Principal refers to loandepositOr the investment is calculatedinterestPrevious original amount.Enterprise principal (includingFixed capitalandworking capital）As a whole, it is at the same time and in parallel in space at different stages of it, with different forms of principal occupation.Each form of occupation of the principal continuously transits from the previous stage to the next stage, from one form to another.The principal requires the financial organization to implement the policy of "developing economy and ensuring supply" to ensure the production, operation andoutbound investmentThe fund needs of the activities should also be strictly economized, the principal should be reasonably allocated, and the role of finance in regulating and controlling production, operation and foreign investment activities should be played.So as to make full use of monetary resources and comprehensively improveEconomic benefits of enterprises。
The principal is called in financial managementpresent value, refers to a futurepoint of timeA certain amount of cash is converted into current value.For example, a cash deposit of 100 yuan with an annual interest rate ofCompound interest10%. After three years, the principal and interest will be withdrawn at one time and 133.10 yuan will be withdrawn.In this example, 100 yuan is the principal, and 33.10 yuan isinterest, the amount after deducting the interest tax is the profit.Profit sharingGross profitAndNet profit。
The principal is carried out by various economic organizations and individualsProduction and operation activitiesAnd advance funds.The economic organizations mentioned here include national financial institutions (national asset management institutions and intermediary operating companies), productionCirculation enterprises、commercial bank、commercial insurance、Non bank financial institutions（securities companyInvestment banking, financialAsset management company）Public institutions operated by enterprises, etc.The individuals mentioned here include individual industrial and commercial households, farmers engaged in commodity production and circulation, andInvestors?Etc.The term "advance fund" here refers to that this part of fund has not been consumed after being put into production and circulation, but is recovered from the income obtained, and requires value-added, with turnover andValue addedCharacteristics of.staymarket economyUnder various conditions, due to variousproduction factorsCapitalization, principal is often called capital.Therefore, from the perspective of the national economy, the capital belonging to the principal mainly includes the national principal, enterprise principal and family (individual) principal.
classification
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principal
Generally speaking, capital refers to the monetary performance of the value of property and materials in the national economy.Under the planned economy, funds are usually divided intoFinancial fundsandCredit fundsIt can be divided into capital construction funds, production and operation funds and other funds for specific purposes.This classification better reflects the actual situation that most of the funds in the national economy were uniformly owned and used by the state in a unified plan during the planned economy period, but it can not reflect nowsocialist market economyThe practice of diversification of capital subject and versatility of use under the conditions.In order to comprehensively reflect the capital movement under the conditions of market economy, research the capital structure and strengthenmacro-controlNational economic funds can be classified according to three standards.
Financial nature
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principal
The enterprise principal movement isEnterprise financial activities。enterprisefinancingInvestment, consumption, income and distribution form the objective economic content of financial activities.From these aspects,Enterprise financing, investment and cost, which can be summarized as the investment of principal.The income and distribution of enterprises can also be summarized as the output of principal.Enterprise financial activities are the investment and output of enterprise principaleconomic activity, which can be summarized as financial and economic activities.therefore,Enterprise economyAccording to the form of movement, activities can be divided into two aspects: production technology economic activities and financial economic activities.Production technology and economic activities are the factors of production and operation（Labor materials、Object of labor, labor, etc.) and the output of production and operation results (commodities).enterprisereproductionIt is the unity of the input and output of production and operation, and the input and output of principal.The relationship between these two aspects is the combination of material movement and principal movement.Financial and economic activities are not only the precursor, reflection and control means of production technology and business activities, but also the independent input and output (income) activities of monetary resources through the capital market to obtain unique financialInvestment benefit。In a word, financial activities are enterprise principal input and output (income) activities, which constitute an independent aspect of enterprise economic activities, that is, financial economic activities. This is the economic attribute of finance.The economic attributes of finance are differentSocio economic formThe commonness of finance.
Law of motion
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The principal movement is based on micro andMacroeconomic environmentOn the condition that the enterprise andstate-owned economyActivity based.The movement of principal and macro andmicrocosmicThere are some laws in the connection of economic conditions.
Combination of principal movement and social capital movement
principal
The principal movement is closely related to economic activities in all aspects of society.Therefore, the principal movement and social capital movement (including financecreditandSocial security fundsMovement, etc.) have the consistency of interdependence and mutual restriction.On the one hand, the principal movement isSocial fundsThe foundation of movement.The smooth progress of the principal movement ensures thatcommodity valueThe formation and realization of the social capital movement as soon as possible laid the foundation for the smooth progress and expansion of the scale of the social capital movement.Only when the income of enterprises increases and the economic efficiency improves can the financial income increase and the bank loans be repaid in time,Insurance fundsCan be turned in in full.On the other hand, the scale and structure of social capital movement, in turn, restrict the scale and structure of principal movement.The growth of financial and credit funds provides conditions for the growth of enterprise principal;Financial and credit funds allocated to fixed asset investment and increaseworking capitalThe proportion ofFixed capitalAnd changes in the structure of working capital.The raising and distribution of insurance funds also play a positive role in ensuring the normal movement of the principal and preventing accidental interruption.
principal
There is a certain deviation between the principal movement and the social capital movement.Both of them show some reverse changes in quantity change and time occupation due to various specific reasons.The principal movement is relatively independent.For example, when the total amount of national economic funds is fixed, enterprisesFund occupationThere is a relationship between the amount of social funds and the amount of social funds;When an enterprise raises funds and investments from the securities market or accumulates funds internally, or offsets property losses by itself (share reduction of joint-stock companies), the principal of the enterprise increases or decreases, but the social capital does not necessarily increase or decrease;The enterprises occupy the unpaid funds for a longer time, and the time limit for repaying bank loans is extended, which will cause the society toOccupying fundsShorten time, etc.The consistency between the principal movement and the social capital movement originates fromsocialist market economyUnder conditionsNational macro-controlFunction of.As the social administrator of the national economy, the state has the right to use variouseconomic levers(e.g. financecredit, insurance, etc.), participationSocial productsAndnational incomeDistribution andredistribution, thus causing various forms of capital convection between enterprises and social capital departments.The deviation between the enterprise's principal movement and the social capital movement stems from the fact that enterprises act as independent operatorsBe responsible for their own profits and lossesThe status of economic legal person.In order to carry out production and operation activities independently, enterprises should not only raise funds from the social fund department, but also accumulate a part of funds from the after tax profits, causing the independent increase or decrease of enterprise principal.This law determines that enterprise finance is not only related to finance, credit and insurance, but also different from them and independent of each other.On the one hand, the enterprise principal and financial capitalCredit fundsInsurance funds should be balanced comprehensively, and the state should strengthenmacro-control；On the other hand, the state should also respect the financial rights of enterprises to operate independently, safeguard the legitimate interests of enterprises, and should not interfere arbitrarily.
Combination of principal movement and material movement
principal
The production and operation process of an enterprise is the unity of material movement and principal movement, and there is consistency between material movement and principal movement.First, the material movement is the basis of the principal movement.The existence of material movement generally determines the existence of principal movement.This is because the use value of commodities is the material undertaker of value, and a certain amount of principal is always attached to a certain amount of materials.Due to the purchase and sale of materials and the purchase, construction, increase and decrease of fixed assets, the investment, recovery and form change of principal are caused.The movement of materials basically determines the movement of principal.Only when materials and materials are purchased in time, stored reasonably and sold quickly can the principal turnover of enterprises be accelerated;Otherwise, the movement of principal will be blocked and the turnover will not work.It is objectively possible to expand the scale of material movement, which will require the expansion of the scale of enterprise principal movement.Secondly, the principal movement reflects the material movement, which in turn restricts the scale and structure of the material movement.This is because the principal of the enterprise is used as a means of purchase andMeans of paymentIts raising often precedes the acquisition of materials and becomes the leader of the material movement.The distribution proportion of enterprise principal also restricts various production and operation factors (such asMaterials, equipment, labor, etc.).The expansion of the scale of enterprise principal movement, in turn, provides conditions for the expansion of the scale of material movement.In addition, enterprise principalMovement speedThe speed of is a sensitive reactor for material movement.Through the inspection and analysis of the movement of principal, the problems existing in the supply, production and marketing of materials movement can be revealed, so as to reasonably manage and use materials and improveEconomic benefits of enterprises。
There is also a certain deviation between the enterprise principal movement and the material movement, which will show inconsistency in time sequence and quantity change for various reasons.First, from the perspective of internal production and operation activitiesCommercial creditExtensive use of means, when legalsell on creditIn the case of advance payment, the material movement often precedes or follows the principal movement;Due to the separation between the value transfer of fixed assets and the physical renewal time, the principal movement will be separated from the material movement at a certain time;From the perspective of enterprises, the distribution of enterprises' net income and the handover to the finance are characterized by capital movement rather than material movement.In addition, when property and material losses occur due to various subjective and objective reasons and are not dealt with financially, there will be no material but no capital.Secondly, enterprises' participation in fund market activities is purely capital raising orInvestment activitiesThere is capital movement but no material movement.The deviation between principal movement and material movement is one of the objective bases for the existence of financial management as an independent functional management.Financial management plays an independent role by making rational use of all kinds of deviations, seeking advantages and avoiding disadvantages.
The consistency of enterprise principal movement and material movement is determined by the unity of commodity use value and value;The deviation between the two is determined by the relatively independent movement of value.
Internal comprehensive balance of principal movement
principal
The movement of corporate principal is complexEconomic mechanismWhether the principal movement is smooth and whether good benefits can be achieved depends on whether the various parts within the mechanism are coordinated and balanced.From the perspective of capital ownership,Enterprise capital. There must be an appropriate proportion between borrowed funds and internal accumulated funds, so thatfinancingCost vsFinancing riskBetter unification.From the perspective of principal utilization,Internal investmentBetween foreign investment and long-term investmentShort term investmentbetween,Fixed capitalAnd working capital.Only in this way can we not only ensure the principal needs of the enterprise's internal production and operation activities, but also make full use of the temporarily idle monetary resources to make profits in the capital market;Only in this way can the production and operation factors within the enterprise be reasonably formed.From the perspective of the comprehensive balance of ownership and utilization of principal, the income and expenditure of principal must be timely andamountIt is coordinated and balanced to closely link the end point of one capital cycle with the start point of the next capital cycle.
The comprehensive balance of enterprise principal movement is determined by the objective requirement of coordination and balance between enterprises' internal investment and external investment, between enterprises' various production and operation factors, and between various links in the production and operation process.This law, on the one hand, requires that the principal movement be based on the internal coordination and balance of enterprise purchase, production, marketing activities and foreign investment activities;On the other hand, finance is required to promote the coordination of all aspects of the enterprise's internal production and operation activities and foreign investment activities by organizing the comprehensive balance of the principal movement, and play its role in comprehensive regulation.This law is an important basis for correct financial decision-making.Comprehensive balance methodIt is one of the basic methods of financial decision-making.
Continuous coexistence of principal movement
From the perspective of the internal production and operation activities of the enterprise, the principal was initially in the form of monetary capital at the beginning of the purchase stage, and was transformed into the value form of production and operation materials (such as fixed assets, materials, etc.) through purchase, into the value form of commodities through the production stage, and returned to the form of monetary capital through the sales stage.fromForeign investment of enterprisesIn terms of activities, the principal is converted from monetary form to securities form through securities purchase, and then into monetary form through securities sales.Fixed capitalAnd working capital, due to the different ways of turnover of fixed assets and current assets, also show their own characteristics in the continuous coexistence of principal movement.Liquidity movementIt has the characteristics of one-time value transfer, consumption and compensation, and completes a turnover in a reproduction process;The movement of fixed funds has the characteristics of value gradual transfer, consumption and compensation, and can only complete turnover in several reproduction processes.Although the specific ways of movement of fixed funds and working funds are different, the coexistence in space and continuity in time of various forms of funds are the same.The coexistence and continuity of principal movement are the premise of each other's existence.Because various principal forms coexist at the same time, each part of the principal has the possibility of mutual transformation;On the other hand, the juxtaposition itself is the result of mutual transformation. Once the continuity of the principal movement is interrupted, the principal form of the next stage will no longer exist.
The continuous coexistence of enterprise principal movement is determined by the continuity and phased characteristics of enterprise production and operation activities.The continuous development of production and operation activities, the continuous formation, consumption and transformation of various production and operation elements into production and operation results, and the realization of their value through sales, will inevitably lead to the continuous transformation of funds advanced on production and operation elements, and the movement cannot be interrupted.The phased nature of production and operation activities makes the principal occupied in each phase in a situation of juxtaposition in space.This law of enterprise principal movement requires that the financial organization should not only continuously raise the principal, but also rationally allocate funds in stages according to the principal occupation structure of each occupation form and its changes, and constantly take measures to ensure the normal circulation of principal, accelerate the speed of principal circulation, and improve the utilization effect of principal.
The above principal movement rules are investigated from the overall principal movement.Various principals have their own laws in different stages and fields of movement, which will be examined in the following chapters of this book.The movement law of principalFinancial management principlesAnd methods have important theoretical and practical significance.A comprehensive study of the law of principal movement is the basic point of building a financial discipline.
Principal repayment
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Repayment of equal principal and interest
According to insiders, the most frequently handled repayment method by banks isRepayment of equal principal and interestMode.This repayment method is based onMortgage loanThe total principal amount and the total interest amount of are added, and then evenly distributed to each month of the repayment period.As the repayment person, the bank will pay a fixed amount every month, but the proportion of principal in the monthly repayment will increase month by month and the proportion of interest will decrease month by month.For example, suppose we need to borrow 200000 yuan from the bank, and the repayment period is 20 years. According to the current interest rate of most banks, we choose the equal principal and interest method, and the monthly repayment is about 1376.9 yuan.The total repayment amount is 330000 yuan, including 130000 yuan of interest payment.
In this regard, the bank's financial management experts analyzed and repaid the loan with equal principal and interestHousing loanThe borrower bears the same amount every month, which is also convenient for arranging income and expenditure.The method of equal principal and interest repayment is especially suitable for people with stable income and people who buy houses to live in. Economic conditions do not allow excessive investment in the early stage.
Repayment of equal principal
exceptEqual principal and interest repayment methodOutside,Equivalent principalRepayment is also a common way to repay the house loan. The borrower can gradually reduce the burden as the repayment years increase.This repayment method allocates the principal to each month and pays off the interest from the previous repayment date to the current repayment date.For example, suppose we need to borrow 200000 yuan from the bank, and the repayment period is 20 years. According to the interest rate of most banks at present, we choose the equal principal method. At the initial stage of repayment, the monthly repayment amount in the first year is about 1700 yuan;The monthly average repayment in the last year is about 800 yuan.The total repayment amount of the equal principal method is 310000 yuan, including 110000 yuan of interest payments.
useRepayment of equal principalIt is characterized by that when the borrower starts to repay the loan, the monthly burden is heavier than the equal amount of principal and interest.But withTime lapseAnd the repayment burden will be gradually reduced.This repayment method is relatively similar toEqual principal and interest method, the total interest expense is low.
There are many ways to analyze income demand, the most common two arePrincipal repayment methodandPrincipal retention method。
Assumption of principal repayment method
The principal repayment method assumes that the principal and interest are used to meet the needs of income in the relevant period.The principal retention method assumes that only the principal investment income can meet the income needs during the relevant period, and the principal is not used for repayment.In order to meet the same income needs, the principal repayment method requires less capital than the principal retention method, and the principal retention method requires a large amount of funds for the next generation (or designated person).The principal retention method is conservative, because the principal may also be used when money is urgently needed.
When the lifetime income demand is considered, the principal repayment method has the following two ways:
(1) Go to the insurance company to buy for lifeannuity。The life of the recipient of an annuity cannot be longer than the annuity income.Life annuities cannot be purchased before the age of 60, 65 or 70.The income demand before the age of 60, 65 and 70 can be paid by a fixed periodLife InsuranceOr in other ways.
(2) Assuming the maximum age, beyond which it is impossible to survive.Some people take the age of 80 as the ultimate age, so the repayment of principal and interest is completely between the current age and the maximum age, so the income demand can be met by life insurance or other fractions paid in a fixed period.
Both principal repayment methods have advantages and disadvantages:
Life annuityWhen other conditions are the same, it can provide higher benefits than other methods, because its assumed maximum age is very high, and each benefit of life annuity includes survival benefits. In some cases, the recipient of life annuity lives shorter than the payment period.However, the current life annuity can only be paid in a flat way or varies with the investment return at that time.This did not take into accountinflation。
principal
The method of setting the maximum age, if there is an appropriate source of funds, can increase the payment with inflation, but also reduce the age of payment.But in the second way, if the final age is set too low and the income recipient lives longer than the payment period, it will cause adverse financial consequences.On the other hand, if the lifetime age is set too high, more funds may be needed, resulting in idle funds.
Among the two extremes of principal retention and principal repayment, there is an intermediate method that does not need to pay all the principal or retain all the principal.Therefore, we should design a reasonable way according to the demand of income.
Inflation assumptions
Inflation is a factor that must be considered when analyzing future income demand, income sources and the impact of related factors.But future inflation is difficult to predict accurately.The best way to predict the inflation rate is to choose oneInflation rateThe floating range, and calculate the sensitivity of the conclusion to change when the inflation rate changes.If this sensitivity analysis is not used properly, the purpose of the analysis will be more ambiguous.Therefore, the sensitivity analysis should be particularly careful, and clear and simple methods should be selected.
Interest rate analysis
discount rateThe choice of is very important in the process of analyzing information, especially when discount is required for many years, the demand and source of income will vary greatly due to different discount rates.Therefore, attention should be paid to the choice of interest rates.Generally speaking, the selected interest rate is after tax generated by investment that is relatively safe and easy to realize in the current economic environmentROI, that is, the relatively conservative interest rate choice.Especially for family financial planning, the choice rate of interest rate is more conservative and prudent.
Other related
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Difference between principal and fund:
Principal andfundThey are two types of funds that are different from each other and related to each other in the national economy.
The main differences between principal and fund are as follows:
1. In terms of materiality, the material content of the principal is various production and operation factors.In production and operation activities, it is manifested in various forms of operational assets, mainly including fixed assets, current assetsintangible assets、Deferred assetsAnd other assets.The material content of the fund is various social consumer goods, such as administrative managementhouse, buildings, supplies, appliances and other consumer goods.
2. From the perspective of mobility, the movement of principal is a cyclical movement.Marx summarized it as
G-W…P…W'-G'·G-W…
That is, from monetary capital toProduction funds, and then converted into commodity capital and monetary capital.This is not a simple reply to the original advance fund, but a monetary fund after appreciation. After cost compensation and accumulation, the second cycle of scale expansion begins again, forming turnover.
The fund movement is a one in one movement, which can be summarized as
G-W…G-W…
That is to say, monetary funds are used to purchase social consumer goods. After consumption, newly raised monetary funds are used to purchase consumer goods for consumption in the next period.The funds spent in the previous period have been consumed and gone forever, so it is not a circulation movement, but a revenue and expenditure movement.
3. From the perspective of socialityeconomic relationsIt mainly refers to the relationship between property rights of principal owners, enterprises and operatorsincome distributionRelationship;The economic relations formed in the fund movement are mainly between the central government and local governments, between national social administrative institutions, andAdministrative institutionsDistribution relationship with economic organizations and individuals.It is not a property right relationship, but a redistribution of part of national income.
Although there are significant differences between the principal and the fund, they all belong tonational economyThe monetary performance of the value of the property and materials in China is closely related to that in the following aspects:
1. Mutual premise.The formation of the fund comes from the redistribution of national income, and the creation of national income depends on the realization of principal investment and income, so the principal movement is the foundation of the fund movement.On the other hand, the normal conduct of material production and circulation activities also requires the national social administrative institutions to provide social stability, economic order, national defense security and other public goods, so the fund movement, in turn, is the condition for the principal movement.
2. Mutual restriction.Assuming that the total amount of national economic funds is certain (due toScarcity of resources, this assumption can be held)Amount of fundsThe larger the fund, the less the fund will be used;On the contrary, the larger the amount of funds used for funds, the smaller the amount of funds available for principal.
3. Mutual transformation.Assuming that the investment of the principal can bring benefits, the financial tax, the fund of the social security department and the fees of other administrative institutions (legalFees）All sources.At this time, part of the principal income is converted into funds;It is also assumed that the above funds still have a certain balance after fulfilling their own functions, which can be temporarily used for risk-free investment (such as purchasenational debt、bank depositOn the one hand, it can bring added value, on the other hand, it can be realized at any time when it is necessary to realize its own functions in the future, without affecting the urgent need.Under this premise, some fund balances can be converted into principal.
