The duration of one revolution is calculated. Working capital consolidation ratio. Structure of current assets
Rational and competent use of the company's resources and funds guarantees its success in the market. An important role is played by the analysis of working capital, in which problematic areas of development lie. In addition, a reliable assessment allows you to analyze the overall policy of the enterprise, identify the main errors and begin to discover reserves for increasing efficiency.
Working capital turnover characterizes the business activity of an enterprise
About the indicator
Indicators of profit, profitability, and liquidity are subject to mandatory calculation. An important role is given to such an indicator as . On its feasibility and the need for regular calculations we're talking about at every enterprise, this is evidenced by the fact that it is recommended for its use by the Russian Ministry of Finance.
Note: the indicator is otherwise called the speed of turnover of goods and characterizes the amount of revenue received from sales by the value average cost funds. Demonstrates how profitable and efficiently working capital is used, which allows you to evaluate the picture economic efficiency generally.
In practice, the value of the period of one revolution is used. Since both are important, their meanings play an important role in the operation of any enterprise.
What does it depend on:
- Industry of the company. For industry, certain values are provided, for construction - others, for the computer sector - third, and for trade - fourth. It is not the general indicator of direction that is taken into account, but its particular values (for example, the seasonality of goods).
- Economic policies applied by management. Qualification and level of preparedness of specialists. Efficiency of making commercial and management decisions.
For each type of enterprise, the optimal value of the parameter is determined.
Calculations
Formulas for calculations
There is no need to use difficult cumbersome formulas for calculations. In principle, there is one method of calculation, which can be deciphered as follows: the value of the indicator is equal to sales revenue divided by the average balance for the reporting period. In another way, these balances are called inventory.
The formula for the working capital turnover ratio is as follows:
The numerator displays the volume of products sold over a certain period, and the denominator displays the average value of the balance of funds for the same time. The parameter demonstrates how many turnovers occurred in funds over a certain period - a quarter, six months, a year.
The turnover time is found by using the following formula
The indicator characterizes how long the company can return its funds as revenue. The T parameter represents the number of days (for a year - 360, for a month - 30).
Calculation example
As we found out, the working capital turnover ratio characterizes the efficiency of their use. Let's consider the calculation procedure and the degree of its significance in any enterprise.
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Let us assume that during the reporting period of one year, products were sold in a quantitative volume equal to 20 million rubles. On average, the balance of inventory for the year amounted to 4 million rubles.
In this case, the calculation will be as follows
Thus, the turnover indicators of working capital are as follows: they manage to complete 5 turnovers every 72 days. For some types of enterprises, this parameter is optimal, but for sales in small enterprises, the turnover ratio should take a greater value.
Finding data for calculations
The question arises about where to find the indicators that are needed to calculate data using the formula. First of all, the main sources of indicators are the data from the company’s financial statements. You will need the most important document of activity - the balance sheet, its application as a profit and loss statement. Data is taken for the period under study.
The volume of quantitatively sold products is the amount displayed on line 10 in the Report - it is this document that contains data on net revenue.
To calculate the average cost of working capital, the sum of the cost is divided in half, that is, the indicator of inventory at the beginning of the year is taken (it equal to the sum TK at the end of the previous one), as well as at the end of the period.
Formula for average cost of working capital
Their amount is divided in half. The question arises about finding data for calculations, and the balance sheet, line code - 290, acts as a reliable source of data.
Factors influencing the indicator
For each enterprise, based on the main industry of its activity, there is a different indicator. No specific meaning, which was considered universal and optimal for everyone. The real champions in terms of the parameter value are wholesale and retail due to the specifics of the activity. But companies engaged in the field of culture and science have slightly different indicators, which is quite natural. A timely analysis of working capital turnover will allow you to achieve optimal results in this area.
The values are affected by:
- raw materials used;
- rates and volumes;
- qualification level;
- Kind of activity.
- carrying out indicator analysis.
Note: The turnover ratio alone speaks volumes. If the parameter exceeds one, the enterprise is considered fully profitable. If the value is more than 1.36, this indicates increased profitability Therefore, his policy works as efficiently and rationally as possible.
Despite this, importance is attached to measuring this indicator not separately, but in dynamics, so that it is possible to compare values. For clarity, accountants and other employees use visual tables that allow them to carry out analytical operations with data and make decisions to stabilize the situation. Positive dynamics indicate good development companies.
where is the turnover ratio;
Revenue from sales of products, works, services (thousands.
Average working capital (thousand rubles).
The turnover ratio shows the number of complete turns (times) made by working capital during the analyzed period of time. With an increase in the indicator, the turnover of working capital accelerates, which means the efficiency of using working capital improves.
2. Duration of one revolution
where is the duration of one turnover of working capital (in days);
Average working capital (thousand rubles);
Reporting period (in days);
A reduction in turnover time, as already noted, leads to the release of funds from circulation, and an increase in it leads to an additional need for working capital.
3. Working capital consolidation ratio
where is the coefficient of fixation of working capital;
Average working capital (thousand rubles);
Revenue from product sales (thousand rubles).
Accelerating capital turnover helps to reduce the need for working capital (absolute release), increase production volumes (relative release) and, therefore, increase profits. As a result, the financial condition of the enterprise improves and solvency strengthens.
The slowdown in turnover requires the attraction of additional funds to continue the economic activities of the enterprise at least at the level of the previous period.
Analysis of accounts receivable is of particular importance during periods of inflation, when the immobilization of own working capital becomes especially unprofitable. This analysis begins by looking at its absolute and relative amounts of accounts receivable.
An increase in accounts receivable may be caused by:
imprudent credit policy of the enterprise in relation to customers, indiscriminate choice of partners;
the onset of insolvency and even bankruptcy of some consumers;
too high a rate of increase in sales volume;
difficulties in selling products.
A sharp reduction in accounts receivable may be a consequence of negative aspects in relationships with customers (reduction in credit sales, loss of product consumers).
The question of comparing receivables and payables is very relevant.
Current assets- one of the resources without which the commercial activities of an enterprise are impossible. Calculation and analysis of indicators turnover current assets characterizing the effectiveness of managing this resource will be discussed in this article.
Current assets, their composition and indicators for analysis
Systematic analysis commercial activities enterprises as an element of effective management is based on calculating a number of indicators and normalizing their values. Comparison of actual and standard indicators allows you to identify various patterns in business processes, eliminate risks, and make management decisions in a timely and correct manner.
The main source of information for calculating analytical ratios is financial statements.
A significant part of the calculations is based on information about movement and balances current assets.
TO current assets The following types of enterprise assets include:
- inventories, including raw materials, supplies, goods for resale and goods shipped, finished goods, deferred expenses;
- VAT on purchased assets;
- accounts receivable;
- financial investments;
- cash.
In accordance with PBU 4/99 “Accounting statements of an organization”, data on current assets enterprises are contained in section II of the balance sheet. Often in the literature you can find the terms “working capital” or “funds in circulation”.
Magnitude current assets used when calculating the following indicators:
- profitability;
- liquidity;
- financial stability.
Let's look in more detail at analysis turnover of current assets, which is one of the aspects characterizing the business activity of an enterprise.
Why do we need analysis of turnover of current assets?
The dynamics of indicators characterizing the turnover of working capital are necessarily disclosed in the information accompanying the financial statements (clauses 31, 39 of PBU 4/99), as part of a group of coefficients that allow interested users of the financial statements to evaluate financial stability, liquidity and business activity of the enterprise. Current assets and their fair valuation are subject to careful verification during the audit of financial statements.
Proper management of funds in circulation allows you to effectively attract credit sources to finance current activities. To assess the creditworthiness of an enterprise, banks use well-known indicators for assessing financial and economic activities. Based on the ranking of these indicators, the company is assigned a certain rating, which determines the terms of the loan, including the loan rate, the amount of collateral and the loan term. Current assets can also be used as collateral for loan obligations.
The presence of a system of analytical coefficients greatly facilitates the dialogue with tax authorities, if it is necessary to explain the reasons for seasonal losses. Current assets may cause VAT deductions to exceed the amount of VAT accrued.
Let's consider the procedure for calculating turnover indicators.
Current assets turnover ratio
The turnover ratio shows how many times in the period under review current assets transformed into cash and back. The coefficient is calculated using the formula:
Cob = B / CCOA,
where: Kob is the turnover ratio of current assets ;
B - revenue for the year or other analyzed period;
SSOA - average cost current assets for the period of analysis.
You should pay attention to the calculation of the average cost current assets. In order to obtain the most correct value of the turnover ratio, it makes sense to divide the analyzed period into equal intervals and calculate the average cost using the following formula:
SSOA = (SOA0 / 2 + SOA1 + SOAn / 2) / (n - 1),
where: ССОА - average cost current assets for the period of analysis;
SOA0 is the balance of funds in circulation at the beginning of the analyzed period;
SOA1, SOАn - balance of funds in circulation at the end of each equal interval of the analyzed period;
n is the number of equal periods of time in the analyzed period.
This method of calculating the average value of funds in circulation will allow us to take into account seasonal fluctuations in balances, as well as the influence of external and internal factors.
However, the value of the calculated turnover ratio gives only general information about the state business activity enterprise and is of no value for management without analysis of its dynamics and comparison with standard indicators.
Turnover of current assets: formula in days
The most informative indicator from the point of view of managing the commercial activities of an enterprise is the turnover of current assets in days or other units of time (weeks, months). This indicator can be calculated using the formula:
Ob = K_dn / Kob,
where: About - turnover in days;
K_dn — number of days in the analysis period;
Kob is the turnover ratio of current assets.
Standard values of turnover in days and turnover ratio are established by the enterprise independently based on an analysis of a combination of factors, such as contract terms, industry characteristics, region of activity, etc.
Current assets have different structure depending on the type of activity. For example, if a company provides services and does not have inventories, the emphasis in the analysis of current asset turnover will be on accounts receivable. Effective management of this type of funds in circulation will give the company the opportunity to release funds frozen in accounts receivable and thereby improve financial position enterprises.
How to set a standard for accounts receivable turnover? It is necessary to compare the turnover of accounts receivable with the turnover of accounts payable. The greater the excess in days of accounts payable turnover over the accounts receivable turnover, the greater the economic effect from managing accounts receivable will be.
Analysis of the dynamics of receivables turnover indicators will make it possible to identify negative trends in the event that debts that are impossible to collect appear in the receivables.
Results
Current assets Enterprises are a rapidly changing resource that reacts most acutely to changes in the external and internal business environment. Turnover indicators current assets are an important indicator of the effectiveness of the commercial activities of an enterprise.
The efficiency of using working capital is determined mainly by their turnover indicators. The significance of accelerating working capital turnover is as follows:
Accelerating turnover, all other things being equal, makes it possible to ensure the same volume of products sold, using less funds.
Accelerating turnover allows you to get more profit.
Accelerating turnover allows you to reduce the need for borrowed funds, or use the freed funds for highly profitable short-term investments.
Accelerating turnover allows you to increase the profitability of current assets.
Indicators
Turnover ratio (turnover speed) – expresses the number of turnovers made by working capital during the analyzed period. The rapid turnover of funds allows enterprises, even with a small volume of production, to receive significant profits from current activities.
This coefficient is calculated as the ratio of the volume of produced (sold) products in value terms to the average balance of working capital.
Turnover period (or duration of one turnover of working capital)
It is calculated as the ratio of the number of days in the analyzed period to the turnover ratio.
Working capital consolidation coefficient (load factor) is the inverse coefficient of the turnover ratio and shows how much working capital is accounted for per 1 ruble of manufactured or sold products.
The effect of accelerating the turnover of working capital is reflected in the indicators of their release or additional involvement in turnover.
The absolute release of working capital occurs when the production program is fulfilled or exceeded. The relative release of working capital is calculated using the following formula:
25. Labor resources, personnel and personnel of the enterprise.
Personnel of an enterprise is the main composition of qualified employees of an enterprise, company, or organization. Typically, enterprise personnel are divided into production personnel and personnel employed in non-production departments.
Production personnel - workers engaged in production and its maintenance - make up the bulk of the enterprise's labor resources.
The most numerous and basic category of production personnel are workers of enterprises (firms) - persons (workers) directly engaged in the creation of wealth or work to provide production services and move goods. Workers are divided into main and auxiliary. Key workers include workers who directly create commercial products enterprises and those engaged in the implementation of technological processes, i.e. changing the shape, size, position, condition, structure, physical, chemical and other properties of objects of labor.
Auxiliary workers include workers engaged in servicing equipment and workplaces in production shops, as well as all workers in auxiliary shops and farms.
Auxiliary workers can be divided into functional groups: transport and loading, control, repair, tool, housekeeping, warehouse, etc.
Managers are employees holding managerial positions at the enterprise (director, foreman, Chief Specialist and etc.).
Specialists are workers with higher or secondary specialized education, as well as workers who do not have special education, but occupy a certain position.
Employees – workers who prepare and process documents, accounting and control, and business services (agents, cashiers, clerks, secretaries, statisticians, etc.).
Junior service personnel - persons occupying positions in the care of office premises (janitors, cleaners, etc.), as well as in servicing workers and employees (couriers, delivery boys, etc.).
The ratio of different categories of workers in their total number characterizes the personnel structure of an enterprise, workshop, or site. The personnel structure can also be determined by such characteristics as age, gender, level of education, work experience, qualifications, degree of compliance with standards, etc.
The professional and qualification structure of personnel is formed under the influence of the professional and qualification division of labor. A profession is usually understood as a type (genus) labor activity, requiring certain preparation. Qualification characterizes the extent to which workers have mastered a given profession and is reflected in qualification (tariff) categories. Tariff categories and categories are also indicators characterizing the level of complexity of work. In relation to the nature of the professional preparedness of workers, such a concept as a specialty is also used, which determines the type of work activity within the same profession (for example, the profession is a turner, and the specialties are a lathe-borer, a turner-carousel operator). Differentiation in specialties for the same working profession is most often associated with the specifics of the equipment used.
26. Quantitative characteristics of the personnel composition of the enterprise. The quantitative characteristics of the enterprise's personnel are measured by indicators of the payroll, average and attendance numbers of employees.
The payroll reflects the movement of the number of all employees - hiring and dismissal from it, etc. It takes into account all permanent and temporary employees, including employees on business trips and vacations, hired on a part-time or part-time basis, as well as those with whom labor relations have been established. To determine the number of employees for a specific period, the average number of employees is calculated, which is used in calculating average labor productivity, average wages, staff turnover, etc. To calculate it, accounting data from working time sheets is used.
Turnout refers to the number of workers who are actually at work during a certain day.
Determining the number of personnel
Determination of personnel requirements at an enterprise (firm) is carried out separately by groups of industrial and non-industrial personnel. The initial data for determining the number of employees are: production program; time, production and maintenance standards; nominal (real) working time budget for the year; measures to reduce labor costs, etc.
The main methods for calculating the quantitative need for personnel are calculations based on the labor intensity of the production program; production standards; service standards; jobs.
1. Calculation of the standard number (Nch) for the labor intensity of the production program. When using this method, the total labor intensity of the production program (ltr. floor) is determined as the sum of the labor intensity of technological (ltr. tech.), maintenance (ltr. obs.) and management (ltr. control): ltr. floor. = ltr. those. +ltr. obs.
Ltr. ex. The sum of the first two terms reflects the labor costs of main and auxiliary workers and, accordingly, forms the actual production labor intensity (ltr. pr.), and the third reflects the labor costs of employees. 2. According to production standards. Loс = Qvyp / (Nв* Teff), where Qvyp is the volume of work performed in accepted units of measurement; Nв - planned production rate per unit of working time; Teff is the effective working time fund.
3. According to service standards. used to determine the number of key workers whose activities are difficult to regulate. This applies to workers who operate units, furnaces, devices, machines and other equipment and control the progress of technological processes. The average number of workers is calculated using the formula: Lр =n* Lр. ag* h *(Ts.pl. / Ts.f.), where n is the number of working units; Lр. ag. - the number of workers required to service one unit during a shift; Ts. pl. - number of days of operation of the unit as planned
period; Shh. f. - actual number of days of work.
4. By workplace it is used when planning the number of those groups of auxiliary workers for which neither the volume of work nor service standards can be established, since their work is performed at certain
workplaces and is associated with a specific service object (crane operator, storekeeper, etc.). In these cases, the calculation is carried out according to the formula: Lvs = Nm * h * ksp, where Nm is the number of jobs; h - number of shifts per day; ksp - payroll coefficient.
The number of service personnel can also be determined by aggregated service standards, for example, the number of cleaners can be determined by the number of square meters of premises, wardrobe attendants - by the number of people served, etc. The number of employees can be determined based on the analysis of industry average data, and in their absence - according to the standards developed by the enterprise. The number of managers can be determined taking into account controllability standards and a number of other factors.
27. Qualitative characteristics of the personnel of the enterprise The qualitative characteristics of the personnel of an enterprise are determined by the structure of personnel, the degree of professional and qualified suitability of workers to achieve the goals of the enterprise and perform the work it performs. When determining the personnel structure, employees engaged in the main and non-core activities are distinguished. Employees of the enterprise directly related to the main activity (production) represent the industrial production personnel of the enterprise. In addition to them, at any enterprise there are employees who are not directly related to the core activities of the enterprise, that is, they are engaged in non-core activities (employees of healthcare institutions, public catering, culture, trade, subsidiary agricultural facilities, etc.). Workers engaged in non-core activities constitute non-production personnel of the enterprise. Employees of industrial production personnel include workers of main, auxiliary, auxiliary and service workshops (see below), research, design, technological organizations and laboratories, plant management, services engaged in major and current repairs of equipment and vehicles. Industrial production personnel are divided into workers and employees. Workers include people directly involved in the production of material assets, as well as servicing this production. Workers are divided into main and auxiliary. The main workers are busy working in the divisions of the main production that produce core products, while the auxiliary workers are in the auxiliary, secondary, service, and ancillary divisions that ensure the uninterrupted operation of all departments (inter-shop, intra-shop transport, warehousing, etc.) .
Employees include workers in the following three categories: managers, specialists and actual employees. Managers are considered to be the employees heading the enterprise and its structural divisions, as well as their deputies and chief specialists (chief accountant, chief engineer, chief mechanical engineer, chief technologist, chief power engineer, chief metallurgist, chief metrologist, etc.). Specialists include workers performing engineering, technical, economic, accounting, legal and other similar activities. The actual employees include workers who prepare and process documentation, accounting and control, and business services (timekeepers, bookkeepers, secretaries, office clerks, etc.). Along with the structure of personnel, the quality indicators of personnel include the professional and qualification suitability of personnel, which is determined by the profession, specialty and level of qualifications of enterprise employees. A profession is a special type of activity that requires certain theoretical knowledge and practical skills. A specialty is a type of activity within one profession that has specific characteristics and requires additional special knowledge and skills from workers) A high degree of qualification is fixed by assigning the employee the appropriate qualification categories (tariff categories), which characterize not only the complexity of the work performed within the profession and specialty, but also the degree of remuneration through tariff coefficients corresponding to tariff categories (the higher tariff category, the higher the tariff coefficient and wages). At a specific enterprise, the professional qualification structure is reflected in a special document, approved annually by the head of the enterprise and representing a list of positions and specialties for each division (department, workshop, site, etc.). This document is called the staffing table.
Instructions
The turnover of assets is their transformation from material and material form into monetary form. Turnover speed is the number of revolutions in a given period of time. This speed represents the ratio of the average cost of working capital to revenue or cost of products, works, services for the analyzed period.
To determine the rate of turnover of working capital, use the following algorithm:
- calculation of the turnover ratio of current assets or their individual components;
- calculation of the turnover period.
Determine the turnover ratio of total current assets using the formula:
Kvol.a = (Revenue)/(Average value of current assets)
Then calculate the turnover rate by dividing the number of days in the period by the resulting turnover ratio. For convenience, round the number of days to the nearest ten: 30, 90, 180, 360.
Analyze the turnover rate of individual elements of current assets using the same principle. To do this, first calculate the average values of assets by adding ½ the sum of the indicators at the beginning and end of the period, as well as whole intermediate values, and dividing the resulting value by the number of reporting dates.
Calculate turnover ratios:
- inventories: K oz = (Revenue)/(Average inventory) or K oz = (Cost)/(Average inventory);
- receivables: Kodz = (Revenue)/(Average receivables) or Kodz = (Amount of repaid receivables)/(Average receivables);
- Money: K ods = (Revenue)/(Average cash) or K ods = (Amount of cash outflow)/(Average cash).
The next step is to calculate the turnover rate of elements of current assets using the following formulas, where T is the turnover period, D is the number of days in the period.
Reserves: T = D/K lake. This indicator characterizes the average shelf life of industrial inventories, finished products or goods, as well as the period of production;
Accounts receivable: T = D/K odz. The value shows the period of settlements between debtors and the company;
Cash: T = D/K ods. The result reflects the number of days that, on average, pass from the moment money arrives in the current account until it is released to pay obligations.
Sources:
- determination of turnover time
- Duration of one revolution
Tip 2: How to calculate working capital turnover
Negotiable facilities- these are the ones facilities enterprises that are advanced in manufacturing process continuously and are returned in the form of revenue in cash, i.e. precisely in the one in which they began their movement.
Instructions
To analyze the turnover of working capital, a number of coefficients are used. The main ones are the average duration in days, the turnover ratio - the number of revolutions made facilities mi for a certain period, the amount of employed working capital that falls on manufactured products is the working capital load factor.
The first indicator is the average duration of one revolution, characterizing the time during which the circulating facilities go through the production cycle: from the moment of purchasing materials to the moment of selling products made from these materials. It is calculated as the ratio of the product of the average balance of working capital and days in the reporting period to sales revenue for this period (month, quarter, year). In other words, the average balance of working capital to the one-day volume of revenue.
The second indicator of working capital turnover, the turnover ratio, can be calculated as the ratio of the volume of products sold to the average balance of working capital. It can be found in another way. This will be the ratio of the number of days in the period under review to average duration one turn.
