. It has been found out that budgeting is the best tool for providing operational, financial and investment activity of the enterprise with the necessary funds for a certain period and at an acceptable cost. Budgeting allows to build a system of control over those activities, and the enterprise independently chooses the number and types of budgets. The author believes that the choice of specific types of budgets depends on the specifics of the company, taking into account the requirements of the effectiveness of monetary assets management. It has been learnt that the formation of planning system on the basis of double-budgeting allows linking the indicative budget with the current annual plan and operational payment calendars, as well as allows to balance the strategic and current goals of the joint-stock company. It has been concluded that budgeting allows to clearly depict the process of changing the value and contribution of each unit in this process. The further researches should be concentrated on the issue of creation the communication mechanisms for the amount of payments in the period from day to week with cash flows of quarterly budgets. It would allow to get more efficient management of cash assets flows within the required liquidity ratio for a specific date.