Capital productivity of fixed production assets. What is capital productivity and capital intensity: calculation formulas. How to determine the reasons for changes in capital productivity
Fixed assets and the specifics of their operation by the company are of global importance for general development. Improving the quality of these elements will be the optimal solution to the problems and difficulties of production: increasing the volume of products that are produced through the use of equipment, reducing costs used to form production costs, increasing labor productivity.
Such changes are designed to have a tremendous impact on return on capital, and ultimately on the profitability of operations. In order for these goals to become a reality, firms must regularly conduct analytical studies of the use of funds by calculating general ratios, in particular, return on assets.
Capital productivity shows the level at which the turnover of fixed assets occurs within the enterprise.
Thanks to this indicator, the effectiveness of their use in the production process is determined.
Capital productivity is an indicator of the efficiency of fixed assets
The influence of various factors on the capital productivity indicator The success of a company is influenced by a number of factors, capital productivity is the first of them.
- But it is also influenced by various parameters, such as:
- armament and reconstruction;
- perfect use of available capacities;
- reduction in cost per unit of power;
- changes in the structure of funds;
- market development factors;
quality of the goods offered.
The profitability of the company depends on these phenomena.
Carrying out settlement actions This indicator can be used in different economic levels
- . Capital productivity demonstrates the same phenomena, in particular the efficiency of production, in relation to the capital used, but the calculations are carried out on different scales:
- company level;
industry level.
In the first case, the volume of the product produced is applied. In the second - output within the framework of the country's economic position (GDP). At both levels there are differences in the calculation actions carried out, however, the indicator is general and characterizes the same phenomenon.
Note:
The main purpose of the indicator is to demonstrate the volume and cost of the product per unit (ruble). (Ukrainian fund_ddacha, English output/capital ratio)- the volume of gross or marketable output in relation to the value of the enterprise's fixed assets. In the USSR it was used as one of the main indicators of economic efficiency in the use of fixed assets.Capital productivity shows how many products the enterprise produces for each invested unit of fixed assets value.
Many sources, while maintaining the ideology of the indicator, nevertheless provide slightly different definitions of the capital productivity indicator. Also, different authors have different formulas for calculating capital productivity. Therefore, below are several options for the formula for calculating capital productivity with comments. Also, to fully understand the essence of the indicator, read the contents of the article “Capital intensity”.
Additional definition.
Return on assets (Ukrainian fundivoddacha, English output/capital ratio)- an indicator of the efficiency of use of fixed assets, which is defined as the ratio of output (gross, marketable, net) to the average annual cost of fixed assets (fixed assets) production assets, funds with the help of which these products were produced).
As can be seen from the definition itself, various authors use three options for the numerator in the formula and three options for the denominator in various combinations. Thus, nine different indicator values can be obtained. However, most sources define capital productivity ratio as the ratio of manufactured marketable products to the average annual cost of all fixed assets of the enterprise .
The original idea behind calculating the indicator is that capital productivity characterizes efficiency use everyone fixed assets enterprises. That is, this indicator can be compared with depreciation of fixed assets, product profitability, etc., and based on this, conclusions can be drawn about the efficiency of the enterprise. The basic verifiable figure should be a comparison of the volume of products produced in relation to the cost of the enterprise's fixed assets involved. After this, it is necessary to determine the volume net profit, received by the enterprise and compare it with at least depreciation charges. Depreciation should be less than the profit received.
This analysis may be important when making decisions about purchasing equipment. In this case, the profit from using the equipment in a particular business over the standard operating period must exceed the acquisition costs. If this condition(checking for efficiency through the return on capital indicator) is carried out, then further checks are made for the effectiveness of investments in terms of return on invested capital (ROI).
Formula for calculating the indicator Capital productivity
Basic formula.
Return on Capital = Produced Commodity Products / Initial Cost of Fixed Assets
Since to calculate capital productivity we are interested in the output produced in relation to the invested funds, it is the initial cost of fixed assets that is taken into account.
It should be noted that many authors disagree about both the numerator and the denominator of the formula for calculating capital productivity (Ukrainian fund-return).
Additional formulas.
Capital productivity = Commodity output / ((Fixed assets at the beginning of the period + Fixed assets at the end of the period) / 2)
Since the fixed assets of the enterprise are not in an unchanged state, the specified formula for calculating capital productivity takes into account their changes between the reporting dates of the balance sheet. In fact, the denominator is the arithmetic mean.
Capital productivity = Annual output / Average annual cost of fixed assets
In this formula, the numerator instead of the value of the volume of commercial products produced indicates the annual output. This replacement, it would seem, does not change the meaning of the indicator itself, but its numerical value can change radically. The fact is that the indicator “commodity output” is calculated in conditional internal prices that the enterprise “wants”. When we talk simply about the output of products, we assume the prices of specific transactions at which the enterprise's products are actually sold. Thus, the value of the capital productivity indicator calculated using different formulas may be different for the same enterprise. You shouldn’t be afraid of this - the meaning of the calculation this indicator consists not in determining its specific current value, but in comparing its dynamics for the same enterprise over different periods or comparing its value among different enterprises of the same industry in the same period (benchmarking) (see below).
Comments on the use of the indicator Capital productivity
(Ukrainian fund_ddacha, English output/capital ratio)
.
| The capital productivity indicator is used when analyzing the efficiency of using fixed assets. The inverse indicator to the capital productivity indicator (Ukrainian fundividdachi, English output/capital ratio) is the capital intensity indicator. Under “normal conditions” capital productivity should tend to increase | The indicator of capital return is stagnated when analyzing the effectiveness of the investment of fixed assets. The return indicator to the capital yield indicator is the capital productivity indicator. For normal minds, the return of funds is due to the tendency to increase. |
| Since the formula takes into account all fixed assets of the enterprise, it must be remembered that the final value of the capital productivity indicator may be affected:
| Since the insurance formula covers all fixed assets of the enterprise, it is necessary to remember that on the pouch, the values of the fund yield indicator may be inflated:
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|
|
Thus, due to the significant variability of the indicator under the influence of reasons “outside production”, as well as the possibility of fluctuations in the capital productivity indicator under the influence of production factors, the analysis must take into account the influence of the reasons outlined above. for example, at an enterprise with a high level of wear and tear on fixed assets, the commissioning of a large modern information system can have a significant negative impact on the capital productivity indicator and, without analyzing the reasons, lead to incorrect conclusions.
Nevertheless, to compare the efficiency of production organization and business in enterprises of the same industry, the capital productivity indicator can be very useful. And provided that “same-type” productions are compared, a calculation formula using natural indicators can be applied. Thus, an enterprise can conduct its own benchmarking in relation to competitors, using only open statistical data and data from officially published financial statements.
To compare capital productivity by physical indicators (for example, the production of brick, concrete, crushed stone, grain and other homogeneous products), you can use the following capital productivity formula:
Capital productivity = Production in physical terms / Average annual cost of fixed assets
| When working with the capital productivity indicator, it is necessary to remember that it does not take into account, for example, changes in product quality. Therefore, the reasons for its fluctuations must always be taken into account to evaluate the results of the analysis. | When working with the indicator of stock return, it is necessary to remember that it is not at fault, for example, changing the components of the product. Therefore, the reasons for this change are always at fault for assessing the results of the analysis. |
When analyzing changes in the capital productivity indicator, it is necessary to analyze:
| When analyzing changes in the fund return indicator, it is necessary to analyze:
|
| Increasing capital productivity can be achieved through: | Transfer of funds can be reached behind the rakhunok: |
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| If we carefully analyze economic essence indicator of capital productivity, we can come to the conclusion that it is inextricably linked with the indicator of labor productivity. Therefore, when assessing the feasibility of investing in increasing fixed assets, it is always necessary to take into account changes in labor productivity | Once it is important to analyze the economic essence of the indicator of capital return, it is possible to come up with an inextricable connection with the indicator of productivity. Therefore, when assessing the value of investment, an increase in fixed assets for It is always necessary to respect the change in productivity. |
Indicator return on assets (Ukrainian fund_оddacha, English output/capital ratio) in the USSR
If we talk about the practical application of the capital productivity indicator, then another “pitfall” may be the fact that according to the old “Soviet” methods, the book value of fixed assets without deduction of depreciation was taken into account when calculating the capital productivity indicator. This was done for the purposes state statistics in order to recalculate the indicator in comparable prices in the future. Of course, in the current conditions, this method of calculating capital productivity does not make much economic sense, but when assessing the data of state statistics of the USSR, this should be taken into account.In addition, since in “Soviet times” a drop in the capital productivity indicator was categorically unacceptable, the planned volume of production was determined by the product of the volume of fixed assets and the capital productivity coefficient. But if you look at the truth, then in the USSR there were significant fluctuations in the level of capital productivity, both associated with cyclical processes and the presence of large capital investments. For example, until 1959, the capital productivity ratio had a constant upward trend, but in the period 1961-65 there was a decline. From 1966 to 1970, the capital productivity indicator did not change significantly, and later, starting in 1971, it even fell. In 1985 capital productivity in the USSR decreased by 14% compared to the 1980 level.
Capital productivity indicator (Ukrainian fundivoddacha, English output/capital ratio) is highly variable for various industries and depends on the structure and characteristics of production. As of 1975 in the USSR average capital productivity was 0.45 (in actual prices), in industrial production - 0.5, in agriculture - 0.36, in transport and communications - 0.13, in construction - 1.18.
In the English-language literature, for an indicator similar in its economic meaning, the term is used in a literal translation from English turnover ratio (turnover) of fixed assets(English) Fixed assets turnover ratio).
This indicator is used to characterize the dynamics of the efficiency of use of fixed assets of an enterprise, as well as for a comparative assessment of the efficiency of use of fixed assets at enterprises in the same industry.
The capital productivity indicator is determined by dividing the annual volume of production in value or physical terms by the average annual total book value of production fixed assets. Determines the quantity of products produced per one ruble or per 1000 rubles of production fixed assets. Indicators of capital productivity are calculated for existing and newly introduced enterprises; they can be calculated for all funds and separately for the active part of fixed assets.
The capital productivity indicator is calculated using the following formula:
F O = Volume of commercial products produced / Average annual cost of fixed assets
The numerical value of the indicator depends on industry characteristics, the level of inflation and the revaluation of fixed assets.
The higher the value of the indicator, the more efficiently fixed assets are used. This means that for every ruble of fixed assets the organization receives more products. In other words, for every ruble of revenue the organization spent less fixed assets.
The main factors for the growth of capital productivity are:
- Increasing equipment productivity as a result of technical re-equipment and reconstruction of existing and construction of new enterprises;
- Increasing the equipment shift ratio;
- Improved time and power utilization;
- Reducing the cost per unit of capacity of newly introduced, reconstructed and re-equipped enterprises;
- Replacement of manual labor with machine labor;
- Improving the development of newly introduced capacities.
The inverse indicator of capital productivity is called capital intensity.
F e = 1/ F o
Notes
Literature
- Brigham Y., Erhardt M. Analysis financial statements // Financial management= Financial management. Theory and Practice. - 10th ed./Trans. from English under. ed. Ph.D. E. A. Dorofeeva.. - St. Petersburg. : Peter, 2007. - pp. 124-125. - 960 s. - ISBN 5-94723-537-4
Wikimedia Foundation.
2010.:Synonyms
See what “capital productivity” is in other dictionaries: Capital productivity…
Spelling dictionary-reference book The inverse indicator of the efficiency of use of fixed assets.. 2010 … Economic dictionary
Economic dictionary The inverse indicator of capital intensity. See also: Fixed assets Financial Dictionary Finam...
Financial Dictionary- The number of products produced in physical or value terms per unit cost of fixed production assets and working capital[Terminological dictionary of construction in 12 languages (VNIIIS Gosstroy USSR)] capital productivity... ... Technical Translator's Guide
The inverse parameter of the capital intensity parameter is calculated as the ratio of the cost of annual production to the cost of fixed assets. F. characterizes efficiency economic activity companies. Dictionary of business terms. Akademik.ru... ... Dictionary of business terms
Noun, number of synonyms: 1 return (27) ASIS Dictionary of Synonyms. V.N. Trishin. 2013… Synonym dictionary
The main purpose of the indicator is to demonstrate the volume and cost of the product per unit (ruble).- [efficiency of capital] is the inverse value of the capital intensity of production, the volume of production per unit of production assets used: p/x2 average F. (for designations, see the article Production function). The indicator is also used... Economic and mathematical dictionary
CAPITAL RETURN- is a general indicator characterizing the use of fixed production assets. There are several calculation methods. The most common is calculation based on gross output, i.e. comparison of the value of gross output and... ... Brief dictionary economist
Output per unit value of production fixed assets (See Production fixed assets) (fixed capital). In a socialist economy, the F indicator characterizes the level of efficiency of use... ... Great Soviet Encyclopedia
G. Quantity, volume of gross or marketable output per one ruble of production assets [fund I 1.], as one of the indicators of economic efficiency; economic indicator efficiency of use of fixed assets... ... Modern Dictionary Russian language Efremova
Books
- Problems of statistics of technical progress in industry, ed. G.I.Baklanov. The collection includes articles covering various problems of statistics of technical progress in industry, including showing the state of mechanization of production, electrification in...
Turnover ratios are the basis for analyzing the benefits that an investor receives by investing material assets in various investment projects. One of the most important economic indicators can be considered capital productivity, which gives an adequate assessment of the work of an enterprise in the economic sphere of activity.
When analyzing turnover, an entrepreneur must remember that capital productivity implies the ratio of the means of labor that the company owns and the revenue that was received from the sale of a certain volume of products. That is, this coefficient is not a direct characteristic of the efficiency of using the funds available to the enterprise. However, monitoring the dynamics of the capital productivity indicator over the past few years will give an idea of the efficiency of production assets. So, what is capital productivity?
How to calculate capital productivity
Total Asset Turnover Ratio - an economic indicator called fund turnover, calculated using the following formula:
RTAT=Revenue/Average Stock Value
The results of calculations using the above formula show how much goods the organization produces per each unit of labor. In most cases, the ratio becomes the main indicator indicating the level of quality of use of funds. It is necessary to calculate the indicator in order to compare the efficiency with which production assets are used by different companies. Return on assets indicates the ability of managers to ensure the efficient use of assets. The lower the indicator indicates inappropriate management of production assets.
Sometimes comparison of capital productivity ratios for a certain reporting period may give incorrect results. Similar difficulties occur:
- when the policies of the companies being analyzed have significant differences;
- when there are suspicions related to overestimation of the proceeds received from the sale of goods;
- when the degree of depreciation of the analyzed funds varies significantly;
- when prices rise due to inflation.
Capital productivity analysis
The capital productivity ratio makes it possible to draw adequate conclusions after internal analysis work of the organization. If, as a result of the analysis, a low coefficient was obtained, we can talk about insufficiently high production volumes for the established value of funds.
To solve the problem, the manager needs to take a set of measures to increase the volume of products prepared for sale. If such an opportunity does not exist, an analysis of the assets that will need to be written off in the future should be carried out.
If the capital productivity indicator is high, the manager needs to think about finding investors whose investments will expand production.
There are several groups of assets that stand out among turnover indicators, for example, accounts receivable or stocks. Such indicators are most often calculated by dividing revenue by the type of liabilities or assets that are being analyzed.
It will help you figure it out clear example. In 2008, the amount of profit received by OJSC Norilsk Nickel was equal to 14,000 million rubles, while the amount of funds amounted to 28,300 million. To calculate capital productivity , you need to divide 14,000 by 28,300. The indicator will be equal to 0.49. This means that during the reporting period, the analysis of which was carried out, for one ruble of the company’s funds there were forty-nine kopecks of revenue, that is, for the analyzed year the funds were able to pay off only forty-nine percent.
If we consider the period from 2005 to 2008, we can notice the negative dynamics of asset turnover; there is a decline. The results of the analysis may indicate an ineffective policy regarding the use of funds owned by the company. This is due primarily to the fact that revenue has increased by only forty-four percent since two thousand and seven, while the amount of funds has increased by one hundred and nineteen percent.
However, it is sometimes difficult to avoid such jumps, since assets are increased in batches, and the revenue received grows steadily. Negative dynamics should not persist for a long time, otherwise company managers should reconsider their sales policy. Sometimes, in order to attract new investors, you need to eliminate all sorts of unnecessary assets.
Optimal return on assets
There is no standard when it comes to capital productivity indicators. The optimal indicator in most cases depends on the characteristics of the organization, as well as the industry in which it operates. If we talk about the asset turnover indicator for capital-intensive production, it should be noted that its value will be lower, since in this case the main part of the fund is fixed assets. We can talk about effectively increasing efficiency only when the capital productivity indicator grows dynamically.
To increase fund turnover, modern managers can:
- increase the level of revenue while leaving the composition of funds the same. To do this, it is necessary to take a set of measures that will improve the efficiency of asset use. Increasing the operating time of the equipment used can also be effective;
- change the composition of funds by writing off usable and unnecessary assets. The final write-off amount will help reduce the denominator used in the formula for calculating capital productivity.
Read more: What is profitability?
Capital productivity is a financial ratio that characterizes the efficiency of using the organization's fixed assets. Capital productivity shows how much revenue is generated per unit cost of fixed assets.It should be noted that the capital productivity indicator itself does not indicate the efficiency of using production assets, but only shows how the volume of products received from sales (i.e., revenue) correlates with the cost of the organization’s existing means of labor. It is possible to draw conclusions about the efficiency of using production assets by comparing the capital productivity indicator over a number of years, or by comparing it with the same indicator for other, similar enterprises in the same industry.
The capital productivity indicator is calculated using the following formula:
Capital productivity = Revenue / Fixed assets
For a more accurate calculation, the value of fixed assets should be taken not at the end of the period, but as the arithmetic average for the period for which the revenue was taken (i.e., the sum of the value of fixed assets at the beginning of the period and the end of the period, divided by 2). Some sources recommend using the original cost of fixed assets. However, in financial statements(Balance) is indicated residual value fixed assets, therefore this assessment is often used in calculations. At its core, the capital productivity indicator can be attributed to turnover indicators (along with the turnover of inventories, accounts receivable and other assets). Turnover indicators (ratio) are always calculated by the ratio of revenue to certain assets or liabilities.
The capital productivity ratio does not have a generally accepted normal value. This is explained by the fact that the indicator strongly depends on industry specifics. For example, in capital-intensive industries, the share of fixed assets in the assets of the enterprise is large, so the ratio will be lower. If we consider the capital productivity indicator in dynamics, then an increase in the coefficient indicates an increase in the intensity (efficiency) of equipment use.
Accordingly, in order to increase capital productivity, you need to either increase revenue when using existing equipment (increase the efficiency of its use, produce products with greater added value, increase the time of equipment use - the number of shifts, use more modern and productive equipment), or get rid of unnecessary equipment, reducing , thus, its value is in the denominator of the coefficient.
Capital productivity indicator
The value of the capital productivity indicator for a specific period shows how many rubles of revenue brought in one ruble invested in fixed assets. The indicator of capital productivity in dynamics helps the management and economists of the enterprise to assess how efficiently and effectively their fixed assets are used.In the literature you can also find other names for this coefficient - for example, the efficiency of non-working capital.
Most easy way to find the value of the capital productivity indicator is to divide sales revenue by the cost of fixed assets.
However, to obtain a more accurate and up-to-date value, it is necessary to take the average annual value of fixed assets, and not the value at the beginning or end of the period, since in this case some distortion of the data is inevitable.
In terms of its content, the capital productivity indicator can be classified as a group of turnover indicators, since, like other such ratios, it is found as the ratio of revenue to a particular item of assets.
If for capital productivity a positive trend is considered to be an increase in the value of the indicator, then capital intensity, on the contrary, should decrease - this indicates labor savings.
Capital productivity of products
The efficiency of use of fixed assets is characterized by the capital productivity indicator, calculated as the ratio of the volume of production for the year (at the enterprise level) to the average annual full cost fixed assets. At the level of industries, output or gross value added is used as an indicator of production, and at the level of the economy as a whole - the value of gross internal product.Capital productivity is the volume of output divided by the average amount of industrial production fixed assets at original cost.
Rational use fixed production assets are necessary to increase the production of social product and national income. Increasing the level of use of fixed assets allows you to increase the size of production output without additional capital investments and in a shorter time. Accelerates the pace of production, reduces the cost of reproduction of new funds and reduces production costs.
The economic effect of increasing the level of use of fixed assets is an increase in social productivity.
Capital productivity shows how much output (or profit) an organization receives from each ruble of its fixed assets.
CAPITAL INTENSITY
Capital intensity is the inverse of capital productivity. It characterizes how many fixed production assets account for 1 ruble of manufactured products.
Capital intensity is the average amount of industrial production fixed assets at original cost divided by the volume of output.
Reducing capital intensity means saving labor.
The value of capital productivity shows how much production is obtained from each ruble invested in fixed assets, and serves to determine the economic efficiency of using existing fixed assets. The value of capital intensity shows how much money needs to be spent on fixed assets in order to obtain the required volume of output.
Thus, capital intensity shows how many fixed assets account for each ruble of output. If the use of fixed assets improves, then capital productivity should increase and capital intensity should decrease.
When calculating capital productivity, working machines and equipment (the active part of fixed assets) are separated from fixed assets. A comparison of growth rates and percentages of implementation of the capital productivity plan per 1 ruble of the cost of fixed industrial production assets and per 1 ruble of the cost of working machinery and equipment shows the impact of changes in the structure of fixed assets on the efficiency of their use. The second indicator in these conditions should be ahead of the first (if the share of the active part of fixed assets increases).
Production capital productivity
Fixed assets are of great importance for the effective functioning of an enterprise. Improving the quality of their use can solve many problems associated with production. Moreover, they affect both an individual company and the industry and, ultimately, the economy of the entire country. Effective use of fixed assets allows you to increase production volumes, reduce production costs, and increase labor productivity. And this directly affects the increase in return on capital, profitability and, ultimately, the increase in the standard of living of society as a whole.To achieve these goals, it is important to regularly analyze the degree of use of fixed capital by an enterprise, using various generalizing coefficients for this. One of the most important in this case is capital productivity. It shows the level of turnover of fixed assets and allows you to determine how efficiently they are used in production.
As already mentioned, this coefficient characterizes the level of use of available capital in an enterprise, industry and the economy as a whole. It is determined on the basis of two values - the issued commodity or the cost of fixed assets of production.
Capital productivity shows the volume of production per unit of fixed assets, and depending on this, the degree of their use or efficiency is determined. Moreover, the value of the goods produced can have both physical and monetary expression (volume or value). And the return on assets indicator itself can be calculated for all funds, and only for part of them.
At different levels of the economy, the capital productivity indicator can be calculated. At the same time, he shows the same thing, namely, the efficiency of production in relation to the use of capital, but on different scales. At the enterprise level, to calculate this coefficient, the annual volume of products produced is taken. At the industry level, gross value added or gross output is used, and at the scale of the country's economy, the value of gross domestic product is used.
To operate effectively, each enterprise must regularly calculate and analyze ratios such as capital intensity and capital productivity. Such an analysis shows a lot, because it allows you to assess the degree to which an enterprise uses its fixed assets and determine the need for them to achieve certain production goals.
Capital productivity of labor
The level of changes in the indicators under consideration will depend, as noted above, on the degree of equipment of the company. During the intensive re-equipment of labor with modern means, a decrease in capital productivity is observed. But subsequently, in the process of mastering new tools, its value stabilizes. Moreover, the prerequisites for increasing the value are being formed. At each stage there is a limit to the growth of the capital-labor ratio, beyond which there is a decrease in capital productivity.One of the necessary conditions is a rapid increase in labor efficiency in comparison with an increase in the degree of equipment. Enterprises must take measures aimed at increasing capital productivity. For example, for construction and installation companies, an urgent solution to the problem may be to increase shifts, increase workload, improve the organization of work and the technological process itself, modernize equipment taking into account the nature of the activity, and so on.
Using the absolute difference method, you can determine the influence of factors related to asset turnover:
Extensive (quantitative) - the amount of fixed assets.
Intensive (high-quality) - capital productivity.
Capital productivity reflects the amount of goods (or the amount of income) that a company receives from each ruble of fixed assets at its disposal. The efficiency of asset turnover is assessed by its value. Capital intensity reflects the amount of funds that need to be invested in fixed assets to obtain the required volume of output.
As asset utilization improves, FI increases and FE decreases. If capital intensity decreases, it means that labor savings are taking place. During the assessment process, working equipment and machines are separated from the operating system. Comparison of the percentage of plan execution and growth rates per ruble of the value of the active part of funds and per 1 ruble. the cost of technological resources shows the impact of changes in the structure of production assets on the effectiveness of their operation. The second value under these conditions should be higher than the first (if the share of the OS working group increases).
Capital productivity ratio
If we refer to the basic formula for calculating capital productivity, then the denominator must reflect the revenue received for a certain period of time. To calculate the capital productivity of fixed assets on the balance sheet, you will need to refer to line 010 of the profit and loss statement (form No. 2) and line 120 of the balance sheet (form . No. 1) with values at the beginning of the reporting period and, accordingly, at its end.Thus, the formula looks like:
Fo = line 010/0.5*(line 120 n + line 120 k)
If we turn to the basic formula, the denominator should reflect the revenue received over a certain period of time. The name of line 010 of the profit and loss report speaks for itself, since it is called “Revenue from the sale of products, goods, works, services,” and as can be seen from the formula, the denominator is revenue. However, it is always worth remembering that the calculation of this line implies revenue minus excise taxes, export duties and other regular mandatory payments.
When calculating capital productivity using the balance sheet, we enter the total value for this line in the denominator of the formula, and then proceed to Form No. 1 of the balance sheet. Line 120 of the balance sheet “Fixed assets” takes into account a certain part of the company’s property, which is directly involved in the production and sale of services or goods. These may include cash registers, machine tools, furniture, tools, etc.
When calculating capital productivity using the balance sheet, we enter the total value on this line in the denominator of the formula, and then proceed to Form No. 1 of the balance sheet. For the capital productivity formula, you will need the total value on line 120 at the end and at the beginning of the reporting period, since the formula requires an average value during the reporting period. There is nothing complicated about this: you just need to summarize the data at the beginning and end of the year, and divide them by 2 or multiply by 0.5. The result obtained will be the divisor when calculating capital productivity on the balance sheet. For clarity, let's consider real example based on the Kroverst enterprise.
Line 120 in it balance sheet matter:
At the beginning of (1) the reporting period - 903,920;
at the end (2) of the reporting period - 885,220.
And line 010 of the income statement is expressed as 3,112,534.
Now we plug these values into the formula and get the following:
Fo=3,112,534/0.5*(885,220+903,920)= 3,112,534/05*1789140= 3,112,534/894570=3.4
Thus, for each individual ruble total assets Kroverst accounted for 3.4 rubles in sales revenue.
The capital productivity ratio clearly responds to all changes in the functioning of the enterprise, but still the following factors can have the most obvious impact on the final result of the ratio:
Age characteristics of the basic technological park;
- incomplete or incorrect loading of technological capacities;
- degree of intensity of operation of equipment, technical machines and vehicles;
- time indicator of turnover of all technological equipment;
- timely control supervision over the wear and tear of technological resources and machines;
- quality and complete set of technological resources of the enterprise.
Calculation of capital productivity
Financial analysis of any enterprise cannot do without studying the effectiveness of the use of fixed assets. To do this, analysts use an indicator such as capital productivity. The formula for calculating it on the balance sheet allows you to identify negative aspects in the organization of the main factors of production available to the company. Based on the analysis, economists and financiers can draw conclusions about ways to improve the balance sheet structure, which will allow them to receive greater profits in the future period. This is why the calculation of the capital productivity formula is so often used in financial economic analysis.Capital productivity of fixed assets is financial ratio, the formula of which characterizes the effectiveness of their use. It shows how much revenue the enterprise receives per unit of resources invested in production assets. In other words, capital productivity, the formula for calculating the balance of which will be discussed below, gives an assessment of the feasibility of using the means of labor relative to the revenue received as a result of their use.
To assess the efficiency of using fixed assets, the capital productivity indicator must be analyzed over time. This will make it possible to determine the financial condition and competence of management activities in terms of the use of funds. The practice of comparing the obtained indicator with the same results of competing enterprises is widely used.
Capital productivity, the calculation formula for which is presented below, is as follows:
Ф = Sales revenue/Fixed assets
In order to draw correct conclusions based on the data obtained, the indicator of the number of production assets should be taken as the arithmetic average for the reporting period.
Data will help you make calculations accounting report No. 1 and No. 2.
Capital productivity, the formula for calculating the balance of which allows you to draw conclusions about the state of factors of production, has the following form:
F = s. 2110 f. 2/(p. 1150 beginning f. 1 + p. 1150 con. f. 1)/2
In my own way general principle The presented indicator is similar to turnover ratios.
Capital productivity, the formula of which was discussed above, has no general normative value. In each industry, the coefficient under consideration differs in its value. In industries that require in the production process large quantity equipment, expensive equipment, the capital productivity indicator will be lower than that of production using cheap equipment in small quantities.
Therefore, comparison of the analysis results is carried out in dynamics and based on indicators from a study of the financial and economic activities of enterprises in this industry. Only on the basis of such studies can conclusions be drawn about the competence of production asset management.
Capital productivity, the formula for calculating the balance sheet of which was carried out by analysts over several years, must be interpreted correctly. If in the period under review the coefficient decreased, this indicates a decrease financial stability companies and insufficiently effective policies in the use of production capacity.
With a gradual increase in capital productivity, we can draw a conclusion about the correct, harmonious development of the company. Competent, appropriate use of production assets led the enterprise in this case to increased financial stability.
The capital productivity indicator, the calculation formula of which helps to calculate the industry average, should be compared with the results of an analysis of the activities of competitors. If the capital productivity ratio exceeds the interindustry value, we can say that the competitiveness of the analyzed organization has increased. And vice versa.
Capital productivity analysis
The efficiency of using fixed assets is characterized by the indicator – capital productivity. In educational and methodological literature, capital productivity is interpreted as an indicator of the use of production fixed assets.The capital productivity indicator shows how profitable investments in fixed assets of an enterprise are. The capital productivity indicator is calculated as the ratio of production volume in value terms to the cost of fixed assets in the reporting period.
The value of capital productivity of fixed assets is influenced by the following factors:
Volume of production and sales of products;
share of machinery and equipment in total cost fixed assets;
utilization rate of machinery and equipment;
labor productivity;
equipment performance;
equipment downtime;
equipment load;
technological level of machinery and equipment;
changes in the structure of fixed assets.
To analyze capital productivity, it is necessary to build an auxiliary analytical table of the following type:
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No. |
Indicators |
Unit. |
At the beginning of the reporting year |
At the end of the reporting year |
Dynamics, % |
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Volume of production, thousand rubles. |
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Average annual cost of fixed assets |
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Average annual cost of working machinery and equipment |
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Average annual cost of installed machinery and equipment |
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Average annual cost of operating equipment |
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Number of operating equipment |
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Number of machine shifts worked |
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Number of working days |
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Number of thousand machine hours worked |
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Machinery and equipment availability ratio |
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Installed Equipment Ratio |
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Operating equipment factor |
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Average annual cost of a unit of equipment, rub. |
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Shift duration |
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Equipment performance |
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Capital productivity |
As we noted earlier, the return on capital assets is influenced by a fairly wide range of factors. To identify unused reserves, it is important to know the main directions of factor analysis of capital productivity, resulting from differences in approaches to modeling this indicator.
The simplest is the two-factor analysis model:
F = Fa/F * N/Fa
Where,
F - capital productivity;
Fa - active part of fixed assets;
N is the volume of production adopted for calculating capital productivity.
When analyzing capital productivity, the use of this model allows us to answer the question of how changes in the structure of fixed assets, i.e., in the ratio of their active and passive parts, affected the change in capital productivity.
In order to reveal the impact on capital productivity of the action of extensive and intensive factors of use of fixed assets (including machinery and equipment), it is necessary to use a more complete model in the analysis:
F = Fa/F * Fmash/Fa * Tcm/Qd * I * 1/s * Tch/Tcm * N/Tch
Where,
Fmash - cost of installed (operating) machines and equipment;
Tcm - number of machine shifts worked;
c - average cost of equipment;
Qd - number of units of operating equipment;
I - duration of the reporting (analyzed) period, in days;
Tch is the number of machine hours worked.
This formula allows us to determine the influence on the dynamics of capital productivity of the following factors:
A. the share of the active part of the funds in their total value (Fa/F);
b. shares of machinery and equipment in the value of active assets (Fmash/Fa);
c. equipment shift coefficient (Tcm/Qd* I);
d. average cost of a unit of equipment (c);
e. duration of machine shift (Tch/Tcm);
f. production output per machine-hour of equipment operation (N/Tch).
One of important factors, which influence the efficiency of use of fixed assets, is to improve the use of production capacities of the enterprise and its divisions.
To establish the relationship between capital productivity and the level of utilization of production capacity, let us present the capital productivity indicator in the following form:
F = N/Noс * Noс/W * W/Fа * Fa/F
where, Noc is the main (core) product of the enterprise;
W - average annual production capacity.
This formula allows us to determine the impact on the dynamics of capital productivity of changes in the level of the following factors:
Level of specialization of the enterprise (N/Noс);
coefficient of utilization of the average annual capacity of the enterprise (Noс/W);
the share of the active part of the funds in their total value (Fа/F);
capital productivity of the active part of funds, calculated by capacity (W/Fa).
When calculating the overall capital productivity indicator, the cost of fixed production assets takes into account own and leased fixed assets. Funds that are on conservation or reserve, as well as leased to other organizations, are not taken into account.
The use of a company's fixed assets is considered effective if the growth in profit exceeds the relative increase in the value of fixed assets for the period under review. An increase in capital productivity leads to relative savings in production fixed assets and to an increase in production volume.
Increase in capital productivity
Capital productivity (from English output/capital ratio) is an indicator of the efficiency of use of fixed assets, the inverse of capital intensity, calculated as annual output divided by the cost of fixed assets with which these products are produced; in the most general form, capital productivity characterizes the level of use of fixed assets (funds) ).Capital productivity is defined as the ratio of output (gross, marketable, net) to the average annual cost of fixed assets. The capital productivity indicator is used when analyzing the level of use of fixed assets, planned justification of production volumes and the increase in new capacities.
Factors influencing capital productivity:
Share of the active part of fixed assets;
- structure and age composition fleet of main technological equipment;
- improvement of the fleet of metal-cutting equipment;
- level of use of operating time of the main technological equipment;
- level of intensive use of machinery and equipment, etc.
At the state level, it is used as an indicator of production results to calculate capital productivity national income. In the sphere of material production and in enterprises, these are gross output, marketable output, and net output. To accurately characterize the dynamics of capital productivity, the indicator of production results and the cost of fixed production assets are calculated in comparable prices in order to reflect the physical volume of manufactured products and assets.
Fixed assets are accepted in full book value(excluding wear and tear). To analyze the financial results of an enterprise in a given year and assess the impact of capital productivity on the profitability of production assets, it is calculated in current prices. To assess the dynamics of capital productivity, it is also determined in comparable prices (product volumes and the cost of production assets in comparable prices are taken into account).
The level of capital productivity, calculated by the volume of products produced (services provided), varies significantly across sectors of the national economy, industries, agriculture, and transport. Therefore, when analyzing the dynamics of capital productivity by country, region, industry, agriculture, transport takes into account changes in the sectoral structure of products and production assets.
The level and dynamics of capital productivity in an enterprise are influenced by:
Volume of production in physical terms and product price;
- composition and structure of fixed assets (in particular, age structure, share of the active part of fixed assets);
- productivity, price and other technical and economic indicators of machinery and equipment; level of depreciation of elements of fixed assets;
- the share of unused elements of fixed assets; degree of loading of machinery and equipment; coefficients of utilization of production area and production capacity of the enterprise, etc.
Increasing capital productivity
Currently, enterprises pay much attention to the problem of marketing their products. In conditions of fierce competition, price becomes perhaps the most important factor in the formation consumer demand. However, constantly restraining prices and providing discounts to customers is a path that can lead an enterprise to a crisis, because... the revenue received will not cover the costs incurred and ultimately the enterprise will become permanently insolvent. There seems to be only one way out - to reduce costs.
Many managers and specialists of enterprises believe that by constantly increasing production output, by reducing semi-fixed costs, it is possible to reduce its cost. The problem of increasing production output, as a rule, is solved by purchasing new equipment (on credit or leasing) and only to a small extent by searching for internal reserves. Of course, new equipment will increase production volumes, but the expected economic effect will be received mainly by those enterprises whose increase in volumes is caused by the need to satisfy increased consumer demand for products. For other businesses, purchasing new equipment may lead to an increase in accounts payable, additional investment in the purchase of basic and auxiliary raw materials and supplies, increasing balances finished products in warehouses, i.e. to the diversion of funds from circulation.
Let us dwell on the search for internal reserves available at the enterprise. One of the areas of search is the availability of the necessary fixed assets and increasing the efficiency of their use.
An important indicator The efficiency of using fixed assets is capital productivity (CR), a downward trend in which has now emerged in many enterprises. In industry, the cost indicator of capital productivity is most often used, characterizing product output (quantity products sold) by 1 rub. or 1000 rubles. industrial production fixed assets (IPOS).
Actual capital productivity is compared over several years, and if this indicator is planned, it is compared with the planned value. Then the factors that caused the change in this indicator are identified and their influence is calculated.
Capital productivity factors
Power is the maximum possible output at a certain, given level of development of productive forces for of this enterprise.The intensive equipment utilization factor is calculated as the ratio of the average daily output of services to the average daily production capacity.
The extensive equipment utilization factor is calculated as the ratio of the actual working time to the estimated working time.
The integral coefficient is equal to the product of the above indicators.
In the process of analysis, the dynamics of these coefficients and the reasons for their changes are studied. The reasons may include the following:
Commissioning of new equipment;
reconstruction of outdated equipment;
technical re-equipment of production.
Then the level of use of the production area is analyzed by calculating the volume of production per 1 m2 of production area.
When analyzing equipment, their structure is also studied in the following sections:
Available and installed equipment;
actually used and undergoing repair and modernization.
The most effective equipment structure is considered to be when the equipment available, installed and actually used coincides in size or is approximately equal to each other.
To characterize the degree of involvement of production equipment, the following coefficients are calculated:
1. Fleet utilization rate of available equipment = used equipment, pcs./available equipment, pcs. The closer this coefficient is to one, the better.
2. Installed equipment fleet utilization rate = used equipment, pcs./installed equipment, pcs.
3. Potential reserve for increasing production by increasing the amount of existing equipment = (amount of available equipment - amount of installed equipment) * average annual output of a unit of equipment.
To characterize the degree of extensive loading of equipment, the balance of its operating time is studied:
The calendar time fund (maximum possible) is calculated as the product of the number of calendar days in the reporting period by 24 hours and the number of units of installed equipment. Thus, this time fund is determined based on the continuous round-the-clock operation of all pieces of equipment. It cannot be used in analytical calculations, since it does not reflect the actual possible operating time of the equipment due to the fact that it requires repairs and cannot be operated all at the same time.
- The duty time fund is found by multiplying the number of units of installed equipment by the number of working days in the analyzed period and by the duration of the working day in hours (taking into account the shift coefficient).
- Planned fund – operating time of equipment according to plan; differs from the normal time when equipment is undergoing scheduled repairs and modernization.
- Actual fund of hours worked.
To characterize the use of equipment operating time, the following indicators are used:
The coefficient of calendar time use is calculated as the ratio of the actual time fund to the calendar time fund;
- the utilization rate of the regime time fund is calculated as the ratio of the actual time fund to the regime time fund;
- the utilization rate of the planned time fund is calculated as the ratio of the actual time fund to the planned time fund;
- the share of downtime in the calendar fund of time is calculated by the ratio of the number of downtimes to the calendar fund of equipment operation.
Return on assets of the active part
Production potential is understood as the maximum possible production result, which can be obtained with the most efficient use of production resources, with the existing level of technology and advanced forms of production organization.Analysis production potential includes an assessment of the correspondence of consumed resources to the volume of products produced.
The composition of production resources takes into account:
Staff;
- out current assets;
- current assets.
The scientific and technical level of production is characterized by the presence and condition of the main (technological) equipment at the enterprise, its renewal and improvement, the progressiveness of the structure of the main production assets and the technologies used, and the technical equipment of labor.
The enterprise's provision with fixed production assets is assessed in accordance with the enterprise's production program.
The analysis is carried out for each group of fixed production assets.
The study of the state, dynamics and structure of fixed assets is given Special attention, since they occupy a large share in the long-term assets of the enterprise. Production and financial results activities of the enterprise.
Indicators of the degree of depreciation of fixed assets, including equipment, is the depreciation coefficient, which is defined as the ratio of the amount of depreciation of fixed assets to their original cost. As a rule, the lower the depreciation rate of fixed assets, the better the condition in which they are located.
The degree of renewal of fixed assets is characterized by the ratio of the value of newly received assets reporting year fixed assets to their value at the end of the period. It shows the amount of fixed assets put into operation for a given period. The wear and tear coefficient is calculated both for all assets and for their active part, as well as for groups of equipment and is usually considered in dynamics.
A higher renewal coefficient of the active part of funds compared to the same coefficient calculated for all funds shows that the renewal of fixed assets is carried out at the enterprise at the expense of their active part and has a positive effect on the capital productivity indicator.
The retirement ratio is calculated as the ratio of fixed assets retired during the reporting year to their value at the end of the period. It shows the share of fixed assets that are retired from production annually. Its growth means updating the material base of the enterprise.
The efficiency of use of production fixed assets is characterized by the ratio of the growth rate of production and the growth rate of fixed assets, as well as indicators of capital productivity, capital intensity, capital-labor ratio and labor productivity.
The general indicator is capital productivity.
In the calculations of the economic and social development capital productivity is calculated based on the volume of production in comparable prices and the average annual cost of production fixed assets (own and leased), except for funds that are under conservation and in reserve, as well as leased. Fixed assets are accounted for at full book value (excluding depreciation).
Capital productivity can be calculated both in relation to the entire cost of production fixed assets, and to the cost of machinery and equipment. This makes it possible to monitor the effectiveness of using the most mobile and decisive part of fixed assets - equipment.
Capital intensity is an indicator inverse to capital productivity. It characterizes the cost of fixed production assets per unit cost of manufactured products.
The most general indicator of the efficiency of using fixed production assets is capital profitability. Its level depends not only on capital productivity, but also on the profitability of products. Capital return is the ratio of profit from core activities to the average annual cost of fixed assets.
Reserves for increasing the efficiency of use of fixed assets.
It is obvious that any enterprise should strive to improve the efficiency of using its fixed production assets. This is the key to increasing product output, which ultimately leads to increased income and, consequently, increased profitability. Therefore, the problem of maximum efficiency of fixed assets should become one of the key ones for any organization. In addition, with the efficient use of fixed assets, the need for them is reduced, which leads to savings, that is, minimization of costs, and this in turn again affects the increase in profitability.
In the process of production or sales, exploited fixed assets wear out physically and become obsolete morally.
To increase the efficiency of using fixed production assets and reduce the degree of wear and tear, an enterprise can use the following ways:
Increasing equipment shifts;
- increasing the degree of utilization of equipment production capacity;
- improvement of user qualifications;
- increasing the level of organization of fund care;
- timely implementation overhaul, as well as planned preventive measures;
- increasing labor discipline;
- ensuring production with the required number of workers;
- provision of materials and equipment, etc.
All these activities are aimed at increasing the efficiency of using fixed assets, which are the most important link in any activity.
The material and technical base of an enterprise is a set of material, material elements, means of production that are used and can be used in economic processes. For an enterprise, the concept of material and technical base takes into account the condition of the components: the availability and suitability of production space, the age of the equipment fleet, the compliance of available material resources production program.
To carry out the production process, the interaction of two factors is necessary - means of production and labor, which form the material and technical base of the enterprise.
Means of production are man-made resources that are used to obtain products and provide services. They consist of objects of labor and means of labor.
Objects of labor are that part of the means, those material elements that a person acts on in the labor process (fuel, materials).
They are characterized by the following qualities:
Completely consumed during the production process;
change, as a rule, their natural shape;
included in new products created with their help;
transfer their cost to the product, thereby forming a significant part of the cost;
require continuous renewal and replenishment for each subsequent cycle.
Means of labor are that part of the means of production, using which a person acts on objects of labor (equipment, machines, structures). They are not materially included in the product; retain their natural shape over a number of years or production cycles of use; transfer their value to the products created or services produced gradually, as they wear out; their worn-out part is included in the cost; they are replaced after they are completely worn out and written off from the balance sheet.
In valuation, objects of labor are taken economic form working capital. The means of labor have the economic form of fixed assets.
One of the most important tasks in the development of any enterprise is to ensure the profitability of production, primarily by increasing its efficiency and more full use on-farm reserves. To do this, it is necessary to use fixed assets and production capacities more rationally.
- increasing the extensiveness of their load. More intensive use of production capacities and fixed assets is achieved primarily through technical improvement of the latter.
More complete use of fixed assets also leads to a reduction in the need for new production capacity when production volume changes, and, consequently, to a better use of enterprise profits, an increase in the share of deductions from profits to the consumption fund, and the direction of a larger part of the accumulation fund for mechanization and automation technological processes and so on.).
Improving the use of fixed assets also means accelerating their turnover, which significantly contributes to solving the problem of reducing the gap in the timing of physical and obsolescence and accelerating the rate of renewal of fixed assets.
Finally, the efficient use of fixed assets is closely related to another key task of the modern period - improving the quality of products, because in the conditions market competition High-quality products are sold faster and are in demand.
The successful operation of fixed assets depends on how fully extensive and intensive factors improving their use. Extensive improvement in the use of fixed assets assumes that, on the one hand, the operating time of existing equipment in a calendar period will be increased, and on the other hand, the proportion of existing equipment in the composition of all equipment available at the enterprise will be increased.
The most important areas for increasing equipment operating time are:
Reducing and eliminating intra-shift equipment downtime by improving the quality of equipment repair services, timely provision of main production with labor, raw materials, fuel, and semi-finished products;
- reduction of all-day downtime of equipment, increase in the shift ratio of its work.
In an important way increasing the efficiency of using fixed assets is to reduce the amount of redundant equipment and quickly involve uninstalled equipment in production.
The possibilities of the intensive route are much wider. Intensive improvement of the use of fixed assets implies an increase in the degree of equipment utilization per unit of time. Increasing the intensive loading of equipment can be achieved by modernizing existing machines and mechanisms, establishing an optimal mode of their operation. Operation at an optimal technological process mode ensures an increase in production output without changing the composition of fixed assets, without increasing the number of employees and with a decrease in the consumption of material resources per unit of production.
The intensity of use of fixed assets is also increased by technical improvement of tools and improvement of production technology, elimination of bottlenecks in the production process; reducing the time required to achieve the design performance of equipment, improved scientific organization labor, production and management, the use of high-speed work methods, advanced training and professional skills of workers.
The development of technology and the associated intensification of processes are not limited. Therefore, the possibilities for intensively increasing the use of fixed assets are not limited.
An essential direction for increasing the efficient use of fixed assets is to improve their structure. Since an increase in production output is achieved in leading workshops, it is important to increase their share in the total cost of fixed assets. An increase in the number of fixed assets of auxiliary production leads to an increase in the capital intensity of products, since there is no direct increase in output. But without the proportional development of auxiliary production, the main workshops cannot function with full efficiency. The enterprise should strive to optimize the structure of the material and technical base.
The structure of fixed production assets can be improved by:
Renewal and modernization of equipment;
improvement of the equipment structure as a result of an increase in the share of progressive types of machines: automatic lines, machines with numerical and program controls;
better use of buildings and structures on free space;
correct development of construction projects and their high-quality implementation;
elimination of redundant and underused equipment and installation of equipment that ensures more correct proportions between its individual groups.
Thus, it is extremely important for an enterprise to effectively use fixed assets and maintain them in an amount that optimizes the management of current activities. Analysis of the efficiency of use of funds is the most important tool for an enterprise. How deeply and in detail such an analysis is carried out in an enterprise, the more effective and successful the financial and economic activities of the enterprise will be.
For the effective use of fixed assets in the production process, a large share of the active part of fixed assets is necessary, thereby achieving a high return on assets.
The effectiveness of using OPFs significantly depends on their technical condition and, above all, on the technical condition Vehicle, level of technical organization. maintenance and repair, the degree of renewal and write-off of the PF and a number of other factors.
To increase the efficiency of using PF, it is necessary to increase capital productivity and reduce the capital intensity of products, which is achieved through the implementation of scientific and technical progress achievements.
Decrease in capital productivity
In economic analysis, it is necessary to take into account that the capital productivity indicator is not comparable in time, since the numerator includes the annual (quarterly) volume of production, and the denominator indicates fixed assets, individual types of which have different service lives.The volume of production used in determining the capital productivity indicator cannot be considered as a value proportional to the size of fixed assets, due to the fact that it also depends on the use of fixed assets during the day (shift), on the annual operating mode (seasonality, intermittent or continuous working week, etc.).
The main reason for the decline in capital productivity is shortcomings in the use of fixed production assets. The decrease in capital productivity is to a certain extent caused by an increase in capital investments aimed at improving working conditions, safety environment, shifts in sectoral structure processing industry and other objective factors, as well as an increase in the cost of a unit of power, growth estimated cost construction and installation works.
The main directions of economic and social development of Russia provide for the concentration of material, financial and labor resources, primarily on technical re-equipment and reconstruction operating enterprises and on the construction of facilities that determine scientific and technical progress and solving social problems.
Return on working capital
Capital productivity on working capital characterizes the amount of turnover obtained per 1 ruble of working capital and is calculated by dividing turnover at retail prices by the average annual amount of working capital.The lower the utilization rate of funds in circulation, the more efficiently current assets are used, which helps improve the financial condition of the organization.
To identify specific reasons for changes in turnover as a whole for a trade organization, turnover indicators are calculated for individual types of working capital.
The economic effect of accelerating the turnover of working capital is the release of funds from circulation and their use for further expansion of core activities, updating the range of goods, and strengthening economic ties with suppliers.
The absolute release of working capital from circulation means a decrease in the amount of working capital in the current year compared to the previous year with an increase in sales volumes. Absolute release occurs when the actual balances of working capital are less than the standards or actual balances for the previous period while maintaining or increasing sales volumes. Consequently, the indicator of the absolute release of working capital from circulation or its involvement in turnover characterizes, respectively, a decrease or increase in the average volume of working capital for a given period for the analyzed period.
Relative release of working capital from turnover (Vrel) occurs when the growth rate of sales volumes outstrips the growth rate of working capital (i.e., a smaller volume of working capital ensures a larger sales volume). The relative release of working capital from circulation characterizes the efficiency of using working capital.
Capital productivity reserve
The final efficiency of the use of fixed assets is characterized by indicators of capital productivity, capital intensity, profitability, relative savings of funds, an increase in production volume, an increase in labor productivity, a decrease in product productivity and the cost of production of fixed assets, and an increase in the service life of labor tools.The problem of producing and selling products with a smaller number of assigned production assets is independent problem enterprise economics. An indicator reflecting the output of products with fewer assets is the total capital productivity of production assets. Reproduction and turnover of fixed production assets is a factor influencing the level of profitability and financial condition of enterprises. For enterprises it is not indifferent how much own funds invested in fixed assets. IN modern conditions The flexibility of enterprises in terms of creating and using means of labor increases, and the role of credit in the formation of fixed assets increases. Cash from the sale of unnecessary means of labor, the production development fund is replenished.
In industrial enterprises, capital productivity is determined by the volume of output per 1 ruble of the average annual cost of fixed assets. Capital productivity is a general indicator of the use of fixed assets. The magnitude and dynamics of capital productivity are influenced by many factors, both dependent and independent of the enterprise (the latter are especially relevant today), however, reserves for increasing capital productivity and better use of equipment are available at every enterprise, site, and workplace. The intensive way of farming involves a systematic increase in capital productivity by increasing the productivity of machines, mechanisms and equipment, reducing their downtime, optimizing their loading, equipment, and technical improvement of production fixed assets.
One of the most important tasks of industrial development is to ensure production, first of all, by increasing its efficiency and more fully using on-farm reserves. To do this, it is necessary to use fixed assets and production capacities more rationally.
An increase in industrial production volumes is achieved through:
Commissioning of fixed assets and production capacities;
- improving the use of existing fixed assets and production capacities.
The increase in fixed assets and production capacity of industry, its branches and enterprises is achieved through new construction, as well as reconstruction and expansion of existing enterprises.
The reconstruction and expansion of existing factories and plants, being a source of increasing fixed assets and production capacities of enterprises, at the same time make it possible to better use the production apparatus available in the industry.
The decisive part of the increase in production in the industry as a whole is obtained from existing fixed assets and production capacities, which are several times higher than the new assets and capacities introduced annually.
One of the most important tasks increasing the efficiency of using capital investments and fixed assets is the timely commissioning of new fixed assets and production capacities, their rapid development. Reducing the time it takes to commission new factories and plants makes it possible to quickly obtain the products needed for the national economy from technically more advanced fixed assets, accelerate their turnover and thereby slow down the onset of obsolescence of fixed assets of enterprises, and increase the efficiency of social production as a whole.
Improving the use of existing fixed assets and production capacities industrial enterprises, including newly commissioned ones, can be achieved thanks to:
Increasing the intensity of use of production capacities and fixed assets;
- increasing the extensiveness of their load. More intensive use of production capacities and fixed assets is achieved, first of all, through technical improvement of the latter.
The practice of industrial enterprises shows that there is a process of increasing the unit capacity of equipment:
In machine tools, machines and units, the most critical parts and assemblies are strengthened;
- the main parameters of production processes are increased (speed, pressure, temperature);
- not only the main production processes and operations are mechanized and automated, but also auxiliary and transport operations, which often hinder the normal course of production and the use of equipment; outdated machines are modernized and replaced with new, more advanced ones.
The intensity of use of production capacities and fixed assets also increases by improving technological processes; organization of continuous-flow production based on optimal concentration of production of homogeneous products; selection of raw materials, their preparation for production in accordance with the requirements of a given technology and quality of products; eliminating storming and ensuring uniform, rhythmic operation of enterprises, workshops and production sites, carrying out a number of other measures to increase the speed of processing objects of labor and ensure an increase in production per unit of time, per unit of equipment or per 1 sq. m production area.
The intensive way of using fixed assets of existing enterprises includes, therefore, their technical re-equipment and increasing the rate of renewal of fixed assets. The experience of a number of industries shows that rapid technical re-equipment of existing factories and plants is especially important for those enterprises where there is greater wear and tear on fixed assets.
Improving the extensive use of fixed assets implies, on the one hand, an increase in the operating time of existing equipment in a calendar period (during a shift, day, month, quarter, year) and, on the other hand, an increase in the quantity and share of existing equipment as part of all available equipment at the enterprise and at its production level.
Increased equipment operating time is achieved through:
Constantly maintaining proportionality between the production capacities of individual groups of equipment at each production site, between workshops of the enterprise as a whole, between individual production within each industry, between the pace and proportions of development of industries and the entire national economy;
- improving the care of fixed assets, compliance with the prescribed production technology, improving the organization of production and labor, which contributes to the correct operation of equipment, avoiding downtime and accidents, carrying out timely and high-quality repairs, reducing equipment downtime for repairs and increasing the turnaround period;
- carrying out measures that increase the share of main production operations in working hours, reducing seasonality in the work of enterprises in a number of industries, increasing the shifts of work of enterprises.
It is known that at enterprises, in addition to operating machines, machines and units, some of the equipment is in repair and reserve, and some is in storage. Timely installation of uninstalled equipment, as well as the commissioning of all installed equipment, with the exception of part that is in planned reserve and repair, significantly improves the use of fixed assets.