How to turn over the capital of an enterprise?

The circulation and turnover of funds can be divided into three stages: supply, construction production and project delivery (sales).

In the process of supply, enterprises use monetary funds to buy labor objects, forming production reserves, and the funds of enterprises are transformed from monetary form to material reserve form. This is the first stage of capital circulation.

Then, enter the production process. Workers use labor means to process the object of labor, so that the shape or nature of the object of labor changes and products are created. At this stage, on the one hand, materials are collected from the warehouse, and at the same time, some monetary funds are used to pay wages and other production expenses. The enterprise's funds are converted from material reserves and monetary forms into production funds (in products and semi-finished products).

With the continuous production, work-in-process and semi-finished products are finally transformed into finished products, separated from the production process and sold as finished products. In this way, the capital of an enterprise is transformed from the form of production capital to the form of products.

Finally, by selling products, enterprise funds are transformed from product form to monetary form. In this way, the capital of an enterprise starts from the monetary form, goes through three consecutive stages of supply, production and sales in turn, and finally returns to the original starting point, that is, the circulation of funds.

Extended data:

As far as industrial enterprises are concerned, capital refers to the monetary expression of all property and materials owned by enterprises. In the process of production and operation, the existing forms of capital are constantly changing, which constitutes the capital movement of enterprises, which is manifested in three processes: capital investment, capital utilization (also known as capital circulation) and capital withdrawal, which are relatively static for a certain period of time and a certain date.

Withdrawal of funds refers to the circulation and turnover of funds leaving the enterprise, mainly including repayment of debts, payment of taxes and distribution of profits to owners.

The three parts of the above-mentioned capital movement are the unity of mutual support and mutual restriction, specifically: without capital investment, there will be no circulation and turnover of funds; Without the circulation and turnover of funds, there would be no debt repayment, tax payment and profit distribution. Without the withdrawal of such funds, there will be no new round of capital investment, and there will be no further development of enterprises.

Baidu Encyclopedia-Capital Circulation and Turnover