The management of any enterprise, as well as its investors and creditors are interested in the performance indicators of the company. To conduct a comprehensive analysis, various methods are used.
Mandatory study of indicatorsprofitability and business activity. If the first group considers the net profit in the process of analysis, then the second group - the revenue from sales. The study of business activity is carried out using a system of indicators. One of the first studied coefficient of turnover, the formula which takes into account all the assets of the company. Further, its structural components are examined. In the analysis, the indicators of liabilities are involved. This allows us to understand how quickly the company turns available resources into money, calculated on debt obligations.
Factor of turnover of enterprise fundsallows to estimate, with what speed the capital of the enterprise passes its full cycle. A company that owns resources uses them to manufacture products, sell them and make a profit.
Period for which the organization has accessmeans pass all the stages, called the reverse cycle. First, resources turn into finished products. Then it goes on sale. Buyers purchase goods or services, and money is returned back to the organization.
The faster the full cycle, the morethe amount of revenue from sales is received by the company. Therefore, she is interested in accelerating turnover. Analysis of business activity allows us to identify constraints. The ratio of assets turnover, the formula of which considers its structural elements, makes it possible to harmoniously distribute and apply property.
The turnover ratio, the formula of whichshows a numerical result, is not always absolutely informative. Its growth in dynamics indicates a positive trend for the organization. But this indicator does not disclose information about the duration of the cycle.
Therefore, such coefficients are represented in days. The analyst can determine exactly how long the period lasts. This allows us to find the optimum value of the coefficient. The researcher evaluates the cycle of turnover of permanent and current assets, accounts payable. But the most attention should be paid to movable property and short-term liabilities. This analysis reflects the system of interaction of the company with suppliers, its marketing and material support of current activities.
The great interest of analysts inpresented analysis is the current assets. Therefore, the coefficient of turnover of circulating assets is applied to the valuation, the formula of which is considered below.
To own information about the factors of influence onthis indicator, the financial manager necessarily considers the cycle time of the components of current assets. Their duration (except for cash) is summarized.
This is the indicator of the cost cycle. The longer it takes, the more financial sources the company puts into circulation. They accumulate in it.
The faster the cost cycle, the more funds are released from the turnover. They can be used more constructively.
The calculation of the ratio of current liabilities or assets has a general view. This is explained by an identical indicator with which one or another article of property or capital is compared. The formula has the following form:
Cob = Calculation base / Asset (or Passive).
The turnover ratio, the formula of whichis applied by financial services of enterprises, assumes to take into account the average annual value of the indicator. Only the estimated article is changed. The numerator of the formula is also selected depending on the coefficient being investigated.
When considering receivables,advance payments to customers, their average annual value is compared with the proceeds from sales. If the speed of turnover of debts on loans and advances to suppliers is calculated, the cost basis is the calculation base. She also participates in the review of the turnover of finished goods, work in progress.
The coefficient of inventory turnover, the formula of which corresponds to the above method, takes material costs for the base.
To determine the indicators of business activity,apply financial statement data. The denominator is found in accordance with Form 1 "Balance", and the numerator is in form No. 2 "Profit and Loss Statement". The asset turnover ratio, the formula of which was considered above, according to the accounts, is as follows:
Cob = s. 2110 (Form 2) / s. 1600 medium. (Form 1).
To determine the turnover ratiocurrent assets, the data of line 1200 of the balance are taken into the denominator. The indicator, which determines the turnover of fixed assets in the previous formula, applies the data reflected in article 1150 of the balance sheet.
In general, the calculation of the turnover of current liabilities looks like this:
Cotp = s. 2110 (Form 2) / s. 1300 medium. (Form 1).
If investors need to assess the speedof the movement of borrowed capital, in the presented methodology the amount is applied c. 1500 and with. 1400. To calculate the debt of debtors use the data from. 1230, and stocks - the sum of. 1210 and p. 1220.
When assessing the movement of stocksIt is more appropriate to apply a technique that shows the result in days. This is one of the most important characteristics that determines the financial service. The reserves should be sufficient for the production cycle to pass without failures and stops. But materials should not accumulate, "freeze" in the company's current assets.
The stock turnover ratio, the formula of which was considered earlier, allows to determine the period in days:
T3 = Material costs / Inventories (average) * 360.
If the reporting period takes a different amountdays, in consideration take its duration. In general, for the calculation in the numerator, the amount of revenue from sales is used. But if we are talking about reserves, their movement is determined by the amount of material costs.
To optimize the indicator and speed up the cycle, it is necessary to reduce the number of "dead" stocks that are not purchased with each new operating period.
Coefficient of turnover, calculation formulawhich examines current assets such as accounts receivable and finished products, is also of interest to analysts. If a significant amount of money accumulates in these articles of balance, this negatively affects the work of the company. If, after the analysis is made, the debtor's turnover period is too long, it is necessary to change the settlement system with the buyers.
Perhaps, it is necessary to switch to an advance, non-cash type of payment. The amount of bad debt is also determined.
If the enterprise accumulates a significant number of finished goods and work in progress, the sales system is revised, equipment is modernized.
The length of the periods of turnover of balance sheet itemsfolds. This allows us to assess the efficiency of the operation of the company's property. In general, mobile resources of the company allows you to study the turnover ratio of current assets (the formula was presented earlier).
The increase in the duration of the cost cycle is negativeaffects a number of other indicators. The coefficient of total liquidity increases with a decrease in its absolute value. The profitability of capital also decreases. In this case, a whole system of measures is developed to optimize the structure of the company's assets.
Analysts consider not only the speed of the cycleproperty of the organization. They also study the coefficient of capital turnover (the formula was considered earlier). This methodology shows how many times during the operational period the enterprise calculates with its creditors on its obligations.
Therefore, for the calculation take into account exactlycurrent debt. Often in an enterprise that has a large amount of accounts receivable, a significant amount of current liabilities is determined. This is a negative trend. Such an organization is limited in the ability to attract borrowed capital, to purchase materials, resources for production in debt. Optimizing the structure of assets, it is possible to improve the performance of liabilities.
A special place in financial and economic analysisoccupy the turnover ratio. Formulas on balance allow to find constraining development factors. Qualitative assessment of business activity provides an opportunity to determine how effectively a company conducts its business.
All indicators obtained during the analysis,are considered in dynamics and are compared with similar coefficients of competing companies. If the turnover ratio, the formula of which allows you to assess the structure of the balance, decreases, the cycle period is accelerated. The organization at the same time expands its sales markets, it has constant suppliers and buyers. This is a competent commercial policy of the enterprise.
Acceleration of the turnover period indicatessimultaneous growth of the profitability of capital. The company uses its assets effectively. Therefore, the presented system of indicators is necessarily analyzed by the financial service of the organization.
