Absolute release of working capital takes place. Indicators of the use of working capital
Release working capital
Rationing of working capital
Duration of one turn
Working Capital Indicators
1 . Turnover ratio shows how many times during the month or year the goods are converted into money.
where K about - turnover ratio
R p - the volume of products sold, UAH.
About with - the balance of working capital, UAH.
2 . Coefficient of fixing working capital - inverse indicator of the turnover ratio, which characterizes the amount of working capital spent on 1 UAH. sold products.
where K 3 - fixing coefficient
where T is the duration of one revolution ͵ days
D - number of days in the period (360, 180, 90)
where H ob.s - normalization of working capital
N pr.z - rationing of inventories
N refinery - refinery rationing
N ᴦ.p - stock rationing finished products
where 3 current. - current stock of materials, UAH.
3 pages - safety stock of materials, UAH.
3 tr. - transport stock of materials, UAH.
where Ps - daily need for materials, UAH.
T p - the period between two next deliveries of this type of material, days
where T is the number of days in the period (360, 90, 60,)
Q - the need for raw materials, UAH
Q= H flow* N
where H consumption _ cost rate per part, UAH.
N - number of products, pcs.
where T is the average delay time of the next delivery of this type
material, days
where T s - transport stock, days
Q main + Q aux. + Znor. + O f + d
where Q main. - material requirement for the main production
Q aux. - material requirement for auxiliary production
Z norm - normative stocks of material
Of - the actual balance of the material at the beginning of the planned
d- use of internal reserves (waste processing, marriage)
The faster working capital makes a circuit, the more efficiently they are used.
The effect of accelerating the turnover of working capital is expressed in release, reducing the need for them due to the improvement of their use.
Absolute Release- reflects a direct decrease in the need for working capital. (120-20 = 100 thousand UAH)
Relative release- reflects both the change in the value of working capital and the change in the volume of products sold. To determine it, you need to calculate the need for working capital for the reporting year based on the actual sales turnover for the given period and the turnover in days for the previous year. The difference gives the amount of release.
For instance: = 120000 thousand UAH
110500 thousand UAH,
72, - 65 days.
The need for working capital at a turnover of 1995ᴦ. and sales volume 1995 ᴦ. will be equal to: (612000 * 72): 360 = 122400 thousand UAH. Relative release 122400 - 110500 = 11900 thousand UAH.
Topic: Intangible resources and assets
1. Understand and see intangible resources
2. Understanding the classification of intangible assets
Intangible Resources- part of the potential of an enterprise that can bring economic benefits for a long time, which is characterized by the absence of a material basis and the uncertainty of the size of future profits from its use. |
The concept of "intangible resources" is used to characterize the totality of intellectual property objects, which include:
1) objects of industrial property;
3) other (non-traditional) objects of intellectual property.
| Objects that are protected by copyright |
Intellectual property is a legal category that is used for:
1) determination of the results of a person's creative work;
2) designation of the belonging of such results to the relevant subjects of creative activity;
3) securing for these subjects of personal non-property and property rights to the development and use of intellectual products created by them.
Intellectual Property Law- this is the right of a person to the result of intellectual activity or to another object of intellectual property rights.
Industrial property objects include:
Invention- this is the result of human creative activity in the field of technology, the solution of technical specifications in a certain branch of the national economy, is characterized by significant novelty and provides a positive effect (practical utility).
Opening- ϶ᴛᴏ the establishment of phenomena or patterns in the material world previously unknown.
Rationalization proposal- ϶ᴛᴏ solving a technical problem that is relatively new and has a positive effect
utility model- this is the result of human intellectual activity, the object of which is a new in appearance, shape, arrangement of parts or the construction of a model, suitable for industrial production.
industrial designs- a new artistic and artistic design solution of products, when the unity of technical and aesthetic properties is achieved, which determine appearance industrial product.
An industrial design can be three-dimensional (model), flat (drawing) or combined.
Trademarks (marks for goods and services)- any original designation or any combination of designations by which the goods and services of some persons differ from the similar goods and services of other persons. The main task of a trademark is to identify a product or service and its manufacturer in the market. It performs two functions at the same time:
2) guarantee their quality.
know-how- this is information of any nature (inventions, original technologies, knowledge, skills, etc.), which are protected by the commercial secret regime and are the subject of sale or be used to achieve competitive advantage over other subjects entrepreneurial activity.
trade secret - the mode of confidentiality of information that allows its owner, under existing or possible circumstances, to increase income, avoid unjustified expenses, maintain a position in the market for goods, works, services, or obtain other commercial benefits. Under the regime of confidentiality of information, it is customary to understand the introduction and maintenance of special measures to protect information.
2.Intangible assets are one of the types of non-current assets and are durable means that do not have a material (physical, natural) form.
According to P (S) BU 19 intangible assets- all assets, except for cash, their equivalents and receivables in a fixed (or certain) amount of money.
Classification and accounting of intangible assets is carried out for each object according to the following groups:
1) the right to use natural resources(the right to use subsoil, other resources of the natural environment, geological and other information about the natural environment, etc.);
2) the right to use property(right to use land plot, the right to use the building, the right to rent premises, etc.);
3) rights to marks for goods and services(trademarks, trademarks, trade names, etc.);
4) rights to industrial property objects(the right to inventions, utility models, industrial marks, plant varieties, animal breeds, "know-how", protection against unfair competition, etc.)
6) goodwill is the excess of the purchase price over the buyer's share of the fair value identifiable assets and liabilities acquired at the acquisition date. In other words goodwill- is the difference between the market and book value of the enterprise.
Date of purchase- the date on which control over the net assets and activities of the acquiree passes to the acquirer.
Positive goodwill means that the value of the enterprise exceeds the total value of its assets and liabilities, and negative indicates an undervalued enterprise;
7) Other intangible assets(the right to carry out activities, use economic and other privileges, etc.).
The main features of intangible assets are:
Absence of material and material structure,
Use for a long time (more than a year),
Ability to be useful to the enterprise;
A high degree of uncertainty about the size of possible future profits due to their use.
Topic: Innovation and investment activity of business
1. Characteristics of innovation and innovation activity
2.Economy day, classification and structure of investments
Innovation- ϶ᴛᴏ new creation or improvement of the competitiveness of technology, products or services, as well as organizational and technical solutions, production, administrative, commercial, or other nature, significantly improving the structure and quality of production and the social sphere.
5. Indicators of the effectiveness of the use of working capital
Improving the use of working capital with the development of entrepreneurship is becoming increasingly important, since the material and financial resources released in this case are an additional internal source of further investment. Rational and effective use working capital contributes to the increase financial stability enterprise and its solvency. Under these conditions, the enterprise timely and fully fulfills its settlement and payment obligations, which allows it to successfully carry out commercial activities.
The efficiency of the use of working capital is characterized by a system economic indicators, primarily the turnover of working capital.
Under the turnover of working capital is understood the duration of one complete circulation of funds from the moment of the transformation of working capital in cash into inventories and until the release of finished products and its sale. The circulation of funds ends with the transfer of proceeds to the account of the enterprise.
The turnover rate of working capital is calculated using three interrelated indicators:
- turnover ratio (the number of turnovers made by working capital for a certain period (year, half year, quarter));
- the duration of one revolution in days,
- the amount of working capital per unit of products sold.
The calculation of the turnover of working capital can be carried out both according to the plan and actually.
The planned turnover can be calculated only for the normalized turnover of funds, the actual one - for all working capital, including non-standardized ones. Comparison of planned and actual turnover reflects the acceleration or deceleration of the turnover of normalized working capital. With the acceleration of turnover, working capital is released from circulation, with a slowdown, there is a need for additional involvement of funds in circulation.
The turnover ratio is defined as the ratio of the amount of proceeds from the sale of products, works, services to the average balance of working capital according to the formula (Fig. 7.29):
K about \u003d P / C,
where P is the net proceeds from the sale of products, works, services, rubles;C - average balances of working capital, in rubles.
Rice. 7.29. Methodology for calculating the turnover ratio
The turnover of working capital can also be presented in days, that is, reflect the duration of one turnover (Fig. 7.30).
The duration of one revolution in days is determined by the formula:
O \u003d C: R / D or O \u003d D / K about,
where O is the duration of one revolution in days;C - balances of working capital (average annual or at the end of the upcoming (reporting) period), rubles;P - revenue of marketable products (at cost or in prices), rubles;D - the number of days in the reporting period.
Rice. 7.30. Calculation of the duration of one revolution in days
To determine the duration of one turnover of receivables, you can use the indicator of sales in selling prices. First, the volume of sales for one day is calculated, and then the urgency of the receivables.
The calculation is made according to the formula:
OD = DZ: Oh,
where OD is the duration of the turnover of receivables (in days);DZ - accounts receivable at the end of the year;O is the volume of sales per day.
The period required for the circulation of all working capital in cash, consists of the duration of one inventory turnover in days and the urgency (duration) of one receivables turnover.
The working capital utilization factor is an indicator of the inverse of the turnover ratio (Fig. 7.31). It characterizes the amount of working capital per unit (1 ruble, 1 thousand rubles, 1 million rubles) of sold products. At its core, this indicator represents the capital intensity of working capital and is calculated as the ratio of the average balance of working capital to the volume of product sales for the analyzed period. Calculated according to the formula:
K z \u003d C / P,
where K z - working capital utilization factor;C - average balance of working capital, rub.;P - proceeds (net) from the sale of products, works, services, rub.
Rice. 7.31. Load Factor Calculation
Example: Over the past year, the volume of marketable products at cost amounted to 350,000 thousand rubles. The average balance of working capital for the same period is 47,800 thousand rubles. Determine the performance indicators for the use of working capital by the enterprise.
The calculation is carried out in the following sequence:
1. The turnover ratio is determined: 350,000 / 47,800 = 7.3 turns. That. for the year, working capital made 7.3 rounds. In addition, this indicator means that for every ruble of working capital, 7.3 rubles of sold products accounted for.
2. The duration of one revolution is calculated: 360 / 7.3 = 49.3 days
3. The load factor is determined: 47,800 / 350,000 = 0.14.
In addition to these indicators, the indicator of return on working capital can also be used, which is determined by the ratio of profit from the sale of the company's products to the average balances of working capital (Fig. 7.32).
Rice. 7.32. Return on current assets
Turnover can be defined as both general and private.
General turnover characterizes the intensity of the use of working capital in general for all phases of the circulation, without reflecting the features of the circulation of individual elements or groups of working capital.
Private turnover reflects the degree of use of working capital in each phase of the cycle, in each specific phase of the cycle, in each group, as well as for individual elements of working capital.
To determine the impact of structural changes, the balances of individual elements of working capital are compared with the volume of marketable products (T), which was taken when calculating the total turnover of working capital. In this case, the sum of the indicators of private turnover of individual elements of working capital will be equal to the indicator of the turnover of all working capital of the enterprise, that is, the total turnover.
The quantitative result of the efficiency of the use of working capital is their release from circulation (with an acceleration of turnover) or additional involvement in economic turnover (with a slowdown in the turnover of working capital) (Fig. 7.33).
Rice. 7.33. Consequences of acceleration and deceleration of working capital turnover
Release can be absolute or relative.
Absolute release of working capital takes place when the actual balance of working capital is less than the standard or the balance of working capital for the previous (base) period while maintaining or increasing the volume of sales for this period.
The relative release of working capital takes place in cases where the acceleration of the turnover of working capital occurs simultaneously with the growth in production at the enterprise, as a result, the growth rate of sales outstrips the increase in working capital.
The funds released at the same time cannot be withdrawn from circulation, as they are in inventories of goods and materials, which ensure the growth of production.
The relative release of working capital, like the absolute one, has a single economic basis and significance, or it means additional savings for an economic entity and allows for an increase in the scale of entrepreneurial activity without attracting additional financial resources.
Example: It is known that for the previous year, the proceeds from the sale of products (in pg) amounted to 6,000 million rubles, for the current year (in tenge) - 7,000 million rubles. The average balance of working capital in the previous year (OS pg) - 600 million rubles, in the current year (OS tg) - 500 million rubles. The number of days in period D is 360 days. Determine the magnitude of the absolute and relative release of working capital from economic turnover.
The calculation is made in the following sequence:
1. The turnover ratios are calculated:
Previous year (KO pg) = 6,000 / 600 = 10 revolutions
Current year (KO tg) = 7,000 / 500 = 14 turns
2. The duration of one revolution in days is determined:
In the previous year (D pg) = 360 / 10 = 36 days
In the current year (D tg) = 360 / 14 = 25.71 days
3. Load factors are determined:
Previous year (KZ pg) = 600 / 6000 = 0.1
Current year (KZ tg) = 500 / 7000 = 0.07142
4. Two methods can be used to calculate the release of working capital.
Method 1: The total amount of release of funds from the economic turnover is calculated according to the formula V = (D tg - D pg) × V tg / D; absolute release: V ab = OS pg - OS tg; relative release: B rel = B - B ab.
According to the task:
B \u003d (25.71 - 36) × 7000 / 360 \u003d (-200) million rubles.
Vab = 500 - 600 = (-100) million rubles
Votn \u003d (-200) - (-100) \u003d (- 100) million rubles.
Method 2: The total amount of release from economic circulation is calculated by the formula B = (KZ tg - KZ pg) × V tg; absolute release: V ab \u003d OS pg - (V tg / KO pg); relative release: V rel = (V tg -V pg) / KO tg.
According to the task:
B \u003d (0.07142-0.1) × 7000 \u003d (-200) million rubles.
Vab \u003d 600 - (7000 / 10) \u003d (-100) million rubles.
Votn \u003d (6000 - 7000) / 10 \u003d (-100) million rubles.
The efficiency of the use of working capital depends on many factors that can be divided into external factors that influence regardless of the interests of the enterprise, and internal factors that the enterprise can and should actively influence.
External factors include: the general economic situation, tax legislation, conditions for obtaining loans and interest rates on them, the possibility of targeted financing, participation in programs financed from the budget. These and other factors determine the scope in which the company can manipulate the internal factors of working capital.
Significant reserves for increasing the efficiency of the use of working capital lie directly in the enterprise itself. In manufacturing, this applies primarily to inventories. Being one of the components of working capital, they play an important role in ensuring the continuity of the production process. At the same time, inventories represent that part of the means of production that is temporarily not involved in the production process.
Rational organization of inventories is an indispensable condition for increasing the efficiency of the use of working capital. The main ways to reduce inventories are reduced to their rational use, eliminating excess stocks of materials, improving rationing, improving the organization of supply, including by establishing clear contractual terms of supply and ensuring their implementation, optimal selection of suppliers, and streamlined transport. An important role belongs to improving the organization of warehouse management.
Accelerating the turnover of working capital allows you to release significant amounts and thus increase the volume of production without additional financial resources, and use the released funds in accordance with the needs of the enterprise.
One of the most important performance indicators production activities company, is the asset turnover. After all, the faster the values go through the full production cycle, the more efficient the functioning of the enterprise. The release of working capital is financial results acceleration of the turnover of current assets. Consider what are current assets, as well as what role the release of working capital plays.
Valuable property of the organization used in the implementation process economic activity, can be classified depending on the degree of liquidity, that is, the ability to quickly turn into a monetary equivalent, as well as how long the period of use of the asset is. If it's about non-current assets, then one cannot speak of them as liquid values. This category includes machinery and equipment, permanent structures, intangible assets and other property with similar characteristics. The use of such assets exceeds one calendar year and is transferred to the cost of production in installments.
Working capital has diametrically opposite characteristics. This category of values is largely determined by significant liquidity (with the exception of uncollectible receivables and stale stocks of material assets).
The cost of working capital is transferred to the manufactured products in full. The use of this category of property for the most part does not exceed the duration of one production cycle or one calendar year.
What is the amount of released working capital?
In the case when, in the process of doing business, by rationalizing the use of working capital, a reduction in the need for them is achieved, we can talk about the release of working capital (the formula for calculating will be presented below).
The value of the process of release of assets for the company cannot be underestimated, since the actual savings in material costs is one of the basic sources of cost reduction, increase in profitability and the level of real profit.
Absolute and relative release of working capital
At its core, in practice, there is a relative release of working capital and absolute.
The absolute release of working capital is a direct reduction in the organization's need for current assets. This type of cost reduction occurs when the balance of assets is significantly lower than the standard established by the company, or the amount noted in previous periods.
With regard to the relative release of working capital (we will consider the formula below), this indicator considers the relationship between a decrease in the amount of working capital of a company and an increase in the value of commercial products produced by an enterprise. This type release takes place in those cases when the process of accelerating the passage of the cycle of current assets is carried out simultaneously with an increase in the amount of marketable products released. At the same time, the rate of production growth should significantly outpace the increase in the balance of assets.
In order to determine the amount of released working capital, both in absolute and relative terms, it is enough to use mathematical calculation formulas. Let's consider each of them.
The absolute release of working capital - the formula - can be represented as follows:
Absolute release = (Duration of 1 turnover in the base period - Duration of 1 turnover in the reporting period) / Volume of current assets / Period.
In this case, the relative release will be determined using the formula:
Relative release = Volume of current assets in the base period * Growth rate of manufactured products - Volume of current assets in the reporting period.
Thus, it will not be difficult to determine the release of working capital, both in absolute and in relative terms, when using the following formulas for calculation.
The process of absolute release occurs when the actual need for assets is much lower than planned. In this case, it will be necessary to compare the real need for assets relevant for the previous period and their planned requirement provided that production volumes either remain at the current level or increase.
Relative release manifests itself in the form of a reduction in the real value of the company's assets in the period under review in comparison with the results achieved earlier.
Consider how the amount of released working capital is determined using a practical example.
This year, the real V of output was achieved - 1200 tr, while the volume of all current assets amounted to 1500 tr, the planned V of production for the next year - 2000 tr. provided that the asset turnover will be increased by 5 days.
- Let's define turnover:
O \u003d 1500 / (1200 / 360) \u003d 45 days;
- The amount of working capital:
OS \u003d 20000 * 45 / 360 \u003d 2500 tr;
- The amount of working capital in the next year:
OS \u003d 2000 * (45 - 5) / 360 \u003d 2220 tr.
- Relative release of assets:
RH = 2500 - 2220 = 280 tr.
The calculation of the relative and absolute release of current assets using the above formulas allows organizations to speed up the turnover of existing assets and identify hidden reserves, which, in turn, will ensure the emergence of free cash resources that the company can direct to business development without attracting third parties. sources of financing activities.
Among the indicators of the effectiveness of the use of working capital are the following.
1. The duration of one revolution (D o) is determined by the formula:
where C o - balances of working capital for the period;
T lane - the number of days in the period;
V real - the amount of products sold (you can use commercial products at cost or at selling prices).
2. The turnover ratio shows the number of turnovers made in a certain period. It is determined by the formula:
3. The load factor of the OBS characterizes the amount of working capital per 1 rub. products sold:
4. The profitability of working capital is calculated as the ratio of profit (gross or net) of the enterprise to the average annual cost of working capital:
As a result of the acceleration of turnover (intensity of use of fixed assets), a certain amount of fixed assets is released.
Absolute Release reflects a direct decrease in the need for working capital. Absolute release occurs when
Fact< С о.план, V реал = const ,
where C o.fact - the actual balances of the OS;
C o.plan - the planned balances of the OS;
V real - sales volume.
Absolute release is determined by the formula:
AB \u003d C o.fact - C o.plan.
Relative release OBS occurs when the turnover accelerates with an increase in production volume. In contrast to the absolute release, the funds released in this case cannot be withdrawn from circulation without maintaining the continuity of production.
Relative release reflects both the change in the value of working capital and the change in the volume of products sold. To determine it, you need to calculate the need for working capital for the reporting year, based on the actual sales turnover for this period and the turnover in days for the previous year. The difference will give the amount of funds released.
When analyzing work industrial enterprise various indicators of useful use of material resources:
The indicator (coefficient) of the output of finished products from a unit of raw materials;
The indicator of raw material consumption per unit of finished product;
The coefficient of use of materials (the ratio of the net weight or mass of the product to the standard or actual consumption of structural material);
The utilization rate of the area or volume of materials;
The level of waste (losses), etc.
Ways to increase the efficiency of the use of working capital: optimization of stocks of resources and work in progress; reduction of the duration of the production cycle; improving the organization of logistics; acceleration of the sale of commercial products, etc.
Common sources of saving material resources are: reducing the specific consumption of materials; weight reduction of products; reduction of losses and waste of material resources; use of waste and by-products; recycling; replacement of natural raw materials and materials with artificial ones, etc.