Indicators of use of working capital. Enterprise economy
organizations are a financial complex that ensures the continuity of its economic activity. They are applied once in the production process, losing naturally or changing the real form. These company assets transfer their full value to finished products. Next, we consider the indicators of the use of working capital.
Ways to use working capital associated with the maintenance of the production process. They enter into operations in kind and are consumed entirely. After the completion of the production process, the manufacture of finished products and their sale, the value of these assets is reimbursed as part of the sales profit. This, in turn, allows systematically to resume production, the process of which is carried out through a continuous turnover of funds.
Considering the efficiency of use of working capital, take into account the ratio of their individual elements. It is expressed as a percentage. The difference in the structure of a company's assets is explained by many factors. Of particular importance are the features of the organization, the conditions in which it is carried out, the specifics of sales and supply, the location of supplier companies and the location of consumers, the composition of production costs. Revolving funds consist of:
- Subjects of labor.These include materials, raw materials, purchased semi-finished products, fuel, spare parts, containers and so on.
- Means of laborwhose life is not less than a year or their cost is not more than one hundredfold (for state-owned enterprises - fifty times) the size of the minimum wage per month. These include high-wear low-value tools and objects.
- Semi-finished products of own production and unfinished production.These include items that have not been entered into the process of manufacturing products. These are, in particular, parts, assemblies, materials, products that are at the assembly or processing stage, semi-finished products that are not completely finished in some workshops and are to be introduced into the other stages in others.
- Expenses for the upcoming periods.This category includes the intangible components of revolving funds, which include the costs of mastering and preparing new products. They are produced in the current period, but relate to future products. For example, these are expenses for the development and design of technologies for the manufacture of new products, for the rearrangement of equipment.
The use of working capital of the enterprise
To illustrate the effectiveness of the implementation of assets in the analysis apply certain factors. The most important of them include indicators of turnover and the duration of one turnover. The first coefficient is calculated by the formulaCob = Qp / Phos, wherein:
- Op is the volume of products sold in the time in question at a wholesale price in rubles.
- Foz is the average balance of assets in rubles over a given period of time.
The indicated ratio shows the number of revolutions per year.
The duration of one cycle in days, reflecting the period in which assets are returned to the company in the form of profits from the sale of goods, is calculated as follows:Tob = Dk / Cob or Tob = Foz * Dk / Qp.
The indicator of consolidation of funds in turnover illustrates the value of assets per ruble of products sold:Kyzos = Foz / Qp.
Sale completes the cycle of capital.This causes the fact that indicators of the use of working capital are calculated according to the volume of sales of products.
Improving the efficiency of use of working capital can be achieved by various factors. For example, a company may:
- Optimize production stocks.
- To increase the volume of manufactured products and their sales at an unchanged level of assets.
- Improve sales and supply systems.
Improving the efficiency of use of working capital is also achieved by improving the quality of the product and its competitiveness, reducing the duration of the production cycle. Accelerating factors also include the reduction of energy and material consumption of products, the outpacing rate of increase in sales volumes in comparison with asset growth, and so on. The efficiency of the use of working capital is of particular importance for achieving the planned results of the financial and economic activities of the company.
Indicators of the use of working capital allow you to choose the most rational methods of implementing assets.On their basis, work in progress is reduced, if necessary, inventories are optimized, and forms of calculation are improved. At the same time, companies can choose various options for writing off costs to the cost of products. For example, based on forecasts of sales volumes and demand, firms may be interested in a more intensive write-off of expenses or their more even distribution over a certain period. To do this, choose the option that is most consistent with the goals. Given the indicators of the use of working capital, it is necessary to predict the impact that these or other decisions will have on the amount of taxes, profits and cost.
The reflection of material and production resources is carried out according to the rule of the lowest estimate of the two - cost and market price. Assessment of the efficiency of use of working capital is carried out in several ways:
- Determining the cost for each unit of all purchased stocks. This is how they are recorded at their actual price.
- At average cost.
- At the price of the first purchases in time (FIFO).
- At the cost of the most recently acquired reserves (LIFO).
Evaluation of the effectiveness of the use of working capital for the latter method provides a reduction in tax payments. However, despite this advantage, many companies try not to use it. This is due to the fact that with a low financial result, the company moves to a disadvantageous position in the market. And the main indicator that influences the stock price is the amount of net profit per security in circulation.
Current assets of the company are integral elements of the production cycle. Due to their implementation, the uninterrupted production process is ensured. When this occurs, they are continuously reimbursed with the adjusted sale of finished products. From the effectiveness of their use depends on the volume of production and sales. The company can use various methods to speed up the cycle, optimize costs. To select the best option, a careful analysis of the work of the enterprise is necessary. In turn, indicators of the use of working capital are calculated for it.According to him, the company orients the subsequent course of financial and economic activities. At the expense of working capital advances are made to circulation funds and production assets. They provide the continuity of the company for the manufacture and sale of products.