13th International Conference of ASECU Social and Economic Challenges in Europe 2016-2020
539
SHORT TERM FINANCIAL MANAGEMENT OF THE COMPANY
“BEREQETI” LLC
Nafi Pollozhani1
Nuhi Sela2
ABSTRACT
Businesses in order to develop their activities, except fixed assets (property, land, equipment,
etc), need raw materials, finished goods and labor, as to conclude the process of production and
making ready products for sale.
Management of raw materials, finished goods, buyers demand, cash, etc., on the one hand,
and short-term financial liabilities relates to short-term financial management company. Often
this process is also known as working capital management. As part of our topic treatment will be
considered the short – term funding sources, the financial operational management, cash
budgeting and short – term financing plan. To illustrate theoretical concepts will be given an
example at the end of the paper.
Short-term planning and financial decisions are of a particular importance for the company
and its vitality, as well as for the new ones (start-up) and for those large and well consolidated.
Even large companies with positive income statements have bankrupted, simply because they
have been unable to carry out short-term obligations.
Keywords: short-term sources, working capital, cash budgeting, operating cycle, decision
making, credit
Jel Classification: G17, P40, G32
1. Introduction
Financial management as a process has to do with the planning and decision making about
important areas of the company and dealing with the decision for the usage of money as well as
finding the funding sources.
Funding sources, forms and financial manners are some of the issues that the financial
manager has to deal with them during his activity.
The short-term financial decisions include current asset decisions and current liabilities, or
which have a lower maturity than a year.
The financial manager which is responsible for the short-term financial decisions, in the
future should not go far. It must deal with the financial and operational activities related to the
maximum for the next 12 months.
Unlike short-term financial decisions, long-term financial decisions deal with the financial
and investment activities over 1 year or more and have to do with long-term assets and liabilities,
1DSc, State University of Tetovo, email: nafipollozhani@yahoo.com
2Ph.D, State University of Tetovo
13th International Conference of ASECU Social and Economic Challenges in Europe 2016-2020
as well as by nature they are not easily changed and put the company in a particular direction for
several years.3
In following of the working paper are presented the issues mentioned above in a more
detailed way.
2. Short-Term Financial Planning
In a manner to clarify the importance of financial management, initially we are presenting briefly
the short-term financial planning and its role in the financial management process.
Financial planning denotes to prepare a financial plan. The financial plan is the evaluation of
the total requirements of the company. It chooses the most economical sources of the company.
The plan also shows us how to use profitability with the received funding. The financial plan
gives a complete picture of the future financial activities of the company. Financial planning is as
follows4:
Figure 1: Financial planning
Financial sources + Use of funds = Financial planning
(Financial resources) (Financial techniques)
