Determining the budget and financial and economic balance

The budget is a monetary expression of the volume of production produced and realized over a certain period, it reflects the level of income that must be received, the level of consumption and expenditures that must be made for this purpose, and the amount of financial capital that must be mobilized to achieve the goals set.

One of the main tasks of the company's financial management is to develop and use a set of financial management tools, methods and techniques to ensure a healthy and balanced financial situation.

In general, the financial balance is represented by the equality that should exist between resources, respectively, between income and expenses. By acting to achieve their own balance sheet, companies contribute to achieving and strengthening financial balance at the macroeconomic level.

Depending on the content of economic processes and the way the results of economic activity are expressed, the economic balance takes the following forms: material, material and labor resources.

Material and economic equilibrium expresses such a state of relative correspondence between the volume, structure and quality of production, on the one hand, and the needs of final consumption and production in quantitative, structural and qualitative aspects, on the other.

The balance of economic value expresses the relative agreement between the various structures of the value of economic outcomes expressed in the monetary standard and the efforts made to obtain them.

The balance of labor resources highlights the relative correspondence between the need for labor and the labor available during the reporting period.;

One of the specific forms of the cost balance is the financial balance, for which various definitions are written in the specialized literature.

Professor Ioan Aurel Giurgiu notes: "The state of the financial balance can be determined from two points of view: 1) the financial balance of a company means the correspondence between capital needs, on the one hand, and the possibility of obtaining them, on the other. 2) The financial balance can also be defined in terms of capital utilization as the equality between the capital advanced in the chain, on the one hand, and the recovered capital, which can be paid or reimbursed depending on the circumstances.

Mihai Adocin and A. Adocin in a study on this topic state: "The financial balance expresses equality and correlation between the need for financial resources and the possibilities of their formation. "G. Manolescu in Financial Management points out:" The financial balance is translated into equality between the use and the results of the period. "

Ioan Mihai (coordinator) in Economic and Financial Analysis states: "The financial balance in a simplified form is determined by the equality of income and expenses. However, in the financial definition, the financial balance expresses equality between financial sources and the economic means necessary to carry out long-term and short-term exploitation and commercialization activities.

From the definitions presented, we find that the financial balance of a company reflects the equivalence between financial sources and economic resources necessary for the company's operating activities, between the advanced capital in the economic chain and the income recorded as a result of their use.

The financial balance of any enterprise is necessary for its existence and development, as it ensures its operational autonomy. Ensuring a financial balance means having sufficient financial resources to make current payments, fully covering the company's costs and expenses, and ensuring an equal balance between the need for financial resources and the ability to obtain them, which leads to maintaining proper relationships with business partners.

At the level of economic agents, the financial balance is defined as the correspondence between the liquidity of assets and the need for capital that provided their financing, and is ensured by appropriate regulation of receipts and operating payments, on the one hand, and investment needs and financial resources, on the other hand. It turns out that the financial balance can be defined as the ability of a company to ensure its payments, without interruption, of debts previously concluded, including current debts incurred as a result of the sale of an object of activity or in accordance with tax legislation, from its proceeds, in order to avoid the risk of bankruptcy. Maintaining a financial balance is a prerequisite for the company's survival. In addition, balance evokes the idea of harmony between the various elements of the system, which in the financial sphere is the harmonization of resources with needs.

The main relationships that express the existence of a financial balance sheet at the enterprise level are:

the need for funds to achieve economic goals = the possibility of obtaining them;
expenses incurred by activities performed by the company = income earned from these activities;
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