The utilization factor of working capital in turnover is calculated. Working capital statistics. And ways to improve it
divided by the following formula:
where K is the loading factor of funds in circulation, kopecks;
Converting rubles to kopecks.
Load factor of funds in circulation (X) - value, inverse
naya to the turnover ratio of funds (K ^). The lower the coefficient
The ficient of loading funds, the more efficiently working capital is used
Funds at the enterprise, its financial position is improving.
Due to the fact that working capital consists of turnover
Nyh funds and circulation funds, then the coefficients of turnover
bridges for them can be defined in the following way:
turnover ratio of working capital;
-average balance of working capital for the reporting period;
turnover ratio of circulation funds;
-average balance of circulation funds for the reporting period.
Working capital is made up of inventories
Work in progress, accounts receivable and
Moves of future periods. Therefore, for a more detailed analysis
You can determine the turnover ratio for each element
Menta of revolving funds.
This methodological approach is also legitimate for elements of the background.
Dov appeal. For example, the turnover ratio of
Inventories and receivables can be
Determined from expression
inventory turnover ratio;
- average balance of inventories for the reporting period;
receivables turnover ratio;
- the average balance of receivables for the reporting period.
Turnover acceleration working capital has an important
First of all, to improve the financial condition of pre-
Acceptance, and ultimately to achieve maximum profit.
The basis for accelerating the turnover of working capital
Are the value of the volume of production and the speed of its
Implementations. Between the volume of sales and turnover
There are direct and inverse relationships for company means.
The magnitude of the increase in production volume due to the acceleration of turnover
Readability of working capital (ceteris paribus) can be
but to determine using the method of chain substitutions:
Where is the increase in the volume of production due to the acceleration of turnover
working capital,
turnover ratio in the reporting and planning periods;
average balance of working capital in the planning period
Influence of working capital turnover on increment
Profits can be determined by the formula
where the increase in profit in the planned period due to the acceleration of turnover
The volume of working capital,
Profit of the enterprise in the reporting period.
The acceleration of the turnover of working capital leads to their
Release. Let's show this with a hypothetical example.
Example. For the reporting year, the volume of product sales amounted to
Million rubles, and the average annual balance of working capital -5 million
rub. For the planning period, the volume of sales is provided
increase by 20%, and the turnover ratio - by one
Turnover.
Determine the indicators of the use of working capital in
even and planned periods and their release.
Decision
We determine the indicators of the use of working capital for
reporting period:
We determine the indicators of the use of working capital
in the planning period:
3. Determine the release of working capital:
where is the need for working capital in the planning period, if not for
there was an acceleration of their turnover;
the need for working capital in the planning period, taking into account
The volume of acceleration of their turnover.
The turnover of working capital in an enterprise depends on
from the following factors: the duration of the production cycle;
The quality of products and their competitiveness; ef-
Efficiency of working capital management at the enterprise
In order to minimize them; solving the problem of reducing material
Product capacities; method of supply and marketing of products; structure
Working capital tours, etc.
REGULATORY BASIS OF THE ENTERPRISE
AND WAYS TO IMPROVE IT
The level of use of material resources is largely
The measure is determined by the state regulatory framework at the enterprise.
The regulatory framework is understood as the whole set of norms and norms
mativov, which is used in the enterprise for planning and
Analysis of the consumption of material resources.
The rate of consumption of material resources is the maximum
permissible planned value of the consumption of raw materials (materials or fuel
Ba) that can be spent to produce a unit
products (or works).
The consumption rate of material resources can be represented as follows
blowing form:
consumption rate,
net mass, or useful consumption;
-total technological waste and losses,
- other organizational and technical waste and losses.
The first and main element of the norm is net weight.
Products, i.e. useful consumption of material resources for production
Production output, or scope of work (excluding any waste
Dov and losses).
The second element of the consumption rate is the total technological
The current assets of the enterprise are placed in section 2 of the asset balance and include stocks, receivables, cash and value added tax on acquired valuables. The analysis can be carried out as a whole for 2 sections and for each type of working capital. In the process of analysis, it is necessary to establish whether turnover has slowed down or accelerated. To do this, the indicators of the use of working capital for several periods are calculated and compared, and the increase in the turnover ratio, the decrease in the duration of one turnover and the working capital utilization factor are positively evaluated.
JSC "Vazhskoye", like any other enterprise, is interested in accelerating the turnover of working capital, because dependence on borrowed funds is reduced, the need for working capital is reduced, and the material and technical base is effectively used.
The criterion for the effectiveness of the use of working capital is the relative minimization of advanced working capital, which ensures the highest possible results of production and financial activities. Based on this, the efficiency of the use of working capital is characterized by a system of indicators:
Average annual working capital balance
Turnover ratio (turns)
Duration of one turnover in days (turnover ratio in days)
Working capital utilization factor
Table 7- Indicators of the use of working capital in OAO Vazhskoye
Analyzing the data in Table-7, we can conclude that the duration of one turnover in days increased in 2007. compared to 2005 by 9.8, this indicates that working capital makes a slower circulation (working capital slowly returns to the enterprise in the form of revenue from the sale of services), and therefore is not effectively used.
The load factor in 2007 increased by 0.029 compared to 2005, i.e. increased costs of working capital to obtain 1 rub. sold products (works, services). With an increase in the load factor of working capital, the financial position of the enterprise worsens, and the efficiency of the use of working capital decreases.
In general, the turnover ratio decreased by 0.07 for working capital. A decrease in the coefficient means that the circulation of working capital of an economic entity is slowing down.
The higher the value of the turnover ratio of current assets, the better used working capital. Its growth means the saving of socially necessary time and the release of funds from circulation. This allows the organization to manage with a smaller amount of working capital to ensure the release and sale of products or, with the same amount of working capital, increase the volume and improve the quality of products (5, p. 468).
Let us find the amount of released (or attracted) funds into circulation in 2007.
Thus, the slowdown in turnover by 9.8 days. requires additional funds for one turnover in the amount of 1101.57 thousand rubles. The turnover in the reporting year amounted to 1.58 turnovers, therefore, additional funds will be required for the entire year: (1101.57 1.58) = 1740.46 thousand rubles.
The turnover of working capital as a whole depends on the speed of turnover of individual elements of working capital, especially such as:
productive reserves
When analyzing inventory turnover according to the balance sheet, instead of revenue from form No. 2 “Profit and Loss Statement”, we take the cost (line 020).
Average annual stock balance
Turnover ratio
S - the cost of goods sold, works, services
Change in number of revolutions: 2.27 - 1.88 = 0.39
The inventory turnover ratio characterizes the number of inventory turnovers for the analyzed period. An increase in the coefficient indicates a relative decrease in inventories and a decrease in production and other activities.
receivables
Medium receivables
Turnover ratio
Change in number of revolutions = 4.97 - 15.48 = - 10.51
The turnover ratio of receivables characterizes the speed of turnover of receivables. The decrease in this indicator reflects the increase in sales on credit.
2.4 . Improving the use of working capital of the enterprise
An essential source of internal investment in an organization is an increase in the rate of turnover of funds invested in assets. Working capital management is based on determining the optimal volume and structure of current assets, sources of their coverage and the ratio between them, ensuring stable and efficient operation of the organization, as well as creating opportunities for self-financing of development. This task can be solved by conducting a regular analysis of the structure and turnover of the organization's assets.
With the acceleration of their turnover, such moments as a decrease in the value of the advanced capital to the minimum required level, a decrease in the need for additional sources of financing (respectively, fees for them), a decrease in the costs associated with the possession of inventory and their storage, as well as a decrease in the amount of paid taxes, etc. (5, p. 467).
The acceleration of the turnover of working capital leads to the release of funds from circulation, which allows a smaller amount of working capital to increase the output and sale of products and improve the quality of products (works, services) (2, p. 187).
The duration of the funds in circulation is influenced by a number of external and internal factors.
External factors include: production, supply and marketing and intermediary activities, industry affiliation, the scale of the organization, the economic situation and related business conditions (inflation rate, violation or complete absence of established economic ties, which leads to a forced accumulation of stocks and a slowdown in the process turnover of funds).
Internal factors include the effectiveness of the asset management strategy through pricing policy, the structure of assets, the choice of methods for assessing inventory items (5, p. 467).
Rational and economical use of working capital is very important for each specific enterprise.
The main goal of improving the use of working capital is to improve the financial condition of the enterprise (maximizing profits and increasing the value of the company).
Unlike inventories, which are quite static and cannot be changed dramatically, since they are largely determined by the essence of the technological process, receivables are a very variable and dynamic element of working capital, which significantly depends on the company's policy towards product buyers. Accounts receivable is an immobilization of own working capital, i.e., in principle, it is unprofitable for the enterprise, because. it depends on the availability of funds in the accounts of the enterprise. Theoretically, receivables can be reduced to a minimum, however, this does not happen for many reasons, including competition.
From the point of view of recovering the cost of the delivered products, the sale can be made in one of three ways:
advance payment (the goods are paid in full or in part before
transfer by the seller);
payment for cash (the goods are paid in full
in the moment transfer of goods, i.e. there is a kind of exchange of goods for
money);
payment on credit (the goods are paid for through a certain
time after it has been handed over to the buyer). In a market economy
It is the latter method that is the main one and is carried out
usually in the form of non-cash payments, the main forms of which are a payment order, a letter of credit, collection settlements and a settlement check. The latter scheme is the most unprofitable for the seller, since he has to lend to the buyer, but it is precisely this scheme that is the main one in the system of payments for delivered products. When paying with a deferred payment, it is precisely accounts receivable for commodity transactions that arise as a natural element of such a generally accepted settlement system.
When developing a lending policy for buyers of its products, the company must decide on the following key issues:
term of the loan (most often the company has several standard contracts providing for the deadline for payment for products);
credit standards (criteria by which the supplier determines the financial solvency of the buyer and the resulting payment options);
a system for creating reserves for doubtful debts (it is assumed that, no matter how the system of working with debtors is debugged, there is always a risk of non-receipt of payment, at least due to force majeure; therefore, based on the principle of caution, it is necessary to create a provision for losses in connection with buyer's insolvency);
payment collection system (this includes procedures for interacting with buyers in case of violation of payment terms, a set of criterial values of indicators indicating the significance of violations in payment, a system for punishing unscrupulous counterparties, etc.);
the system of discounts provided (in a market economy
the usual practice is to provide discounts in the case of a specified and fairly short period of payment for the delivered products) (8, p. 372).
An effective system for establishing relationships with customers involves:
Qualitative selection of clients to whom credit can be granted;
Determination of optimal lending conditions;
A clear procedure for filing claims;
Monitoring how customers fulfill the terms of contracts.
No matter how effective the buyer selection system is, in the course of interaction with them all kinds of overlays are not excluded, so the enterprise is forced to organize some system of control over the fulfillment of payment discipline by buyers. This system, called the mutual administration systemrelationships with customers includes:
Regular monitoring of debtors by product type,
the amount of debt, maturity, etc.;
Minimization of time intervals between the moments of completion of work, shipment of products, presentation of payment documents;
Sending payment documents to the appropriate addresses;
d) careful consideration of customer requests for conditions
payment;
A clear procedure for paying bills and receiving payments.
The following ways to improve the use of working capital in the enterprise are possible:
creation of a perfect regulatory framework at the enterprise;
management of working capital at the enterprise in order to minimize them;
education of employees of the enterprise in the spirit of rational
use of material resources;
maintenance of equipment and technology in good working condition and strict observance of technological processes, etc. (3, pp. 248-249).
Conclusions and offers
Object of study term paper- open joint stock company "Vazhskoe". The production direction of JSC "Vazhskoye" in terms of the structure of commercial products is dairy and meat. The leading branch of animal husbandry is the production of milk and cattle meat.
For the economic characteristics of the enterprise were used:
data of forms of accounting (financial) statements of the enterprise for 2005 - 2007, order on accounting policy, primary accounting documents.
Analyzing the level and dynamics of financial results in general for the enterprise and by type of activity, we can say that the sales proceeds, the level of other income and expenses have increased. The growth rate of revenue is equal to the growth rate of cost, which is of course a negative indicator. The profitability of turnover has decreased, which means that the demand for products has decreased. The financial position of the enterprise is stable, as of 01.01.2008 there are free funds.
The financial condition of the enterprise largely depends on the structure and level of use of working capital. Indicators of the use of working capital are the turnover ratio; the duration of one revolution and the load factor.
In comparison with 2005, there was a decrease in the volume of working capital (2005 - 34659 thousand rubles, as of 01.01.2008 - 60153 thousand rubles). Analyzing the effectiveness of the use of working capital in OAO "Vazhskoye", we can conclude that the duration of one turnover in days has increased, which indicates that working capital makes a slow turnover. The load factor increased, while the financial position of the enterprise worsened, working capital began to be used less efficiently. In general, the turnover ratio decreased by 0.07 for working capital.
When drivingworking capital, it is necessary to pay attention to the state of affairs at the enterprise in the following areas:
a system for improving the regulatory framework at the enterprise;
management of working capital at the enterprise in order to minimize them (in order to receive funds for the work and services performed in a timely manner and to reduce the costs associated with the recovery of overdue debts, JSC “Vazhskoye” needs to analyze the circle of its customers and buyers, strengthen control over the fulfillment of the terms of the contract ; develop a report on accounts receivable with the timing of its occurrence, for timely action to be taken against non-paying enterprises);
monitoring of standards and dynamics of actual unit costs and turnover of working capital;
improving the planning and formation of working capital;
the level of quality of works and services and ensuring their competitiveness, etc.
In essence, this is all critical factors improving the efficiency of the use of working capital at the enterprise.
Improving the use of working capital in the enterprise hasof great economic and social importance, as it allows:
significantly increase the profit remaining at the disposal of the enterprise;
increase the competitiveness of products;
improve the financial condition of the enterprise;
accumulate sufficient own financial resources
to buy new equipment, etc.
Bibliography
negotiable facilities (12)
Abstract >> Economics... negotiable funds are: 1. standard negotiable funds by production stocks 2. standard negotiable funds for work in progress 3. standard negotiable funds ...
negotiable facilities (16)
Abstract >> Economic theoryComponents of the material structure negotiable funds. Elements negotiable funds negotiable production assets include: ... for financing negotiable funds borrowed facilities. Additional need for negotiable means due to...
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under turnover negotiable funds refers to the duration of a complete cycle funds from the date of purchase negotiable funds(purchases...
The director of the company, who has before his eyes only indicators of profit and overall profitability, cannot always understand how to correct them in the right direction. In order to have all the levers of control in hand, it is absolutely necessary to also calculate the turnover of working capital.
The picture of the use of working capital consists of four main indicators:
- Duration of turnover (determined in days);
- How many times working capital makes a turnover in the reporting period;
- How much working capital is accounted for per unit of products sold;
- Load factor of funds in circulation.
Consider the calculation of these data using an example conventional enterprise, as well as the calculation of a number of important ratios to understand the importance of turnover indicators in the overall picture of the company's success.
Turnover ratio
The basic formula that determines the turnover rate of working capital is as follows:
Cob is the turnover ratio. It shows how many turnovers of working capital were made for a specific period of time. Other designations in this formula: Vp - sales volume for the reporting period;
Oav, - the average balance of working capital for the reporting period.
Most often, the indicator is calculated for a year, but absolutely any period necessary for analysis can be selected. This ratio is the rate of turnover of working capital. For example, the annual turnover of a mini-store mobile phones amounted to 4,800,000 rubles. The average balance of funds in circulation was 357,600 rubles. We get the turnover ratio:
4800000 / 357 600 = 13.4 turns.
Turnover duration
It also matters how many days one revolution lasts. This is one of the most important indicators, which shows how many days the company will see the funds invested in turnover in the form of cash proceeds and will be able to use them. Based on this, it is possible to plan both making payments and expanding turnover. Duration is calculated like this:
T is the number of days in the analyzed period.
Let's calculate this indicator for the above digital example. Since the enterprise is trading, it has a minimum number of days off - 5 days a year, for the calculation we use the figure of 360 working days.
Calculate how many days the company could see the money invested in turnover in the form of revenue:
357,600 x 360 / 4,800,000 = 27 days.
As you can see, the turnover of funds is short, the company's management can plan payments and use funds for expanding trade almost monthly.
To calculate the turnover of working capital, the profitability indicator is also important. To calculate it, you need to calculate the ratio of profit to the average annual balance of working capital.
The profit of the enterprise for the analyzed year amounted to 1,640,000 rubles, the average annual balance was 34,080,000 rubles. Accordingly, the return on working capital in this example is only 5%.
Load factor of funds in circulation
And one more indicator necessary for assessing the speed of turnover of working capital is the utilization factor of funds in circulation. The coefficient shows how much working capital is advanced for 1 rub. revenue. This is the working capital intensity, which shows how much working capital must be spent in order for the company to receive 1 ruble of revenue. It is calculated like this:
Where Kz - the load factor of funds in circulation, kop.;
100 - transfer of rubles to kopecks.
This is the opposite of the turnover ratio. The smaller it is, the better the use of working capital. In our case, this coefficient is equal to:
(357,600 / 4,800,000) x 100 = 7.45 kop.
This indicator is an important confirmation that working capital is used very rationally. The calculation of all these indicators is mandatory for an enterprise that seeks to influence the efficiency of work with the help of all possible economic levers.
Forecast NOW! can be calculated
- Turnover in monetary and physical units both for a specific product, and for a group of goods, and for a cut - for example, for suppliers
- The dynamics of changes in turnover in any necessary sections
An example of calculating the turnover rate for groups of goods:
Evaluation of the dynamics of changes in turnover by goods/groups of goods is also very important. At the same time, it is important to correlate the turnover schedule with the service level schedule (how much we satisfied consumer demand in the previous period).
For example, if the turnover and the level of service are declining, then this is an unhealthy situation - you need to study this group of goods more carefully.
If turnover is increasing, but the level of service is decreasing, then the increase in turnover is most likely provided by fewer purchases and an increase in shortages. The opposite situation is also possible - the turnover decreases, but with this calculation, the level of service - customer demand is provided by large purchases of goods.
In these two situations, it is necessary to evaluate the dynamics of profit and profitability - if these indicators grow, then the ongoing changes are beneficial for the company, if they fall, then measures must be taken.
Forecast NOW! it is easy to assess the dynamics of turnover, service level, profit and profitability - it is enough to conduct the necessary analysis.
Example:
Since August, there has been an increase in turnover with a decrease in the level of service - it is necessary to evaluate the dynamics of profitability and profit:
Profitability and profits have been falling since August, we can conclude that the dynamics of changes is negative
working capital is the total amount of money advanced to create working capital production assets and circulation funds that ensure the continuity of the firm.
Composition and classification of working capital
revolving funds are assets that, as a result of its economic activity fully transfer their value to finished product, take a one-time part in, changing or losing their natural-substantial form.
Revolving production assets enter production in their natural form and are entirely consumed in the production process. They transfer their value to the created product completely.
circulation funds associated with servicing the process of circulation of goods. They do not participate in the formation of value, but are its carriers. After finishing, manufacturing finished products and its implementation, the cost of working capital is reimbursed as part of (works, services). This creates the possibility of a systematic resumption of the production process, which is carried out through the continuous circulation of enterprise funds.
Working capital structure- is the ratio between the individual elements of working capital, expressed as a percentage. The difference in the structures of working capital of companies is determined by many factors, in particular, the characteristics of the organization's activities, the conditions for doing business, supply and marketing, the location of suppliers and consumers, the structure of production costs.
Working capital assets include:- (raw materials, basic materials and purchased semi-finished products, auxiliary materials, fuel, containers, spare parts, etc.);
- with a service life of not more than one year or a cost of not more than 100 times (for budget organizations- 50 times) the established minimum wage per month (low-value consumable items and tools);
- unfinished production and semi-finished products of own production (objects of labor that have entered into manufacturing process: materials, parts, assemblies and products that are in the process of processing or assembly, as well as semi-finished products of their own manufacture, not fully completed by production in some workshops of the enterprise and subject to further processing in other workshops of the same enterprise);
- future spending(non-material elements of working capital, including the costs of preparing and developing new products that are produced in a given period, but are related to products of a future period; for example, costs for the design and development of technology for new types of products, for rearranging equipment).
circulation funds
circulation funds- funds of the enterprise operating in the sphere of circulation; part of working capital.
The circulation funds include:- enterprise funds invested in stocks of finished products, goods shipped but not paid for;
- funds in settlements;
- cash on hand and in accounts.
The amount of working capital employed in production is determined mainly by the duration of production cycles for the manufacture of products, the level of development of technology, the perfection of technology and the organization of labor. The amount of circulation funds depends mainly on the conditions for the sale of products and the level of organization of the system of supply and marketing of products.
Working capital is a more mobile part.
In every the circulation of working capital goes through three stages: monetary, production and commodity.
To ensure an uninterrupted process, the enterprise forms working capital or material values that await their further production or personal consumption. Inventories are the least liquid item among items of current assets. The following inventory valuation methods are used: for each unit of purchased goods; by average cost, in particular, by weighted average cost, moving average; at the cost of the first time purchases; at the cost of the most recent purchases. The unit of accounting for working capital as inventories is a batch, a homogeneous group, an item number.
Depending on the destination, stocks are divided into production and commodity. Depending on the functions of use, stocks can be current, preparatory, insurance or warranty, seasonal and transitional.- Insurance stocks- a reserve of resources intended for the uninterrupted supply of production and consumption in cases of a decrease in supplies compared to those provided.
- Current stocks- stocks of raw materials, materials and resources to meet the current needs of the enterprise.
- Preparatory stocks- stocks dependent on the production cycle are necessary if the raw materials must undergo any processing.
- carryover stocks- part of unused current reserves, which are transferred to the next period.
Working capital is simultaneously at all stages and in all forms of production, which ensures its continuity and uninterrupted operation of the enterprise. Rhythm, coherence and high performance largely depend on optimal size of working capital(circulating production assets and circulation funds). Therefore, the process of normalization of working capital, which relates to the current financial planning at the enterprise. Rationing of working capital is the basis rational use business assets of the firm. It consists in the development of reasonable norms and standards for their consumption, necessary to create a constant minimum stock, and for the smooth operation of the enterprise.
The standard of working capital establishes their minimum estimated amount, which is constantly required by the enterprise for work. Failure to fill the standard of working capital may lead to a reduction in production, non-fulfillment production program due to interruptions in the production and sale of products.
Normalized working capital- the size of inventories planned by the enterprise, work in progress and the balance of finished products in warehouses. The working capital stock rate is the time (days) during which the fixed assets are in the production stock. It consists of the following reserves: transport, preparatory, current, insurance and technological. The working capital ratio is the minimum amount of working capital, including cash, needed by a company, a firm to create or maintain carry-over inventory and ensure business continuity.
Sources of the formation of working capital can be profit, loans (banking and commercial, i.e. deferred payment), equity (authorized) capital, shares, budget funds, redistributed resources (insurance, vertical management structures), accounts payable, etc.
The efficiency of the use of working capital has an impact on financial results enterprise activities. In its analysis, the following indicators are used: the presence of own working capital, the ratio between own and borrowed resources, the solvency of the enterprise, its liquidity, the turnover of working capital, etc. The turnover of working capital is understood as the duration of the successive passage of funds through individual stages of production and circulation.
The following indicators of turnover of working capital are distinguished:
- turnover ratio;
- duration of one turn;
- working capital utilization factor.
Turnover ratio(rate of turnover) characterizes the amount of proceeds from the sale of products on the average cost of working capital. Duration of one turn in days is equal to the quotient of dividing the number of days for the analyzed period (30, 90, 360) to the turnover of working capital. The reciprocal of the turnover rate shows the amount of working capital advanced for 1 rub. proceeds from the sale of products. This ratio characterizes the degree of loading of funds in circulation and is called working capital utilization factor. The lower the value of the working capital utilization factor, the more efficiently working capital is used.
The main goal of managing the assets of an enterprise, including working capital, is to maximize the return on invested capital while ensuring a stable and sufficient solvency of the enterprise. To ensure sustainable solvency, the enterprise must always have a certain amount of money on the account, actually withdrawn from circulation for current payments. Part of the funds should be placed in the form of highly liquid assets. An important task in terms of managing the working capital of an enterprise is to ensure the optimal balance between solvency and profitability by maintaining the appropriate size and structure of current assets. It is also necessary to maintain the optimal ratio of own and borrowed working capital, since this directly affects financial stability and the independence of the enterprise, the possibility of obtaining new loans.
Analysis of the turnover of working capital (analysis of the business activity of the organization)
working capital- these are funds advanced by organizations to maintain the continuity of the production and circulation process and returned as part of the proceeds from the sale of products in the same monetary form with which they began their movement.
To assess the effectiveness of the use of working capital, indicators of turnover of working capital are used. The main ones are the following:
- average duration of one turnover in days;
- the number (number) of turnovers made by working capital during a certain period of time (year, half year, quarter), otherwise - the turnover ratio;
- the amount of employed working capital per 1 ruble of sold products (working capital utilization factor).
If working capital goes through all stages of the cycle, for example, in 50 days, then the first indicator of turnover (the average duration of one turnover in days) will be 50 days. This indicator approximately characterizes the average time that passes from the moment of purchase of materials to the moment of sale of products made from these materials. This indicator can be determined by the following formula:
- П - average duration of one turn in days;
- SO - the average balance of working capital for the reporting period;
- P - sales of products for this period (net of value added tax and excises);
- B - the number of days in the reporting period (in a year - 360, in a quarter - 90, in a month - 30).
So, the average duration of one turnover in days is calculated as the ratio of the average balance of working capital to the one-day turnover for the sale of products.
The indicator of the average duration of one turnover in days can be calculated in another way, as the ratio of the number of calendar days in the reporting period to the number of turnovers made by working capital for this period, i.e. according to the formula: P \u003d B / CHO, where CHO is the number of turnovers made by working capital for the reporting period.
The second turnover rate- the number of turnovers made by working capital for the reporting period (turnover ratio) - can also be obtained in two ways:
- as the ratio of sales of products minus value added tax and excises to the average balance of working capital, i.e. according to the formula: CHO \u003d P / CO;
- as the ratio of the number of days in the reporting period to the average duration of one turnover in days, i.e. according to the formula: CHO \u003d V / P .
The third indicator of turnover (the amount of employed working capital attributable to 1 ruble of sold products, or otherwise - the working capital utilization factor) is determined in one way as the ratio of the average balance of working capital to the turnover for the sale of products for a given period, i.e. according to the formula: CO / R.
This indicator is expressed in kopecks. It gives an idea of how many kopecks of working capital are spent to receive each ruble of proceeds from the sale of products.
The most common is the first indicator of turnover, ie. average duration of one turn in days.
Most often, turnover is calculated per year.
In the analysis, the actual turnover is compared with the turnover for the previous reporting period, and for those types of current assets for which the organization sets standards - also with the planned turnover. As a result of such a comparison, the value of the acceleration or deceleration of turnover is determined.
The initial data for the analysis are presented in the following table:In the analyzed organization, the turnover slowed down, both for standardized and non-standardized working capital. This indicates a deterioration in the use of working capital.
With a slowdown in the turnover of working capital, an additional attraction (involvement) of them into circulation occurs, and during acceleration, working capital is released from circulation. The amount of working capital released due to the acceleration of turnover or additionally attracted as a result of its slowdown is determined as the product of the number of days by which the turnover accelerated or slowed down by the actual one-day sales turnover.
The economic effect of accelerated turnover is that the organization can produce more products with the same amount of working capital, or produce the same volume of products with a smaller amount of working capital.
The acceleration of the turnover of working capital is achieved by introducing new technology into production, progressive technological processes, mechanization and automation of production. These activities help to reduce the duration of the production cycle, as well as increase the volume of production and sales.
In addition, to accelerate the turnover, it is important: the rational organization of logistics and marketing of finished products, the observance of the regime of savings in the costs of production and sale of products, the use of forms of non-cash payments for products that contribute to the acceleration of payments, etc.
Directly in the analysis of the current activities of the organization, the following reserves for accelerating the turnover of working capital can be identified, which consist in eliminating:
- excess inventories: 608 thousand rubles;
- goods shipped, not paid on time by buyers: 56 thousand rubles;
- goods in safe custody with buyers: 7 thousand rubles;
- immobilization of working capital: 124 thousand rubles.
Total reserves: 795 thousand rubles.
As we have already established, the one-day sales turnover in this organization is 64.1 thousand rubles. So, the organization has the opportunity to accelerate the turnover of working capital by 795: 64.1 = 12.4 days.
To study the causes of changes in the rate of turnover of funds, it is advisable, in addition to the considered indicators of general turnover, to calculate also indicators of private turnover. They refer to certain types of current assets and give an idea of the time spent by working capital at various stages of their circulation. These indicators are calculated in the same way as stocks in days, however, instead of the balance (stock) on a certain date, the average balance of this type of current assets is taken here.
Private turnover shows how many days on average there are working capital in this stage of the cycle. For example, if the private turnover for raw materials and basic materials is 10 days, then this means that from the moment the materials arrive at the organization's warehouse to the moment they are used in production, an average of 10 days pass.
As a result of summing up the private turnover indicators, we will not get the total turnover indicator, since different denominators (turnovers) are taken to determine the private turnover indicators. The relationship between indicators of private and general turnover can be expressed in terms of total turnover. These indicators allow you to establish what impact the turnover of certain types of working capital has on the overall turnover rate. The terms of the total turnover are defined as the ratio of the average balance of this type of working capital (assets) to the one-day turnover for the sale of products. For example, the term of the total turnover for raw materials and basic materials is equal to:
Divide the average balance of raw materials and basic materials by the one-day turnover for the sale of products (excluding value added tax and excises).
If this indicator is, for example, 8 days, then this means that the total turnover due to raw materials and basic materials accounts for 8 days. If we sum up all the terms of the total turnover, then the result will be an indicator of the total turnover of all working capital in days.
In addition to those considered, other turnover indicators are also calculated. So, in analytical practice, the indicator of inventory turnover is used. The number of turnovers made by stocks for a given period is calculated using the following formula:
Works and services (minus and ) divided by the average value for the item "Stocks" of the second section of the balance sheet asset.
The acceleration of inventory turnover indicates an increase in the efficiency of inventory management, and the slowdown in inventory turnover indicates their accumulation in excessive amounts, ineffective inventory management. Indicators reflecting the turnover of capital, that is, the sources of formation of the organization's property, are also determined. So, for example, turnover equity, is calculated by the following formula:
The sales turnover for the year (net of value added tax and excises) is divided by the average annual cost of equity.
This formula expresses the effectiveness of the use of equity capital (authorized, additional, reserve capital, etc.). It gives an idea of the number of turnovers made by the organization's own sources of activity per year.
The turnover of invested capital is the turnover on sales of products for the year (net of value added tax and excises) divided by the average annual cost of equity and long-term liabilities.
This indicator characterizes the effectiveness of the use of funds invested in the development of the organization. It reflects the number of turnovers made by all long-term sources during the year.
When analyzing the financial condition and the use of working capital, it is necessary to find out from what sources the financial difficulties of the enterprise are compensated. If the assets are covered by sustainable sources of funds, then the financial condition of the organization will be stable not only at this reporting date, but also in the near future. Sustainable sources should be considered own working capital in sufficient amounts, non-reducing balances of carry-over debt to suppliers on accepted settlement documents, the payment deadlines for which have not come, permanently carry-over debt on payments to the budget, a non-reducing part of other accounts payable, unused balances of special purpose funds (accumulation funds and consumption, as well as the social sphere), unused balances of targeted financing, etc.
If the organization's financial breakthroughs are blocked by unstable sources of funds, it is solvent at the reporting date and may even have free cash in bank accounts, but financial difficulties await it in the short term. Unsustainable sources include sources of working capital that are available on the 1st day of the period (balance sheet date), but not available on dates within this period: non-overdue wage arrears, contributions to off-budget funds (in excess of certain stable values), unsecured debt to banks on loans for inventory items, debts to suppliers on accepted settlement documents, the payment deadlines for which have not come, in excess of the amounts attributed to sustainable sources, as well as debts to suppliers for uninvoiced deliveries, debts on payments to the budget in excess of the amounts attributed to stable sources of funds.
It is necessary to make a final calculation of financial breakthroughs (ie, unjustified spending of funds) and sources of coverage for these breakthroughs.
Analysis ends general assessment the financial condition of the organization and drawing up an action plan to mobilize reserves to accelerate the turnover of working capital and increase liquidity and strengthen the solvency of the organization. First of all, it is necessary to assess the security of the organization with its own working capital, their safety and use for their intended purpose. Then, an assessment is made of compliance with financial discipline, the solvency and liquidity of the organization, as well as the completeness of the use and security of bank loans and loans from other organizations. Events are planned for more efficient use both equity and debt capital.
The analyzed organization has a reserve for accelerating the turnover of working capital by 12.4 days (this reserve is noted in this paragraph). To mobilize this reserve, it is necessary to achieve the elimination of the causes that cause the accumulation of excess stocks of raw materials, basic materials, spare parts, other inventories and work in progress.
In addition, it is necessary to ensure the targeted use of working capital, preventing their immobilization. Finally, receiving payments from buyers for goods shipped to them that were not paid for on time, as well as the sale of goods that are in safe custody with buyers due to refusal to pay, will also speed up the turnover of working capital.
All this will help to strengthen the financial condition of the analyzed organization.
Indicators of availability and use of working capital
Circulating assets - are consumed in one production cycle, are materially included in the product and completely transfer their value to it.
The availability of working capital is calculated both on a certain date and on average for the period.
Indicators of the movement of working capital characterize its change during the year - replenishment and disposal.
Working capital turnover ratio
It is the ratio of the cost of products sold for a given period to the average balance of working capital for the same period:
To turnover= Cost of goods sold for the period / Average working capital balance for the period
The turnover ratio shows how many times the average balance of working capital for the period under review turned around. In terms of economic content, it is equivalent to the rate of return on assets.
Average turnaround time
Determined from the turnover ratio and the analyzed period of time
Average duration of one revolution= Duration of the measurement period for which the indicator is determined / Working capital turnover ratio
Coefficient of fixing working capital
The value is inversely proportional to the turnover ratio:
Go to pinning= 1 / To turnover
Consolidation ratio = average working capital balance for the period / cost of goods sold for the same period
In terms of economic content, it is equivalent to the capital intensity indicator. The fixing coefficient characterizes the average cost of working capital per 1 ruble of the volume of products sold.
Need for working capital
The enterprise's need for working capital is calculated on the basis of the coefficient of fixing working capital and the planned volume of product sales by multiplying these indicators.
Security of production with working capital
It is calculated as the ratio of the actual stock of working capital to the average daily consumption or the average daily need for it.
Accelerating the turnover of working capital helps to improve the efficiency of the enterprise.
TaskAccording to the data for the reporting year, the average balance of the working capital of the enterprise amounted to 800 thousand rubles, and the cost of products sold during the year in operating wholesale prices enterprises amounted to 7200 thousand rubles.
Determine the turnover ratio, the average duration of one turnover (in days) and the coefficient of fixing working capital.
- To turnover = 7200 / 800 = 9
- Average turnaround time = 365 / 9 = 40.5
- To fixing collective funds \u003d 1/9 \u003d 0.111
For the reporting year, the average balance of working capital of the enterprise amounted to 850 thousand rubles, and the cost of products sold for the year - 7200 thousand rubles.
Determine the turnover ratio and the coefficient of fixing working capital.
- Turnover ratio = 7200 / 850 = 8.47 turnovers per year
- Fixing coefficient = 850 / 7200 = 0.118 rubles of working capital per 1 ruble of sold products
The cost of sold products in the previous year amounted to 2,000 thousand rubles, and in the reporting year compared to the previous year it increased by 10% with a reduction in the average duration of one turnover of funds from 50 to 48 days.
Determine the average balance of working capital in the reporting year and its change (in%) compared to the previous year.
Decision- The cost of products sold in the reporting year: 2000 thousand rubles * 1.1 = 2200 thousand rubles.
Average balance of working capital = Volume of sold products / Turnover ratio
To turnover \u003d Duration of the analyzed period / Average duration of one turnover
Using these two formulas, we derive the formula
Average balance of working capital = Volume of sold products * Average duration of one turnover / Duration of the analyzed period.
- Average balance Total average in the previous year = 2000 * 50 / 365 = 274
- Average balance Total average in the current year = 2200 * 48 / 365 = 289
289/274 = 1.055 In the reporting year, the average working capital balance increased by 5.5%
TaskDetermine the change in the average coefficient of fixing working capital and the influence of factors on this change.
To secure = average working capital balance / cost of goods sold
- To consolidation by group, base period = (10+5) / (40+50) = 15 / 90 = 0.1666
- To consolidate the group reporting period = (11 + 5) / (55 + 40) = 16 / 95 = 0.1684
Index of the general change in the coefficient of fixation
- \u003d SO (average balance)_1 / RP (sold products)_1 - SO_0 / RP_0 \u003d 0.1684 - 0.1666 \u003d 0.0018
Index of change in the coefficient of consolidation from changes in the average balance of working capital
- \u003d (SO_1 / RP_0) - (SO_0 / RP_0) \u003d 0.1777 - 0.1666 \u003d 0.0111
Index of change in the coefficient of fixing from changes in the volume of sold products
- \u003d (SO_1 / RP_1) - (SO_1 / RP_0) \u003d -0.0093
The sum of the individual indices must equal the overall index = 0.0111 - 0.0093 = 0.0018
Determine the total change in the balance of working capital, and the amount of released (involved) working capital as a result of changing the speed and changing the volume of sales.
- Average change in working capital balance = 620 - 440 = 180 (increased by 180)
General index of change in the balance of working capital (CO) \u003d (RP_1 * prod.1.turnota_1 / days in the quarter) - (RP_0 * prod.1.turnota_0 / days in the quarter)
- Duration of 1 turnover in the reporting quarter = 620*90/3000 = 18.6 days
- Duration of 1 turnover in the previous quarter = 440*90/2400 = 16.5 days
OS change index from changes in the volume of products sold
- \u003d RP_1 * prod.1ob._0 / quarter - RP_0 * prod.1ob._0 / quarter \u003d 3000 * 16.5 / 90 - 2400 * 16.5 / 90 \u003d 110 (increase in the balance of working capital due to an increase in the volume of sales )
Index of changes in fixed assets from changes in the turnover rate of working capital
- = RP_1*prod.1rev._1 / quarter - RP_1*prod.1rev._0/quarter = 3000*18.6/90 - 3000*16.5/90 = 70
The financial condition, liquidity and solvency of the organization to a greater extent depend on the level of business activity, the optimal use of working capital, assessment of its size and structure.
Due to the fact that working capital forms the bulk of the liquid assets of any organization, their value should be sufficient to ensure the rhythmic and uniform operation of the company and, as a result, profit. The use of working capital in operating activities should be carried out at a level that minimizes time and maximizes the speed of circulation of working capital and its transformation into real money supply for subsequent financing and acquisition of new working capital. The need for financing proportionally depends on the rate of turnover of assets.
The lower the turnover of working capital, the greater the need to attract additional sources of financing, since the organization does not have its own funds to carry out business activities. Thus, the indicators of working capital turnover are closely related to the solvency and liquidity of the balance sheet structure.
In the practice of analysis, to assess current assets, various turnover ratios are used, which can be determined both for the entire working capital of the company as a whole, and for individual components of this capital elements or their groups.
The availability and effectiveness of working capital are determined and analyzed directly according to the balance sheet data.
The change in the balance of working capital as a whole and for its individual groups and elements is a consequence of the continuity of the production cycle, during which stocks are consumed, and their renewal and replenishment is possible only as a result of the sale of products (works, services) and receipt of funds.
Working capital efficiency enterprises are evaluated using the following indicators:
1. The duration of one revolution (D). Shows how long it takes for the company to return its working capital in the form of proceeds from the sale of products. Determined by the formula:
D \u003d Cav x Tper / Vp
2. Turnover ratio (Kob). Informs about the number of turnovers made for a certain period by the working capital of the organization. The coefficient is calculated by the formula:
Kob \u003d Vp / Co
When analyzing the indicator, attention should be paid to comparing the level of the turnover ratio according to the analyzed enterprise and related enterprises, as well as competing companies. One of the main areas of analysis is the study of the dynamics of the indicator. The growth of the indicator indicates the acceleration of turnover. The higher the number of turnovers, the less funds the organization needs to have for operating activities.
3. Working capital utilization factor (Kz). The indicator characterizes the amount of working capital per one ruble of sold products:
Kz \u003d Cav / Vp \u003d 1 / Kob
4. Profitability of working capital (Рс). The indicator is calculated as the ratio of profit (gross or net) to the average annual cost of working capital according to the following formula:
Rs \u003d Pch / Ssr x 100%
Where,
Tper - number of days in the period;
Vr - revenue;
Pch - net (gross) profit;
Cav - the average annual cost of working capital, defined as: (CNG + Ckg) / 2 (the sum of the cost of working capital at the beginning and end of the year divided by two).
For clarity, the calculation of the efficiency of the use of working capital, you can summarize the indicators in a summary table:
| No. p / p | Indicators | Base period | Reporting period | Dynamics to the base period | |
|---|---|---|---|---|---|
| thousand roubles. | % | ||||
| 1 | Sales revenue, thousand rubles | ||||
| 2 | Average annual balance of working capital, thousand rubles | ||||
| 3 | Cost of products sold, thousand rubles | ||||
| 4 | Profit, thousand rubles | ||||
| 5 | Turnover ratio | ||||
| 6 | Duration of one turn, days | ||||
| 7 | Working capital utilization factor | ||||
| 8 | Return on working capital, % | ||||
Accelerating the turnover of working capital, i.е. Reducing the time it takes for working capital to pass the entire cycle and its individual stages reduces the need for these funds, and working capital is released from circulation. Conversely, a slowdown in turnover is accompanied by the involvement of additional funds in circulation, which negatively affects the efficiency of the use of working capital.
The release of working capital as a result of accelerating their turnover can be absolute and relative.
Absolute release of working capital(С abs) occurs in cases where the volume of sales is provided by a lower use of working capital in the reporting period (С 1) compared to the base period or planned demand(from 0):
C abs \u003d C 1 - C 0
Relative release of working capital(C rel) is obtained by accelerating turnover with an increase in sales or production. The main difference from absolute release, this is that, while the company's funds cannot be withdrawn from circulation without maintaining the continuity of production. The relative release of working capital is determined by the formula:
C rel \u003d (C 0 * B 1) / B 0 - C 1
C rel \u003d C 0 * I v - C 1
Where,
B 0 , B 1 - the volume of sales in the base (planned) and reporting period;
C 0, C 1 - the average balance of working capital in the base (planned) and reporting period;
l v - growth rate of production volume, i.e. V1/V0.
The main indicators of the efficiency of the use of working capital are the indicators of their turnover. The acceleration of turnover helps to reduce the need for current assets, increase the volume of production, increase the amount of profit received and, consequently, increase the stability of the financial condition.
To obtain the most complete information about the state of working capital, it is recommended to consider the relevant indicators in dynamics for a certain time interval (usually 3 periods), observing the requirement of comparability of indicators. Such an analysis allows us to characterize the changes that have taken place in the organization during the analyzed periods, and to predict them for the future.