Analysis of general indicators of current assets turnover. Analysis of asset turnover of the organization. Types of current assets
Federal Agency for Education
State educational institution of higher
vocational education
Kuban State Technological University
GRADUATE WORK
Analysis of the turnover of current assets and the identification of reserves for the effectiveness of their use
Krasnodar
Introduction
Chapter 2. Analysis of the turnover of current assets
2.2 Goals, objectives and information sources of the analysis of working capital
Conclusion
Bibliography
Applications
Introduction
Working capital is one of the components of the property of the enterprise. The condition and effectiveness of their use is one of the main conditions for successful activity. The development of market relations determines new conditions for the organization of working capital. High inflation, non-payments and other crisis phenomena force enterprises to change their policy in relation to current assets (funds), to look for new sources of replenishment, to study the problem of the efficiency of their use.
The process of production and sale of products can be carried out without interruption if the enterprise has not only the necessary fixed assets, intangible assets, but also working capital, mainly in the form of stocks of raw materials, materials, semi-finished products, fuel, etc. Like fixed assets, working capital operates in sphere of production, being the material basis of production and constitute production assets. But in the process of functioning, the means of labor and objects of labor transfer their value in different ways and to different degrees to the value of the manufactured product. This is due to the division of production assets into fixed assets and working capital.
Working capital assets in terms of material content are objects of labor, as well as implements of labor, accounted for as part of low-value and rapidly wearing items. Revolving production assets serve the production sector and completely transfer their value to the value of the finished product, changing the initial form in the course of one production cycle.
Revolving production assets represent the minimum necessary for the implementation of the production program stocks of raw materials, basic materials, purchased semi-finished products and components, auxiliary materials, fuel, spare parts for repairs, low-value and wearing items, as well as work in progress.
The circulation funds, although not directly involved in the production process, are necessary to ensure the unity of production and circulation. The nature and scope of their functioning create the prerequisites for their allocation into an independent concept of “circulation funds”.
Circulation funds consist of stocks of finished goods at the enterprise’s warehouse, goods shipped to consumers, and cash balances in bank accounts and at the cash desk of the enterprise.
Revolving production assets and circulation funds are closely related. Their movement is of the same nature and makes up a single process of the circulation of funds of the enterprise.
At the same time, there is a constant and regular change in the forms of advanced cost: from money it turns into commodity, then into production and again into commodity and money. Thus, there is an objective need for advance payments to ensure the continuous movement of revolving production assets and circulation funds in order to create the necessary inventories, backlog of work in progress, finished products and conditions for its implementation.
In the system of measures to increase the efficiency of social production an important place is occupied by the issues of rational use of working capital in all spheres of activity.
The purpose of the analysis of accounting (financial) statements from the perspective of the user is to review and evaluate the information available in the statements in order to obtain reliable conclusions about the past state of the enterprise in order to predict its viability in the future.
As a result of the analysis of accounting (financial) statements, the most important characteristics of the enterprise are also determined, which indicate, in particular, its success or the threat of bankruptcy.
For different users, the analysis of accounting (financial) statements in terms of the scale of its implementation depends on the specific goal. At the same time, the nature of the analysis and the direction of work in the analysis of accounting (financial) statements may be different.
The analysis of current assets is one of the most important areas of analysis of financial statements, since the change in the dynamics and structure of current assets determines the solvency of the enterprise, its production capabilities, and the demand for this enterprise on the market.
The working capital turnover is one of the most important indicators characterizing the intensity of the use of working capital of the enterprise and its business activity. The financial condition of the organization directly depends on how quickly the funds invested in current assets turn into real money. So, the growth of non-payments complicates the rhythm of the organization and leads to an increase in receivables; excessive diversion of funds into inventories, work in progress, finished products leads to the “necrosis” of resources and inefficient use of working capital.
The purpose of writing the final qualification work is to analyze the current assets of Yuzhnaya Zvezda LLC and develop recommendations for their optimization, determine the level of efficiency of the enterprise using current assets at its disposal.
The tasks of the final qualification work include:
The study of the theoretical and organizational foundations of the turnover of current assets;
Studying the methods of analysis of the turnover of current assets;
The study of organizational and economic data of the object of study of final qualification work;
Factor analysis of indicators of turnover;
Analysis of the turnover of current assets of LLC "South Star" and the development of recommendations based on the results of the analysis.
Analysis of current assets is carried out on the example of Limited Liability Company LLC “South Star”. The main activities of LLC "South Star" is the sale of the following products: flower crops, indoor plants, open ground plants, planting material, seeds and bulbs, soil mixtures, plant accessories, and accessories for caring for them.
The first chapter discusses general approaches to collecting and using information for economic analysis; the problems of verifying the reliability of information are studied; outlines the principles of organizing the search for business reserves.
The second chapter gives the general organizational and economic characteristics of the object of study; defined goals and objectives of the analysis of the turnover of current assets; the analysis of the turnover of current assets of LLC “South Star”.
The third chapter is devoted to the identification of reserves for the efficiency of the use of working capital, contains a factor analysis of indicators of turnover, a list of proposals for the optimal use of working capital.
Chapter 1. The information base for the analysis of the business entity
1.1 Sources of information and verification of its reliability
The depth of analysis, the reliability and objectivity of the analytical conclusions are provided by the involvement and analytical processing of various sources of information. The largest role in the information support of the analysis is played by internal information, which includes all types of business accounting, accounting and statistical reporting; constituent documents; legal documentation characterizing contractual relations with suppliers and buyers, borrowers, depositors and issuers; design and other technical documentation reflecting the functional structure of products, their quality, the level of engineering and production technology, the degree of automation of management of all aspects of the business entity; normative planning documentation and a business plan; acts of audits and scheduled inspections.
To conduct different types of economic analysis, a different set of sources of internal information and their different ratio are used.
On-farm accounting data is involved in the implementation of all types of analysis by internal users within the range of access to this data authorized by management.
The main source of information for external users is the financial statements. The content of published (so-called public) statements and the degree of aggregation of its data are established by the state in law.
In the legislatively regulated volume, financial statements are submitted to the tax authorities, with the application of calculations of the tax base of various taxes, to the statistical authorities, as well as to lending commercial banks.
Along with internal information in modern conditions of the market economy of Russia, to make rational managerial decisions it is necessary to have information about the state of the external environment in which the business entity operates and develops.
Such information comes from sources outside the business entity, and therefore is called external information; it includes:
1) political information about the economic policy of the state during the analysis and the planned changes, in particular with regard to certain types of economic and commercial activities;
2) economic information on the state of supply and demand for various types of goods and services in domestic and foreign markets, on interest rates for loans, on stock quotes of securities of different issuers, on fluctuations in foreign exchange rates, on ratings of individual commercial banks and companies, with with which the analyzed subject has business relations, about the prospects for the development of individual industries and subsectors of the national economy;
3) information on the business and personal qualities of the leaders of these legal entities.
Sources of external information are newspapers, magazines, exchange bulletins, television, the Internet, state statistics agencies, economic security services and personal observations of the leaders of the analyzed entity, companies that specialize in collecting and processing information on the user's orders.
Information collected from various sources is grouped and processed in the sections necessary to achieve this type of analysis of goals. Moreover, special attention is paid to checking the consistency of data obtained from different sources and their reliability.
Inaccuracy is caused by a number of reasons of an objective and subjective nature.
The objective reason for the inconsistency of the information with the real state of the business entity and the actual result of its activity is, first of all, the mismatch of legislatively established rules for assessing the value of property and its real market value at the date of analysis. The determination of the size of income and expenses, and, consequently, financial results is to some extent conditional, since it depends on the adopted accounting policy and the rules for their recognition on an accrual basis or on a cash basis. Deviation of information from reality is also caused by a number of other objective reasons, including the impossibility of accurately determining the degree of moral and physical depreciation of fixed assets, the loss of consumer value of tangible working capital, the risk level of reducing the exchange value of the securities portfolio, the risk of default on debt, and impairment of property due to inflation.
The subjective reasons for receiving false information is the insufficient qualifications of the personnel, which cause errors in the preparation of primary, legal, accounting and technical documentation, in accounting, reporting and tax calculation. Subjective reasons also include the deliberate distortion of internal and external information by its compilers in order to deceive users with regard to financial stability and profitability of the business entity or direct fraud for personal enrichment.
All of the above reasons of an objective and subjective nature make it necessary to verify the reliability of reporting and make adjustments to it, which will bring it closer to the real state of the analyzed aspects of activity and allow to give its correct assessment.
The process of checking information usually involves several steps.
The first stage is a counting check, i.e. checking compliance with analytical and synthetic accounting data by compiling revolving statements of balances and revolutions for each account provided for by the working chart of accounts.
Next, we compare the indicators of different reporting forms, which either should completely coincide in these forms, or be deduced from one another by subtraction, addition, or division (arithmetic operations are carried out to identify a comparison or interrelation of individual indicators).
The second stage is a counter check, i.e. information obtained from different sources is compared.
Data on balances on settlement, current, deposit and loan accounts must be confirmed by extracts on balances received from their leading banks; balances of debt for each debtor and creditor are verified with the accounting data of these debtors and creditors. In this volume, a counter check should be carried out without fail by the accounting department before preparing the annual financial statement.
Further counter verification of information is carried out by analysts (or auditors).
At the same time, the data of internal accounting, statistical and operational accounting and reporting are compared, as well as data obtained from external sources of information; The reasons for the revealed discrepancies are clarified, which is essential for assessing the reliability of the information and, if possible, the necessary clarifications are made.
The third stage is a logical check. At this stage, the analyst, taking into account the current economic situation, finds out how much you can trust the data of internal and external information about the quality of the manufactured (sold) products (or services), about the income and expenses of the analyzed economic entity based on its own assessment of the qualifications and integrity of its managers and staff, state of accounting and control.
The methodology of logical verification is very subjective and almost impossible to formalize.
At the stage of logical verification, the conclusions of the analyst are mainly preliminary and entirely depend on his qualifications and experience in practical audit or audit activities.
1.2 Analytical information processing: modern computer analytical programs
After checking the completeness and reliability of the information, its analytical processing is carried out, i.e. a system of indicators is determined, the study of which is required to achieve the objectives of the analysis. These indicators are either already contained in the selected information, or are calculated in the process of its analytical processing.
By a system of indicators is meant such an ordered set of them, in which each indicator gives a qualitative and quantitative characteristic of a certain side of the economic entity, is interconnected with other indicators, but does not duplicate them, has the properties of reducibility and divisibility.
The number of indicators in the process of analytical information processing can increase almost unlimitedly by their differentiation or integration depending on the analysis program, the depth of the study of the results of activities and the factors influencing them.
Since the activities of business entities, their structural divisions, as well as their various associations, are mostly quite stable, the system of indicators with which it is analyzed has a certain stability, but is gradually enriched with new indicators as new tasks arise, changes in the general economic situation, external and internal conditions of business entities.
A wide market for software products and many developers offering their services in the Russian market require evaluating the effectiveness of their use in different conditions. For mass consumption, the simplest signs of the classification of software products are most understandable, for example, the orientation of software products to large, medium and small enterprises. Despite their simplicity, they are very widely used.
Currently, according to the degree of functional coverage of the program, they can be focused only on accounting, accounting and operational (production) accounting; on inventory and other types of information. In this case, the software products are focused on serving various departments, divisions and links of production and management. At the same time, comprehensive programs cover several departments at once.
There are programs on the market that have a sectoral focus, for example, for construction, trade organizations, discrete production (according to the type of production technology), and for railway transport.
According to the degree of readiness, the method and the depth of tuning, one can distinguish ready-made programs with parametric tuning, with elements of algebraic-formula setting, individually developed programs.
The most widely distributed integrated financial and functional systems in Russia, focused on several business management units. They include blocks for managing financial flows, financial analysis, but they are primarily based on accounting functions. The universal systems of this class include: 1C-Enterprise, Accord, BEST-4, Sail, Flagship; Cascade, Domino, BEST-Pro, etc.
In complex and integrated systems, special modules are often allocated that implement the functions of analysis and planning.
Most developed in Russia were software products for analyzing financial results and assessing the financial condition of an organization. This is explained, on the one hand, by the objective demand for solving problems of financial analysis. Financial analysis is most closely associated with financial (accounting) statements, uses accounting data, i.e. most closely adjacent to the accounting system, which received the greatest development in software products.
Retrospective analysis allows you to generate high-quality initial information for subsequent forecasting and planning. But the possibilities of software products in the qualitative analysis and interpretation of coefficients for further forecasting are limited.
In recent years, prognostic tasks began to be developed quite actively in software products, but without prior qualitative selection of information, which, of course, reduces their reliability. These programs can be used in the development of business plans, investment projects, and the formation of forecast financial statements.
Analysis of the financial results of the activities of economic entities and its effectiveness implies the greatest coverage of analytical functions, and therefore, the use of integrated software. The significance of this line of analysis is undeniable. Firstly, it is the sustainability of improving financial results and their positive dynamics that guarantee the financial stability of an economic entity. Secondly, profit growth and an increase in the share of economic profit, understood as an increase in equity, is a solid and reliable source of financing measures to increase the organization’s production potential. Thirdly, in a saturated market, organizations have to maneuver, choosing a rational ratio of growth in sales and profitability of products, which is governed by changes in prices for a certain type of product. This approach involves tight continuous monitoring of the assortment program, focused on optimizing the selected criterion (sales volume or rate of return).
1.3 the Economic essence of the reserves of improving the efficiency of management and the principles of the organization of their search
The concept of “reserves” is used in science and practice to analyze the activities of business entities in a double sense. Firstly, reserves are considered material and material resources that are temporarily not used for their intended purpose. These reserves are created for additional needs, in order to use them in certain circumstances. They are expressed in specific material elements, these are stocks of raw materials, materials, fuel, semi-finished products, uninstalled equipment, free production space.
Reserves in this sense are analyzed from the point of view of correspondence of their sizes to real needs: they are excessive or insufficient. To this end, in practice, inventories, inventories, and uninstalled equipment are systematically analyzed.
The search for reserves should be carried out purposefully and systematically in the main areas, without sputtering forces to identify reserves of secondary and insignificant. From this follows the relevance of developing principles for organizing the search for reserves [Melnik, p. 197].
The principle of mass search for reserves. Reserves are practically inexhaustible. With the acceleration of scientific and technological progress, the role of reserves associated with extensive factors of growth in economic efficiency is weakened, and the importance of finding reserves to intensify social production, which are more easily discovered by directly studying them at workplaces, is growing. These reserves are identified more fully, the greater the number of workers of various professions and specialties involved in their search. That is why it is necessary to involve all personnel in the search for a reserve in the order of performance of official duties.
The principle of determining the leading link in improving production efficiency and highlighting bottlenecks. To preliminarily identify areas for finding reserves, the structure of production costs is essential, according to which it can be established whether production is material-intensive, energy-intensive, or capital-intensive (in terms of fixed assets) or labor-intensive. Depending on this, a decisive group of resources is determined by which it is necessary to find resources in the first place.
This does not mean that one can neglect the search for reserves in other groups of resources and the factors affecting them.
The principle of selective search for reserves. Even with the participation of all personnel in identifying reserves, analysis is carried out selectively in the most reserve-intensive areas.
The principle of accounting for the type of production. In mass and large-scale production, the search for reserves is recommended by detailing the indicators of resource use in the following sequence: product, unit, part, technological operation.
The principle of the simultaneous search for reserves at all stages of the life cycle of the analyzed object. The effectiveness of the search for reserves is higher, the earlier it starts at the product creation stage.
Domestic and foreign experience confirms that the possibilities of identifying and mobilizing the reserves of saving materials and wages at the stage of designing an object and preparing its production are several times greater than at the stage of production and operation of an object. Thus, it is highly relevant to extend the analysis of reserves to the pre-production stage when costs are still negligible.
The principle of determining the completeness of reserves. A real opportunity to mobilize reserves is only provided that the reserves are complete. For example, the identified reserves of material savings cannot be used to increase production if production capacities in some limiting areas do not allow for further growth in output. Therefore, it is necessary to analyze the degree of use of equipment and identify its reserves. If the possibility of increasing output by increasing the shiftability of equipment is identified, the problem arises of attracting additional workers and engineering workers, and this, with limited labor resources, involves the conditional release of workers as a result of increased productivity of their labor.
The problem of assessing the completeness and reality of reserves is not solved by simple comparison of the total volume of reserves in monetary terms for three simple moments of the labor process. It is necessary to compare the reserves identified by individual equipment groups and, on this basis, determine the real reserve for the growth of production at the expense of fixed assets, consider the labor reserves in the context of professions and qualifications, determine the reserves for labor items not only in general terms of their value, but also taking into account the natural material composition of scarce varieties of materials.
The principle of eliminating re-provisioning. When measuring the value of the total reserves there is a danger of their re-calculation. For example, they accumulate reserves for increasing the volume of production hidden in eliminating the causes of downtime of workers and equipment, although for the most part the downtime of workers coincides with the downtime of the equipment on which they work. To eliminate the re-invoice, it is necessary to organically link the change in the cost norms with the implementation of individual measures that cause a decrease or increase in material consumption and labor input of production. At present, it is very difficult to make such a link, and most often it is practically impracticable, since this requires a more advanced organization of accounting for changes in norms, which has not yet been created in most enterprises. As a result, the calculation of reserves, on the one hand, is very incomplete, and on the other hand, their re-calculation is not ruled out.
Chapter 2. Analysis of the turnover of current assets of LLC “South Star" "
2.1 Organizational and economic characteristics of LLC "South Star"
The founders of the enterprise are individuals. The purpose of the company is to make a profit. The authorized capital of the Company is 13,200 rubles. The company does not create special purpose funds from its profits . Intangible assets at the enterprise are absent.
The average number in 2005-2007 was 75 people.
The activities of the enterprise are managed by the Director General, I. Ivanov, who independently solves the issues of the enterprise’s activities, acts on his behalf, has the right to first sign up, manages the property of the enterprise, and accepts and dismisses employees. The General Director bears material and administrative responsibility for the accuracy of the data of the accounting and statistical report. In accordance with the orientation of the company, the Director General appoints his deputies. One is engaged in marketing marketing and product advertising. Another deputy is engaged in production issues. Chief Accountant Petrova I.I. compiles documentary reports of enterprises.
To study the property status of LLC "South Star" we will form an analytical table (table. 2.1).
Table 2.1.
Analytical characteristics of the property of the enterprise
| Index | 2005 | 2006 | 2007 | Change ( + ) | |
2006 to 2005, |
2007 to 2006, |
||||
| Total property, thousand rubles (300) | 32552 | 41684 | 334858 | 128,1 | 803,3 |
including: Non-current assets, thousand rubles (190) |
1396 | 1300 | 190046 | 93,1 | 14618,9 |
| in% of property | 4,3 | 3,1 | 56,8 | x | X |
| Current assets, thousand rubles (290) | 31156 | 40384 | 144812 | 129,6 | 358,6 |
| in% of property | 95,7 | 96,9 | 43,2 | x | x |
| Stocks, thousand rubles (210) | 14149 | 13828 | 15724 | 97,7 | 113,7 |
| in% to current assets | 45,4 | 34,2 | 10,9 | x | X |
| Finished products and goods for resale, thousand rubles (211) | 14149 | 13814 | 15678 | 97,6 | 113,5 |
| in% to current assets | 45,4 | 34,2 | 10,8 | x | x |
| Accounts receivable, thousand rubles (240) | 2156 | 4412 | 71983 | 204,6 | 1631,5 |
| in% to current assets | 6,9 | 10,9 | 49,7 | x | x |
|
buyers and customers, thousand rubles (241) |
1482 | 3700 | 70347 | 249,7 | 1901,3 |
| in% to current assets | 4,8 | 9,2 | 48,6 | x | x |
| Cash, thousand rubles (260) | 893 | 1321 | 1100 | 147,9 | 83,3 |
| in% to current assets | 2,9 | 3,3 | 0,8 | x | x |
The dynamics of the assets structure of LLC Yuzhnaya Zvezda in dynamics over three years will be demonstrated graphically (Fig. 2.1).
Fig. 2.1. The ratio of current and non-current LLC "South Star" for the period 2005-2007
It should be noted that the share of current assets in the total value of the property of the organization decreased by the end of 2007, 96.9% to 43.2%. This situation is associated with the appearance of a significant amount in the balance sheet asset under the article “Construction in progress”. However, for the analyzed period, the amount of the organization’s working capital also increased and we can observe its dynamics in Fig. 2.2.
Fig. 2.2. Dynamics of current assets of LLC "South Star" for the period 2005-2007
The analytical characteristic of the liability of the balance sheet of LLC “South Star” is presented in table. 2.2. (p. 24).
Table 2.2
Analytical characteristics of the sources of formation of property of the enterprise
| Index | 2005 | 2006 | 2007 | Change ( + ) | |
2006 to 2005, |
2007 to 2006, |
||||
| Total liabilities, thousand rubles (700) | 32552 | 41684 | 334858 | 128,1 | 803,3 |
including: Capital and reserves, thousand rubles (490) |
10459 | 11071 | 11178 | 105,9 | 101,0 |
| 32,1 | 26,6 | 3,3 | x | x | |
| Long-term liabilities (590) | - | - | 240000 | ||
| in% to sources of funds (liabilities) | 71,7 | x | x | ||
| Short-term loans and credits, thousand rubles (610) | 11116 | 21169 | 6682 | 190,4 | 31,6 |
| in% to sources of funds (liabilities) | 34,1 | 50,8 | 2,0 | x | x |
| Accounts payable, thousand rubles (620) | 10964 | 9444 | 76998 | 86,1 | 815,3 |
| in% to sources of funds (liabilities) | 33,7 | 22,7 | 23,0 | x | x |
|
suppliers and contractors, thousand rubles (621) |
10712 | 9137 | 76693 | 85,3 | 839,4 |
| in% to sources of funds (liabilities) | 32,9 | 21,9 | 22,9 | x | x |
Consider the financial results of the activity of the object of study and their components (table. 2.3).
According to this table, one can trace the dynamics of the components of profit, but also the influence of first-order factors on the profit from the sale of goods. According to the reporting and calculation data, the combined effect of first-order factors on sales profit led to its decrease by 279 thousand rubles. in 2006 compared with 2005, and then to an increase of 948 thousand rubles. in 2007 compared with 2006, growth in sales revenue as a factor had a positive effect on the amount of profit, an increase in the amount of selling expenses and the cost of goods sold was negative.
In the last year of the analyzed period, the growth rate of revenue from sales and the cost of goods sold coincide, averaging 150%, the growth rate of commercial expenses amounted to 122%.
Table 2.3
Calculation of the influence of first-order factors on sales profit
LLC "South Star" according to form No. 2
| Factors | 2005 year | 2006 year | 2007 year | Absolute increase | The influence of factors on profit from sales | ||
| from 2006 to 2005 | from 2007 to 2006 | from 2006 to 2005 | from 2007 to 2006 | ||||
| Sales revenue | 76418 | 121827 | 181361 | 45409 | 59534 | 45409 | 59534 |
| Cost of goods sold | 65676 | 105966 | 161050 | 40290 | 55084 | -40290 | -55084 |
| Selling expenses | 9970 | 15368 | 18870 | 5398 | 3502 | -5398 | -3502 |
| The cumulative effect of factors | -279 | +948 | |||||
Represent graphically the behavior of profit from sales of the object of study in Fig. 2.3.
Fig. 2.3. Dynamics of profit from sales of LLC "South Star" for the period 2005-2007 (thousand roubles.)
In Figure 2.3, it can be seen that the nature of the combined influence of factors also changed the behavior of profit from sales of the research object - a decrease in 2006 of 36.1% compared to 2005, an increase in 2007 of 192% compared to 2006 ., or 2.9 times.
Analyze the indicators characterizing the solvency of the organization (table. 2.3.)
Solvency indicators
LLC "South Star"
The liquidity of an enterprise reflects its ability to pay forthcoming debts (liabilities) or the ability to turn assets (fixed and current assets, including securities and other assets) into money for payment of liabilities.
The main indicators characterizing the solvency of the enterprise include, first of all, the current ratio. It shows how much of the current loan and settlement obligations can not be repaid by mobilizing all current assets. The optimal value of this indicator is 1-1.5. The current liquidity ratio is equal to the ratio of current assets to short-term liabilities, i.e., s.290 / s.690 balance sheet. At the beginning of 2005 it amounted to 1.84, but at the end of 2005 it assumed the optimal value (1.35) and for two years remained within this framework.
The equity ratio is equal to the difference between capital and reserves and non-current assets divided by current assets (p. 490 – p. 190) / p. 290.
The quick ratio is equal to the ratio of cash minus stocks and other assets to current liabilities, i.e. (p. 290-p. 210-p. 220) / p. 690. Criterion of at least 1. By enterprise in 2005 at the end of the year it is less than 1 per 0.51, in 2006 by 0.51, and in 2007 by 0.14, this is due to the fact that most of the free cash immediately goes to providing reserves (in our case, the purchase of goods).
The absolute liquidity ratio is equal to the ratio of cash to current liabilities i.e. s.260 / s.690 balance. Absolute (total) liquidity ratio indicates which part of the company's short-term liabilities can be immediately repaid at the expense of cash in current and other bank accounts. A theoretically sufficient value of this indicator is from 0.2 to 0.25. For the studied three years, the value of this indicator significantly decreased from 0.2 at the beginning of 2005. to 0.04 at the end of 2007 This means that immediate repayment of short-term obligations requires lending.
Based on the study, we can conclude that the results of the financial and economic activities of LLC "South Star", the structure and dynamics of the main economic indicators, are characteristic for the organization of trade; processes and phenomena of the period 2005-2007 explained by the influence of various internal and external factors; the financial condition of the object of study during the period under review can be called stable. However, to assess the effectiveness of the use of current assets, which are an important component of a trading organization, the general economic characteristics of OOO South Star is not enough.
2.2 Goals, objectives and information sources of the analysis of current assets
The main objective of the analysis is the timely identification and elimination of deficiencies in working capital management and finding reserves to increase the intensity and efficiency of its use. And also: identification of factors affecting indicators of turnover and the duration of one period, a quantitative measurement of their impact; determination of the impact of working capital turnover on the financial condition of the enterprise.
The financial position of the enterprise, its liquidity and solvency directly depend on how quickly the funds invested in assets are converted into real money. This effect is explained by the fact that the following are associated with the turnover rate of funds:
The minimum required amount of advanced (involved) capital and related cash payments (interest on the use of bank loans, dividends on shares, etc.);
The need for additional sources of financing and payment for them;
the amount of costs associated with the possession of inventory and their storage;
The amount of taxes paid, etc.
Certain types of assets of an enterprise have different turnover rates.
The duration of the funds in circulation is determined by the combined influence of a number of multidirectional external and internal factors. The first should include the scope of the enterprise, industry affiliation, the scale of the enterprise (in most cases, the turnover of funds in small enterprises is much higher than in large ones - this is one of the main advantages of small businesses) and a number of others.
The current expenditure of funds and their receipts, as a rule, do not coincide in time, as a result, the enterprise has a need for more or less funding in order to maintain solvency. The lower the turnover rate of current assets, the greater the need for financing.
External financing is expensive and has certain restrictive conditions. Own sources of capital increase are limited primarily by the ability to obtain the necessary profit. Thus, managing the working capital, the company gets the opportunity to a lesser extent depend on external sources of cash and increase its liquidity. Therefore, the management of current assets is considered as one of the ways to satisfy the need for capital.
In order to manage current assets, indicators of their turnover and factor analysis of indicators of turnover are used, although they are more likely to confirm a specific opinion than a fundamental argument for making a management decision.
Since working capital includes both material and monetary resources, not only the process of material production, but also the financial stability of the enterprise depends on their organization and efficiency of use.
However, it should be emphasized that the period the funds are in circulation is largely determined by the internal conditions of the enterprise, and primarily the effectiveness of its asset management strategy (or lack thereof). Indeed, depending on the applied pricing policy, asset structure, and inventory valuation methodology, an enterprise has more or less freedom to influence the duration of its assets turnover.
The value of the turnover ratio of current assets is directly affected by the methodology adopted by the company for their assessment and based on the challenges and the selected asset management strategy, the enterprise has a certain ability to adjust the value of the turnover ratio of its assets.
In the general case, the turnover of funds invested in property can be estimated by the following main indicators: the turnover rate (the number of turns that the capital of the enterprise or its components make during the analyzed period) and the turnover period - the average period for which they return to the economy invested in production -commercial operations cash.
Working capital analysis allows you to:
Assess the efficiency of resource use in the operational activities of the enterprise;
Determine the liquidity of the balance sheet of the enterprise, that is, the ability to timely repay short-term liabilities;
Find out what the company's own working capital is invested during the financial cycle.
The size and structure of working capital should correspond to the needs of the enterprise, which are reflected in the budget, while current assets should be minimal, but sufficient for the successful and uninterrupted operation of the enterprise.
The main tasks of working capital analysis: the study of changes in the composition and structure of working capital; grouping of working capital according to the main features; determination of the main sources of working capital formation; determination of key performance indicators for the use of working capital.
The objectives of a comprehensive economic analysis of the status and use of working capital of the organization are:
1. The determination of the volume of working capital necessary to ensure the continuity of the economic activity of the organization;
2.
Verification of compliance of stocks of material assets with established standards and identification of excessive and unnecessary organization of materials in the composition of production stocks;
3. Ensuring the safety of working capital, ie identification and minimization of losses of working capital;
4. Ensuring the use of working capital for its intended purpose;
5. Determining the impact of the organization of material and technical supply and the full use of material resources on the most important indicators of the organization's work (output, cost, labor productivity, etc.);
6. Justification of the effectiveness of the use of working capital by accelerating their turnover and conditional release from circulation;
7. Justification of the optimal demand for material resources;
8. The identification of reserves to increase the efficiency of working capital.
The set studied in the process of analyzing the state and efficiency of use of working capital gives a comprehensive description of the state and effectiveness of their use.
The main source of data for the analysis of the working capital of an enterprise is the balance sheet (form No. 1) and the profit and loss statement (form No. 2).
The balance sheet characterizes the composition, placement and purpose of the funds of the enterprise on a specific date. The balance sheet is in the form of a table, consists of two parts - asset and liability. The asset shows the composition, placement and use of funds, grouped according to their functional role in the economy.
The profit and loss statement contains information on the financial results of the enterprise (profit), as an effect of the use of working capital.
The composition, content and quality of the information that is involved in the analysis have a decisive role in ensuring the effectiveness of the analysis of economic activity. Sources of information for the analysis of working capital turnover are accounting in nature, i.e. this is data that contains accounting documents. These include the balance sheet (form No. 1) and the profit and loss statement (form No. 2), approved by order of the Ministry of Finance of the Russian Federation of July 22, 2003 No. 67n.
The initial information is subject to certain requirements. Among the most important, relevance, reliability, comparability, rationality, and content are highlighted. The relevance of accounting information means its timeliness, value, usefulness for evaluating results and forecasting. The reliability of the information is characterized by truthfulness, compliance with regulations and internal regulations, neutrality, the ability to verify and transparency, prudence - reflecting costs and losses before income and profits. The rationality of economic information implies its sufficiency, efficiency and lack of redundant data.
An important step in the analysis is the preparation of information, which includes data verification, ensuring their comparability, and simplification of numerical information.
First of all, the information collected for analysis should be checked for good quality. Verification is carried out from two sides. Firstly, the analyst checks how complete the data that contains reports, tables and other documents is, whether they are correctly formatted. Be sure to check the correctness of arithmetic calculations, as well as the consistency of the indicators given in different reports and tables.
Secondly, all the data involved in the analysis are checked in essence, during which they determine how much this or that indicator corresponds to reality. The means of this verification are both logical interpretation of the data, and verification of the state of accounting, mutual consistency and validity of indicators from different sources.
The analysis will be significantly less laborious if the comparability of indicators is ensured. To do this, all the numerical information after checking its good quality is brought into a comparable form, using methods to neutralize the effects of cost, volume, quality and structural factors by bringing them to a single basis, as well as using average and relative values, correction factors, conversion methods, etc.
Let us consider in more detail the sources of information for the analysis of the turnover of current assets.
Form No. 1 - balance sheet - describes the financial position of the organization as of the reporting date. Data for the purposes of our analysis, i.e. information on the state of working capital, as well as their elements: inventories, settlements with debtors, short-term financial investments and cash are reflected in section II of the balance sheet.
In the subsection "Inventories" the bulk of the current assets of the enterprise is concentrated, and more precisely, assets of a material and material nature that are directly included in the production and technological process. The structure of inventories includes: finished products, work in progress, raw materials, goods shipped.
This article can be a significant share not only in the working capital, but also in the assets of the enterprise as a whole, which may indicate the difficulties of the company with the sale of its products, a violation of production technology and the choice of ineffective implementation methods, the specifics of a particular production related, for example, to the duration of the production cycle or its seasonal cycle.
Accounts receivable - the next element of working capital, which represents the requirements of the enterprise in relation to other enterprises, organizations, customers to receive money for the delivery of goods or the provision of services. Accounts receivable are reflected in the balance sheet in two groups of articles depending on the timing of expected payments: receivables for which payments are expected within 12 months after the reporting date, and receivables for which payments are expected more than 12 months after the reporting date
There are two types of receivables - normal and overdue. Normal receivables arise as a result of the applicable forms of payment for delivered products, services rendered, work performed, and is not a result of shortcomings in the operation of the enterprise. Overdue receivables arise as a result of the unsatisfactory operation of the enterprise, for example, if the recipients of the products violate the settlement conditions, if shortages, embezzlements and thefts of inventory and cash are detected. The presence of large receivables should be considered as a factor adversely affecting the financial position of the enterprise, and its growth in dynamics - about the deterioration of the financial situation.
Short-term financial investments - liquid securities that bring profit to the enterprise in the form of interest or dividends. They can be easily sold on the securities market and converted into cash.
The group of cash items reflects the cash balance at the cash desk, on settlement accounts and foreign currency accounts with banks and cash documents. Cash is a specific type of assets of the enterprise, which are a universal means of payment for attracting any resources to the enterprise. In its content, the item “cash” represents the amount of money left on the bank’s current account (demand deposit) in national and foreign currency, as well as a certain amount of cash stored in the cash desk of the company on the balance sheet date.
Under the article other current assets shows the amounts that are not reflected in other articles of section II of the balance sheet.
Form No. 2 — Profit and Loss Statement — contains a comparison of the total income of the enterprise from the sale of goods, the provision of services, as well as income and income from other activities with the sum of all expenses incurred by the enterprise to maintain its activities from the beginning of the year. As part of the analysis of working capital turnover, the information on the profit and loss statement on the revenue (net) from the sale of goods, products, works, services (net of VAT, excise taxes and similar obligatory payments) is used.
In addition to the aforementioned forms of external reporting, for the analysis of receivables turnover, they also use information from analytical accounting: data from order journals or statements replacing them, accounting of settlements with buyers and customers, with suppliers on advances paid, accountable persons, with other debtors.
2.3 Main indicators and directions of their analysis
Coefficient analysis – this calculation of relative financial indicators, based on the absolute indicators of current assets, is the ratio of interrelated units.
Indicators of business activity allow us to assess the financial situation of the enterprise from the point of view of solvency: how quickly the funds can turn into cash, what is the production potential of the enterprise, is its capital and labor resources efficiently used, how does the company use its assets to generate income and profit.
The general indicators of business activity include, first of all, indicators of turnover. In theory and practice, the following indicators are used:
1. The turnover Ratio of working capital and the duration of their turnover
|
Revenue from sales - Page 010 f.2;
OA cf. - the arithmetic average of current assets (beginning and end of the year - p. 290);
Not only the size of the minimum working capital necessary for economic activity, but also the size of the costs associated with the possession and storage of stocks depends on the turnover of current assets. In turn, this affects the cost of production and, ultimately, the financial results of the enterprise. Everything necessitates continuous monitoring of current assets and analysis of their turnover to determine the production and commercial cycle.
A comparison of the turnover ratios in the dynamics over the years allows us to identify trends in changes in the efficiency of working capital use. If the number of revolutions made by circulating assets increases or remains stable, then the enterprise works rhythmically and rationally uses circulating assets. The decrease in the number of revolutions made in the period under review indicates a decline in the pace of development of the enterprise and its poor financial condition.
An important factor in improving the financial condition of the enterprise is the acceleration of the turnover of working capital (reducing the duration of the turnover). The duration of the turnover is expressed in days and is calculated as follows:
T – the number of days in the analyzed period (360, 270, 180, 90, 30);
As a result of accelerating the turnover of working capital, there is a conditional release of working capital, that is, their savings. With a slowdown in turnover, additional working capital is attracted to service production, that is, an overrun.
The release or additional attraction of working capital due to the acceleration (deceleration) of turnover is calculated as follows:
A conditional release of working capital is considered a positive effect when ΔОА is a negative value. When ΔОА has a “+” sign, this is a negative effect of a change in the turnover rate of working capital.
2. The inventory turnover ratio;
The turnover and the duration of the turnover of inventory or inventories characterizes the use of working capital. The amount of resources distracted from the production process depends on the use of the latter. The formation of inventory balances and the efficiency of their use largely depend on the speed of their turnover, which, in turn, is influenced by the regularity, speed of supply and the one-day need for raw materials, materials, fuel, etc. Production stocks (raw materials, materials) provide the organization with freedom making purchases. The level of stocks should be high enough to meet the need for them when necessary.
The main indicators calculated in this block of analysis of current assets turnover are:
Inventory turnover ratio is the ratio of the cost of production sold during the reporting period to the average value of stocks in this period. This coefficient shows how many times the average stocks of the company are sold over a period of time.
 |
Cost of sales - Page 020 f.2
Inventory \u003d Page 210 f. 1 + Page 220 f. 1
West wed . = arithmetic average for stocks (beginning and end of the year);
Take into account several types of inventory turnover:
The turnover of each item in quantitative terms;
The turnover of each item at cost;
The turnover of the aggregate of items or the entire stock in quantitative terms;
The turnover of a set of positions or the entire stock at cost.
The turnover ratio can be calculated according to different parameters and for different time periods, for one item or for a combination of items of inventory.
The duration of inventory turnover (the duration of the production cycle) is expressed in days and is calculated as follows:
This indicator can also be calculated based on the total cost of sales instead of sales revenue:
(7)
3. The turnover ratios of receivables and cash and short-term financial investments;
The accounts receivable turnover ratio, which characterizes the ratio of sales proceeds to the average value of receivables, shows the expansion or decrease in commercial credit provided by the enterprise.
The period of accounts receivable turnover (repayment) in days characterizes the average maturity of receivables, and shows how many days an average product sales cycle takes place: the lower this indicator, the more efficiently the enterprise sells its products:
The longer the receivables turnover period, the higher the risk of non-payment of it. The increase in receivables is possible for the following reasons:
Prudent enterprise policy towards customers;
Indiscriminate choice of partners;
Counterparty insolvency;
Increasing sales volumes;
Difficulties in the sale of products.
It is necessary to analyze the structure of receivables. Uneven distribution of receivables between debtors, i.e. the presence of one or two debtors, which account for the bulk of the debt. Having discovered a negative change in receivables, it is necessary to consider ways to improve it. A priority measure may be to review and amend the existing loan sales policy, for which it is necessary to tighten the loan terms, evaluate and control consumers, use discounts or other motivation to expedite payments by debtors. In addition, it is necessary to review and change the procedures for receiving payments.
The debt collection period (Tink.) Is calculated based on the expected sales revenue with a deferred payment for the analyzed period:
(9)
Formation of the procedure for collection of receivables:
As part of this procedure, the terms and forms of preliminary and subsequent reminders to buyers of the date of payments, the possibilities and conditions for prolonging the debt on the granted loan, the conditions for initiating bankruptcy proceedings of insolvent debtors should be provided.
Inventory turnover characterizes the mobility of funds that an enterprise invests in creating inventories: the faster the money invested in inventories returns to the enterprise in the form of revenue from sales of finished products, the higher the business activity of the organization.
The calculation of the cash turnover period and short-term financial investments are as follows:
The list of calculated ratios can be expanded, depending on the objectives of the analysis and the constituent elements of working capital (for example, the turnover ratio of finished products, etc.).
4. Return on working capital.
Return on working capital illustrates the company's ability to profit from the implementation of its core business, i.e. their usual business operations. Operating profit excludes elements of profit from the sale of assets or ownership of corporate rights of other enterprises. Since the working capital of an enterprise is that part of the assets that are directly and almost daily used in the process of the enterprise, it is advisable to compare operating profit with the average value of current assets for the period when evaluating the efficiency of their use.
Return on working capital provides a comprehensive assessment of the effectiveness of the use of working capital of the enterprise. Profitability shows the amount of profit from the sale of products (works, services) per 1 RUB. funds invested in the activities of the enterprise. Return on working capital is calculated by the formula:
(12)
R vol. \u003d p. 140 (F.№2) / average according to p. 290 (F.№1);
The indicator can be represented as a product of two other indicators: return on sales and current assets turnover.
Profitability of funds most fully characterizes the effectiveness of the financial activities of enterprises, comparing the results with the costs. Return on working capital is usually studied over a long period (5-10 years); analyze the absolute size and pace of its change, and most importantly, identify the predicted reserves of growth.
2.4 analysis of the turnover of current assets of LLC “South Star”
The rational use of working capital contributes to an increase in the sale of goods with a smaller amount of material and monetary costs, the release of which is an additional source of increasing the efficiency of economic activity. As a result of the acceleration of turnover, circulating assets are freed up, less stocks of raw materials, fuels and materials are required, and, consequently, monetary resources are freed up.
The calculation of turnover ratios is presented in table 2.4.
An indicator giving the most generalized idea of \u200b\u200bthe economic activity of an enterprise is the asset turnover ratio.
Table 2.4.
The turnover indicators of LLC "South Star"
Index |
2005 year | 2006 year | 2007 year | Change ( + ) | |
| 2006 to 2005 | 2007 to 2006 | ||||
| Revenue from sales of products (works, services), thousand rubles | 76418 | 121827 | 181361 | 45409 | 59534 |
| The average annual amount of working capital, thousand rubles | 29597,5 | 35770 | 92598 | 6172,5 | 56828 |
| Current assets turnover ratio | 2,58 | 3,41 | 1,96 | 0,82 | -1,45 |
| 141 | 107 | 186 | -34 | 79 | |
| The average annual amount of reserves, thousand rubles | 12678 | 13988 | 14776 | 1310 | 788 |
| Inventory turnover ratio | 6,03 | 8,71 | 12,27 | 2,68 | 3,56 |
| Duration of turnover, days | 61 | 42 | 30 | -19 | -12 |
| The average annual amount of receivables, thousand rubles | 6752,5 | 3284 | 38197,5 | -3468,5 | 34913,5 |
| Accounts receivable turnover ratio | 11,32 | 37,10 | 4,75 | 25,8 | -32,3 |
| Duration of turnover, days | 32 | 10 | 77 | -22 | 67 |
Chapter 3. The identification of reserves of efficiency of use of current assets
3.1 the Consequences of acceleration (deceleration) of the turnover of working capital
In the framework of the study, in accordance with the studied methodology for the analysis of current assets, it is necessary to graphically present their structure (Fig. 3.1.), In order to determine their most significant components. In paragraph 2.1. current assets were fragmented, the structure and dynamics indicators for the analyzed period were calculated.
Fig. 3.1. The structure of current assets of LLC "South Star"
A graphical representation of the structure determines that the essential components of current assets are: short-term financial investments - 51%; goods for resale - 34%; accounts receivable - 11%. From the point of view of the type of activity of the object of study, we are more interested in receivables and goods for resale. Short-term financial investments, given the financial statements, are loans granted to other organizations.
In modern conditions, many enterprises experience a lack of working capital, that is, a situation where the norm exceeds the amount of working capital. The reason for its occurrence may be the failure to fulfill the plan for profit, the use of profit for purposes not stipulated by the plan, untimely financing of the working capital ratio, diversion of working capital, i.e. immobilization.
Immobilization of working capital is the disposal of them from a continuous systematic circuit. Any immobilization of working capital indicates their inefficient use, leads to a slowdown in turnover and deterioration of the solvency of the enterprise. It is necessary to distinguish between immobilization resulting from the use of working capital for other purposes, that is, for purposes that are not generally related to the circulation of funds and immobilization resulting from a slowdown in the circulation of funds at its individual stages.
We can distinguish the following main ways of accelerating the turnover of working capital:
At the stage of preparation for production - the calculation of scientifically based norms and standards of working capital;
At the production stage - reducing the length of the production cycle through automation, complex mechanization, applying the latest scientific discoveries and technical inventions, replacing expensive materials with cheaper ones, reusing containers, tools, rhythmic production, etc.
At the circulation stage - an increase in volume and ensuring the rhythmicity of product sales, which contributes to uninterrupted shipment to customers and the timely receipt of funds for it in the current account; development of a settlement system in the national economy, timely paperwork and strict observance of payment discipline.
Turnover indicators help determine how efficiently an enterprise uses its assets and sources of financing.
Turnover characterizes the amount of funds that an enterprise should invest in a business for its normal functioning.
The turnover ratios help to evaluate the effectiveness of not only the management of the enterprise as a whole, but also of individual services. Analysis of turnover allows you to identify hidden reserves of capital at the enterprise and thereby sometimes refuse to use borrowed “paid” financing.
The financial position of the enterprise is largely determined by how quickly the funds invested in assets are converted into real money. The acceleration of working capital turnover allows either to release part of the working capital from the turnover with the same sales volume, or to increase the sales volume with the same working capital value. In this regard, indicators of turnover are also called indicators of business activity. To assess the effectiveness of the use of assets, indicators of total asset turnover, current assets, as well as inventories and receivables are used.
The turnover Ratio of current assets reflects the number of turns made by the property for the analyzed period. It is an indicator of a stimulant and, therefore, should tend to increase. It characterizes the efficiency of the enterprise using all available resources, regardless of the sources of their attraction. This ratio shows how many times a year a complete cycle of production and circulation takes place, bringing the corresponding effect in the form of profit.
The turnover for the analyzed periods from 2005 to 2006 increased from 2.58 to 3.41, and from 2006 to 2007 sharply decreased from 3.41 to 1.96, which is a negative trend and indicates a fall the rate of turnover, sales, lower efficiency of resource use, the overall profitability of production, as well as increasing the instability of the financial condition of the enterprise. Moreover, the turnover decreased both due to the growth of current assets and due to a decrease in revenue.
The duration of the turnover is a decoding of the indicator of turnover and shows how many days the current assets go through a full cycle. As a result of accelerating the turnover of working capital, there is a conditional release of working capital, that is, their savings. It is expressed in days and is calculated as follows:
Boa \u003d T / K rev.oa \u003d T x OA cf. / Revenues from sales; (2)
If in 2005 the period of one turnover was 141 days, then in 2006 - 107 days, and in 2007 - 186 days.
With a slowdown in turnover, additional working capital is attracted to service production, that is, an overrun.
The additional attraction of working capital due to the slowdown in turnover is calculated as follows:
rOact \u003d (Boa 1 - Boa 0) x Vyrr 1 / T 1;
In 2005, the overrun of working capital amounted to 87,552.5 thousand rubles, that is, these funds did not participate in the turnover, which reduced the efficiency of working capital use and the overall profitability of the enterprise. In 2006, the overspending decreased by 280 times to 312.3 thousand rubles, but remained positive, which coincides with a slowdown in the decline in the turnover of current assets and speaks of a decrease, but a decrease in the efficiency of use of working capital. In 2007, the additional attraction of current assets increased to 52,608.9 thousand rubles, which indicates a deterioration in the rationality of the economic activity of the enterprise and an even greater decrease in the profitability of production.
The rate of turnover of inventory is one of the most important factors affecting the total turnover of working capital. The circulation period of stocks is the average period of time necessary for the transformation of raw materials into finished products and subsequent sale.
With an increase in inventory turnover, the period of one revolution also decreases. What is a positive change and suggests that the company is rationally using resources. Current assets are concentrated in liquid form and this leads to an increase in their turnover and increase profits.
With regard to the organization’s reserves: the speed of their turnover is increasing, which is a positive trend, the movement and change in the form of reserves is faster, which reduces the risk of necrosis of cash in the reserves; in 2005, stocks managed to complete one turn in 61 days, in 2006 - in 42 days, in 2007 - in 30 days. The lower this indicator, the more effective the work of a trade organization.
Since a significant share of the stocks of LLC Yuzhnaya Zvezda belongs to goods for resale, management should monitor the immobilization of working capital by product groups. To do this, it is necessary to study the structure of goods for resale, to monitor its changes quarterly. Due to insufficient data, we analyzed the structure of goods for resale only in 2007, the following results were obtained (Fig. 3.3).
Fig. 3.3. Inventory structure for resale of LLC Yuzhnaya Zvezda in 2007
As you can see, the largest share in the total value of inventories is occupied by flower crops - 45%; Accessories for plants and planting material have approximately the same shares - 20% and 14%, respectively.
As a result of the analysis, we received the amounts of additionally raised working capital as a result of a slowdown in the turnover of current assets.
Table 3.1
Overrun of working capital as a result of a slowdown in the turnover of current assets (thousand rubles)
The system of generalized and private indicators of working capital turnover is based on two interrelated financial ratios: the turnover ratio and the duration of one turnover, characterizing the efficiency of working capital use, in particular, the turnover of inventory turnover, the turnover and maturity of receivables etc.
In terms of their content, turnover indicators are direct indicators of the efficiency of the resource type, i.e. characterizing the ratio of effect to cost. As an effect, the initial financial indicator is applied - sales revenue. Quantitatively, costs are expressed in terms of advanced resources, which gives reason to attribute the indicators of turnover to the resource type. In other words, the turnover is characterized by a comparison of indicators of the volume of production and the amount of advanced working capital.
The duration of the funds in circulation is influenced by external and internal factors.
External factors include: the scope of the organization; industry affiliation; organization scale; economic situation in the country and related economic conditions.
Internal factors include the organization’s pricing policy, asset structure, inventory valuation methodology.
Reserves and ways to accelerate the turnover of working capital in a generalized form depend on two factors: production volumes, sales and the size of working capital.
To improve production and marketing, to normalize the placement of working capital;
Improve the organization of production and marketing, introduce progressive forms and methods;
Prevent the growth of receivables.
The effectiveness of the use of working capital of enterprises, therefore, depends, first of all, on their ability to improve the organization of production and marketing, to increase the level of commercial and financial work.
Particular attention is paid to studying the causes identified for certain types of current assets and developing measures to optimize them. The growth of inventories may be the result of shortcomings in the organization of trade, advertising, the study of customer demand, other marketing activities, the presence of unclaimed and slow-moving industries.
Large cash balances at the cash desk and in transit arise due to irregular sales development, untimely delivery of proceeds to the bank, unused cash and other violations of cash discipline. Excessive residuals of other inventory items are the result of the presence or acquisition of surplus and unnecessary materials, raw materials, fuel, low-value and wearing items, other material values. It is possible to reduce the stocks of goods, materials, raw materials, and fuel to optimal sizes through their wholesale sales or barter transactions, and uniform and frequent delivery. The normalization of balances of goods and cash at the checkout along the way contributes to the rhythmic development of trade.
Minimum necessary amounts of funds should be kept in bank accounts, and all available balances should be transferred to the early repayment of loans received, invested in securities, and granted loans to legal entities and individuals. In case of over-expenditure of funds of special purpose funds and reserves, the main attention is paid to the development of measures for its repayment and prevention.
3.2 Factor analysis of indicators of working capital turnover
The turnover Ratios of working capital can be considered as an effective indicator with the allocation of factors of the first and subsequent orders. The duration of the turnover of working capital depends on the average size of working capital and revenue from sales. Therefore, the total change in the turnover rate will consist of two components: the average annual size of current assets (OA cf.) is a first-order factor, and sales revenue (Vyr.) Is a second-order factor.
The change in the duration of the turnover of working capital due to changes in the average size of current assets is calculated as follows:
ΔB (OA cf.) \u003d T x ΔOA cf. / Rev. 0; (thirteen)
Substituting the available data in the formula, we get that the duration of one turnover of working capital in days in 2007 due to changes in the average size of current assets increased by 170 days (for convenience, you can use table 2.4.).
In general, from 2005 to 2007, the change in current assets negatively, although not too significantly, affected the turnover of current assets and the period of their turnover, which was mainly caused by an increase in the total mass of current assets and, in particular, an irrational economic strategy in terms of procurement of materials and sales finished products. To increase turnover, the company needs to keep current assets in a more liquid form and prevent growth and large swings in receivables and commercial products in stock, that is, revise the marketing policy for the sale of products, if this is possible in principle.
The influence of a second-order factor (revenue from product sales) on the change in the effective indicator is expressed:
ΔВ (Vyr.) \u003d T x OA cf. 1 x [(1 / Vyr. 1) - (1 / Vyr. 0)]; (14)
We get the following:
ΔВ (Exp.) \u003d 365 x 92598 x [(1/181361) - (1/121827)] \u003d -91 day;
The size of average working capital on the turnover of current assets affected the increase in the duration of the turnover by 170 days, and the increase in revenue from sales decreased the duration of the turnover by 91 days. The multidirectional influence of factors led to a general change in the duration of the turnover by 79 days (170-91 \u003d 79). Therefore, the desire to increase sales revenue will always give a positive result in the form of an increase in the turnover rate of current assets.
ΔВ (Outgrowth) \u003d ΔВВыр.р. (ПЗ) + ΔВВыр.р. (КР) + ΔВВыр.р. (УР) + ΔВВыр.р. (РР); (fifteen)
Due to cost (variable costs):
ΔВВыр.р. (ПЗ) \u003d ΔВ (Выр.р.) x ΔПЗ / ΔВыр.р .; (sixteen)
ΔВВыр.р. (ПЗ) \u003d -91 х (164049.77 - 105965.718) / 59534.335 \u003d -84.2 days;
Due to business expenses:
ΔВВыр.р. (КР) \u003d ΔВ (Гр.р.) x ΔКР / ΔВыр.р .; (17)
ΔВВыр.р. (КР) \u003d -91 х (18869,557-15368,35) / 59534,335 \u003d -5,35 days;
Due to the result of sales (profit):
ΔВВырр.р. (РП) \u003d ΔВ (Гр.р.) x ΔРП / ΔВыр.р .; (eighteen)
ΔВВыр.р. (РП) \u003d -91 х (1441.711-492.635) / 59534.335 \u003d -1.45;
The deviation balance converges:
ΔВ (Outgrowth) \u003d ΔВВыр.р. (ПЗ) + ΔВВыр.р. (КР) + ΔВВыр.р. (УР) +
ΔВВыр.р. (РП) \u003d -84.2-5.35-1.45 \u003d -91; (nineteen)
3.3 the Efficiency of the use of current assets and ways to increase it
To increase the turnover of working capital, the company Yuzhnaya Zvezda LLC needs to use working capital more efficiently and change the value of its turnover and its structure, use advanced methods of product sales, etc. The company is recommended to reduce the stock of materials to an optimal level, increase the liquidity of current assets (by reducing the share of materials and an increase in cash) and to prevent growth and large swings in receivables and commercial products in stock, i.e. Review the marketing policy for the sale of goods.
To speed up turnover, you must:
Fully and rhythmically implement business plans;
Improve settlements with suppliers and customers;
Improve claims work;
To accelerate the circulation of funds by improving the collection of revenue, strict limitation of cash balances at the box office of the enterprise, on the way, on the bank account;
Minimize stocks of household materials, low-value and wearing items, equipment, workwear at the warehouse, reduce accountable amounts, deferred expenses;
Conclusion
The condition and efficiency of the use of working capital is one of the main conditions for the successful operation of the enterprise. Limited resources, the instability of a market economy, inflation, defaults, and other crisis phenomena force enterprises to change their policies with respect to current assets, look for new sources of replenishment, and study the problem of their efficient use, their optimal sizes.
Working capital is a set of cash advanced for the creation and use of working capital assets and circulation funds, which ensure the continuity of the production and sale of products.
The availability of working capital in the minimum necessary sizes, ensuring the normal production and commercial activities of the enterprise, is an indispensable condition for their successful fulfillment of their functions.
For any type of analysis, reliable and high-quality information is required. After checking the completeness and reliability of the information, its analytical processing is carried out, i.e. a system of indicators is determined, the study of which is required to achieve the objectives of the analysis. These indicators are either already contained in the selected information, or are calculated in the process of its analytical processing. Analytical processing of information is possible using modern software tools.
It should be noted that most of the economic analysis software products are oriented towards a retrospective analysis of financial ratios. Many issues of financial analysis are still poorly developed. So, it is generally accepted that the center of financial management at the enterprise is the management of financial flows. At the same time, the operational management of cash flow precisely ensures the solvency of the organization. This task should be closely intertwined with the tasks of accounting for sales of products, regulation of sales and purchases, i.e. it fits into a comprehensive universal system of management tasks; but in modern software products this task is not worked out enough.
Retrospective analysis allows you to generate high-quality initial information for subsequent forecasting and planning.
Gradually, new software products appear on the market that provide the solution to analytical problems, but the change in the external and internal factors of management, in turn, poses new, more complex tasks. The solution to such analytical problems is a serious theoretical and methodological study in organic unity with software products.
Studying the theoretical aspects of the concept of “reserves” allows us to draw the following conclusions. The concept of “reserves” is used in science and practice to analyze the activities of business entities in a double sense. Firstly, reserves are considered material and material resources that are temporarily not used for their intended purpose. These reserves are created for additional needs, in order to use them in certain circumstances. They are expressed in specific material elements, these are stocks of raw materials, materials, fuel, semi-finished products, uninstalled equipment, free production space.
Secondly, reserves are unused opportunities to increase production efficiency, strengthen factors that contribute to the growth of economic efficiency, and eliminate the negative impact of other factors. The identification of such reserves is the main task of economic analysis.
The search for reserves should be carried out purposefully and systematically in the main areas, without sputtering forces to identify reserves of secondary and insignificant. This implies the relevance of developing principles for organizing the search for reserves.
The main drawback of the modern practice of finding reserves is that it mainly comes down to the identification of unconditional losses and cost overruns of resources. The bulk of the reserves lurking in the over-planned acceleration of scientific and technological progress, the mobilization of which leads to an increase in the use of the scientific, technical and production potential of the analyzed object, most often does not open.
As a result of the analytical part of the work, the following conclusions were obtained.
The legal form of the enterprise under study is a limited liability company. Location of the enterprise: legal address - Krasnodar, street 70 years of October, 8; actual address - Krasnodar, Krasniy partizan street, 4/1 (Appendix A). The main activities of Yuzhnaya Zvezda LLC are the sale of the following products: flower crops, indoor plants, open-ground plants, planting stock, seeds and bulbs, soil mixtures, plant accessories, and devices for caring for them.
The calculation of the dynamics and structure of the asset balance showed the following. The value of the organization’s property increased by 28.1% in 2006 compared with 2006, and almost 8 times in 2007 compared with 2006. Such a sharp and significant increase was caused by: firstly, an increase in the amount of non-current assets (construction in progress) 146 times at the end of 2007 compared with 2006; secondly, a significant increase in receivables in the same period - 16 times; thirdly, an increase in the amount of current assets - by 29.6% in 2006 compared with 2005, and an increase of 3.6 times by the end of 2007.
It should be noted that the share of current assets in the total value of the property of the organization decreased by the end of 2007, 96.9% to 43.2%. This situation is associated with the appearance of a significant amount in the balance sheet asset under the article “Construction in progress”.
The increase in current assets was due to an increase in receivables by 16.3 times in 2006-2007, the share of debt in the amount of current assets increased by the end of 2007 to 49.7%, and the qualitative component of receivables is the debt of buyers and customers .
It should be noted that long-term liabilities in the sources of formation of the enterprise’s economic assets appeared by the end of 2007, which was associated with obtaining a loan for the construction of storage facilities. The rest of the mass of liabilities consists of short-term borrowed funds and equity, which is represented by authorized capital and retained earnings. Due to the emergence of long-term liabilities during 2007, the organization’s equity decreased its share in the sources of funds from 32.1% in 2005 to 3.3% in 2007. Long-term liabilities in the total amount of liabilities by the end of 2007 were 71 7%; 23.0% of all liabilities belong to short-term borrowed funds, and their share did not change significantly for three years and most of them fell to the organization's accounts payable to suppliers and contractors: in 2005 - 32.9%, 2006 - 21.9%, 2007 - 22.9% of the total liabilities.
According to the reporting and calculation data, the combined effect of first-order factors on sales profit led to its decrease by 279 thousand rubles. in 2006 compared with 2005, and then to an increase of 948 thousand rubles. in 2007 compared with 2006, growth in sales revenue as a factor had a positive effect on the amount of profit, an increase in the amount of selling expenses and the cost of goods sold was negative.
Based on the study, we can conclude that the results of the financial and economic activities of LLC "South Star", the structure and dynamics of the main economic indicators, are characteristic for the organization of trade; processes and phenomena of the period 2005-2007 explained by the influence of various internal and external factors; the financial condition of the object of study during the period under review can be called stable.
The calculations of the main coefficients show the following: the turnover rate of all current assets of the organization decreases: if in 2005 current assets made 2.58 turnover, in 2006 3.41, then in 2007 the number of transactions committed by assets was reduced to 1.96 times. A decrease in the turnover ratio increases the duration of one turnover in days for the period 2005-2007, with a slight decrease in the duration of turnover in 2006 - by 34 days, but with a significant increase in 2007 - by 79 days.
With regard to the organization’s reserves: the speed of their turnover is increasing, which is a positive trend, the movement and change in the form of reserves is faster, which reduces the risk of necrosis of cash in the reserves; in 2005, stocks managed to complete one turn in 61 days, in 2006 - in 42 days, in 2007 - in 30 days. The lower this indicator, the more effective the work of a trade organization.
The speed of accounts receivable turnover is reduced, this is a negative characteristic of the organization of settlements with debtors, the increase in the duration of the turnover of receivables in days leads to the fact that free funds are diverted from the turnover.
The main factor in accelerating the turnover in the working capital management system is a reasonable relative decrease in stocks: the smaller the stock it is possible to maintain the rhythm of the production and technological process (in our case, the turnover), the higher the efficiency and profitability of the economic entity.
In 2007, the share of short-term financial investments decreased to 17%, as before, a substantial share in the total amount of current assets belongs to goods for resale - 11%; the share of accounts receivable in working capital also increased - up to 49%, which is already a negative point: in 2007 half of all working capital of the organization was not used for business purposes, it was excluded from it, which naturally reduces the efficiency of the organization's business.
With regard to the organization’s reserves: the speed of their turnover is increasing, which is a positive trend, the movement and change in the form of reserves is faster, which reduces the risk of necrosis of cash in the reserves; in 2005, stocks managed to complete one turn in 61 days, in 2006 - in 42 days, in 2007 - in 30 days. The lower this indicator, the more effective the work of a trade organization.
Since a significant share of the stocks of LLC Yuzhnaya Zvezda belongs to goods for resale, management should monitor the immobilization of working capital by product groups. To do this, it is necessary to study the structure of goods for resale, to monitor its changes quarterly.
As a result of the analysis, we received the amounts of additionally raised working capital as a result of a slowdown in the turnover of current assets: 2005 - 87553 thousand rubles, 2006 - 312.3 thousand rubles, 2007 - 52609 thousand rubles.
The size of average working capital on the turnover of current assets affected the increase in the duration of the turnover by 170 days, and the increase in revenue from sales decreased the duration of the turnover by 91 days. The multidirectional influence of factors led to a general change in the duration of the turnover by 79 days.
Therefore, the desire to increase sales revenue will always give a positive result in the form of an increase in the turnover rate of current assets.
Each of the three components of the proceeds from the sale of goods affected the duration of one turnover of current assets in days in the direction of decrease, which means that each factor contributed to the increase in the rate of turnover: a change (increase) in selling expenses reduced the duration of the turnover by 5 days; change (increase) in the cost of goods sold - by 84 days; change (increase) in profit from sales - by 1 day. The most significant was the impact of cost.
However, the positive impact of revenue growth from sales failed to block the negative impact on the duration of one turnover of current assets of the average annual value of current assets. But as it turned out, such a significant increase was not associated with an increase in inventories, it was due to a significant increase in receivables of buyers and customers to LLC Yuzhnaya Zvezda, a decrease in its turnover rate from 37.1 in 2006 to 4.75 turnover in 2007 .
To speed up turnover, you must:
To improve production and marketing, to normalize the allocation of working capital: to increase the economic efficiency of production and marketing of products, it is necessary to use the created production potential more intensively, to achieve the rhythm of production and marketing of products;
Fully and rhythmically implement business plans;
Improve the organization of production and sales, introduce progressive forms and methods: develop a delivery plan, an implementation plan, control over the implementation of these plans on time, receive products from workshops, organize shipment and other functions;
Improve settlements with suppliers and customers;
Improve claims work;
To accelerate the circulation of funds by improving the collection of revenue, strict limitation of cash balances at the box office of the enterprise, on the way, on the bank account;
Minimize stocks of household materials, low-value and wearing items, equipment, workwear at the warehouse, reduce accountable amounts, deferred expenses;
Prevent the growth of receivables. To do this, you must:
Avoid debtors with a high risk of non-payment, for example, customers representing organizations, industries or countries experiencing serious financial difficulties;
Periodically review the limit on the amount of vacation goods on the basis of the financial situation of buyers and their own; when selling a large number of goods, invoice customers immediately so that they receive them no later than one day before the due date;
Determine the period of overdue payments on accounts of debtors, comparing this period with the industry average, with data from competitors and with indicators of past years;
When granting a loan or credit, require a pledge of at least the amount of the receivable for the forthcoming payment, use the services of institutions and organizations that collect debts if there is a guarantee;
Pay off debt by offset, i.e. providing a uniform counterclaim, replacing the original circumstances with another, or providing other performance of debt obligations
Sell \u200b\u200bdebtors' debts to a bank that carries out factoring operations, or other organizations on the basis of an assignment agreement, if the losses from the bad debt are substantially less than the funds that need to be spent to collect it;
Exchange receivables for shares or stakes in the share capital of the debtor enterprise in order to strengthen its influence in its business.
The effectiveness of the use of working capital of enterprises, therefore, depends primarily on the ability to manage them, improve the organization of production and marketing, and increase the level of commercial and financial work.
Particular attention is paid to studying the causes of the revealed deviations for certain types of current assets and developing measures to optimize them. The growth of inventory may be the result of shortcomings in the organization of trade, advertising, the study of customer demand, other marketing activities, the presence of unclaimed and slow-moving product groups.
Bibliography
1. Gilyarovskaya L.T., D.V. Lysenko, D.A. Endovitsky: “Comprehensive economic analysis of economic activity”. - M.: TC Velby, Prospect Publishing House, 2006.
2. Markaryan E.A. “” Economic analysis of economic activity ”Vol. 2, revised and amended - Rostov n / A, Phoenix, 2005,
3. Selezneva NN, Ionova AF, “Financial analysis. Financial Management ”: Textbook for universities. - 2nd ed., Revised. and add. - M.: Unity-Dana, 2003.
4. Lyubushin NP, Leshcheva VB, Dyakova VG “Analysis of the financial and economic activity of the enterprise”: Textbook for universities - M .: Unity – Dana, 2003.
5. M.S. Abryutina, A.V. Grachev “Analysis of the financial and economic activity of the enterprise”, Training manual, Moscow: Publishing house “Delo and service”, 1998
7. L.E. Basovsky “The Theory of Economic Analysis” M .: INFRA-M. - 2001
8. Schiborsch K.V. Business analysis. - M .: Business and service, 2003.
9. Economic analysis: Textbook for universities / Ed. Gilyarovsky L.T. - M.: UNITY-DANA, 2001
10. Sheremet A.D. Methodology of financial analysis. - M .: Infra-M, 2000.
11. Theory of analysis of economic activity / Ed. Osmolovsky V.V ..- Minsk: New Knowledge, 2001.
12. Selezneva N.N. The financial analysis. - M.: Unity-Dana, 2001.
Page 1
Working capital (current assets) - is the money invested by the organization in current operations during each cycle. The characteristic features of working capital are:
· Full consumption during one production cycle and full transfer of value to newly created products;
· Being in constant circulation;
· Within one turnover, working capital changes its form from monetary to commodity and from commodity to monetary, passing through the stages of procurement, consumption and sale.
A feature of working capital is that in normal business activities working capital is not spent, but advanced in various types of current expenses of the organization, returning to its original value after each turnover.
The period of time during which the cash flow is committed is the length of the production and commercial cycle, which consists of the length of time between the payment of money for raw materials and materials and the receipt of money from the sale of finished products.
Calculation and evaluation of indicators of working capital turnover
The effectiveness of the use of working capital is characterized primarily by their turnover.
The turnover of funds -
an indicator characterizing the speed of movement of working capital of an enterprise equal to the time during which these funds carry out a full turn.
The acceleration of capital turnover contributes to a reduction in the need for working capital, an increase in production volumes, and thus an increase in profit. As a result, the financial condition of the enterprise improves, solvency strengthens.
Slowing turnover requires additional funds to continue the organization’s business at least at the level of the previous period.
The duration of the stay of funds in circulation is influenced by factors of internal and external nature. External factors include: the scope of the organization, industry affiliation, the size of the organization, the economic situation in the country and the associated economic conditions of the organization. Internal factors include the organization’s pricing policy, asset structure, inventory valuation methodology.
To assess the working capital turnover are used:
1. The turnover ratio.
Cob. - turnover ratio (in revolutions);
VR - revenue from sales of products, works, services;
OS - the average value of working capital.
The turnover ratio shows the number of revolutions made by circulating assets for the analyzed period of time and characterizes the volume of products sold per 1 ruble invested in circulating assets.
1. The duration of one revolution.
Dl - the duration of the working capital circulation period (in days);
T - reporting period (in days).
1. The load factor of working capital is an indicator inverse to the turnover ratio. Shows the value of working capital for 1 RUB. sold products. The lower the load factor, the more efficiently used working capital.
a factor of 100 is the transfer of rubles into kopecks.
The magnitude of the absolute savings (attraction) of working capital can be calculated by the formula:
= (108-91) *39993993/360=1888605,1
The calculated value shows the amount of release (additional attraction) of funds received from the acceleration (deceleration) of the turnover of working capital.
The value of the increase in the volume of production due to the acceleration of the turnover of working capital can be determined using the method of absolute differences:
= (3,327-3,967) *12022792= - 7694586,8
The amount of profit growth as a result of changes in working capital turnover:
=
*3,327/3,967=855233*0,839=717540,48-855233= - 137692,52
Ppl - planned profit;
Table number 16
Current assets turnover ratios.
|
Indicators |
Deviation |
Rates of growth, % |
|||
|
1. Volume of output, rubles. (p. 010, f. No. 2) | |||||
|
2. The number of days of the analyzed period, days | |||||
|
3. The average value of working capital, rubles. (p. 290, f. No. 1) | |||||
|
4. The turnover ratio of funds, about. (p. 1 / p. 3) | |||||
|
5. Duration of one revolution, days (p. 3 ´ p. 2) / p. 1 | |||||
|
6. The load factor of working capital, cop. (p. 3 / p. 1 ´ 100) |
The turnover of funds invested in the property of an organization consists in studying the levels of dynamics of various financial turnover ratios, which make it possible to assess how efficiently an organization uses its assets.
The economic significance of turnover:
- 1) the value of the necessary organization of assets for the implementation of the production and marketing of products (goods, works and services) depends on it;
- 2) the acceleration of capital turnover contributes to a reduction in the need for working capital (absolute release), an increase in production volumes (relative release) and an increase in profit. As a result, the financial condition of the organization improves, and its solvency is strengthened.
The turnover Ratios are of great importance for assessing the financial condition of the organization, since the rate of turnover of capital, that is, the rate of its conversion into cash, has a direct impact on the solvency of the organization. In addition, the increase in the rate of turnover of capital reflects, ceteris paribus, an increase in the production and technical potential of the organization. For this, the basic indicators of turnover and one comprehensive indicator “business activity index” are calculated, giving the most generalized idea of \u200b\u200bthe economic activity of the organization.
Asset turnover ratios
When analyzing the economic activity of an organization, during a financial analysis, an asset turnover ratio is used to assess the intensity of use of fixed assets.
The asset turnover ratio (turnover ratio, capital productivity ratio) reflects the effectiveness of the organization using all available assets, regardless of the source of their formation.
This coefficient characterizes the number of turns and shows how many monetary units of the sold products each unit invested in assets brought. An increase in the asset turnover ratio in the reporting period means an acceleration of asset turnover, indicating a more efficient management of the organization’s assets only if the organization is profitable.
Another characteristic of asset turnover is the duration of one turnover in days.
A decrease in the duration of one asset turnover means an acceleration of turnover, and an increase means a slowdown in asset turnover.
The main factors affecting the size and speed of turnover of the organization’s assets are:
- - the scale of the organization (small business, medium, large);
- - the nature of the business or activity, i.e., the industry affiliation of the organization (trade, industry, construction);
- - the duration of the production cycle (the number and duration of technological operations for the production of goods, the provision of services, works);
- - the quantity and variety of consumed types of resources;
- - the geography of consumers of products and the geography of suppliers and suppliers;
- - a system of payments for goods, work, services;
- - solvency of customers;
- - quality of banking services;
- - the growth rate of production and sales;
- - the share of value added in the price of the product;
- - accounting policies of the organization;
- - qualification of managers;
- - inflation.
The turnover ratio of fixed assets.
The turnover of fixed assets is the return on assets, that is, it characterizes the efficiency of use of fixed assets (funds) of the organization for the period. It is calculated by dividing the volume of net sales revenue by the average fixed assets for the period:
The fixed assets turnover ratio shows how many monetary units of products sold are per unit of investment in fixed assets. This indicator allows you to assess the organization’s ability to recover investments in fixed assets.
The main condition for the growth of capital productivity is the excess of the growth of labor productivity over the growth rate of its capital-labor ratio.
Current assets turnover ratio
Reflects the efficiency of use of current assets.
The ratio shows how many units of products sold per unit of investment in current assets. The dynamics of this indicator has a direct impact on the financial results and financial condition of the organization. Negative dynamics indicate a deterioration in the financial position of the organization. In this case, to maintain normal business activity, the organization is forced to attract additional financial resources.
Slowing the turnover of current assets leads to an increase in their balances, acceleration - to their reduction. Thus, when their turnover is slowed down, the organization has a need for additional attraction of financial resources, and when the turnover is accelerated, funds are released from circulation. Calculate the amount of additional funds raised in one revolution of funds by the formula
P (B) - attraction as a result of changes in the turnover of current assets
BP - sales revenue
D - the duration of the analyzed period
TOA - the period of turnover of current assets in the analyzed period
TOP - the period of turnover of current assets in the previous period
Inventory turnover ratio
Shows the rate at which stocks circulated during the reporting period.
The growth of the indicator in dynamics is considered as a positive trend and is characterized as an acceleration of the turnover of funds in stocks. The decrease in the turnover of funds in stocks reflects the outstripping growth of stocks in relation to the growth in sales.
Accounts receivable turnover ratio
Shows how many times the average receivables were converted into cash during the reporting period.
business activity return on equity
An increase in this ratio may reflect an improvement in the situation with accounts receivable and / or a decrease in sales volumes with deferred payment, a decrease - about a deterioration in the payment discipline of debtors or an increase in the number of settlements with deferred payments.
Liabilities turnover ratios.
Obligations turnover ratios allow assessing how efficiently an organization uses funds raised under various conditions. The turnover ratio of obligations is calculated both for the entire amount of obligations and for its individual types.
The turnover ratio of loans and borrowings.
Reflects the effectiveness of the organization using all long-term and short-term loans and borrowings.
The dynamics of the turnover of loans and borrowings reflects changes in the payment discipline in relations with creditors, and the decline is a deterioration.
The accounts payable turnover ratio is calculated in a similar way.
An increase in accounts payable turnover indicates an improvement in payment discipline in relation to creditors or a reduction in purchases with deferred payment.
The turnover ratios of assets, equity and liabilities and the duration of their turnover equally reflect the organization’s business activity and therefore the use of a particular indicator is determined by the choice of a financial analyst.
The stability of the financial position of the organization and its business activity is also characterized by the ratio of the terms of turnover of receivables and payables. Comparison of turnover ratios allows you to compare the conditions for granting and obtaining loans
Foreign experience in assessing the business activity of an enterprise
To characterize the business activity of joint-stock companies in the accounting and analytical practice of economically developed countries, in addition to the pace indicators, a coefficient of economic growth stability is used, calculated by the formula:
The equity of a joint-stock company may increase either due to an additional issue of shares, or due to reinvestment of profit. Thus, the coefficient shows how fast, on average, equity capital increases due to financial and economic activities, and not due to the attraction of additional share capital.
Thus, the coefficient of sustainability of economic growth shows how fast the average commercial organization can develop in the future, without changing the existing relationships between various sources of financing, capital productivity, profitability of production, dividend policy, etc. The relationship of this coefficient with these indicators can be described by a rigidly determined factor model
Economic interpretation:
the first factor of the model characterizes the dividend policy in a commercial organization, expressed in the choice of an economically feasible ratio between the paid dividends and the accumulated part of the profit;
the second factor characterizes the profitability of sales;
the third factor characterizes resource return (an analogue of the indicator "capital productivity" known in domestic statistics);
the fourth factor, which is the coefficient of financial dependence, characterizes the ratio between borrowed and own sources of funds.
The given factor model describes both the production (second and third factors) and financial (first and fourth factors) activities of a commercial organization. It follows that a commercial organization can choose one of two approaches in building its economic potential. The first approach is to focus on the prevailing proportions in the structure and dynamics of production, while the growth rate of production volumes is determined by the current or dynamics-averaged value of the coefficient of IER. According to the second approach, faster development rates are expected. At the same time, as follows from the model, a commercial organization can use certain economic levers: reducing the share of paid dividends, improving the production process (decreasing capital intensity, increasing profitability), finding the possibility of obtaining economically viable loans, additional issue of shares.
The considered model is extremely important not only for the analyst, but also for the financial manager, because it allows you to understand the logic of the main factors of the development of the organization, quantify their impact, understand what factors and in what proportion can and should be mobilized to increase production efficiency.
Moscow State University of Service
Course work
By subject:
" Economic analysis "
Subject:
"Analysis of the turnover of current assets."
Completed: student
Group FVK 3.1.- T
Chernenko A.A.
Teacher:
Filimonova N.N.
Moscow, 2002
Introduction 2
1. 1. Classification of current assets. 4
2. Analysis of the composition of current assets. 6
2.1. Cash flow analysis. 9
2.2. Accounts receivable analysis. 10
2.3. Inventory analysis. thirteen
3. Analysis of working capital turnover. 21
3.1. General assessment of asset turnover. 21
3.2. Calculation of working capital ratio. 25
3.3. Analysis of the effectiveness of the use of working capital. 27
4. Analysis of working capital turnover at LLC “Intek Service”. 29th
Conclusion 35
Introduction
To improve the economic and financial activities of the enterprise, systematic economic analysis is essential.
The main task of the analysis is to identify and use production reserves. The formation of a market economy determines the development of analysis at the micro level, that is, at the level of an individual enterprise or its unit. Since these grassroots links in any form of ownership form the basis of a market economy.
What does analysis study? - economic processes taking place in the country and at the enterprise, economic efficiency, costs, final results of the enterprise.
The economic activity of the enterprise consists of the following processes:
supply
production
sales and marketing.
At the first stage, the enterprise acquires the necessary fixed assets, inventories.
On the second - part of the funds in the form of reserves goes into production, and part is used:
to pay employees,
tax payment
social insurance payments,
other expenses.
This stage ends with the release of finished products.
At the third stage, products are sold and funds are credited to the account of the enterprise, and, as a rule, more than the initial amount by the amount of profit received from the business.
The object of economic analysis are: all aspects of business processes that are not considered in isolation from each other, but in interaction with each other. At the same time, causal relationships between individual parties to economic processes are revealed, and factors determining the results of these processes are revealed.
The essence of economic analysis lies in the fact that it is a special type of management activity not an integral element of any management function, since the management process includes three stages:
Selection and processing of necessary information.
Analysis of this information.
Management decision making.
Thus, analysis is an intermediate link between the collection of information and decision making.
The main task of this course is to determine the classification of working capital, determine the composition of working capital, give a general assessment of the working capital turnover, calculate the working capital ratios, analyze the efficiency of working capital use, using the example of Intek Service LLC.
1. Classification of current assets.
The organization’s fixed assets are fully consumed in each production process, completely transfer their value to the finished product and change their natural form.
Classification of working capital assets:
1. Working capital in inventories:
a) raw materials, basic materials;
b) purchased semi-finished products;
c) supporting materials;
d) fuel;
e) packaging and container materials;
f) spare parts for maintenance;
g) low-value and rapidly wearing out household equipment and tools.
2. Revolving funds in the production process:
a) work in progress;
b) the cost of developing new products;
c) semi-finished products of their own manufacture.
Raw materials- this is the subject of labor, for the extraction or production of which labor has been expended. Raw materials are, for example: ore, cotton.
Materials - these are objects of labor that have already undergone industrial processing, for example, rolled metal. Products are made from basic materials, they form its main material content.
Semi-finished products - labor products that have passed one or more stages of production, but require further processing or assembly.
Tare and tare materials - represent all types of packaging and materials necessary for their manufacture.
Unfinished production- these are objects of labor that are being processed or awaiting further processing and not yet included in the finished product.
The composition, structure and cost of working capital of various associations (enterprises) are different, since they depend on the nature and volume of products, the duration of the production cycle, the degree of mechanization and automation of production.
An association (enterprise) not only produces products, but also sells them, therefore, in addition to revolving production assets, it also has circulation funds. TO circulation funds includes finished products in the enterprise’s warehouse, cash at the cash desk and in the current account with the State Bank, as well as in incomplete settlements for shipped products.
The sum of working capital assets and circulation funds in monetary terms is current assets of the association (enterprise).
All property of the enterprise can be divided into:
1. Immobilized assets (1 section of the balance sheet)
2. Mobile assets (section 2 of the balance sheet), which include stocks, cash, receivables, etc.
The stability of the financial situation of the enterprise to a large extent depends on the feasibility and correctness of investments of financial resources in assets. The structure of household assets largely depends on the type of activity of the enterprise.
Analysis of the composition of current assets.
Section 2 of the balance sheet “Current assets” combines different items, including current assets (current assets).
In the composition of current assets are distinguished:
Stocks (including raw materials, materials, IBE, finished products, goods shipped, etc.).
VAT on purchased assets.
Short-term and long-term receivables.
Short-term financial investments.
Cash (including cash, current account, foreign currency account, etc.)
Other current assets.
For the purposes of an in-depth analysis, it is advisable to group all current assets by risk categories. For example, there is a greater likelihood that accounts receivable will be easier to realize (convert to cash) than work in progress or deferred expenses. In this case, the scope of one or another type of working capital should be taken into account. Assets that can be used only for a specific purpose have a greater risk (less likely to be realized) than multi-purpose assets. The more funds invested in assets that fall into the category of high claims, the lower the liquidity of the enterprise.
|
Risk degree |
Current assets group |
|
Minimum |
Cash affinities, easily traded short-term securities |
|
Accounts receivable of enterprises with a normal financial position + stocks (excluding stale) + mass-produced finished goods in demand |
|
|
Industrial products, work in progress, deferred expenses |
|
|
Accounts receivable from enterprises in financial distress, inventories of finished products, obsolete stocks, illiquid assets |
In development of the above analysis, it is advisable to assess the trend in the ratio of hard-to-sell assets and total assets, as well as hard-to-sell and easy-to-sell assets.
The tendency of these ratios to growth indicates a decrease in liquidity.
When conducting such an analysis, it should be remembered that the classification of working capital for difficult to implement and easily sold can not be constant, but changes with changing specific economic conditions.
For example, in conditions of instability of supply and the ongoing depreciation of the ruble, enterprises may be interested in investing money in inventories and other types of inventories, market prices for which are steadily rising, which gives reason to classify the assets of this group as easily tradable.
There are more serious negative consequences of such a significant amount of hard-to-sell assets on the balance sheet of the enterprise. This so-called dead capital slows down the turnover of funds in the enterprise and, therefore, reduces the efficiency of its activities. Often at our enterprises, the drop in profitability indicators is largely determined by the presence and growth of the share of hard-to-sell assets.
Finally, the hard-to-sell assets reflected in the composition of individual elements of current assets distort the true picture of the liquidity of the enterprise, misleading its management and business partners.
The situation is aggravated by the fact that many of our enterprises have significantly weakened control over the safety of inventory items.
An often formalized inventory does not allow the head of the enterprise and its accounting department to draw up an objective picture of the availability and preservation of material values.
If hard-to-sell assets comprise a significant part of current assets, then the management of the enterprise and its chief accountant should take urgent measures to stabilize the financial situation of the enterprise.
Such measures should include:
inventory of property status in order to identify assets of "low" quality (worn-out equipment, stale stocks of materials;
accounts receivable, unrealistic to collection) and clarification of the real value of the property of the enterprise;
improving the organization of settlements with customers (in the context of inflation, as a rule, it is more profitable to sell products faster and cheaper than to expect more favorable conditions for its sale);
reduction of excessive inventory holdings and, as a result, reduction of cash outflows.
Cash flow analysis.
Of particular importance for the stable operation of the enterprise is the speed of cash flow. One of the main conditions for the financial well-being of an enterprise is an inflow of funds, which ensures coverage of its current liabilities.
The absence of such a minimum required cash supply indicates its serious financial difficulties.
Excessive amount of cash means that the company actually suffers losses associated, firstly, with inflation and the depreciation of money and, secondly, with the missed opportunity for their profitable placement and additional income.
In this regard, there is a need to assess the rationality of cash management in the enterprise.
There are various ways to do this analysis.
In particular, a peculiar barometer of financial difficulties is the tendency to reduce the share of cash in the current assets of the enterprise with an increasing volume of its current liabilities. Therefore, a monthly analysis of the ratio of cash and the most urgent obligations (the term of which ends in the current month) can give a rather eloquent picture of the excess (shortage) of funds in the enterprise.
Another way of assessing cash sufficiency is to determine the cash turnover ratio.
For this purpose, the formula is used:
To calculate the average cash balances, internal credentials are used.
In order to reveal the real cash flow at the enterprise, to assess the synchronism of cash inflow and outflow, and also to correlate the amount of financial result obtained with the state of cash flow at the enterprise, all directions of cash flow (inflow) should be selected and analyzed, as well as their disposal (outflow).
Accounts receivable analysis.
A significant proportion of receivables in current assets determines their special place in the assessment of working capital turnover. In the most general form, changes in the volume of receivables for the year can be characterized by balance sheet data.
For the purposes of internal analysis, it is necessary to draw on the information of analytical accounting: data from journals-orders or substitute statements of accounting for settlements with buyers and customers, with suppliers on advances paid, accountable persons, with other debtors.
To summarize the results of the analysis, a summary table is compiled in which the receivables are classified according to the period of formation.
Analysis of short-term debt is carried out on the basis of data from the analytical accounting of settlements with suppliers, bank loans received, settlements with other creditors
(magazine orders No. 4, 6, 8, 10, statements, etc.).
In the course of the analysis, a selection is made of obligations, the maturities of which occur in the reporting period, as well as deferred and overdue obligations.
To assess the turnover of receivables, the following group of indicators is used.
Accounts receivable turnover.
It should be borne in mind that the longer the period of delay in debt, the higher the risk of default.
The share of receivables in total current assets.
allowing to manage receivables:
Monitor the status of settlements with customers on deferred (overdue) debts;
If possible, focus on a larger number of buyers in order to reduce the risk of non-payment by one or more large buyers;
Monitor the ratio of receivables and payables: a significant excess of receivables poses a threat to the financial stability of the enterprise and makes it necessary to attract additional (usually expensive) sources of financing;
Use the method of providing discounts for early payment.
Inventory analysis.
Stock assessment is carried out for each type (inventory, finished goods, goods, etc.).
The turnover of inventories characterizes the speed of movement of material assets and their replenishment. The faster the turnover of capital deposited in stocks, the less capital is required for a given volume of business operations.
The turnover of inventories in industries varies greatly. In industries with a long production cycle, inventory requires larger capital.
The turnover periods of inventories of enterprises of the same industry, as a rule, characterize how successfully they use capital. As it was clarified earlier, the accumulation of reserves is associated with a very significant additional outflow of funds, which makes it necessary to assess the possibility and expediency of reducing the shelf life of material assets. The fall in the purchasing power of money forces enterprises to invest temporarily surplus funds in stocks of materials. In addition, the accumulation of stocks is often a necessary measure to reduce the risk of not supplying (short supply) of raw materials needed for the production process of the enterprise.
We note in this regard that an enterprise that focuses on one main supplier is in a more vulnerable position than enterprises that build their activities on contracts with several suppliers.
At the same time, it should be borne in mind that the policy of accumulating stocks of inventories inevitably leads to an additional outflow of funds due to:
increase in costs arising from ownership of stocks (rental of storage facilities and their maintenance, costs of moving stocks, property insurance, etc.);
increase in costs associated with the risk of losses due to obsolescence and damage, as well as theft and uncontrolled use of inventory items; it is well known: the longer the volume and duration of storage of property, the weaker (more difficult) control over its safety;
increase in the amount of taxes paid.
In the context of inflation, the actual cost of inventories (the amount written off to cost) is significantly lower than their current market value.
As a result, the amount of profit is "bloated", but it is from it that the tax due to be paid will be calculated.
The same is true for value added tax.
The fact that with the increase in stocks increases the value of the property tax, probably does not require explanation; diversion of funds from circulation, their "necrosis".
Excessive reserves stop the movement of capital, violate the financial stability of the activity, forcing the management of the enterprise to urgently seek the funds necessary for current activities (usually expensive). Therefore, not without reason, excessive inventories are called the "business cemetery."
These and other negative consequences of stockpiling policies often completely block the positive effect of savings from earlier purchases.
Significant cash outflows associated with the costs of forming and storing stocks make it necessary to find ways to reduce them.
In this case, of course, we are not talking about minimizing the cost of creating and maintaining inventory of inventories.
Such a solution would most likely prove to be ineffective and lead to an increase in losses of a different kind (for example, from spoilage and uncontrolled use of inventory items).
The challenge is to find a middle ground between excessively large stocks that can cause financial difficulties (cash shortages) and excessively small stocks that are dangerous to production stability.
Such a problem cannot be solved under conditions of spontaneous formation of reserves; an established system of control and analysis of the state of stocks is necessary.
In theory and practice of inventory management, the following main features of an unsatisfactory resource control system are distinguished:
the tendency to a constant increase in the duration of stock holdings;
continuous growth of stocks, significantly outstripping the dynamics of increasing the volume of products sold;
frequent equipment downtime due to lack of materials;
lack of storage space;
periodic refusal of urgent orders due to a shortage (absence) of stocks of inventory items;
large amounts of write-offs due to the presence of outdated (stale), slowly turning stocks;
significant amounts of write-offs of reserves due to their spoilage and theft.
The main objectives of control and analysis of stock status:
ensuring and maintaining liquidity and current solvency;
reduction of production costs by reducing the cost of creating and storing stocks;
reduction of losses of working time and equipment downtime due to lack of raw materials;
prevention of spoilage, theft and uncontrolled use of material assets.
Achieving the goals implies the following accounting and analytical work.
Evaluation of the rationality of the structure of reserves, which allows to identify resources, the amount of which is clearly excessive, and resources, the acquisition of which must be accelerated.
This will avoid unnecessary capital investments in materials, the need for which is reduced or cannot be determined. It is equally important when assessing the rationality of the structure of reserves to establish the volume and composition of damaged and slow-moving materials. This ensures the maintenance of inventories in the most liquid state and the reduction of funds immobilized in inventories.
Definition of terms and volumes of purchases of material assets. This is one of the most important and complex tasks for modern conditions of functioning of Russian enterprises to analyze stocks.
Despite the ambiguity of the decisions made for each particular enterprise, the general approach is to determine the volume of purchases, allowing to take into account:
average volume of consumption of materials during the production and commercial cycle (usually determined on the basis of the analysis of the consumption of material resources in past periods and the volume of production in terms of estimated sales);
additional amount (safety stock) of resources for reimbursement of unforeseen expenses of materials (for example, in the case of an urgent order) or an increase in the period required for the formation of necessary stocks.
Selective regulation of stocks of material assets, suggesting that attention should be focused on expensive materials or materials having high consumption. attractiveness.
In foreign practice, the so-called ABC method has become widespread, the techniques of which can be applied at Russian enterprises.
The main idea of \u200b\u200bthe ABC method is to evaluate each type of material in terms of their value. This refers to the degree of use of the material for a particular period; the time required to replenish stocks of this material, and the costs (losses) associated with its absence in the warehouse; the possibility of replacement, as well as loss from replacement.
A small share of these material resources in the total amount of material assets stored in a warehouse determines the main amount of cash outflows during the formation of stocks.
Such materials are considered as resources of group A.
Materials of group B are of secondary importance; they are less expensive than the materials of group A, but surpass them in the number of items.
Materials of group C are considered relatively unimportant - these are the least expensive and most numerous material values.
Their acquisition and maintenance are accompanied by a slight (in comparison with the total amount) cash outflow.
Typically, the cost of storing such stocks is less than the cost of providing tight control over ordered batches, insurance (reserve) stocks and stock balances.
Material resources are divided into these groups depending on the specific conditions of production.
What matters here is that the materials of group A are most carefully controlled.
Particular attention is paid to:
calculating the need for them;
scheduling the formation of stocks and their use;
substantiation of the value of insurance stocks, inventory.
Calculation of indicators of turnover of the main groups of stocks and their comparison with similar indicators of past periods in order to establish the correspondence of stocks to the current needs of the enterprise.
For this, the turnover of materials calculated on various sub-accounts is calculated ("Raw materials and materials", "Purchased semi-finished products and components, structures and parts", "Fuel", "Container and container materials", "Spare parts", etc.), and then the total turnover of materials by determining the weighted average.
Since inventories are accounted for at the cost of their procurement (acquisition), then to calculate the inventory turnover ratio, it is not sales revenue that is used, but the cost of sales.
To assess the speed of stock turnover is used the formula:
Analysis of working capital turnover.
General assessment of asset turnover.
The financial position of the enterprise is directly dependent on how quickly the funds invested in assets are converted into real money.
With the turnover rate of funds are associated:
The minimum required amount of advanced (involved) capital and related cash payments (interest on the use of bank loans, dividends on shares and other.);
The need for additional sources of financing (and payment for them);
The amount of costs associated with the possession of inventory and their storage;
The amount of taxes paid, etc.
Certain types of assets of an enterprise have different turnover rates.
The duration of the funds in circulation is determined by the combined influence of a number of multidirectional external and internal factors. Among the first should include the scope of the enterprise (production, supply and marketing, intermediary, etc.), industry affiliation (there is no doubt that the turnover of working capital at the machine-tool plant and the confectionery factory will be objectively different) the scale of the enterprise (in most cases, the turnover of funds in small enterprises it is much higher than in large ones - this is one of the main advantages of small business) and a number of others.
The economic situation in the country and the associated economic conditions of enterprises have no less impact on asset turnover.
Thus, inflationary processes and the absence of well-established economic relations with suppliers and buyers in most enterprises lead to the forced accumulation of reserves, which significantly slows down the process of turnover of funds.
However, it should be emphasized that the period the funds are in circulation is largely determined by the internal conditions of the enterprise, and primarily the effectiveness of its asset management strategy (or lack thereof). Indeed, depending on the applied pricing policy, asset structure, and inventory valuation methodology, an enterprise has more or less freedom to influence the duration of its assets turnover.
It should be borne in mind that the value of the current assets turnover ratio is directly affected by the methodology adopted by the company for their assessment and based on the tasks and the chosen asset management strategy, the enterprise has a certain ability to adjust the value of its assets turnover ratio.
In the general case, the turnover of funds invested in property can be estimated by the following main indicators: the turnover rate (the number of turns that the capital of the enterprise or its components make during the analyzed period) and the turnover period — the average period for which the investments in production commercial operations cash.
The turnover rate of the assets of the enterprise is usually calculated using the formula:
The average value of assets according to the balance sheet is determined by the formula:
where the asset turnover is numerically equal to the asset turnover ratio.
Each industrial association (enterprise) should improve the use of working capital.
To assess the use of working capital, two indicators are used:
the duration of one revolution in days
H \u003d T 1 + T 2 + T 3,
T 1 - procurement cycle (acquisition and delivery of materials, fuel, etc.);
T 2 - manufacturing cycle;
T 3 - product sales cycle;
2) the number of revolutions during the planning period or the turnover ratio, which characterizes the output of 1 rub. working capital:
To about. \u003d T / N
T - the duration of the planning period, days
The shorter the duration of one revolution, the more revolutions the working capital will make.
When accelerating the turnover of working capital, the need for them decreases, a reserve is created to increase output.
To accelerate the turnover of working capital, it is necessary to reduce the time of their stay in the sphere of production and in the sphere of circulation.
To do this:
reduce the time of processing and assembly of products by mechanization and automation of the production process;
improve the use of new technology;
accelerate the control and transportation of products during their processing;
reduce stocks of materials, fuel, containers, work in progress to the established standard;
ensure the rhythmic work of all production sites and workshops of the enterprise, timely delivery of materials to the enterprise and workplaces;
accelerate the shipment of finished products; promptly and quickly make settlements with consumers;
improve product quality, prevent the return of finished products from the consumer, etc.
Calculation of working capital ratio.
The calculation of the working capital standard is usually made by the direct calculation method based on the indicators of the production program for the planning period, production and sales volume, nomenclature, and frequency of deliveries. the duration of the production cycle.
Calculation can also be done by the analytical method, based on the relationship between the growth rate of production volume and the size of normalized working capital in the previous period.
Normative - this is the minimum planned size of working capital, constantly necessary for the association (enterprise) for normal operation. Norm (need) of working capital for materials in monetary terms N determined by the formula
H \u003d RD
R - one-day consumption of materials according to estimates of production costs, rubles;
D - the rate of working capital in days of stock.
Calculation of working capital ratio in work in progress No.s is determined by the formula
N o.s. \u003d SPK n.z / D + Z p,
WITH - production cost of commercial products according to the estimated costs for the planning period;
P - the duration of the production cycle, calculated according to the production schedule;
To n.z - coefficient of increase in costs (the ratio of the cost of work in progress to the planned cost of the product);
D - the number of days in the planning period;
S r - the value of the reserve stock of work in progress.
Analysis of the effectiveness of the use of working capital.
Particular attention should be paid to the efficiency of the use of working capital, as the rational use of working capital affects the main indicators of the economic activity of an industrial enterprise: growth in production volume, lower cost of production, and increased profitability of the enterprise. Analysis of the effectiveness of the use of working capital should help identify additional reserves and contribute to improving the basic economic indicators of the enterprise.
The main synthetic indicator of the use of working capital is:
Return on assets (property).
The acceleration of the turnover of working capital depends on the time spent by them at various stages of the circuit, reducing its duration. It is achieved by increasing production and sales, a more complete and rational use of material resources, reducing the time of the technological cycle. The turnover is affected by the use of the latest achievements of scientific and technological progress.
Analysis of working capital turnover at Intek Service LLC.
Let us analyze the turnover ratio of current assets at the company LLC “Intek-Service” for 2001.
The table shows that the increase in turnover ratio was affected by a decrease in the duration of working capital.
During the analyzed period, the working capital duration decreased by 1 day. And accordingly, the turnover ratio increased by 0.13.
The duration of asset turnover may vary due to the amount of revenue and average balances. To calculate the influence of factors, the chain substitution method is used:
P about. \u003d 6000 * 90/20000 \u003d 27 days.
P vol. \u003d 13000 * 90/20000 \u003d 58.5 days.
P about. \u003d 13000 * 90/45000 \u003d 26 days.
Hence the change in the duration of the turnover of working capital due to:
Working capital turnover
P about. \u003d 26 - 58.5 \u003d - 32.5 days
Average working capital balances
P about. Residues \u003d 58.5 - 27 \u003d + 31.5 days
The economic effect as a result of accelerating the capital turnover is expressed in the relative release of funds from the turnover, as well as in an increase in the amount of revenue and the amount of profit.
The amount of release of funds from turnover in connection with the acceleration
(-E) or additionally raised funds in circulation (+ E) when the capital turnover is slowed down is determined by multiplying the one-day turnover for sale by changing the duration of the turnover:
E \u003d Sum of turns \\ days * P about. \u003d 45000 \\ 90 * (26-27) \u003d - 500 million rubles.
In our example, in connection with the acceleration of working capital turnover for 1 day, there was a relative release of funds from turnover in the amount of 500 million rubles.
If capital were circulated in the reporting quarter not for 26 days, but for 27, then to ensure actual revenue in the amount of 45,000 million rubles. it would be necessary to have in circulation not 13,000 million rubles. working capital, and 13500 million rubles, i.e. 500 million rubles more.
The same result can be obtained in another way, using the capital turnover ratio. To do this, from the average amount of working capital of the reporting period, subtract its estimated value, which would be required to ensure the amount of turnover with a capital turnover ratio of the previous year.
E \u003d 13000-45000 / 3.33 \u003d - 500 million rubles.
To establish the effect of the turnover ratio on the change in the amount of revenue, you can use the factor model:
Vk.ob. \u003d 13000 * (3.46 - 3.333) \u003d 1647 million rubles.
In k1 \u003d (13000-6000) * 3.3333 \u003d 23333 million rubles.
In total \u003d 45000 –20000 \u003d 25000 million rubles.
P \u003d K about. * P + K1 \u003d (3.46 - 3.3333) * 0.66 * 13000 \u003d 1087 million rubles.
After analyzing our company, we saw, due to the acceleration of working capital turnover in the reporting period, the company additionally received profit in the amount of 1087 million rubles.
Define the change in working capital turnover and the amount of release (involvement) at the company LLC “Intek-service”.
We draw the appropriate conclusions.
Working capital balances for:
240 million rubles
242 million rubles
238 million rubles
240 million rubles
236 million rubles
242 million rubles
244 million rubles
242 million rubles
The average quarterly working capital balances for 1 quarter. \u003d
(240/2 + 242 + 238 + 240/2) / 4-1 \u003d 240 million rubles.
The average quarterly working capital balance for 2 square. \u003d
(236/2 + 242 + 244 +242/2) / 4-1 \u003d 240 million rubles.
Working capital turnover per 1 sq. \u003d 240 * 90/473, 7 \u003d
Working capital turnover for 2 square meters. \u003d 240 * 90/509, 4 \u003d
the amount of release \u003d 509.4 / 90 * (-3.2) \u003d - 18.1 million rubles.
We conclude:
The table shows that in the second quarter, revenue from sales of products amounted to 509.4 million rubles. compared with the 1st quarter, in which sales revenue amounted to 473.7 million rubles.
As a result, the deviation amounted to + 35.7 million rubles, it can be concluded that the company's profit increased due to increased sales revenue, as well as due to a decrease in working capital turnover (in days).
In the second quarter, the turnover ratio of working capital decreased and amounted to 42.4 days, compared with the 1st quarter, the indicator was 45.6 days, the deviation was 3.2 days.
It can be concluded that the smaller the turnover of working capital, that is, the less time is spent on the process of turnover of funds, the higher the revenue from sales of products, and therefore the greater the profit of the enterprise.
Thus, we can advise the company to continue to work in this direction and to continue to continue to use its resources effectively.
In conclusion of the analysis, the enterprise should develop measures to accelerate the turnover of working capital:
Reducing the duration of the production cycle due to the intensification of production:
using the latest technology
mechanization and automation of production processes,
increase in labor productivity,
fuller use of production facilities of the enterprise,
labor and material resources, etc.
Improving the organization of material and technical supply in order to uninterruptedly provide production with the necessary material resources and reduce the time spent on capital stocks.
Acceleration of the process of shipment of products and registration of settlement documents.
Reducing the time spent finding funds on receivables.
Increasing the level of marketing research aimed at accelerating the promotion of goods from producer to consumer
(including market research, improving the product and its forms of promotion to the consumer, forming the right pricing policy, organizing effective advertising, etc.).
Conclusion
The aim of this course work was to study the analysis of the turnover of working capital in a form that is universal for all enterprises, regardless of their type of activity.
Analysis of the use of working capital helps to identify additional reserves to improve the economic performance of the enterprise.
Using the example of Intek Service LLC, we examined how an enterprise can get additional profit by accelerating the turnover of capital.
Based on the foregoing, we can conclude that the analysis of the financial and economic activities of the enterprise, subject to its correct implementation, will bring
the company additional profit
Bibliography.
- 1. Raw materials, materials, purchased semi-finished products
- 2. Fuel
- 3. Tara
- 4. Spare parts for repair.
- 5. Low-value and wearing items.
- 6. Other materials
- 11240067
- 3200790
- 450627
- 25800
- 448263
- 2077180
- 8344573
- 5438712
- 300210
- 293500
- 520747
- 72608957
- 12075960
- 4959202
- 730437
- 193570
- 95880
- 74103622
- 7508680
- 3680300
- 20400
- 125730
- 873130
- 582515
- 7. Economic result
- (release during acceleration of turnover, additional attraction during deceleration):
- a) in days
- - current assets.
- - material circulating assets.
- b) in the amount of rubles
- - current assets
- - material working capital
- 1997 year.
- 52391498 : 31592291= 1,6
- 52391498: 48535429= 0,07
- 1998 year.
- 1) the turnover ratio of material working capital
- 72608957: 32747381,5= 2,2
- 2) the turnover ratio of current assets
- 72608957: 7312276= 0,99
- Calculation of the cross section of the output in the light;
- Analysis of current assets turnover;
- Typical sections and determination of the size of the final section of mining workings;
- Innovation: the concept and types of innovation;
- Methods of product promotion to any budget Types of product promotion in marketing;
- Analysis of the turnover of assets of the organization;
- Bowling project. Bowling business plan. The cost of bowling equipment. How to buy the best bowling equipment. Costs of bowling equipment in a business plan;
- Factors affecting the quality of dairy products;
"Methodology of financial analysis" Sheremet A.D. Moscow: INFRA-M, 2000
“Financial analysis” O. Efimova Moscow Accounting, 1999
The Theory of Economic Analysis M.I. Bakanov, A.D. Sheremet, Moscow: Finance and Statistics, 2001
“Analysis of the economic activity of the enterprise” Savitskaya GV, 2nd ed., Revised and enlarged, Moscow, Minsk: IP Ecoperspective, 2001
The financial application of the enterprise is directly dependent on how quickly the funds invested in assets turn into real money.
However, certain types of assets of an enterprise have different turnover rates. So, the largest turnover period is real estate and other non-current assets (fixed assets, intangible assets and others), which are funds intended for long-term use by the enterprise.
All other assets, called current assets, being intended for sale or consumption, can repeatedly change their form (tangible to monetary and vice versa) during one operating cycle of an enterprise.
The duration of the funds in circulation is determined by the combined influence of a number of multidirectional factors of an external and internal nature. The first should include the scope of the enterprise (production, supply and marketing, intermediary and others), industry affiliation (for example, there is no doubt that the turnover at the machine-tool plant and the confectionery factory will be objectively different), the scale of the enterprise (in most cases, the turnover of funds at small enterprises it turns out to be significantly higher than at large ones — this is one of the main advantages of small business) and a number of others.
No less impact on the turnover of the enterprise has the economic situation in the country and the associated conditions of economic enterprises. Thus, the inflationary processes taking place in the country, the absence of well-established economic relations with suppliers and buyers in most enterprises leads to a forced accumulation of reserves, which significantly slows down the process of turnover of funds. Consider the reasons for the change in current assets in the Ulyanovsk OJSC "Simbirsk-alcohol" for 1997-1998.
Table3 - The reasons for the change in current assets of Ulyanovsk OJSC “Simbirsk-alcohol” in 1998.
|
Reasons for the increase in working capital |
Amount, rub. |
Reasons for the reduction of working capital |
Amount, rub. |
|
Net profit (after tax) |
1. Expenses due to the profit remaining at the disposal of the enterprise |
||
|
2. Depreciation (depreciation) |
2. Capital investments |
||
|
3. The increase in equity |
3. Long-term financial investments |
||
|
4. The increase in debt on loans |
4. Decrease in debt on loans. |
||
|
5. Increase in accounts payable |
5. Decrease in accounts payable |
||
Deviation balance:
19599975=40195131-20595156
The increase in current assets was due to an increase in equity by 39,00071 rubles and due to an increase in accounts payable by 26,270,615 rubles. Capital investments for the reporting period amounted to 1854054 rubles.
The fines and penalties paid at the expense of net profit in 1998 amounted to fines, penalties paid at the expense of net profit amounted to 1,317,468 rubles. Charitable assistance and other expenses amounted to 16305502 rubles.
Consider the composition and movement of inventories in the Ulyanovsk OJSC "Simbirsk-alcohol" for 1997-1998.
Large stocks of raw materials and supplies slow down the process of turnover against 30 days according to the standard affects the financial situation of the enterprise. Illiquid products (old labels, expired chemicals) are a large part of the stocks of raw materials and supplies. Analysis of low-value wearing items at the company's warehouses (777 days) also indicates a large volume of illiquid products, namely obsolete calculators and telephones, defective tools, etc. which amounted to 3460 rubles or% 3460/448263.
The large fuel supply (for 267 days) is explained by the fact that, on the orders of the Head of the Administration of Ulyanovsk, OJSC Simbirsk-alcohol should provide fuel to rural areas during the sowing campaign, due to offsets with the local budget.
Table 4 - Composition and movement of inventories in the Ulyanovsk OJSC "Simbirsk-alcohol" in 1998.
|
Indicators |
Balance at the beginning of the year |
Received, rub. |
Spent RUB |
Balance at the end of the year |
Balance at the end of the year |
||
|
Amount, rub. |
Amount, rub. |
In days raskh. |
|||||
|
|
|
|
|
|
|||
The most important stage of the analysis of the financial condition of the enterprise is the study of indicators of the turnover of current assets of the enterprise, allowing to characterize the effectiveness of their use. The study and analysis of the turnover of current assets is important, since the speed of their turnover is directly dependent on such important indicators as the volume of sales of products, works, services.
Let us analyze the data on the turnover of current assets in the Ulyanovsk OJSC “Simbirsk-alcohol” 1997-1998.
Table 5 - Analysis of the turnover of current assets in the Ulyanovsk OJSC "Simbirsk-alcohol" for 1997-1998.
|
Indicators |
Actually |
Deviations (+, -) |
|
|
1. Revenue from sales (works, services), excluding VAT and excise taxes, rubles |
|||
|
2. One-day sale, rub. |
|||
|
3. The average cost of working capital, rubles |
|||
|
4. The average value of current assets, rubles |
|||
|
5. The duration of one turnover of current assets, days |
|||
|
6. The duration of one revolution of material circulating assets, days |
|||
|
|
As follows from table 5, compared with last year, the duration of the turnover of current assets slowed down by 28 days, which could lead to a deterioration in the financial situation of the enterprise. The consequence of this was the need to attract additional funds in economic turnover in the amount of 5590888 rubles (201691.5 * 2.2). The acceleration of the turnover of material circulating assets by 61 days allows the company to freely use 27066999 rubles in turnover (calculation 201691.5 * (- 61) * 2.2). To calculate these indicators, we needed the following coefficients:
The next stage of work will be the study of the composition and structure of financial resources of the enterprise of the Ulyanovsk OJSC “Simbirsk-alcohol”.
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