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0METHODS FOR ASSESSING THE INCOME OF SMALL BUSINESSES RECEIVED IN THE PROCESS OF EFFICIENT USE OF EXPENSES
Usmonov Parviz
Assistant of SamIES Yahyoyev Bahriddinxon
student of SamSIES
Abstract: In this article, the methods of assessing the income of small business entities in the process of effective use of expenses and the use of this method to ensure the allocation of additional funds for the financial support of small businesses have been developed.
Keywords: valuation, tax, income, bankruptcy, expenses, small business, financing, sustainability.
Assessing the efficiency of expenses of small businesses is one of the priority tasks, which has received quite a lot of attention in recent years. This is due to the increased interest, firstly, in the methods of program-target planning, and secondly, in the methods of assessing the probable bankruptcy of small businesses, assessing the probable bankruptcy of the entity through the prism of ensuring the effectiveness of their activities. However, often preventing possible bankruptcy is identified with efficiency, economy, effectiveness, rationality, etc. organization of economic activities.
For example, the prevention of probable bankruptcy of small businesses means the effective expenditure of funds of small businesses that meets the conditions: achieving specified results using the least amount of funds.
Be that as it may, to bring a subject out of probable bankruptcy in the classical sense is the self-creation of effective working conditions with the support of the state and is included in the concept of bringing a subject out of bankruptcy, in our opinion. The inadmissible complexity of assessing the probable bankruptcy of an entity (both the efficiency of expenses and the activities of management bodies) lies in the fact that costs and results, as a rule, are expressed in different indicators. This, in turn, encourages either to reduce bankruptcy to inefficient management, which, for example, happened with the assessment of the subject's activities (the result, the costs of achieving it, and the ratio of costs to results in calculations, methods for assessing probable bankruptcy are not used at all).
Thus, the assessment of probable bankruptcy is possible only if the indicators characterizing results and costs are comparable, which is an indispensable condition for the correctness of the calculation of the assessment of probable bankruptcy.
In this case, two main approaches can be formulated to bring the results and costs of small businesses into comparable values. The first approach is to reduce the cost results to a monetary equivalent. The second is to reduce both the results of expenditures and costs to a single abstract equivalent - an index. Each approach can be represented by a set of characteristic methods for measuring probable bankruptcy.
Depending on what is considered as a result of expenses, a number of methods for assessing probable bankruptcy can be formulated.
Let us consider in more detail the methods of approaching bringing the result to a monetary equivalent.
The income assessment method involves calculating the effectiveness of expenses based on the ratio of income received as a result of effective spending of funds to expenses, taking into account the time factor.
This method allows you to compare the efficiency of spending funds of probably bankrupt entities with the efficiency of using funds in business and thereby give an objective assessment of the expected expenses.
For example, does it make sense to withdraw funds from the capital market for investment expenses by placing securities or attracting loans from commercial banks, thereby increasing the cost of borrowed funds for business, if the efficiency of their use in a likely bankrupt entity will be significantly lower than in a competitive entity. If the project has a high level of impact, then is there a need to intervene in the activities of small businesses that are on the verge of bankruptcy?
The task of a likely bankrupt entity is not to generate profit or other income, but to solve priority problems, and therefore the expenditure of funds on the provision of social services will always exceed additional income from revenue.
For example, opening a kindergarten will provide additional income in the form of personal income tax paid by kindergarten employees, but the costs of its maintenance will still exceed the expected additional income. Moreover, even the very assumption of increasing income is not indisputable: in an industrially developed territory, when entering a new activity, it will create competition for those providing similar services, which can complicate the entity's quick exit from bankruptcy
To estimate the expenses of a likely bankrupt entity using this method, it is necessary to take into account the macroeconomic effect: thus, as a result of the opening of a kindergarten, the number of workers who will pay tax on their own income will increase, the volume of enterprise profits, the volume of fixed assets, and, consequently, the income tax will increase, land tax, etc. Moreover, this will affect not only one subject, but also others associated with it in the production cycle. Such changes will lead to an increase in budget revenues, despite the fact that the costs of only one entity can ensure an increase in mandatory payments and support the standard of living of employed workers and members of their families. But the application of this method is very limited.
The use of this method is suitable for assessing the effectiveness of investment expenditures: provision of government guarantees, contributions to the authorized capital of enterprises, provision of subsidies to small businesses, etc.
Consequently, income assessment methods define efficiency as the ratio of additional income received as a result of the provision of budget services to the costs of providing budget services, taking into account the time factor.
The advantage of this method is that it becomes possible to measure the result of "investments in human capital" in monetary terms. For example, an increase in the
level of income of an employee is a result achieved through the expenditure of budget funds to provide him with budget services for retraining and advanced training, obtaining secondary specialized or higher education.
This method has a drawback and is caused by a high risk of distorting the result: having received higher education, a university graduate may, due to both objective and subjective reasons, not work in the future in his specialty. An employee of a likely bankrupt entity who has completed advanced training courses does not always receive an increase, and if he does not complete the retraining or receives a low grade, he will not lose any salary.
The above method allows you to measure the effect of the cumulative efforts of the entire team, both providing services to employees and creating conditions for their provision, as well as to assess the effect of the work of the team as a whole. For example, it is difficult to determine how an employee's studies will subsequently affect his level of income or what impact social expenses in general will have on the subject's income. However, these expenses have an impact on labor results and, as a consequence, on the level of income, but it is impossible to measure this impact in total terms.
So, the implementation of state and local government can also influence the income of the subject: the number of jobs, the level of wages, the level of legality of workers' income, and their security depend on whether conditions for business development are created or not.
Of course, the level of income of legal entities or individuals is a universal indicator; it characterizes the somewhat successful state and local authorities collectively solving social problems. An employee, having a high level of income, is able to independently purchase education, healthcare, cultural services, pay for housing and communal services, landscaping services, and transport services. This makes us look skeptically at the provision of new benefits when their recipients and consumers are employees, their parents or children.
It should be noted that among the disadvantages of this method is the high risk of service efficiency. The fact is that creating conditions for increasing income levels is a complex task that requires taking into account many factors, both at the time of making decisions about spending and funds, and in the future. An easier way to achieve high results is to increase the subject's income. Let's take our example from a normally functioning entity, where staff salaries make up about 25% of all expenses, and taking into account deductions to the wage fund, more than 35%. By increasing spending on goals by 10%, but directing them to pay wages to employees, we can increase their income by 15%. Therefore, the cost efficiency measured within this method will be 150%. And taking into account the fact that an increase in wages causes an increase in wages in other commercial enterprises of social institutions, the efficiency will be even higher. A similar situation arises when investment increases. But what are the consequences of such "efficiency"? At the same time, it is necessary to take into account the efficiency risk when assessing the effectiveness of expenditures through the human capital index.
The practical application of this method of assessing efficiency will be the most optimal for a comprehensive assessment of cost effectiveness, provided that the growth of costs, in particular, for labor costs, is contained.
The presence of a target allows us to consider this method as quite acceptable for assessing the effectiveness of expenditures within the framework of result-oriented budgeting in order to improve the financial condition of a business.
The cost savings assessment method involves calculating cost efficiency based on the ratio of achieved cost savings for the provision of services from the budget to production costs, taking into account the time factor.
Along with this, it should be noted that the advantage of this method is its focus on the future, the ability to choose the least expensive method of providing budget services. The current budget legislation in most cases assigns spending powers (issues of local importance) to a public legal entity, but does not prescribe the method of their implementation. In this regard, there is a need to find the least expensive method of management.
However, there is also a drawback of this method and it is manifested in the fact that it does not allow taking into account changes in the quality of the provision of budget services. In this case, the time factor can play a big role. For example, what will be the savings of small businesses on mandatory payments: if we take a short or medium term, the savings are unlikely to exceed the costs of mandatory payments and these expenses will be considered ineffective. In the long term, the costs of mandatory payments will pay off, but the longer the payback period, the less reliable the estimate of costs.
In the context of traditional budgeting, the most optimal use of this method will be when the main criterion for the allocation of additional funds to support small businesses is to contain the growth of expenses and the adoption of new expenditure obligations at given minimum quality levels for the provision of funds to support them, as well as to assess the effectiveness of capital expenditures.
List of used literature
1. Rustamovich, N. A. (2023). Kichik biznes va tadbirkorlikni rivojlantirishda xitoy va turkiya mamlakatlari tajribalaridan foydalanish. Лучшие интеллектуальные исследования, 9(1), 176-182.
2. Xalildinov, A. A. (2023). Milliy iqtisodiyotda kichik biznes va xususiy tadbirkorlikni rivojlantirishning ustuvor yo 'nalishlari. Journal of new century innovations, 23(3), 46-51.
3. Qodirov, A. A., & Jabborovich, A. N. (2023). Ozbekiston respublikasida kichik biznes va xususiy tadbirkorlikni rivojlantirish yonalishlari. Journal of new century innovations, 41(2), 25-29.
