Analysis of the efficiency of using working capital LLC Center "Zabota"

The limited liability company "Care" center is based on the sole decision of its founder - Yuri Terentyevich Gorbunov - created to fulfill its intended goals in accordance with the decision to create and registered on February 26, 1998 with the Administration of the city of Meleuz and Meleuzovsky district.

In its activities, the company is guided by the current legislation of the Russian Federation and the Republic of Belarus. The company is a legal entity, has separate property, has an independent balance sheet, settlement and other accounts in credit institutions, has a seal with a company name and TIN, corner and other stamps.

The main direction of the company's activities is to most fully satisfy the needs of the population for a variety of goods and services, develop business activities and make a profit. The Company carries out the following types of activities:

trading, trade intermediary, purchasing, sales;

creates wholesale and retail trade divisions;

catering services;

any types of activities that are not prohibited by current legislation and do not contradict the main directions of the company’s activities.

Current assets occupy a large share in the total balance sheet currency. This is the most mobile part of capital, the state and rational use of which largely determine the results of economic activity and the financial condition of the enterprise.

The main goal of the analysis is the timely identification and elimination of shortcomings in working capital management and finding reserves for increasing the intensity and efficiency of its use.

When analyzing the structure of current assets, it should be borne in mind that the stability of the financial condition largely depends on the optimal allocation of funds at the stages of the circulation process: supply, production and sales of products. Chechevitsyna Ya.N. Analysis of financial and economic activities. - M.: Phoenix, 2008.

In the process of analysis, first of all, it is necessary to study changes in the availability and structure of current assets. It should be borne in mind that a stable working capital structure indicates a well-functioning process of production and sales of products. Significant changes indicate unstable operation of the enterprise.

An analysis of the composition and structure of working capital of the Zabota Center LLC is presented in Table 1.

Table 1. Analysis of the composition, structure and dynamics of working capital

Type of current assets	Availability of funds, thousand rubles.	Structure of funds, %
		Change			Change
including:
raw materials, supplies and other similar assets
finished products and goods for resale
Future expenses
VAT on purchased assets
Accounts receivable
including:
buyers and customers
Cash
TOTAL current assets

LLC Center "Zabota" for 2004 and 2005

As can be seen from Table 1, the total amount of the company's working capital in 2005 was compared to 2004 increased by 6,400 thousand rubles. The largest share is occupied by reserves, so in 2004. they make up 47.2%, in 2005 - 76.8%, i.e. their share increased by 29.6%. Since the main activity of the company is trade, purchase and sales, the largest share in inventories is occupied by finished products and goods for resale. Due to the fact that the company expanded its distribution network in 2005, the amount of finished products and goods for resale increased by 6,430 thousand rubles, and their share by 30.7%. The amount of raw materials and materials increased by 15 thousand rubles, but their share decreased by 0.6%. The positive point is the reduction in accounts receivable in 2005. compared to 2004 by 1482 thousand rubles, incl. debts of buyers and customers for 646 thousand rubles. This indicates that the center is developing measures to collect funds from its debtors. There is also an increase in the company’s funds by 930 thousand rubles, and their shares by 4.1%.

Their turnover has a great influence on the state of current assets. Accelerating the turnover of working capital reduces the need for them, which allows the enterprise to use the released part of working capital for additional production or other production needs.

As a result of the acceleration of turnover, material elements of working capital are released, less raw materials, supplies, fuel, and work in progress are required. Monetary resources previously invested in these reserves and reserves are also released, which helps improve the financial condition of the enterprise and strengthens its solvency. A comprehensive indicator of the level of production and economic activity is the rate of turnover of funds.

Table 2. Analysis of working capital turnover

Indicators			Change
Revenue from the sale of goods, thousand rubles.
Average value of working capital, thousand rubles.
Working capital turnover ratio, times
Turnover rate, days
Average value of production inventories, thousand rubles.
Cost of goods, products, works, services sold
Production turnover ratio stocks, times
Inventory shelf life, days
Average amount of accounts receivable, thousand rubles.
Debtor turnover ratio. debt, times
Receivables repayment period, days

Calculations show that the working capital of LLC Center "Zabota" in 2004 was. turn around 3.6 times or 103 days, and in 2005 - 6.5 times or 56 days. Due to the fact that the center is constantly in search of new closest partners, acquires high-quality goods, and constantly monitors warehouse stocks, working capital began to turn over 2.9 times faster and its speed decreased by 47 days. This led to an increase in the volume of goods sold, and, consequently, to an increase in revenue from the sale of goods by 34,211 thousand rubles. The number of turnover of industrial inventories also increased in 2004, amounting to 5.6 times or 64 days, in 2005 - 8.2 times or 44 days. This is due to the fact that the center opened its own cafe in 2005, began producing its own baked goods and attracting new customers. As mentioned above, the center took measures to collect receivables, this led to a significant increase in the turnover of receivables, so in 2004 the number of turnovers was 9 times or 40 days, in 2005 - 34.8 times or 10 days. An important point is that the center does not have doubtful accounts receivable.

An increase in the turnover of working capital does not yet indicate its effective management; it is necessary that the acceleration of turnover lead to the release (i.e., savings) of working capital. Using the formula, we calculate the release of capital: Analysis of the efficiency of using working capital // Accounting No. 10, 2006.

A positive result indicates that the center does not receive savings from the use of working capital, i.e. its irrational use.

To determine the degree of dependence of the continuity of the enterprise’s activities on external sources, it is necessary to calculate the coverage ratio: Sheremet A.D. Comprehensive analysis of economic activities. - M.: INFRA-M, 2008.

The coverage ratio in 2004 was 37.3%, in 2005 it was 38%.

These values ​​are higher than the normative ones, which means that the center is sufficiently provided with its own working capital.

An important indicator of the effective use of working capital is their profitability, which shows how much profit the center will receive from one ruble of working capital. Using the formula, we find its value:

The profitability of working assets increased by 31%, this indicates effective management of working capital and an increase in business activity of the center.

Material reserves make up part of the cost of the center's property, and the costs of material resources make up a significant share of the center's expenses and the cost of the products they produce. Therefore, strengthening control over the state of material reserves and their rational use has a significant impact on the financial position of the center. To determine the efficiency of using material resources, we will calculate indicators (5)-(8) and enter the results into Table 3.

Table 3. Analysis of the efficiency of use of material resources

An analysis of the efficiency of using material resources showed that in 2005 there was a strong increase in material costs by 3,185 thousand rubles. This is due to the expansion of the center's trading activities. However, only due to the increase in revenue from the sale of goods, material intensity decreased by only 4 kopecks, and material output increased by 2.1 rubles. For the same reason, the center began to receive only 1 kopeck more per ruble of material costs. The increase in material costs led to an increase in the cost of goods sold by 33,105 thousand rubles. A decrease in material intensity accompanies a decrease in the share of material costs in the cost of goods.

The goal of inventory management in a market economy is to achieve optimal capital investments in materials and to avoid the “freezing” of funds in inventories, which negatively affects the financial condition of enterprises. Achieving this goal is facilitated by the use of methods for optimal investment of funds in materials reserves. It is based on the use of the economical order quantity method for materials. At the “Zabota” center, cafe managers calculate the amount of each product consumed; let’s take one product when preparing their products - Sterlitamak mayonnaise. The annual requirement of this product is 194 kg. Products are purchased once every 3 months, the cost of completing one order, taking into account transportation and transaction costs, is 658 rubles, the cost of storing a unit of product is 5 rubles. According to the formula, the economical order size will be equal to:

When determining the number of orders per year, we use formula (14):

In this case, the total costs will be:

According to the economical order size model, the center must order mayonnaise in the amount of 226 kg once every 1.2 years, and then the total costs will be 1130 rubles. On the other hand, the center can apply the existing model: once every three months.

Federal State Educational Institution of Higher Professional Education Siberian Federal University

Institute of Business Process Management and Economics

Faculty of Economics

Abstract on the discipline: “Finance and Credit”

Topic: “Analysis of the efficiency of using working capital”

Completed by: 3rd year student

groups EA 08-22 Kozlova N.V.

Checked by: Chudnovets A.Yu.

Krasnoyarsk

INTRODUCTION…………………………………………...…………………………..3

1. WORKING CAPITAL OF THE ENTERPRISE AND THEIR TURNOVER……………………………………………………….………………4

1.1 Economic essence of working capital……………..………………..4

1.2 Classification of working capital………………………………………….7

1.3 Methodology for analyzing the efficiency of using working capital....10

2. ANALYSIS of the efficiency of using working capital of the enterprise and ways to improve it………………….19

conclusion…………………………………………………………….25

REFERENCES……………………………………………………27

INTRODUCTION

Working capital is one of the components of the enterprise's property. The condition and efficiency of their use is one of the main conditions for the successful operation of an enterprise. The development of market relations determines new conditions for their organization. High inflation, non-payments and other crisis phenomena force enterprises to change their policy in relation to working capital, look for new sources of replenishment, and study the problem of the efficiency of their use.

To ensure an uninterrupted production process, along with fixed production assets, labor and material resources are needed. Objects of labor, together with the means of labor, participate in the creation of the product of labor, its use value.

The presence of sufficient working capital and production reserves of an optimal structure at the enterprise is a necessary prerequisite for its normal functioning in a market economy. Therefore, the enterprise must carry out rationing of working capital, whose task is to create conditions that ensure the uninterrupted production and economic activities of the company.

It is also important to be able to properly manage working capital and inventories, develop and implement measures that help reduce the material consumption of products and accelerate the turnover of working capital. As a result of the acceleration of turnover of working capital, they are released, which gives a number of positive effects.

An enterprise, in the case of effective management of working capital and inventories, can achieve a rational economic position, balanced in terms of liquidity and profitability.

All of the above determines the relevance of the chosen topic of the essay.

The purpose of the abstract is to analyze the state of working capital and assess their effectiveness using the example of the enterprise OJSC Yaransky KMP.

1. WORKING CAPITAL OF THE ENTERPRISE AND THEIR TURNOVER

1.1 Economic essence of working capital

Working capital is part of the enterprise's capital invested in its current assets. According to material characteristics, the composition of working capital includes: objects of labor (raw materials, fuel, etc.), finished products in the warehouses of the enterprise, goods for resale, cash and funds in settlements.

Working capital is usually understood as the monetary expression of the cost of assets in production, that is, stocks of raw materials and materials in warehouses, work in progress, finished products in warehouses, as well as funds in settlements - mainly debt funds for shipped but not paid for products and receivables, as well as cash in the company’s accounts.

The main purpose of working capital is to ensure a continuous process of production and sales of products, completeness and timeliness of financing of commercial activities.

The organic property of working capital is their constant movement, which takes place in the form of a circulation - a sequential change of their functional forms in production.

In the first phase of the circulation, working capital appears in cash form.

This stage of the circulation of funds is preparatory. It occurs in the sphere of circulation. Their main purpose is to serve with monetary resources the formation of industrial reserves. Further, at the production stage, they take the form of work in progress, concentrated in workplaces, individual technological transitions, and in warehouses. At the final stage, the newly created finished products are delivered to the warehouse and then sold to the consumer, and the funds invested in them are returned to cash. There is an opportunity for another investment of resources.

A characteristic feature of working capital is the high speed of their turnover. The functional role of working capital in the production process is fundamentally different from fixed capital. Working capital ensures the continuity of the production process.

Material elements of working capital (labor items) are consumed in each given production cycle. They completely lose their natural form, therefore they are fully included in the cost of manufactured products (work performed, services rendered).

Stages of working capital circulation:

D-T -. . .P. . . - T" - D",

where D – funds advanced by the business entity;

T - means of production;

P - production;

T" - finished products;

D" - cash received from the sale of products and including realized profit.

The dots (...) mean that the circulation of funds is interrupted, but the process of their circulation continues in the sphere of production.

The circulation of capital covers three stages: procurement (purchases), production and sales.

Any business starts with a certain amount of cash, which is deployed into a certain amount of resources for production (or goods for sale).

As a result of the procurement stage, working capital moves from the monetary form to the production form (labor items or goods).

At the production stage, resources are embodied in goods, works or services. The result of this stage is the transition of working capital from the production form to the commodity form.

At the implementation stage, working capital again passes from the commodity form into monetary form. The sizes of the initial amount of money (D) and revenue (D") from the sale of products (works, services) do not coincide in size. The resulting financial result of the business (profit, loss) explains the reasons for the discrepancy.

As we can see, the elements of working capital are part of the continuous flow of business transactions. The purchase results in an increase in inventories and accounts payable; production leads to an increase in finished products; sales lead to an increase in accounts receivable and cash in hand and in the current account. This cycle of operations is repeated many times and ultimately comes down to cash receipts and cash payments.

The period of time during which the turnover of funds occurs represents the duration of the production and commercial cycle.

This period consists of the period of time between the payment of money for raw materials and the receipt of money from the sale of finished products. The length of this period is influenced by: the period of lending by the enterprise to buyers, the period of raw materials being in inventory, the period of production and storage of finished products.

Elements of working capital continuously move from the sphere of production to the sphere of circulation and return to production again. Part of the working capital is constantly in the sphere of production (inventory, work in progress, finished products in the warehouse, etc.), and the other part is in the sphere of circulation (shipped products, accounts receivable, cash, securities, etc. ). Therefore, the composition and size of the working capital of an enterprise are determined not only by the needs of production, but also by the needs of circulation.

The need for working capital for the sphere of production and for the sphere of circulation is not the same for different types of activity and even for individual enterprises of the same industry. This need is determined by the material content and speed of turnover of working capital, production volume, technology and organization of production, the procedure for selling products and purchasing raw materials and other factors.

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Working capital is the most important resource in ensuring the current functioning of the enterprise, i.e., production and sales of products. In the process of production and economic activity, an enterprise needs the funds necessary to manufacture products, purchase raw materials and materials, pay wages, and then the funds required for its implementation. Thus, working capital is money advanced into circulating production assets and factors of circulation.

Working production assets ensure the continuity of the production process, and circulation funds ensure the sale of manufactured products on the market and the receipt of funds that guarantee the well-being of the enterprise. This economic role of working capital determines their essence, which lies in the need to ensure the uninterrupted functioning of the production process and the circulation process. While functioning, working capital makes a continuous circuit, which can be divided into three phases: in the first phase, working capital is transformed into goods; in the second, working capital, participating in the production process, takes the form of work in progress, semi-finished products and finished products; in the third phase, working capital in the form of finished products in the process of their sale are again converted into money.

Working capital spent during the manufacture of products and their sale is completely consumed and transfers its value to the product within one year or operating cycle. The operating cycle includes the following activities for the production of products:

Purchase of raw materials and materials for cash and non-cash payment of supplier bills;

Production processing of raw materials and materials, payment of wages;

Transition of products into the process of their production from the category “work in progress” to the category “finished products”;

Sales of finished products and invoicing to customers;

Receipt of cash from customers.

Working capital in business practice includes the cost of inventories, accounts receivable (invoices presented for payment), deferred expenses, cash (cash, bank accounts, other accounts).

Rational management of working capital requires adherence to the following principles:

Ensuring an optimal balance between the required volume of working capital and their production needs.

Economical and rational disposal of inventory items; minimizing the cost of creating inventories; ensuring the minimum presence of working capital in production inventories while maintaining the continuity of the production process; maximum possible self-financing of working capital needs.

When following these principles, management with working capital ultimately falsely aims at creating optimal production and commercial conditions and current financing of enterprises. This is achieved, on the one hand, by pursuing an effective technical policy for the best use of material and material working production assets, and on the other hand, by implementing such financial and commercial activities that would ensure maximum economic results with a minimum of spent working capital.

Financial and commercial work should be aimed at reducing the need for working capital while ensuring maximum production volumes and maintaining its continuity. This is done by accelerating the turnover of working capital, determining the optimal amount of working capital when creating inventories, purchasing high-quality raw materials, but at cheaper prices.

In particular, issues of saving raw materials and supplies and organizing their purchase require special consideration. This is due to the fact that the production of many enterprises is not only material-intensive, but also unproductive.

The efficiency of using working capital ultimately finds its expression in reducing the amount of their need, which implies a reduction in the time during which working capital is diverted. Accelerating the turnover of funds reduces the additional need for them.

The turnover of working capital is calculated by the duration of one revolution in days or the number of revolutions during the reporting period (turnover ratio).

Since capital turnover is closely related to its profitability and serves as one of the most important indicators characterizing the intensity of use of an enterprise’s funds and its business activity, in the process of analysis it is necessary to study capital turnover indicators in more detail and establish at what stages of the circulation the slowdown or acceleration of the movement of funds occurred.

It is necessary to distinguish between the turnover of the entire total capital of the enterprise, including fixed and working capital. The capital turnover rate is characterized by the following indicators:

Turnover ratio (K rev);

The duration of one revolution (P rev).

The capital turnover ratio is calculated using the formula:

K rev = Net sales revenue

Average annual cost of capital

The inverse indicator of the capital turnover ratio is called capital intensity (K e):

K e = Average annual cost of capital

Net sales revenue

Duration of capital turnover:

P ob = D, or P ob = Average annual cost x D

K about Net sales revenue

where D is the number of calendar days in the analyzed period (year - 360 days, quarter - 90, month - 30 days).

Average balances of total capital and its components are calculated according to the chronological average: ? amounts at the beginning of the period plus balances at the beginning of each next month plus? balance at the end of the period and the result is divided by the number of months in the reporting period. The necessary information for calculating turnover ratios is available in the balance sheet and income statement.

When determining the turnover of total capital, the amount of turnover must include total revenue from all types of sales. If the turnover indicators of only functioning capital are calculated, then only revenue from sales of products is taken into account. Turnovers and average balances on capital investment accounts, long-term and short-term financial investments are not taken into account in this case.

capital turnover, on the one hand, depends on the speed of turnover of fixed and working capital, and on the other hand, on its organic structure; the larger the share of fixed capital, which turns over slowly, the lower the turnover ratio and the longer the duration of turnover of the entire aggregate material:

K ob.s.k = UD t.a xK ob.t.a.

P obs.k =P obt.a /UD t.a

where K obs.k is the total capital turnover ratio;

UD t.a - the share of current assets (working capital) in the total amount of assets;

P obs.k - duration of turnover of total capital;

P obt.a - duration of turnover of current assets.

The main ways to accelerate capital turnover: reducing the duration of the production cycle due to the intensification of production (use of the latest technologies, mechanization and automation of production processes, increasing the level of labor productivity, better use of the enterprise's production capacity, labor and material resources, etc.); improving the organization of logistics in order to ensure uninterrupted supply of production with the necessary material resources and reducing the time that capital remains in reserves; speeding up the process of shipping products and processing settlement documents; reducing the time spent in accounts receivable; increasing the level of marketing research aimed at accelerating the promotion of goods from the manufacturer to the consumer (including market research, improving the product and the forms of its promotion to the consumer, forming the correct pricing policy, organizing effective advertising.

At the stage of work in progress, acceleration of the turnover of working capital in the company is achieved mainly by reducing the duration of the production cycle based on the achievement of scientific and technological progress. It includes measures aimed at reducing the labor intensity of manufacturing products at all stages of raw material processing; reduction of time for technical operations and interoperational follow-up; improving the organization of production and operational regulation (expanding in-line production methods, etc.), ensuring uniform and rhythmic work. Increasing the speed of movement of funds in the sphere of circulation is achieved by reducing stocks of finished products in warehouses and speeding up the time of settlements with consumers. As a result of the acceleration of turnover, a certain amount of working capital is released. Liberation can be absolute or relative.

The absolute release of working capital occurs when the actual need for them is less than planned during a reduction or increase in sales volume for this period. Working capital can be used to further expand production, develop new types of products, improve the supply and sales system, as well as other measures to improve business activities.

Relatively released working capital occurs in cases where the acceleration of working capital turnover occurs simultaneously with an increase in production volume. The funds released in this case cannot be withdrawn from circulation, since they are in inventories that ensure production growth.

Accelerating turnover and the resulting release of working capital in any form allows the enterprise to direct them to the development of business activities without attracting additional financial resources.

Working capital occupies a large share in the total amount of funds available to the enterprise. In the process of analysis, the structure of working capital, its placement in the sphere of production and in the sphere of circulation, and the efficiency of use are studied. Separate groups of working capital, its placement in the sphere of production and in the sphere of circulation, and efficiency of use are also studied. Individual groups of working capital that have the most significant impact on the solvency and financial stability of the enterprise are also studied.

The main objectives of the analysis and the efficiency of using working capital are:

Assessment of the implementation of the enterprise supply plan in terms of volume, range, quality of supplied raw materials, basic and auxiliary materials;

Monitoring compliance with consumption standards and reserves of material resources, identifying the reasons for deviations from the standards;

Development of measures to ensure savings in material resources in production and reduction of inventories through the sale of excess and unnecessary assets.

The main sources of data for analyzing the use of working capital are:

Logistics plan, applications, contracts for the supply of raw materials, materials, statistical reporting forms on the availability of use of material resources, production costs, operational data of the logistics department, analytical accounting data on receipt, consumption and balances of material resources.

First of all, a general assessment of changes in the availability of funds in the structure of their most important groups is given, the data of which is given in Table 8.

Table 8 Availability, composition and structure of working capital

Indicators			Deviations
Amount, thousand tenge.		Amount, thousand tenge.
	Revolving funds
Inventory
Unfinished production
Future expenses
	Circulation funds
Cash
Finished products
Accounts receivable
Advances issued
Financial investments
Other current assets
Total working capital

The data in Table 8 indicates changes in working capital. So, if in the previous year the cost of working capital amounted to 726,600.9 thousand tenge, then in the reporting year there was an increase in working capital by 1,385,779.5 thousand tenge. In the structure of funds, the largest weight is occupied by inventories: if in 2006 they amounted to 33.8%, then in 2007 - 16.2%: finished products in the reporting year - 23.3%; accounts receivable - 11.1% and advances issued - 28.4%. Noteworthy is the trend towards a decrease in the share of these components, except for advances issued, compared to the previous year. The composition of working capital has also undergone changes in a number of its parameters.

Since working capital is one of the most important components of working capital, it is necessary to analyze the efficiency of their use for the analyzed period, to consider such indicators as material intensity and material productivity. Material productivity is determined by the ratio of the volume of marketable products to the cost of working capital. Material intensity is the inverse of material productivity.

Table 9 Efficiency of using working capital

Indicators					Pace. unit, %
Volume of commercial products
Cost of commercial products
Total working capital
Including: inventory
Unfinished production
Future expenses
Material consumption	tg/1 thousand tg.
Material efficiency	tg/1 thousand costs
Share of material costs in the cost of goods sold

The data in Table 9 shows that the cost of working capital has increased, i.e. if in 2006 it was 247,044 thousand tenge, then in 2007 it was 329,815.5 thousand tenge, the deviation in this case is 82,711.5 thousand tenge or 133.5 %.

Prepaid expenses and other working capital composition are insignificant.

The material productivity indicator in the reporting year decreased by 0.8 times, or by -0.6 tenge/1 tenge of costs, respectively, the share of material costs in the cost of marketable products in the reporting year decreased by 24.8%. This happened due to a decrease in the share of material costs in the cost of commercial products by 0.9 times.

The efficiency of using working capital is characterized by a system of economic indicators, primarily the turnover of working capital.

Working capital turnover is the activity of one complete circulation of funds. The circulation is completed by crediting the proceeds to the company's current account. Let's consider asset turnover according to the following table.

Table 10 Turnover of working capital

From the data in Table 10 it is clear that the working capital turnover ratio decreased from 1.49 to 0.90, although the cost of working capital at the enterprise increased 1.9 times. As a result, in the reporting year the duration of one revolution increased by 119 days.

Table 11 Assessment of inventory turnover status

From the data in Table 11 it can be seen that in the reporting year there was an increase in the inventory turnover ratio from 3.5 to 4.2, i.e. by 14.8% (114.8-100). Inventory shelf life decreased from 102.8 to 89.5 days. All this suggests that in the reporting year, inventories were not stored in warehouses.

An increase or decrease in accounts receivable has a great influence on the turnover of capital invested in current assets, and consequently on the financial condition of the enterprise.

A sharp increase in accounts receivable and its share in current assets may indicate an imprudent credit policy of the enterprise in relation to customers, or an increase in sales volume, or the insolvency and bankruptcy of some customers. On the other hand, the company can reduce the shipment of products, then accounts receivable will decrease. Consequently, the growth of accounts receivable is not always assessed negatively. It is necessary to distinguish between normal and overdue debt. The presence of the latter creates financial difficulties, since the company will feel a lack of financial resources to purchase inventory and pay wages. In addition, freezing funds in accounts receivable leads to a slowdown in capital turnover.

Overdue receivables also mean an increased risk of non-payment of debts and reduced profits. Therefore, every enterprise is interested in reducing the repayment period of payments due to it. You can speed up payments by improving calculations, timely execution of settlement documents, prepayment, and using the bill of exchange form of payment.

In the process of analysis, it is necessary to study the dynamics, composition, reasons and prescription of the formation of receivables, to determine whether it contains amounts that are unrealistic for collection, or those for which the statute of limitations expires. If there are any, then it is necessary to urgently take measures to collect them (drawing out bills of exchange, applying to the judicial authorities. To analyze receivables, in addition to the balance sheet, materials from primary and analytical accounting are used.

The problem of non-payments becomes especially urgent in conditions of inflation, when money depreciates. Recently, the receivables of enterprises in the CIS countries have reached an astronomical amount, a significant part of which is lost during inflation. With inflation of 30% per year, at the end of the year you can buy only 70% of what you could buy at the beginning. Therefore, it is unprofitable to keep money in cash, and it is unprofitable to sell goods on credit. However, it is advantageous to have credit obligations payable in cash, since payments for various types of accounts payable are made in money, the purchasing power of which decreases by the time of payment. To calculate the company's losses from timely payment of bills by debtors, it is necessary to subtract from overdue receivables its amount adjusted by the inflation index for this period (minus the penalty received), or multiply the amount of overdue receivables by the bank refinancing interest rate for this period and from the result obtained subtract the amount received in singing.

The art of managing current assets is to keep in the accounts the minimum necessary amount of cash that is needed for current operational activities. The amount of cash that a well-managed business needs is essentially a safety stock intended to cover short-term cash flow imbalances. The amount must be such that it is sufficient to make all priority payments. Since cash in cash or in bank accounts does not generate income, it must be kept at a safe minimum level. Having large balances of cash over a long period of time can be a result of improper use of working capital. In order for money to work for an enterprise, it must be put into circulation in order to make a profit:

Expand your production by turning them around in the working capital cycle;

Invest in profitable projects of business entities in order to receive profitable interest;

Reduce the amount of accounts payable in order to reduce debt servicing costs;

Renew fixed assets, acquire new technologies.

An increase or decrease in cash balances in bank accounts is determined by the level of cash flow imbalance, i.e., the inflow and outflow of money. The excess of inflows over outflows increases the balance of free cash and, conversely, the excess of outflows over inflows leads to a shortage of cash.

Working capital(current assets) are the funds invested by the enterprise in current operations during each operating cycle.

One of the criteria for the efficiency of using working capital is the amount of working capital, which depends on:

• turnover of current assets (with what frequency the funds invested in operational activities are returned to the enterprise);
• working capital structure (what part of current assets is financed from own funds and how resources are distributed in the operating cycle).

Analysis of the use of working capital of an enterprise allows:

• assess the efficiency of resource use in the operational activities of the enterprise;
• determine the liquidity of the enterprise’s balance sheet, i.e. the ability to repay short-term obligations in a timely manner;
• find out what the enterprise’s own working capital is invested in during the financial cycle.

The size and structure of current assets must correspond to the needs of the enterprise, which are reflected in the budget.

Current assets should be minimal, but sufficient for the successful and uninterrupted operation of the enterprise.

Structure of working capital- these are the proportions of resource distribution between individual elements of current assets. The structure of working capital reflects, in particular, the specifics of the operating cycle, as well as what part of current assets is financed from own funds and long-term loans, and what part is financed from borrowed funds, including short-term bank loans.

The size and structure of own working capital may reflect the duration and characteristics of the financial cycle.

The amount of own working capital reflects the share of funds belonging to the enterprise in its current assets and is one of the characteristics of financial stability.

The value of own working capital shows not only how much current assets exceed current liabilities, but also how much non-current assets are financed from the enterprise’s own funds and long-term loans.

To identify the reasons for the decrease in the total turnover period of current assets, it is necessary to analyze the dynamics of the turnover periods of the main types of working capital (inventories, work in progress, finished goods inventories and accounts receivable).

A significant share of working capital is occupied by goods shipped (accounts receivable). The total amount of accounts receivable (excluding advances issued to suppliers) is 47% of the company's working capital. Industrial inventories and finished goods inventories also make up a significant share of current assets (33%). Advances issued (7%) further increase the duration of the financial cycle.

For a more detailed analysis of the use of working capital, it is necessary to evaluate the turnover of each of the significant parts of current assets.

The financial position of an enterprise, its liquidity and solvency indicators directly depend on how quickly funds invested in current assets turn into real money.

The duration of funds in circulation is determined by the combined influence of a number of multidirectional external and internal factors.

To calculate the current asset turnover ratio (Cob.), the following formula is used:

Cob. = sales revenue / average current assets for the period

For analysis it is convenient to use a derived indicator:

turnover period (days) - number of days in the period / Kob.

Let's continue our example. The total turnover period is growing and at the end of the year reaches 133 days, which corresponds to a decrease in the turnover of current assets by 48% per year.

It is obvious that the turnover period of all elements of current assets has deteriorated, and the turnover period of receivables has increased especially sharply. This negative trend is especially important since accounts receivable occupy a large share in the structure of working capital.

Attention should be paid to the relatively high value of the turnover periods of inventories and finished products, despite the fact that the turnover period of work in progress is almost 2.5 times less than each of these indicators and is 15 days. This leads to an unjustified lengthening of the financial cycle.

Return on current assets. This indicator allows us to give a comprehensive assessment of the efficiency of using working capital. The indicator can be presented as the product of two other indicators - return on sales and turnover of current assets.

The return on current assets deteriorated sharply in 1998 compared to the previous year and fell to the level of 1996. Consequently, to identify the reasons for this decline, it is additionally necessary to analyze the return on sales and turnover of current assets.

The optimal level of working capital will maximize profits with an acceptable level of liquidity and commercial risk.

Working capital includes that part of the means of production that is entirely consumed in the production process during one cycle, and its cost is completely transferred to the finished product.

Working capital can be located in the sphere of production (inventories, work in progress, deferred expenses) and in the sphere of circulation (finished products in warehouses and shipped to customers, funds in settlements, short-term financial investments, cash in hand and in bank accounts).

The financial condition of the enterprise largely depends on the state of working capital, so it is necessary to especially carefully analyze changes in the composition and dynamics of current assets. It should be borne in mind that the stability of the working capital structure indicates a stable, well-functioning process of production and sales of products and, conversely, significant structural changes are a sign of unstable operation of the enterprise.

The state of inventory has a great influence on the financial condition of the enterprise and its production results. An increase in the share of reserves may indicate:

Expanding the scale of the enterprise’s activities;

The desire to protect funds from depreciation under the influence of inflation;

Ineffective inventory management, as a result of which a significant part of capital is frozen for a long time in inventory and its turnover slows down.

At the same time, the lack of reserves (raw materials, materials, fuel) negatively affects production volumes. Therefore, it is necessary to check whether the actual balances correspond to their planned requirements.

A sharp increase in accounts receivable and its share in current assets may indicate an imprudent credit policy of the enterprise in relation to customers, or an increase in sales volume, or the insolvency of some customers. A reduction in accounts receivable is assessed positively if it occurs due to a reduction in its repayment period. If accounts receivable decrease due to a reduction in product shipments, this indicates a decrease in the business activity of the enterprise. Therefore, in the process of analysis, it is necessary to study the dynamics, composition, reasons and prescription of the formation of receivables, to determine whether there are any amounts in its composition that are unrealistic for collection or those for which the statute of limitations expires. If there are any, then it is necessary to take measures to collect them (executing bills of exchange, applying to the judicial authorities, etc.).

To assess the efficiency of using working capital, the following indicators are used:

Turnover ratio;

Working capital consolidation ratio;

Duration of one revolution;

Level of profitability of using working capital.

The turnover ratio is calculated by dividing the cost of marketable products by the average annual cost of working capital.

The working capital consolidation ratio is the inverse indicator of the turnover ratio and is calculated by dividing the average annual cost of working capital by the cost of marketable products.

The duration of one turnover in days is determined by dividing the number of days in the period by the turnover ratio.

The level of profitability of the use of working capital is calculated as follows: profit from the sale of products is divided by the average annual cost of working capital and multiplied by 100%.

An increase in the turnover ratio, a decrease in the working capital consolidation ratio and a reduction in the duration of one turnover in days indicate an acceleration in the turnover of working capital. This, in turn, allows the company to free up part of its working capital for additional production. If, as a result of the acceleration of turnover, material elements of working capital are released (stocks of raw materials, supplies, fuel), then the monetary resources previously invested in these stocks are also released, and this improves the financial condition of the enterprise and strengthens its solvency.

The main ways to accelerate capital turnover:

Reducing the duration of the production cycle due to intensification of production;

Improving the organization of material and technical supply in order to uninterruptedly provide production with the necessary material resources and reduce the time that capital remains in reserves;

Accelerating the process of shipping products and processing settlement documents;

Reducing the time spent in accounts receivable.