Volume 03 Issue 03-2023
25
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
I
SSUE
03
Pages:
25-31
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
ABSTRACT
In the context of market relations to the system of financial management of enterprises, firms and partners, suggests
a new approach. The economically independent and financially stable functioning of enterprises depends on a number
of factors, such as the correct organization of management on them, the rational organization of production and
service using existing capabilities, the use of scientific and technical innovations, new information technologies, the
correct organization of financial management. At the same time, this article reflects on the prospects for the
development of the financial management system in Uzbekistan, and also aims to reveal the features and principles
of the financial management system.
KEYWORDS
Accounting (financial) reporting, enterprise management, financial analysis, financial management, financial
indicators, financial resources.
INTRODUCTION
In the context of diversification and implementation of
structural changes in the sectors of the economy, the
development of financial activities of corporate
structures, it becomes urgent to further increase the
role and importance of financial management in
ensuring financial stability. The introduction of modern
methods of corporate governance at enterprises
(joint-stock companies) operating in our republic, in
Research Article
DEVELOPMENT OF THE FINANCIAL MANAGEMENT SYSTEM IN
UZBEKISTAN
Submission Date:
March 17, 2023,
Accepted Date:
March 22, 2023,
Published Date:
March 27, 2023
Crossref doi:
https://doi.org/10.37547/ijmef/Volume03Issue03-04
Bakhtiyorov Asrorbek
Assistant, Department Of Accounting And Audit, Fergana Polytechnic Institute, Uzbekistan
Journal
Website:
https://theusajournals.
com/index.php/ijmef
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
Volume 03 Issue 03-2023
26
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
I
SSUE
03
Pages:
25-31
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
particular, the study of the theoretical and economic
foundations
of
financial
management,
the
development of knowledge aimed at improving the
mechanism of financial management, the rational use
of the best practices of foreign statehood in the field
of science are considered important.
It should be noted that in the context of the
development of market relations, special attention is
paid to a new approach to the financial management
system of joint-stock companies. The management of
an enterprise depends on a number of factors, such as
the availability of economically independent and
financially stable types of activities, the correct
organization of management in them, the rational
organization of production and service with the
effective use of existing opportunities, the use of
scientific and technical innovations, new information
technologies, the correct organization of financial
management work.
After the independence of the Republic of Uzbekistan,
the priority task was to create legal and organizational
foundations for the formation of a multi-level economy
and a competitive environment capable of ensuring
high rates of economic growth and sustainable
development of society [5]. The experience of
reforming the transition economies shows that the
most important means of a harmonious transition from
an administratively planned economy to a market
model of management are privatization and
axonerization, which leads to the formation of a real
class of owners, and financial management is of
particular importance when introducing effective
methods of corporate management of privatized
property.
As a result of economic reforms in Uzbekistan,
structural transformations of enterprises are being
carried out and modern management methods are
being introduced into their activities [3]. However, in
modern conditions, the level of ensuring the
functioning of modern management mechanisms at
enterprises based on the use of innovative ideas and
technological developments, improving management
efficiency and effective use of investments remains
low. Therefore, the new development strategy of
Uzbekistan for 2022-2026 defines such priority tasks as
“accelerated development of the national economy
and
ensuring
high
growth
rates”
[1],
the
implementation of this task requires increasing the
efficiency of using modern management methods in
managing the activities of enterprises.
Research methodology. When writing the article, an
assessment of the current state of the features and
principles of the development of the financial
management system in Uzbekistan was carried out
using the method of expert assessment and the
definition of areas of improvement. The method of
expert assessments is a complex of logical and
mathematical-statistical methods and procedures
aimed at obtaining the necessary information for the
preparation and selection of rational solutions to a
certain range of issues.
Literature review. Economic scientists express
different opinions when explaining the economic
content of financial management in international and
national practice. Of course, we can see that the
opinions expressed in some cases differ in their
approach to this concept, in addition to explaining the
essence of financial management [7]. The main reason
for this and before studying the opinions of scientists,
it is worth dwelling on international approaches to the
concept of financial management and on various
aspects in it.
The authors of numerous scientific literature devoted
to the coverage of the economic content and practical
aspects of financial management are American
economists James Van Ham and John Wachowicz,
describing financial management as follows [2].
Financial Management is the process of formation,
Volume 03 Issue 03-2023
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International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
I
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03
Pages:
25-31
SJIF
I
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FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
financing and asset management, implying the
achievement of several main goals. Accordingly, in
financial management, the decision-making function
will focus on the following three main areas:
investment, financing and asset management decision-
making. According to scientists, financial managers, in
exchange for effective formation, financing and
rational management of financial assets, contribute
not only to ensuring the financial stability of the
company in the future, but also to ensuring economic
progress [6]. Despite the fact that the goals of firms
and companies are different, the main one is to
maximize the financial condition of the owners of the
company.
Well-known American economists Stephen Ross, who
has conducted many studies on the science of financial
management, Randalf Westerfield and Bradford
Jordons believe that financial managers should take
responsibility in three main areas of the company's
activities [3]. The first is financing (budget
development) of capital investments, that is, planning
and managing long-term capital investments of the
company. The second is the structural structure of the
company's capital, that is, determining and managing
the necessary sources of supply to finance the
company's long-term capital investments. The third is
working capital, that is, the management of short-term
assets and liabilities in order to ensure the regularity of
the company's activities and the continuity of the
production process.
Professor of Birkbeck University (Birkbesk
—
University of London) in the L. Fongning believes that
"financial management refers to the decision-making
process related to the control and financial planning of
the company's subsystems, which includes treasury;
evaluation, selection, control and management of new
investment opportunities; ensuring and managing the
dynamics of growth of long-term financial assets;
financial risk management; management of short-term
and long-term financial activities of the company" [7],
[8].
The Russian scientist-economist G.B. Polsky noted that
the concept of financial management as an active
component of the economic mechanism is connected
with the concepts of the financial management
mechanism of enterprises or the financial mechanism
[4]. Financial management is the process of formation
and rational use of financial resources at enterprises,
working capital management. Financial management is
a generalized system of methods, applications and
levers used in the process of managing financial
resources and working capital at enterprises.
It should be noted that in the following years, scientific,
theoretical and practical studies on the organization of
the financial management system in our country are
conducted on a large scale [9]. In turn, the concept of
financial management is also defined by economists of
our country.
In particular, Professor O.K.Iminov believes that
"financial management is a system of principles and
methods of development and implementation of
management decisions in the organization of
circulation of monetary resources of the enterprise and
in the process of maintenance, distribution, use of
financial resources." [10], [11].
B.Tashmurodova, S.Elmirzaev and N. Tursunova's
textbook "Financial Management", this concept is
described as follows: "Financial management is the
management of financial resources and financial
activities aimed at the implementation of strategic and
current goals of the enterprise." [12]
R.Karlibaeva in her research paper expressed the
following opinion based on various approaches to the
definition of financial management [13]. As a result of
the study of financial management as a special field of
science and practice, the following conclusions were
formulated: first of all, financial management is a
synthesis of management theory, financial theory and
Volume 03 Issue 03-2023
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VOLUME
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SJIF
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(2021:
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(2022:
5.
705
)
(2023:
7.
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)
OCLC
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1121105677
Publisher:
Oscar Publishing Services
Servi
analytical accounting apparatus; Secondly, financial
management is a multidimensional concept that can be
considered, on the one hand, as a science, and on the
other hand, as a separate type of independent practical
activity in the company's management system,
combining a specific subject, object and an arsenal of
management tools; thirdly, the main function of
financial management is the process of making optimal
decisions [14].
Based on the definitions given by the above scientists,
the concept of financial management can be described
as follows: financial management
—
the development
and implementation of current and strategic goals of
the enterprise, the implementation of functions such
as forecasting the financial situation in the future,
management and assessment of financial risks,
planning, management processes of effective
formation and rational use of financial resources.
Analysis and results. In our opinion, financial
management is the science and art of managing the
cash flows of joint-stock companies, attracting the
most rational sources of financial resources and using
them with the greatest efficiency to achieve the
strategic and tactical goals of joint-stock companies.
The content of financial management is a much
broader concept than its essence. In a market
economy, the law of value plays a regulatory role, and
financial relations cover the entire production process
in joint-stock companies, including all economic
relations. Thus, financial management is the main
component of the general management system of a
joint-stock company. Financial management - profit
maximization is the goal of the entire management
system at the same time, including technical and
production management.
The process of making financial decisions, as well as
making any management decisions, will consist of
three stages [15].
Each type of solution requires specific information and
analytical support. Forecasting and planning decisions
are based on a generalized accounting report for a
number of years or quarters using promising trend
analysis methods. Decisions regulating the course of
economic activity are based on operational, including
accounting information, using operational analysis
methods. Evaluation and control decisions are based
on retrospect, support of current analysis methods,
comparison of current and planned (forecast) data for
the current reporting period.
The content of modern financial management is
characterized by the deepening of financial analysis
methods and the solution of new problems associated
with the transition of the Republic of Uzbekistan to
market conditions. Such problems are, for example,
discounting income and capital, managing the capital
structure by determining the cost of capital, the ability
to use methods of economic diagnostics, financial risk
management, the effect of financial leverage, etc.
Their solution in practical management increases the
efficiency of financial management in joint-stock
companies.
Volume 03 Issue 03-2023
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International Journal Of Management And Economics Fundamental
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VOLUME
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(2023:
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OCLC
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Publisher:
Oscar Publishing Services
Servi
1- scheme. General scheme of financial management
Financial management of a joint-stock company is an
integral part of the overall management system, and it,
in turn, is a system of rational management of the
process of financing the economic activities of joint-
stock companies, which involves the movement of
financial resources and the formation of financial
resources arising from the movement [16]. Based on
this, financial management can be characterized as a
system of rational and efficient use of capital, as a
mechanism for managing the movement of financial
resources aimed at increasing the volume of capital,
increasing investments and increasing financial
resources. Financial management is focused on
supporting the normal process of handling financial
resources, the effectiveness of which is characterized
by the speed of rotation (speed of circulation).
A new difficult stage in the formation of a market
economy in the Republic of Uzbekistan has created the
need for training in financial management as a science
of financial management of a joint-stock company
aimed at achieving strategic and tactical goals.
The priority goal of financial management is to
maximize the economic efficiency of the property
owner. The mechanisms for achieving this goal are an
effective dividend and investment policy, the credit
policy of the joint-stock company, an adequate policy
of liquidity and optimal working capital, maintaining an
optimal policy of forming the tax base.
The
second
goal
of
financial
management
complements and clarifies the priority goal. Its essence
lies in the organization of effective business
cooperation in a joint-stock company with clients and
creditors, business entities that serve the business
development of this joint-stock company [17]. The
mechanism for ensuring the effectiveness of business
cooperation is justified by the relations of the parties,
the poured funds are fully returned and controlled for
a period, the provision of guarantees, collateral, rent,
commodity loans, banking services is the conclusion of
an effective scheme for servicing the principal amount
of debt.
Our next goal is to ensure the social responsibility of
the activities of our joint-stock company. The stability
of the Joint-Stock Company's business activity creates
good prospects for expanding the tax base, increasing
employment, increasing demand for means of
production, supporting commercial relations in the
relationship
and
interaction
between
market
Common task (using
capital and setting
the maximum)
The choice of
methods and means
of managing the
movement of
financial resources
Decision-making,
preparation of a
program of financial
plan activities
Organization of
execution of the
decision
Control over
decision-making
Analysis and
evaluation of
decision-making
results
Volume 03 Issue 03-2023
30
International Journal Of Management And Economics Fundamental
(ISSN
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2771-2257)
VOLUME
03
I
SSUE
03
Pages:
25-31
SJIF
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FACTOR
(2021:
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(2022:
5.
705
)
(2023:
7.
448
)
OCLC
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1121105677
Publisher:
Oscar Publishing Services
Servi
participants within the country and abroad [18], [19].
Special attention is paid to social indicators affecting
economic and financial growth, social planning,
investment in human capital, monitoring of potential
bankruptcy and business decision-making.
In the process of developing the country's economy,
the goals of financial management change [20].
As mentioned above, the goal of financial
management is to maximize profits. However,
maximizing the market value of a joint-stock company
is not always achieved automatically by maximizing the
amount of profit it receives. For example, the resulting
high profit can be completely spent on current goals,
as a result of which joint-stock companies lose the main
source of their financial resources for development. In
addition, a high level of profit can be achieved with a
high level of financial risk, which may justify a decrease
in the market value of joint-stock companies.
CONCLUSION
In conclusion, it should be noted that the practice of
effective management in Uzbekistan is at the stage of
development, faces problems related to objective
economic difficulties, imperfection of the regulatory
framework, insufficient level of training of specialists.
The following are considered characteristic of the
modern economy:
-
privatized joint-stock companies reduce the level
of authorized capital;
-
high cost of financial resources;
-
low investment attractiveness of joint-stock
companies;
-
underdevelopment of the stock market and
financial infrastructure.
Consideration of trends and state of changes in the
economy of financial management development in the
Republic of Uzbekistan allows us to conclude that this
direction will not only have certain traditions, but also
a bright future.
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