Syktyvkar Forestry Institute - branch of the State Educational Institution of Higher Professional Education
"St. Petersburg State
Forestry Academy named after S.M. Kirov"
Faculty of Correspondence Studies
Department accounting, analysis, audit and taxation
Coursework
Discipline: Analysis and diagnostics of financial and economic activities
On the topic: Analysis of the business activity of an enterprise (using the example of Luzales LLC)
Syktyvkar 2007
Introduction
1. Theoretical foundations of business activity and the role of its indicators in the system of comprehensive economic analysis
1.1 Approaches to determining the essence of business activity
1.2 Financial indicators of business activity
1.2.1 System of indicators of business activity and enterprise performance
1.2.2 Analysis of turnover and efficiency of use of fixed assets
1.2.3 Analysis of turnover and efficiency of use working capital
2. Analysis of business activity of the enterprise Luzales LLC
2.1 Analysis of the balance sheet structure
2.1.1 Analysis of the structure and dynamics of the balance sheet liabilities
2.1.2 Analysis of the structure and dynamics of the balance sheet asset
2.2 Analysis of the condition and efficiency of use of fixed assets of the enterprise
2.3 Analysis of the efficiency of using working capital
2.4 Calculation of profitability indicators and business activity ratios
Conclusion
Bibliography
Applications
Introduction
Changes in legislative and regulatory acts, as well as the transformation of reporting taking into account international standards in accordance with the Concept for the development of accounting and reporting for the medium term, have identified a range of pressing problems for research to improve the information base for analyzing business activity indicators and methodological issues of analysis.
In world practice, there are a number of examples of the application of methods for assessing the business activity of an enterprise, which can also be used in the domestic economy.
Investing in the domestic economy is difficult due to the lack of a system of objective indicators that would allow assessing both the state of the country’s economy as a whole and individual industries.
In reporting forms adopted in Russian Federation, there is no provision for identifying indicators of business activity, which does not allow one to imagine the effectiveness of management of an enterprise, industry, or economy as a whole. This determines the presence of methodological problems in establishing a system of indicators of business activity, its objective assessment, as well as the formation of a reliable and sufficient information base.
The relevance of improving the analysis of business activity and its information base, the insufficient development of the problem of choice and the optimal methodology for calculating its indicators determined the choice of the research topic and the range of issues under consideration.
Problems of assessing business activity and improving the information base of analysis as part of financial statements are considered in the works of foreign economists, in particular such as D.A. Aaker, E.J. Dolan, K.D. Campbell, R.J. „ Campbell, L.A. Bernstein and others. The work of many domestic economists, such as A.D., is devoted to the development of certain aspects of this problem. Sheremet, M.I. Bakanov, V.V. Kovalev, G.V. Savitskaya, N.N. Ilysheva, SV. Pankova, O.V. Efimova, R.S. Saifulin and others.
At the same time, the problem of assessing business activity remains poorly developed, since each of the authors proposes different methods for calculating its indicators, which do not fully reflect the overall picture of the performance of an individual enterprise. Due to the general economic instability in the country, it is practically difficult to make a long-term forecast of indicators characterizing the economic efficiency of enterprises and industries, and it is not done even for the short term.
According to the majority of economists (M.I. Bakanov, A.D. Sheremet, V.V. Kovalev, R.S. Saifulin, etc.), the content of the current financial statements does not fully correspond to the goals and objectives of economic analysis and requires certain adjustments not only for the purposes of analysis, but also for the purpose of approaching IFRS.
Target course work conducting an analysis of the business activity of a forest industry enterprise (using the example of Luzales LLC)
1. Consider the theoretical foundations of business activity and the role of its indicators in the system of comprehensive economic analysis,
2. conduct an analysis of the business activity of the enterprise Luzales LLC
The subject of research in this work is the methodology for analyzing business activity and financial condition and their information base.
The object of the study is the enterprise of the timber industry of the Komi Republic, LLC Luzales.
Society with limited liability“Luzales” was created in January 1999 with an authorized capital of 8.5 thousand rubles and registered by Resolution of the Priluzsky District Administration No. 12 dated January 13, 1999. The founders of Luzales LLC are two individuals. Semenyuk Nikolay Terentyevich - 60% of the authorized capital, Nikolaev Ivan Andreevich - 40% of the authorized capital. Location of the enterprise: Komi Republic, Syktyvkar, Chovyu m., postal address: Komi Republic, Priluzsky district, Obyachevo village, st. Sovetskaya, 1.
Luzales LLC was created to organize logging and wood processing for the purpose of making a profit.
The main activities of the enterprise are:
1. Logging work (harvesting, hauling and bucking of wood)
2. Production and commercial activities for the purpose of production and sale of forest products to consumers (Syktyvkar Plywood Mill LLC, Leskom CJSC; Mondi Business Paper OJSC, Syktyvkar LDK LPK OJSC. Lumber is also exported to Hungary and Lithuania.) ;
3. Provision of transport and forwarding services;
4. Marketing research in the field of logging;
5. Primary processing of forest products.
Luzales LLC is currently engaged in logging and wood processing, supplying assortments for processing enterprises of the Komi Republic. The company currently operates using Scandinavian technology, which ensures the safety of undergrowth.
The management structure of Luzales LLC is linear-functional and is aimed, first of all, at establishing clear relationships between the individual divisions of the company, distributing rights, duties and responsibilities between them. It also determines the composition of the enterprise and the system of subordination in the overall hierarchy of enterprise management. (Appendix 1).
The main technical and economic indicators of the enterprise’s operation for the period under study are presented in Appendix 2.
The course work consists of an introduction, two sections, a conclusion, a bibliography and appendices.
During the research, legislative and regulations Russian Federation, orders and letters of the Ministry of Finance of the Russian Federation, data from the State Committee on Statistics of the Russian Federation, international accounting and reporting standards. Special literary reference sources were also used: economic, financial reference books and textbooks, Regulations and instructions of the Ministry of Finance.
1. Theoretical foundations of business activity and the role of its indicators in the system of comprehensive economic analysis
1.1 Approaches to determining the essence of business activity
Domestic practice is still characterized by a contradictory assessment of the country’s business activity at the macro level, as well as an individual economic entity at the micro level. Many economic encyclopedic dictionaries compiled by various groups of authors either do not provide a definition of business activity at all, or do not clearly define this concept.
The definitions encountered reflect the business activity of a person (entrepreneur), or consider business activity as a category that specifies economic activity.
The authors of a large encyclopedic dictionary gave following definition business activity: “Business activity is economic activity, specified in the form of the production of a particular product or the provision of a specific form of service. Forms the basis for the international standard classification of economic sectors, economic classifiers of the System of National Accounts (SNA).” A simplified interpretation is obvious, which does not reveal the final goal and result of production or provision of services at both macro and micro levels.
The definition of business activity of B.A. is ambiguously formulated. Raizberg, L.Sh. Lozovsky, E.B. Starodubtseva - authors of a modern economic dictionary: “Business activity: characteristics of the state of entrepreneurial activity in an industry, company, country; is assessed, in particular, by the index of dynamics of securities prices.” More fully characterizes business activity at the enterprise level by V.V. Kovalev, noting that “in a broad sense, business activity means the whole range of efforts aimed at promoting a company in the product, labor, capital markets..., in a narrower sense - as the current production and commercial activities of an enterprise.” In this approach to defining business activity, the directions for characterizing the results and activities of the enterprise are clearly defined, which corresponds to its essence at the micro level. Sharing the general position of V.V. Kovalev, we consider it necessary to note that business activity at the level of the state economy as a whole is not sufficiently characterized, and there is no connection with the target setting of entrepreneurship for the efficient use of capital at the enterprise level.
For a more complete understanding of the essence of business activity and the correct formulation of its definition, there is a need to substantiate it on the basis of the relationships between economic and financial processes, expressed in a system of interrelated indicators. At the same time, an integrated approach to the study of these indicators was used, otherwise it is impossible to establish the role of business activity and its manifestation. The basis for this study was the development of a scheme for the formation and analysis of the main groups of indicators in the system of comprehensive economic analysis by A.D. Sheremet. Considering the controversial proposals of various economists on the formation of business activity indicators, it is important to identify their place in the presented scheme and critically evaluate their role and participation in a comprehensive assessment of the results of the enterprise. The need for an integrated approach is rightfully justified by A.D. Sheremet and supported in the economic literature by many authors: V.V. Kovalev and O.N. Volkova, G.V. Savitskaya, L.E. Basovsky and E.N. Basovskoy, L.T. Gilyarovskaya, N.P. Lyubushin.
There is a need to substantiate the relationship between business activity and financial condition and to include their indicators in a general assessment of business activity, as well as to determine the main stages of analysis.
Most definitions of business activity at the enterprise level are reduced to either one-sided characterization of indicators or directions of use of capital, although significant elements of business activity are affected.
L.E. Basovsky, E.N. Basovskaya note business cycles and express them in terms of GNP (gross national product) and industrial production. They note that “indices of GNP and industrial production rise and fall in accordance with the development of the business cycle and other longer cycles of economic development. However, reducing the definition of business activity to gross growth indicators without assessing the quality of this growth, which is manifested in income and profit, does not make it possible to fully characterize business activity, both at the macro and micro levels.
L.V. Dontsova and N.A. Nikiforova note: “ Business activity in the financial aspect it manifests itself, first of all, in the speed of turnover of funds. Analysis of business activity consists of studying the levels and dynamics of various financial ratios - turnover indicators.”
The speed of capital movement, which is manifested in turnover rates, is certainly the most important criterion of business activity. However, the financial result (effect) that completes this movement is this definition did not find a reflection.
So, S.M. Pyastolov notes that “evaluating the business activity of an enterprise ultimately comes down to determining the effectiveness of managing the capital at the disposal of the enterprise”
Close to this definition characterizes the business activity of L.S. Prykina: “The business activity of an enterprise is usually characterized by the intensity of use of invested (internal) capital.” The intensification of the use of capital is manifested in a change in the speed of its turnover, which has given rise to many economists to mention only turnover in defining the essence of business activity.
In particular, A.D. Sheremet and R.S. Sayfulin note that business activity ratios are reflected in the turnover of capital, mobile funds, accounts receivable and payable, equity, and non-current assets. Drawing a general parallel among the opinions of various authors, it should be noted that there are similar approaches to the fact that business activity depends on the effective use of the organization’s material, labor and financial resources. But then it should include, along with indicators of the efficiency of using fixed capital, indicators of the efficiency of using labor resources, indicators characterizing the financial results of the organization’s activities, as well as profit per ruble of capital, which is not noted by all economists.
Thus, business activity should reflect the efficiency of capital allocation in various types assets. If a significant part of it is advanced into non-current assets, then it will take much more time to release it than when investing in current assets that have average term circulation up to one year. Consequently, enterprises must control the optimal ratio of current and non-current assets so as not to freeze advanced financial resources for more long term than it was planned. This is one of the conditions effective management capital of an enterprise, industry, economy as a whole.
The profitability of an enterprise's capital allocation is also determined by how profitably the operations are carried out. In particular, one should take into account the effect in the form of income, which enterprises can increase by providing for penalties for violating the terms of contracts with customers and suppliers, compensation for material damage, and investing in securities at high interest rates. Thus, if an enterprise has long-term receivables, then the income from such an investment of capital should be no less than the refinancing rate of the Central Bank. Therefore, it is important to consider these issues as factors of business activity that influence the effectiveness of management decisions.
1.2. Financial indicators of business activity
1.2.1 System of indicators of business activity and enterprise performance
For the purpose of assessing the management of enterprise activities, science and practice have developed special tools, called economic indicators.
Economic indicators are micromodels of economic phenomena. Reflecting the dynamics and contradictions of ongoing processes, they are subject to changes and fluctuations and can move closer or further from their main purpose - measuring and assessing the essence economic phenomenon. Therefore, the analyst must know for each economic indicator: whether we are talking about operational efficiency or business activity of the enterprise.
Currently the most comprehensive and consistent study economic efficiency economic activity (disclosure of the subject of analysis) is given in the theory of comprehensive economic analysis. All sections of current, prospective and operational analysis are devoted to efficiency analysis. The achieved efficiency of economic activity is assessed, factors of its change, untapped opportunities and reserves for improvement are identified.
The efficiency of economic activity is measured in one of two ways, reflecting the performance of the enterprise relative to either the amount of advanced resources or the amount of their consumption (costs) in the production process. These indicators characterize the degree of business activity of the enterprise:
(A) Efficiency of advanced resources = Products / Advanced resources
(B) Efficiency of resources consumed = Products / Resources consumed (costs)
The relationship between the dynamics of products and the dynamics of resources (costs) determines the nature of economic growth. Economic growth in production can be achieved as extensive , so intense way. The excess of the growth rate of products over the growth rate of resources or costs indicates predominantly intensive economic growth.
To assess the effectiveness of business activities, profitability indicators are also used - profitability or profitability of its capital, resources or products.
The business activity of an enterprise in the financial aspect is manifested, first of all, in the speed of turnover of its funds. The profitability of an enterprise reflects the degree of profitability of its activities. Analysis of business activity and profitability consists of studying the levels and dynamics of various financial turnover and profitability ratios, which are relative indicators of the financial performance of an enterprise.
The general scheme for the formation of the indicators under consideration is presented in Table. 1.
The first row and first column of the table present possible options the numerator and denominator of the financial ratio, respectively. The intersections of the second and third columns and the second and third rows of the table show three different types of relative indicators resulting from possible combinations of numerator and denominator (the exception is the intersection of the second column and second row, which does not give an indicator). In generalized form, the formulas for financial ratios generated according to this scheme are as follows.
Table 1 GENERAL SCHEME OF FORMATION OF INDICATORS
Turnover of funds or their sources = Revenue from sales / Average value of funds or their sources for the period
Return on Sales = Profit / Sales Revenue
Profitability of funds or their sources = Profit / Average value of funds or their sources for the period
These formulas deliberately do not specify the profit indicator, since it can be taken as profit from the sale of products (works, services) or balance sheet profit, taxable profit, net profit remaining at the disposal of the enterprise after paying taxes. If the profitability of funds or their sources is calculated on the basis of profit from sales and thereby achieves comparability with profitability of sales, then there is a certain relationship between the financial ratios under consideration:
Profitability of funds or their sources = Return on sales * Turnover of funds or their sources
This formula shows that the profitability of an enterprise’s funds or their sources is determined both by the pricing policy of the enterprise and the level of production costs of sold products (they are comprehensively reflected in the return on sales indicator), and by the business activity of the enterprise, measured by the turnover of funds or their sources. The formula indicates ways to increase the profitability of funds or their sources (in essence, the degree of profitability of using the enterprise’s capital or its components): with low sales profitability, it is necessary to strive to accelerate the turnover of capital and its elements, and vice versa, low business activity of an enterprise determined by one reason or another can only be compensated by reducing production costs or increasing product prices, i.e. increasing the profitability of sales.
The formulas also do not specify the indicator of the average value of the enterprise’s funds or their sources over the period. This indicator can be used as a result of the balance sheet, the amount of mobile funds, material mobile funds, finished products, accounts receivable, accounts payable, fixed assets and other non-current assets, equity, permanent capital, etc.
Let's consider the most important financial ratios of profitability and business activity obtained by various options denominator of the relative indicator. Below are given first all the coefficient formulas for the analytical block, then comments on the economic meaning and dynamics of the indicators.
The symbol indicates the profitability analysis block, the symbol indicates the business activity analysis block; the symbol means a comment to the analysis block.
Profitability ratios ()
1) Sales profitability
, (1)
Profit from sales of products (works, services).
2) Return on total capital of the company
(2)
where is the average net balance sheet total for the period,
both balance sheet profit () and profit from sales ().
H) Profitability of fixed assets and other non-current assets
(3)
where is the average value of fixed assets and other non-current assets for the period.
4) Return on equity
(4)
where is the average value for the period of sources of the enterprise’s own funds on the balance sheet
5) Return on permanent capital
(5)
where is the average value of long-term loans and borrowings over the period.
Comment on profitability ratios.
1K) shows how much profit accrues per unit of products sold. Growth is a consequence of rising prices with constant production costs of sold products (works, services) or a decrease in production costs with constant prices. A decrease indicates a decrease in prices with constant production costs or an increase in production costs with constant prices, i.e. a decrease in demand for the enterprise’s products.
2K) shows the efficiency of using all the assets of the enterprise. The decline also indicates a falling demand for the company's products and an overaccumulation of assets.
ZK) reflects the efficiency of use of fixed assets and other non-current assets, measured by the amount of profit per unit of cost of assets. Growth with a decrease indicates an excessive increase in mobile means, which may be a consequence of the formation of excess inventories of goods. material assets, overstocking of finished products as a result of decreased demand, excessive growth of accounts receivable or cash.
4K) shows the efficiency of using equity capital. Dynamics influence the level of stock quotes on stock exchanges.
5K) reflects the efficiency of using capital invested in the company’s activities for a long time (both own and borrowed).
Business Activity Ratios (A)
1A) Total capital turnover ratio
, (6)
where is revenue from sales of products (works, services);
Average balance sheet total for the period.
2A) Mobile assets turnover rate
, (7)
where is the average value of inventories and costs on the balance sheet for the period;
The average value of cash, settlements and other assets for the period.
3A) Inventory turnover ratio
. (8)
4A) Finished product turnover ratio
, (9)
where is the average value of finished products over the period.
5A) Accounts receivable turnover ratio
, (10)
where is the average accounts receivable for the period.
6A) Average receivables turnover period
(11)
7A) Accounts payable turnover ratio
(12)
where is the average accounts payable for the period.
8A) Average turnover period of accounts payable
. (13)
9A) Capital productivity of fixed assets and other non-current assets
, (14)
where is the average value of fixed assets and other non-current assets on the balance sheet for the period.
10A) Equity turnover ratio
(15)
where is the average value for the period of sources of the enterprise’s own funds on the balance sheet.
Commentary on business activity ratios (AK)
1AK) reflects the turnover rate (in the number of revolutions per period) of the entire capital of the enterprise. Growth means an acceleration of the circulation of enterprise funds or an inflationary rise in prices (in the case of a decrease or).
2AK) shows the turnover rate of all mobile (both tangible and intangible) assets of the enterprise. Growth is characterized positively if combined with growth, and negatively if it decreases.
ZAK) reflects the number of turnover of inventories and costs of the enterprise for the analyzed period. A decrease indicates a relative increase in inventories and work in progress or a decrease in demand for finished products (in the case of a decrease).
4AK) shows the turnover rate of finished products. Growth means an increase in demand for the company's products, a decrease means overstocking of finished products due to a decrease in demand.
5AK) shows the expansion or reduction of commercial credit provided by the enterprise. If the ratio is calculated based on sales revenue generated as bills are paid, an increase means a decrease in credit sales. A decrease in this case indicates an increase in the volume of credit provided.
6AK) characterizes the average repayment period of receivables. A decrease is assessed positively and vice versa.
7AK) (similar to shows an expansion or decrease in commercial credit provided to an enterprise. Growth means an increase in the rate of payment of the enterprise’s debt, a decrease means an increase in purchases on credit.
8AK) reflects the average period for repayment of the enterprise's debts (except for obligations to banks and other loans).
9AK) characterizes the efficiency of use of fixed assets and other non-current assets, measured by the amount of sales per unit of asset value.
10AK) shows the rate of turnover of equity capital, which for joint-stock companies means the activity of funds at risk to shareholders. The sharp increase reflects an increase in the level of sales, which should be largely provided by loans and, therefore, reduce the share of owners in the total capital of the enterprise. The significant decrease reflects the tendency towards inactivity of part of own funds.
1.2.2 Analysis of turnover and efficiency of use of fixed assets
In production and economic activities, production assets and non-production assets are used. Production assets advanced for production and economic activities come in three forms:
· productive,
· monetary and
· commodity.
The task of funds in three forms is one - to ensure the continuity of production and reproduction, which is why these funds are called production funds. Unlike non-productive funds, productive funds serve the production process itself in the material branches of production.
The problem of using production assets of enterprises has two sides. The first is associated with a decrease in the mass of means of production consumed in the production process; the second - with a decrease in funds advanced for production and economic activities. The total amount of consumed production assets for the analyzed period corresponds to the costs of means of labor (depreciation) and objects of labor for production. The advanced amount of production assets is such a sum that ensures the simultaneous presence of production assets in all their natural forms and at all stages of economic activity.
The problem of producing products with the least cost of production assets is the problem of reducing the cost of industrial products. Indicators reflecting the reduction in production costs are:
· level of profitability of one turnover of production assets (ratio of profit to cost);
costs per ruble of commercial or sold commercial products and
· profit per ruble of product.
The problem of producing and selling a certain mass of products with a smaller number of assigned (advanced) production assets (or, what is the same, producing the largest amount of products using a certain mass of advanced funds) is a completely independent problem in the economics of enterprises. An indicator reflecting the output of products with fewer assets is the total capital productivity of production assets, or their turnover. It can be calculated either at the cost of products sold or at the cost of products sold. The inverse of this indicator is the indicator of the total capital intensity of production (the coefficient of fixation 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 important how much of their own funds are 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 replenishes the production development fund.
Table 2 INFLUENCE OF BUSINESS OPERATIONS WITH FIXED ASSETS ON THE FINANCIAL CONDITION AND RESULTS OF THE ENTERPRISE
| Contents of a business transaction | Impact on the property status and financial results of the enterprise |
| RECEIPT OF FIXED ASSETS | |
| Received free of charge from individuals | The size of the enterprise's equity capital increases due to the growth of special-purpose funds (less delivery costs). This leads to an increase in the stability of the financial situation. On the other hand, this leads to an increase specific gravity depreciation and repair costs in the cost of production, which, with low capital productivity of gratuitously received fixed assets, can lead to a decrease in profit and profitability |
| Received free of charge from legal entities | Non-operating income of the enterprise increases by the amount of the initial or residual value of the objects. At the same time, non-operating expenses (losses) increase by the amount of depreciation. Special funds, either net profit or retained earnings from previous years are reduced by the amount of delivery costs. In general, the balance sheet profit increases by the amount of received fixed assets (minus delivery costs). |
| Purchase of fixed assets for a fee | The non-current assets of the enterprise increase, the capital structure of the enterprise changes. In general, capital turnover slows down, the size of the most liquid assets decreases, and solvency deteriorates. The net profit or accumulation fund is reduced by the amount of costs for delivery and installation of objects. Working capital increases by the amount of VAT paid (written off to reduce the debt to the budget for VAT on products sold within 6 months). For purchased vehicles, in addition to VAT, a vehicle acquisition tax is paid. Production costs increase by the amount of tax from vehicle owners. |
| Long-term lease of fixed assets | The amount of non-current assets and the amount of debt to lessors increases. Periodically, cash is reduced by the amount of rent and rental interest. The net profit or savings fund is reduced by the amount of %. |
| Current lease of fixed assets | The tenant's costs increase by the amount of the rent, as well as by the amount of expenses for major repairs (if stipulated by the terms of the lease agreement). |
| DISPOSAL OF FIXED ASSETS | |
| Free transfer of fixed assets | The amount of losses from the gratuitous transfer of fixed assets (their residual value plus disposal costs, plus VAT) reduces the net profit or accumulation fund, or retained earnings of previous years. The amount of fixed assets decreases. |
| Making a contribution to the authorized capital of a subsidiary | A contribution at an agreement price higher than the residual leads to an increase in non-operating income of the enterprise. Otherwise, losses are attributed to a decrease in net profit or savings fund. |
| Sale of fixed assets | A financial result (profit, loss) from other sales is formed, which increases (decreases) the balance sheet profit of the enterprise. The size of fixed assets decreases, balance sheet liquidity increases, and the turnover of all capital accelerates. The optimal sales option for profit taxation is the sale of fixed assets at market value. But the assessment of this operation should first of all be made from the point of view of the enterprise’s production needs for the fixed assets being sold, and the possibility of their replacement with more productive ones. |
| Liquidation of fixed assets | The financial result is revealed for each liquidated object. The enterprise's own sources are reduced by the amount of VAT not paid into the budget and by the amount of under-depreciation of the liquidated object. |
The methodology for analyzing the effectiveness of an enterprise’s investments in fixed assets, their operation and reproduction should take into account a number of fundamental provisions:
· the functional usefulness of fixed assets is maintained for a number of years, so the costs of their acquisition and operation are distributed over time;
· the moment of physical replacement (renewal) of fixed assets does not coincide with the moment of their cost replacement, as a result of which losses and damages may occur that underestimate the financial results of the enterprise;
· the efficiency of using fixed assets is assessed differently depending on their type, affiliation, the nature of participation in the production process, as well as their purpose. Since fixed assets serve not only the production sphere of the enterprise, but also social, cultural, natural, environmental and other spheres, the effectiveness of their use is determined not only by economic, but also by social, environmental and other factors.
Fixed assets and long-term investments in fixed assets have a multifaceted and diverse impact on the financial results of an enterprise. The nature of this influence is shown in Table 1.
Presented options analytical tasks allow us to assess the structure, dynamics and efficiency of the use of fixed assets and long-term investments. Let us emphasize that there is a lot of freedom for the analyst here. The determining factors for the selection of analytical tasks and the formation of their set are the specific management needs and the content of the management decisions made.
At the same time, the analyst’s actions can be systematized. They mainly boil down to performing the following analytical procedures:
· comparison of the data of the reporting period with the corresponding data of the previous period (periods);
· comparison of reporting data with planned estimates or design indicators;
· comparison of reporting data with industry indicators;
· comparison of efficiency indicators for the use of fixed assets with indicators for the use of other types of resources and capital of the enterprise as a whole;
· comparison of reports on fixed assets with reports on production and financial results of the enterprise;
· factor modeling of relationships between indicators of the use of fixed assets.
The completeness and reliability of the results of the analysis of fixed assets depend on the degree of perfection of accounting, the well-functioning systems for recording transactions with fixed assets, the completeness of filling out accounting documents, the accuracy of assigning objects to accounting classification groups, the reliability of inventory records, the depth of development and maintenance of analytical accounting registers.
The following sources of accounting information for the analysis of fixed assets are used:
· account 01 “Fixed assets”,
· account 02 “Depreciation of fixed assets”,
· account 03 “Long-term leased fixed assets”,
· account 07 “Equipment for installation”,
· account 08 “Capital investments”,
· order journals No. 10, 10/1, 12, 13, 16, analytical accounting data for the relevant accounts by type and individual inventory items of fixed assets (statements and analytical accounting cards), forms No. 1, forms No. 2, forms No. 5 annual and quarterly financial statements of the enterprise, construction passport.
Let us consider the methodology for solving individual analytical problems from the list given in Table. 3
Analysis of the structure and dynamics of fixed assets
During this analysis, it is necessary to assess the size, dynamics and structure of the enterprise's capital investments in fixed assets, to identify the main functional features of the production activity (business) of the analyzed economic entity. To do this, a comparison of data is carried out at the beginning and end of the reporting period. A generalized picture of the process of movement and renewal of fixed assets in the context of classification groups can be presented according to the data in section 5 “Availability and movement of fixed assets” of form No. 5 of the appendix to the annual balance sheet of the enterprise. In table Figure 3 gives an example of “horizontal analysis” of indicators of the movement of fixed assets.
Table 3 TOPICS AND TASKS OF ANALYSIS OF FIXED ASSETS AND LONG-TERM INVESTMENTS
| Topics of Analysis | Main tasks of analysis |
| 1. Structural dynamics of fixed assets | 1. Assessment of the size and structure of the enterprise’s capital investments in fixed assets |
| 2. Determining the nature and direction of the changes that have occurred | |
| 3. Assessment of changes in the investment policy of the enterprise | |
| 2. Analysis of reproduction and turnover | 1. Horizontal analysis of fixed assets movement indicators |
| 2. Vertical analysis of fixed assets movement indicators | |
| 3. Assessment of the progressiveness and intensity of renovation of fixed assets | |
| 4. Factor analysis of changes in capital productivity | |
| 3. Analysis of the efficiency of use of fixed assets | 1. Analysis of profitability of fixed assets |
| 2. Analysis of capital productivity | |
| 3. Analysis of the use of production equipment fleet | |
| 4. Analysis of equipment use over time (balance of its operating time) | |
| 5. Integral assessment of equipment use | |
| 4. Cost-effectiveness analysis of equipment operation maintenance | 1. Analysis of costs for major repairs of fixed assets |
| 2. Analysis of costs for current repairs | |
| 3. Analysis of the relationship between production volume, profit and cost level | |
| 5. Analysis of the effectiveness of investments in fixed assets | 1. Analysis of the effectiveness of capital investment options |
| 2. Assessing the effectiveness of raising loans for investment |
As can be seen from table. 3, at the analyzed enterprise, the provision of fixed assets in the reporting period increased. Significant reason changes is the revaluation of fixed assets. However, a positive trend is the faster growth of production assets in comparison with non-production assets. The active part of fixed assets is high (almost 80%) and its growth rate is higher than the passive part of the funds. All this indicates the correct economic policy pursued by the enterprise to increase the efficiency of use of fixed assets.
Vertical analysis means the calculation and assessment of the structure and structural changes in the composition of fixed assets.
Analysis of capital productivity of fixed assets
The final efficiency of use of fixed assets is characterized by indicators of capital productivity, capital intensity, profitability, relative savings of funds, increasing production volume, increasing labor productivity, reducing production costs and costs of reproduction of fixed assets, increasing the service life of labor tools.
In industrial enterprises, capital productivity is determined by the volume of output per 1 ruble. average annual cost of fixed assets. Capital productivity is a general indicator of the use of production fixed assets. The magnitude and dynamics of capital productivity are influenced by many factors, both dependent and independent of the enterprise, 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, optimal loading of equipment, and technical improvement of production fixed assets. 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:
where is capital productivity;
Active part of fixed assets;
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, influenced 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:
, (17)
where is the cost of installed (operating machines) and equipment;
Number of machine shifts worked;
Average cost of equipment;
Number of units of operating equipment;
Duration of the reporting (analyzed) period in days;
Number of machine hours worked.
This formula allows us to determine the influence on the dynamics of capital productivity of the following factors:
· share of the active part of the funds in their total value
· shares of machinery and equipment in the value of active funds ();
· equipment shift ratio
average cost of a unit of equipment (),
· duration of machine shift ();
· product output per machine-hour of equipment operation ().
One of the important factors influencing the efficiency of use of fixed assets is the improvement of the use of production capacities of the enterprise and its divisions.
,
(18)
where is the main (core) product of the enterprise;
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 ();
· coefficient of utilization of the average annual capacity of the enterprise ();
· share of the active part of the funds in their total value ();
· capital productivity of the active part of funds, calculated by capacity ().
· For action analysis external factors the capital productivity indicator can be “expanded” into a factor model of the following form:
,
(19)
where is the cost of material costs excluding the cost of purchased parts and semi-finished products;
Cost of purchased parts and semi-finished products;
Net product cost (value added).
Thus, changes in total capital productivity are presented as an algebraic sum of changes in its components. Here the total cost of the product is broken down into cost elements: material costs, wages and profit. The total capital productivity increases if there is an increase in all components. Leading on a single term will indicate the predominant reason for the overall growth.
When calculating the overall capital productivity indicator, the cost of fixed assets takes into account own and leased assets. Funds that are on conservation or reserve, as well as leased to other enterprises, are not taken into account.
The use of fixed assets is considered effective if the relative increase in the physical volume of output or profit exceeds the relative increase in the value of fixed assets for the analyzed period.
An increase in capital productivity leads to relative savings in production fixed assets and to an increase in the volume of output. The size of the relative savings of resources and the share of the increase in production as a result of an increase in capital productivity are determined by a special calculation.
Thus, the relative savings of fixed assets is defined as the difference between the average annual value of fixed assets of the reporting period and the average annual value of fixed assets of the base (preceding) year, adjusted for the growth in production volume.
The share of the increase in production due to the growth of capital productivity is determined by the method of chain substitutions: the increase in capital productivity for the analyzed period is multiplied by the average annual actual cost of fixed production assets.
1.2.3 Analysis of turnover and efficiency of use of working capital
Acceleration working capital turnover reduces the need for them, allows enterprises to free up part of their working capital either for needs national economy(absolute release), or for additional production (relative release).
As a result of the acceleration of turnover, material elements of working capital are released, less reserves of raw materials, supplies, fuel, work in progress reserves, etc. are required, and therefore, monetary resources previously invested in these reserves and reserves are also released. The released monetary resources are deposited in the current account of enterprises, as a result of which their financial condition improves and their solvency is strengthened.
The rate of turnover of funds is a comprehensive indicator of the organizational and technical level of production and economic activity. The increase in the number of revolutions is achieved by reducing production time and circulation time. Production time is determined by the technological process and the nature of the equipment used. To reduce it, it is necessary to improve technology, mechanize and automate labor. Reducing circulation time is also achieved by developing specialization and cooperation, improving direct inter-factory connections, and accelerating the transportation of documents and payments.
Total turnover of all working capital consists of the private turnover of individual elements of working capital. The speed of both general turnover and private turnover of individual elements of working capital is characterized by the following indicators.
Duration of one revolution of all working capital is calculated using the formulas:
Where - average cost all working capital;
Length of the analyzed period in days;
Proceeds from sales of products and from other sales, with the exception of excess and excess material assets and the amount of turnover tax in the current wholesale prices of the enterprise.
Similar formulas are used to calculate turnover of standardized working capital and individual elements or groups of working capital . Instead of the value of all working capital, the value of normalized funds or a separate element of them is substituted into the formulas. The partial turnover of individual elements or groups of working capital is called a component if it is calculated based on sales proceeds. The totality of the components of the partial indicators for all types (groups) of working capital will result in a general indicator of the turnover of all working capital:
(21)
where is the average balance of production (material) inventories;
Average backlog of work in progress;
Average balance of goods shipped and other working capital;
(22)
This formula for decomposing the total duration of turnover of working capital as the sum of the duration of turnover for individual elements (types) of working capital is correct only in its most general form. The actual turnover of individual elements is characterized not by the total amount of sales proceeds, but by the turnover of a given element (for example, for inventories - their consumption for production, for work in progress - release of finished products, for balances of finished products in warehouses - shipment of products, for goods shipped and funds in settlements - receipt of money to the current account). In this case, we have private indicators calculated based on a special turnover - based on the credit of the accounting accounts on which the various elements working capital.
When the planned balances of working capital are calculated, the balances according to the standards are taken as the basis for the calculation. But for complete comparability with actual ones, the amounts of funds credited by the bank are added to the planned balances.
The differences in the methodology for constructing turnover indicators for all working capital and standardized assets are explained by the fact that in the first case, the sale of marketable products is considered as the result of the use of all (own and borrowed) working capital. In the second case, the sales indicator is the result of the use of standardized funds generated from own funds and bank loans against them. For economic analysis, the turnover indicator of both the company’s own and all funds is of interest.
Based on the turnover results, the amount is calculated saving working capital (absolute or relative release) or the amount of their additional attraction.
To determine the amount of savings in working capital due to the acceleration of their turnover, the need for working capital for the reporting period is established, based on the actual revenue from all sales during this time and the turnover rate for the previous period. The difference between this conditional amount of working capital and the amount of funds actually involved in the turnover will be the saving of working capital. If turnover is slow, then in the end they will receive the amount of funds additionally involved in the turnover.
To calculate savings or overexpenditure of normalized working capital compared to the plan, for example, the following formula is used:
,
(23)
where are the actual average balances of standardized working capital;
Actual implementation;
Planned implementation;
Planned value of standardized working capital.
Savings or overexpenditure of working capital can be defined as the product of the sum of one-day sales and the difference in days of turnover of the reporting and base (planned) periods:
, (24)
where is the duration of the period under consideration (year).
The efficiency of using working capital lies not only in accelerating their turnover, but also in reducing the cost of production by saving natural material elements of working productive assets and distribution costs. Since general indicators of the operational efficiency of industrial enterprises are the amount of profit and the level of overall profitability, it is necessary to determine the impact of the use of working capital on these indicators.
The main factors influencing the size and speed of turnover of an enterprise’s working capital are:
· scale of activity of the enterprise (small business, medium, large);
· the nature of the business or activity, i.e. the industry sector of the enterprise (trade, industry, construction, etc.);
· duration of the production cycle (number and duration of technological operations for the production of products, provision of services, work);
· quantity and variety of consumed types of resources;
· geography of product consumers and geography of suppliers and subcontractors;
· solvency of clients;
· quality of banking services;
· growth rates of production and sales of products;
· share of added value in the price of the product;
· accounting policy of the enterprise;
· qualifications of managers;
· inflation.
In the conditions of the Russian Federation, the transition to a market is accompanied by many enterprises entering a zone of economic uncertainty and increased risk. For the first time, most enterprises faced the need for an objective assessment of the financial condition, solvency and reliability of their partners, constant monitoring of the quality of settlement and financial transactions and payment discipline.
According to the current regulations, an excessive increase in the debt obligations of an enterprise in an amount 2 times greater than the value of its property is one of the conditions for applying bankruptcy proceedings to it. However, the vicious practice of abuse of borrowed funds has taken root in the activities of many enterprises. Thus, the phenomenon of mass non-payments turns into the immoral benefit of some economic entities making insignificant transactions.
The state of receivables and payables, their size and quality have a strong impact on the financial condition of enterprises.
The analysis of receivables and payables is carried out according to analytical accounting data for accounts 45, 60, 61, 62, 63, 65, 67, 68, 69, 70, 71, 73, 76, 78 on a monthly basis. The main goal in analyzing accounts receivable is to accelerate its turnover.
The method of analyzing accounts payable is similar to the method of analyzing receivables. The analysis is carried out on the basis of data from analytical accounting of settlements with suppliers and settlements with other creditors.
There is no share of urgent debt in the composition of overdue accounts payable, which indicates some stability of the financial situation.
To improve the financial position of the enterprise it is necessary:
1. Monitor the ratio of receivables and payables. A significant excess of accounts receivable poses a threat to the financial stability of the enterprise and makes it necessary to attract additional sources of financing;
2. If possible, focus on increasing the number of customers in order to reduce the risk of non-payment by a monopoly customer;
3. Monitor the status of settlements on overdue debts. In conditions of inflation, any deferment of payment leads to the fact that the enterprise actually receives only part of the cost of the work performed. Therefore, it is necessary to expand the system of advance payments.
4. Timely identify unacceptable types of receivables and payables, which include: overdue debts to suppliers, to the budget, etc.; claims payable; excess debt on stable liabilities; goods shipped but not paid for on time; suppliers and buyers on claims; debt for calculations of compensation for material damage; debt under the item “other debtors”.
2. A analysis of business activity of the enterprise Luzales LLC
2.1 Analysis of the balance sheet structure
2.1.1 Analysis of the structure and dynamics of the balance sheet liabilities
The first source of information for assessing the creditworthiness of business organizations should be their balance sheet with an explanatory note to it. Analysis of the balance sheet allows you to determine what funds the company has and what size loan these funds provide. However, for a reasonable and comprehensive conclusion about the creditworthiness of bank clients, balance sheet information is not enough. This follows from the composition of the indicators. Analysis of the balance sheet gives only a general judgment about creditworthiness, while in order to draw conclusions about the degree of creditworthiness it is necessary to calculate qualitative indicators that assess the prospects for the development of enterprises and their viability.
When considering the liability side of the balance sheet, the closest attention should be paid to studying the sections where loans and other borrowed funds are reflected: it is necessary to request credit agreements for those loans, the debt for which is reflected in the balance sheet and not repaid on the date of the loan request, and make sure that it is not expired.
The presence of overdue debt on loans from other banks is a negative factor and indicates obvious miscalculations and disruptions in the borrower’s activities, which may be temporarily compensated with the help of a loan. If the debt is not overdue, it is necessary, if possible, to ensure that the loan is repaid before the repayment of other loans. When assessing the status of accounts payable, it is necessary to make sure that the borrower is able to pay on time with those whose funds he uses in one form or another: in the form of goods or services, advances, etc.
Table 4 Analysis of the structure and dynamics of the liabilities side of the balance sheet of LLC Luzales for 2004-2006.
| No. | Title of articles | Amount, thousand rubles | Ud. weight for 2006 | Changes over |
||||
| 2004 | 2005 | 2006 | at the beginning of the year (%) | at the end of the year (%) | +(-) amount | +(-) % specific weight | ||
| 1 | Capital and reserves | 6121 | 80814 | 82535 | 25,38 | 32,30 | 1721 | 6,91 |
| 2 | Long-term liabilities | 62581 | 87283 | 74110 | 27,42 | 29,00 | -13173 | 1,58 |
| 3 | Short-term liabilities, including: Loan. Wed Credit debt Other liabilities |
|||||||
| Total balance | 234909 | 318370 | 255558 | 100 | 100 | -62812 | 0 | |
2.1.2 Analysis of the structure and dynamics of the balance sheet asset
When working with a balance sheet asset, you must pay attention to the following: in case of registration of a pledge of fixed assets (buildings, equipment, etc.), inventories, finished products, goods, other inventories and expenses, the pledgor’s ownership of these values must be confirmed by including their value in the composition corresponding balance sheet items.
The balance of funds in the current account must correspond to the data in the bank statement as of the reporting date. When analyzing receivables, it is necessary to pay attention to the timing of their repayment, since the receipt of debts can become one of the sources for the borrower to repay the requested loan.
Table 5 Analysis of the structure and dynamics of the balance sheet asset of LLC Luzales for 2004-2006.
| Indicators | Amount (t.r.) | Specific gravity, % (at the end of the year) | Change from 2006 to 2005 | |||||
| 2004 | 2005 | 2006 | 2004 | 2005 | 2006 | absolute, thousand rubles | relative, % | |
| I. Non-current assets, including: | 108110 | 151733 | 125374 | 44,14 | 47,66 | 49,06 | -26359 | -17,37 |
| - fixed assets | 81693 | 150534 | 119134 | 75,56 | 99,21 | 95,02 | -31400 | -20,86 |
| - unfinished construction | 21242 | - | 5265 | 19,65 | - | 4,20 | +5265 | - |
| - profitable investments in material assets | - | 1199 | 975 | - | 0,79 | 0,78 | -224 | -18,68 |
| -deferred tax assets | 5175 | - | - | 4,79 | - | - | -5175 | - |
| II. Current assets, including: | 126799 | 166637 | 130184 | 51,77 | 52,34 | 50,94 | -36453 | -21,88 |
| - stocks | 72470 | 123901 | 79998 | 57,15 | 74,35 | 61,45 | -43903 | -35,43 |
| - VAT on purchased values | 3649 | 8144 | 5739 | 2,88 | 4,89 | 4,41 | -2405 | -29,53 |
| - accounts receivable (payments for which are expected within 12 months after the reporting date) | ||||||||
| 42604 | 28466 | 31642 | 33,60 | 17,08 | 24,31 | +3176 | +11,16 | |
| - cash | 6999 | 6126 | 11293 | 5,52 | 3,68 | 8,67 | +5167 | +84,35 |
| - other current assets | 1077 | - | 1512 | 0,85 | - | 1,16 | +1512 | - |
| Total balance | 244909 | 318370 | 255558 | 100 | 100 | 100 | -62812 | -19,73 |
2.2 Analysis of the condition and efficiency of use of fixed assets of the enterprise
Fixed assets are understood as funds invested in the totality of material assets related to the means of labor. (Also, fixed assets are means of labor that are repeatedly involved in the production process, while maintaining their natural form and transferring their value to the manufactured products in parts and as they wear out.)
Fixed assets occupy the largest share in the total amount of fixed capital, so analysis of the condition and use of fixed assets is very important for the enterprise. The result correct use fixed assets is making a profit. In addition, the efficiency of use of fixed assets affects the increase in the production efficiency of an economic entity, and, consequently, the financial stability of the enterprise and the results of its activities. The future of the enterprise also depends on how correctly the analysis of the condition and use of fixed assets is carried out, since a correctly conducted analysis allows timely identification of shortcomings in the efficiency of their use.
Analysis of the condition and use of fixed assets begins with determining the value of their value at the beginning and end of the period. Then their growth rate is determined by comparing the indicator values at the end of the year to the indicator value at the beginning of the year, expressed as a percentage. The analysis examines indicators of the movement and condition of fixed assets, such as coefficients of renewal, serviceability, disposal and wear, capital ratio, technical equipment, capital productivity, capital intensity, labor productivity (the method of their calculation is presented in the theoretical part of the work).
Table 6. Analysis of the condition and efficiency of use of fixed assets of the enterprise at Luzales LLC for 2004-2006
| Indicator | Period | growth rate (%) | ||
| 2004 | 2005 | 2006 | ||
| Cost of fixed assets | 81693 | 150534 | 119134 | 79,14 |
| The cost of the active part of the main funds | 36703 | 99587 | 72341 | 72,64 |
| Specific weight of the active part of fixed assets | 44,92796 | 66,15582 | 60,72238 | 91,79 |
| Accrued depreciation amount | 17894 | 53239 | 49126 | 92,27 |
| Received fixed assets | - | 64706 | 12854 | 19,87 |
| fixed assets retired | - | 1822 | 40100 | 2200,88 |
| Wear rate | 0,22 | 0,35 | 0,41 | 116,60 |
| Usability factor | 0,78 | 0,65 | 0,59 | 90,92 |
| Renewal factor | - | 0,43 | 0,11 | 25,10 |
| Attrition rate | - | 0,02 | 0,27 | 1194,39 |
| Sales revenue | 359373 | 444985 | 359373 | 80,76 |
| return on assets | 4,40 | 2,96 | 3,02 | 102,05 |
| return on assets of the active part of the open pension fund | 9,79 | 4,47 | 4,97 | 111,18 |
| Average headcount | 601 | 751 | 893 | 118,91 |
| capital-labor ratio | 135,93 | 200,44 | 133,41 | 66,56 |
| technical equipment | 61,07 | 132,61 | 81,01 | 61,09 |
| capital intensity | 0,23 | 0,34 | 0,33 | 97,99 |
| labor productivity | 597,96 | 592,52 | 402,43 | 67,92 |
The value of fixed assets decreased by 20.86%, and the value of the active part of the open pension fund decreased by 27.36%. This is a negative trend in the activities of the enterprise.
Let's analyze the indicators characterizing the decrease in the efficiency of using fixed assets. Such indicators are capital ratio and technical equipment. We will analyze using factor analysis.
Factor analysis is a gradual transition from the initial factor system to the final factor system. Using factor analysis, a full set of factors influencing changes in the performance indicator is revealed.
Factor analysis finds application in economic analysis by using the method of chain substitutions. Consistently replacing each planned indicator in fact, the remaining indicators are left unchanged and determine the final result. To calculate the influence of each factor, the first is subtracted from the second, and the previous one is subtracted from the subsequent one.
The method of differences is used to determine the influence of factors on the result and is a type of method of chain substitutions.
The rule for using the method of differences: when determining the influence of a quantitative indicator on a specific result, the qualitative indicator is taken according to plan. When determining the influence of a qualitative indicator, the quantitative indicator is taken in fact.
Table 7 Factor analysis of capital-labor ratio
With a decrease in the value of fixed assets, the capital-labor ratio fell by 67.03
Table 8 Factor analysis of technical equipment:
total influence: 81.01-132.61=-61.09
with a decrease in the cost of the active part of the OPF, the technical equipment decreased by 61.09
Table 9 Factor analysis of capital productivity of the active part:
Total influence=-0.86+1.36=0.5;
With a decrease in sales revenue by 85,612 thousand rubles, the capital productivity of the active part decreased by 0.86
With a decrease in the cost of the active part by 27,246 thousand rubles, the capital productivity of the active part increased by 1.36
Table 10 Factor analysis of labor productivity
Let's calculate how the change in capital productivity of the active part affected labor productivity:
(4,96-4,47)*81,01=40,505
due to an increase in capital productivity of the active part by 0.5, labor productivity increased by 40.505
Let's calculate how the change in technical equipment affected labor productivity:
(81,01-132,61)*4,47= -230,652
due to a decrease in technical equipment by 7.07, labor productivity decreased by 18,803
total influence = 40.505-230.652 = 190.9
The influence of technical equipment had the greatest impact on the result of labor productivity.
2.3 Analysis of the efficiency of using working capital
In order for an enterprise to carry out its activities normally, it needs working capital. They are understood as objects of labor that are repeatedly involved in the production process, are completely consumed and transfer their value to the cost of the product produced. Also, working capital can be presented in the form of cash advanced to circulating production assets and circulation funds.
Working capital ensures the continuity of the production process, so it is very important for an enterprise to use it effectively. To do this, you need to remember that excess working capital means idle working capital and does not generate income. At the same time, the lack of working capital will slow down progress production process, slowing down the speed of economic turnover of the enterprise's funds. Therefore, an enterprise needs to clearly know how much working capital it needs. The task of managers responsible for planning and organizing the effective use of working capital is to organize the expansion of production volumes and sales of products, the conquest of new markets, in the most rational and economical way, that is, with a minimum amount of working capital. And for this it is necessary to regularly analyze the efficiency of using working capital. It must be remembered that the speed of their turnover will depend on how effectively they are used.
When analyzing the efficiency of using working capital, the values of indicators at the beginning and end of the year are analyzed. Then the rate of their growth is considered by comparing the indicator values at the end of the year to the indicator values at the beginning of the year, expressed as a percentage.
The most important indicators of the use of working capital are the turnover and loading ratios of working capital, as well as the duration of one turnover in days and the coefficient of provision with own working capital.
Table 11 Analysis of the efficiency of using working capital
| Indicator | 2004 | 2005 | 2006 | growth rate, % |
| Balance currency | 234909 | 318370 | 255558 | 80,27 |
| Cost of working capital | 126799 | 166638 | 130184 | 78,12 |
| Share of working capital in assets | 53,97792 | 52,34099 | 50,94108 | 97,33 |
| Own sources in the formation of working capital | -101989 | -70919 | -42839 | 60,41 |
| SOS security ratio | -0,80434 | -0,42559 | -0,32907 | 77,32 |
| Inventory cost | 72470 | 123902 | 79998 | 64,57 |
| Share of inventories in current assets | 57,1 | 74,4 | 61,4 | 82,53 |
| Accounts receivable | 42604 | 28466 | 31642 | 111,16 |
| Share of receivables in current assets | 33,6 | 17,1 | 24,3 | 142,11 |
| Sales revenue | 359373 | 444985 | 359373 | 80,76 |
| Working capital turnover ratio | 2,834 | 2,670 | 2,761 | 103,38 |
| Duration of 1 revolution | 1,270 | 1,348 | 1,304 | 96,73 |
| Working capital utilization ratio | 0,008 | 0,012 | 0,009 | 77,65 |
During the analyzed period the following changes occurred:
The share of reserves decreased by 17.47% - this is a positive trend. An extremely negative factor is the increase in accounts receivable by 11.16%, because the enterprise has less money in circulation. A decrease in sales revenue has a negative impact on the activities of the enterprise. A slight increase in the working capital ratio indicates that working capital has begun to turn over better, although not by much. The duration of 1 revolution also decreased slightly (by 3.27%). A decrease in the duration of 1 revolution indicates an acceleration in the circulation of working capital.
Table 12 Factor analysis of the coefficient of provision with own working capital
1) with an increase in own sources of security, SOS increased by 0.169
2) with a decrease in the value of current assets, K security will decrease by 0.072
total influence -0.072+0.169=0.097
As a result of the conducted factor analysis, we can say that the decrease in the value of current assets did not entail a decrease in K security of SOS.
Table 13 Factor analysis of the working capital turnover ratio:
Overall influence 0.091
1) with a decrease in sales revenue by 85,612 thousand rubles, asset turnover decreased by 0.514
2) with a decrease in the value of current assets by 36,454 thousand rubles, the asset turnover increased by 0.605
As a result, the influence of the value of current assets Asset turnover increased by 0.091.
2.4 Calculation of profitability indicators and business activity ratios
Using formulas (1)-(5) we calculate profitability indicators (Table 14).
Table 14 Calculation of profitability indicators of Luzales LLC for 2004-2006
| Indicators | 2004 | 2005 | 2006 | Growth rate, % |
| 359373 | 444985 | 359373 | 80,76 | |
| 2. Accounting profit, thousand rubles. | -14572 | 99805 | -8356 | -8,37 |
| 3. Balance sheet result - net | 234909 | 318370 | 255558 | 80,27 |
| 4. The amount of fixed assets and other non-current assets | 126799 | 166638 | 130184 | 78,12 |
| 5. Amount of sources of own funds | -101989 | -70919 | -42839 | 60,41 |
| 6. The amount of long-term loans and borrowings | 52000 | 68778 | 65000 | 94,51 |
| 7. R sales | -4,1 | 22,4 | -2,3 | -10,37 |
| 8. R of total capital | -6,2 | 31,3 | -3,3 | -10,43 |
| 9. R fixed assets and other non-current assets | -11,5 | 59,9 | -6,4 | -10,72 |
| 10. R equity | 14,3 | -140,7 | 19,5 | -13,86 |
| 11. R permanent capital | -28,0 | 145,1 | -12,9 | -8,86 |
Return on permanent capital reflects the efficiency of using capital invested in the activities of the enterprise for a long period. In 2006, there was a decrease in accounting profit and the amount of long-term loans and borrowings compared to 2005.
To calculate business activity coefficients, we use formulas (6)-(15) and fill out Table 15.
Table 15 Analysis of business activity coefficients of Luzales LLC for 2004-2006
| Indicators | 2004 | 2005 | 2006 | Growth rate, % |
| 1. Revenue from product sales, thousand rubles. | 359373 | 444985 | 359373 | 80,8 |
| 2. Balance sheet result - net | 234909 | 318370 | 255558 | 80,3 |
| 3. Amount of inventories and costs | 76119 | 132046 | 85737 | 64,9 |
| 4. Amount of cash, settlements and other assets | 8076 | 6126 | 12805 | 209,0 |
| 5. Amount of finished products | 299088 | 325205 | 384577 | 118,3 |
| 6. Accounts receivable | 42604 | 28466 | 31642 | 111,2 |
| 7. Accounts payable | 55336 | 76079 | 76638 | 100,7 |
| 8. The amount of fixed assets and other non-current assets | 126799 | 166638 | 130184 | 78,1 |
| 9. Amount of sources of own funds | -101989 | -70919 | -42839 | 60,4 |
| 10. To the total capital turnover | 1,53 | 1,40 | 1,41 | 100,6 |
| 11. Towards the turnover of mobile devices | 4,27 | 3,22 | 3,65 | 113,2 |
| 12. To the turnover of materials | 4,72 | 3,37 | 4,19 | 124,4 |
| 13. To the GP turnover | 1,20 | 1,37 | 0,93 | 68,3 |
| 14. To reverse DZ | 8,44 | 15,63 | 11,36 | 72,7 |
| 15. Wed period of turnover of the DZ | 43,27 | 23,35 | 32,14 | 137,6 |
| 16. To reverse short circuit | 6,49 | 5,85 | 4,69 | 80,2 |
| 17. Wed term of turnover of short circuit | 56,2 | 62,4 | 77,8 | 124,7 |
| 18. Return on fixed assets and other non-current assets | 2,83 | 2,67 | 2,76 | 103,4 |
| 19. To the turnover of own capital | -3,52 | -6,27 | -8,39 | 133,7 |
Conclusion
The term “business activity” came into the domestic economic lexicon from world practice in connection with economic reform and the formation of market relations. In developed countries, in particular the United States, business activity is determined at the macro and micro levels.
Business activity is economic activity, specified in the form of the production of a particular product or the provision of a specific form of service. It forms the basis for the international standard classification of economic sectors, economic classifiers of the System of National Accounts (SNA).
The object of the study is the enterprise of the timber industry of the Komi Republic, LLC Luzales. Luzales LLC was created to organize logging and wood processing for the purpose of making a profit.
From the analysis performed, the following conclusions can be drawn:
The amount of own funds at the end of 2006 increased by 1,721 thousand rubles, with an increase in the share of 6.9%, which is a positive trend in the activities of the enterprise.
Long-term liabilities decreased in the reporting year by 13,173 thousand rubles. this indicates that the company uses long-term loans to purchase expensive equipment (harvester and forward)
Borrowed funds increased by 9345 thousand rubles, which is a negative trend, because the financial dependence of the enterprise has increased.
As for accounts payable, its amount in the reporting year increased (by 559 thousand rubles), which is by 21,302 thousand rubles. more compared to 2004. This is a negative trend, because The financial dependence of our enterprise has increased. The balance sheet shows (see appendix) that the main amount of accounts payable falls on debt to suppliers and contractors and to the budget.
In general, short-term liabilities decreased in 2006 by 51,360 thousand rubles. , this happened mainly due to the lack of reserves for upcoming expenses, which in 2005 amounted to 61,264 thousand rubles.
From these data it should be noted that the enterprise has both positive and negative factors. For normal functioning, it is necessary to increase the share of own funds and try to liquidate accounts payable as soon as possible.
The total amount of the asset decreased by 62,812 thousand rubles. This was mainly due to a decrease in current assets (by 36,453 thousand rubles).
The cost of fixed assets decreased by 31,400 thousand rubles, this was due to the write-off of fixed assets.
Accounts receivable increased by 3,176 thousand rubles, this is a negative factor. Cash increased by 5,167 thousand rubles, this is not much more than accounts receivable, so we can talk about an insignificant threat to the financial condition of the enterprise.
A thorough analysis and assessment of debtors who violate the terms of repayment of receivables is necessary.
We also see that wear and tear increased by 16.6%, which means rapid wear and tear of fixed assets; accordingly, serviceability decreased by 9.8%. It is also clear that the company has a fairly high renewal rate and a high retirement rate. This means that the enterprise is working, purchasing new equipment and using the old one.
Revenue from product sales decreased by 19.24%.
Positive factors are an increase in capital productivity of 2.05% and the capital productivity of the active part of the general public fund increased by 11.18%
Capital productivity shows how many rubles of marketable or sold products each ruble invested in fixed assets brings. An increase in capital productivity indicates an increase in the use of fixed assets. Due to the fact that sales revenue decreased, labor productivity decreased by 32.08% accordingly.
Capital intensity decreased because capital productivity increased. Capital intensity shows the cost of fixed assets per ruble of manufactured products. A decrease in capital intensity indicates an improvement in the use of fixed assets.
A negative trend is a decrease in capital and technical equipment. The capital-labor ratio characterizes the degree to which the enterprise's employees are equipped with fixed assets. The decrease in the capital-labor ratio by 33.44% was due to a decrease in the cost of fixed assets. Technical equipment shows how much equipment per 1 production worker. The reduction in technical equipment occurred due to a decrease in the cost of the active part of fixed assets.
During the analyzed period the following changes occurred:
The total value of assets decreased by 19.73%, and the value of current assets decreased by 21.88%, which is a negative trend. We also see that in the reporting year the share of current assets decreased by 6.67%. To form current assets, the company lacks its own sources, so in addition to its own capital, it also uses borrowed funds.
The ratio of own working capital increased in 2006 from 2,670 to 2,761. All this is a positive factor.
The share of reserves decreased by 17.47% - this is a positive trend. An extremely negative factor is the increase in accounts receivable by 11.16%, because the company has less money in circulation. A decrease in sales revenue has a negative impact on the activities of the enterprise. A slight increase in the working capital ratio indicates that working capital has begun to turn over better, although not by much. The duration of 1 revolution also decreased slightly (by 3.27%). A decrease in the duration of 1 revolution indicates an acceleration in the circulation of working capital.
Based on all of the above, it should be noted that in order to increase the efficiency of using working capital, an enterprise should, first of all, get rid of or at least try to reduce accounts receivable, because this money can be used as a source of working capital, and in this case the company will not have to resort to borrowed funds.
Return on sales in the reporting year amounted to -2.3%, which worsened its indicator by 24.7%. This indicates a decrease in prices with constant production costs, and there has also been an increase in production costs.
The return on total capital also worsened in 2006 and amounted to 3.3%.
Return on fixed assets and other non-current assets reflects the efficiency of use of fixed assets and other non-current assets. The return on fixed assets and other non-current assets in 2005 was almost 60%, and in 2006 this figure decreased to a negative value. This is due to the fact that in 2005 the enterprise had an excess of finished products that were in warehouses.
Return on permanent capital reflects the efficiency of using capital invested in the activities of the enterprise for a long period. In 2006, there was a decrease in accounting profit and the amount of long-term loans and borrowings compared to 2005.
In 2006, there was a slight increase in the turnover rate of total capital by 0.01, which indicates an acceleration in the turnover of the enterprise’s funds.
The turnover ratio of mobile funds also increased by 0.43. The increase in this ratio and the increase in the turnover ratio of material working capital is characterized positively. The increase in the inventory turnover ratio indicates an increase in inventories in 2006 compared to 2005.
In 2006, there was a decrease in the turnover ratio of finished products, which again indicates that finished products are being stored in warehouses.
There is a decrease in the accounts receivable ratio by 4.27 - an increase in sales from credit provided by the enterprise to its consumers. The average maturity of accounts receivable in 2006 was 32.14. which is assessed negatively compared to the previous year, since there was an increase.
The decrease in accounts payable turnover in 2006 indicates an increase in purchases on credit of the same equipment, machinery and spare parts. The average debt repayment period in 2006 increased by 15.4.
In 2004-2006, there was a significant decrease in the equity capital turnover ratio, which reflects the tendency towards inactivity of part of equity capital.
Bibliography
1. Abryutina, M.S. Analysis of financial and economic activity of an enterprise: Textbook. / M.S. Abryutina, A.V. Grachev - M.: Business and service, 1998. - 256 p.
2. Bakanov, M.I. Economic analysis: situations, tests, examples, tasks, choices optimal solutions, financial forecasting: Proc. village / M.I. Bakanov, A.D. Sheremet. - M.: Finance and Statistics, 2004. - 656 p.
3. Bank, V.R. Financial analysis: Textbook / V.R. Bank, S.V. Bank, A.V. Taraksina. – M.: TK Velby, Prospekt Publishing House, 2006. – 344 p.
4. Civil Code of the Russian Federation. Part 1 and 2. – Publishing group “Norma-Infra”. –M:. - 1998.- 555 p.
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10. Lyubushin, N. P. Analysis of financial and economic activity of enterprises: Textbook. village / N. P. Lyubushin, V. B. Lescheva, V. G. Dyakova. - M.: UNITY-DANA, 2002. - 471 p.
11. Matveycheva, E.V. Traditional approach to assessing the financial results of an enterprise (using the example of Uralselenergoproekt CJSC) / Matveycheva, E.V., Vishninskaya G.N. // Audit and financial analysis
12. Savitskaya, G. V. Analysis of the economic activity of an enterprise: Textbook. village / G. V. Savitskaya. - Mn. : New edition, 2002.- 704 p.
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14. Savitskaya, G.V. Analysis of economic activities. Second edition, revised and expanded / G.V. Savitskaya. – Minsk.Moscow: IP “Ecoperspective”. - 2003. -490s.
15. Chechevitsyna, L. N. Analysis of financial and economic activities: Textbook. village / L. N. Chechevitsyna, I. N. Chuev. - Rostov n/D.; Phoenix, 2005.- 384 p.
16. Sheremet, A.D. Methodology of financial analysis. 3rd edition, revised and expanded / Negashev E.V. –M. - Infra - M. - 2003. 207 p.
Appendix 1
Appendix 2
Main technical and economic indicators of the work of Luzales LLC
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Coursework
Analysis and assessment of enterprise business activity
Completed:
student gr. 3k4
Osintseva Valeria Vyacheslavovna
Teacher:
Slobodyanik Evgeniya Anatolevna
Introduction
1.3 Profitability indicators
- 1. 3 .1 Profitability capital
- 1.3.2 Profitability de regarding you
Conclusion
List of used literature
Introduction
The business activity of an enterprise in the financial aspect is manifested, first of all, in the speed of turnover of its funds.
The profitability of an enterprise reflects the degree of profitability of its activities.
Analysis of business activity and profitability consists of studying the levels and dynamics of various financial turnover and profitability ratios, which are relative indicators of the financial performance of an enterprise.
The business activity of an enterprise in the financial aspect is manifested in the rate of turnover of its funds.
Those. the financial position of an enterprise is directly dependent on how quickly funds invested in assets are converted into real money.
Relative business activity ratios allow you to analyze how efficiently an enterprise uses its funds.
Such coefficients usually include various turnover indicators.
Based on the dynamics of business activity indicators, one can judge the state of affairs at the enterprise, the efficiency of services, planning the needs for certain resources, i.e. marketing supply services, correct choice of clients, forms of settlements with suppliers and customers, timely collection and repayment of debts.
Chapter 1. Analysis and assessment of indicators of business activity and enterprise performance efficiency
1.1 Basic coefficients for assessing business activity
You can present a list of coefficients used and applied in assessing the business activity of an enterprise:
1. Asset turnover ratio.
Shows the number of turnovers made by assets during the analyzed period.
2. Duration of one revolution.
Characterizes the duration of one turnover of all advanced capital (assets) in days.
3. The turnover ratio of non-current assets shows the rate of turnover of the enterprise’s non-mobile assets for the analyzed year.
4. The duration of one turnover of non-current assets, days, characterizes the duration of one turnover of non-mobile assets in days.
5. Turnover ratio of current assets.
Shows the turnover rate of the enterprise's mobile assets for the analyzed period.
6. Duration of one turnover of current assets, days.
Expresses the duration of turnover of mobile assets for the analyzed period, i.e. duration of the production cycle of the enterprise.
7. Inventory and cost turnover ratio.
Shows the rate of inventory turnover and costs.
8. Duration of one turnover of inventories and costs, days.
Shows the rate of transformation of inventories and costs from material to monetary form. A decrease in the indicator is a favorable trend.
9. Accounts receivable turnover ratio.
Shows the number of turnovers made by receivables during the analyzed period. As turnover accelerates, the value of the indicator decreases, which indicates an improvement in settlements with debtors.
10. Duration of one turnover of receivables, days.
Characterizes the average repayment period of receivables. A decrease in the indicator is a favorable trend.
11. Equity turnover ratio.
Reflects the activity of equity capital. Growth in dynamics means an increase in the efficiency of using equity capital.
12. Duration of one turnover of equity capital, days.
Characterizes the rate of turnover of equity capital. A decrease in the indicator in dynamics reflects a trend favorable for the enterprise.
13. Accounts payable turnover ratio.
Shows the speed of settlements with creditors. Acceleration has an adverse effect on the liquidity of the enterprise.
1.2 Capital turnover indicators
The overall property turnover ratio reflects the efficiency of using available funds, regardless of their sources. It determines how many times a year the full cycle of production and circulation is completed, generating profit, or determines how many monetary units of sold products were transferred by each unit of assets (property of the enterprise).
Financial indicators of turnover have important for any enterprise:
1) firstly, the volume of revenue from sales depends on the speed of turnover of advanced funds;
2) secondly, the relative amount of commercial and administrative expenses is associated with the size of sales proceeds, and therefore with the turnover of assets; the faster the turnover, the less of these expenses there are for each turnover;
3) thirdly, the acceleration of turnover at a certain stage, the individual circulation of the enterprise’s assets, leads to an acceleration of turnover at other stages of the production cycle (at the stages of supplying production, sales and payments for finished products).
The production (operating) cycle is characterized by the period of turnover of inventories (material inventories, work in progress, finished products) and accounts receivable. The financial cycle expresses the difference between the duration of the production cycle (in days) and the average period of circulation (repayment) of accounts payable.
One of the important factors in increasing the efficiency of management of current assets is the reduction of the financial cycle (the period of turnover of net working capital), while maintaining an acceptable ratio between receivables and payables, which can serve as one of the criteria for managing the finances of an enterprise.
Since the duration of the production cycle is greater than the duration of the financial cycle for the period of turnover of accounts payable, this decrease in the financial cycle usually leads to a reduction in the operating cycle, which characterizes a positive trend in the activity of the enterprise.
In general, accelerating the turnover of current assets reduces the need for them and allows the enterprise to free up part of its working capital.
The turnover of funds invested in the property of the enterprise is assessed using:
1) Turnover speed - the number of turnovers made by fixed and working capital during the analyzed period.
The rate of turnover of funds is a comprehensive indicator of the organizational and technical level of production and economic activity. As a result of the acceleration of turnover, the material elements of working capital are released, less raw materials and supplies are required, and, consequently, monetary resources previously invested in inventories and reserves are released. The released resources can be used to improve the financial condition of the enterprise.
2) Period - the average period during which funds invested in tangible and intangible assets are returned to the economic activities of the enterprise.
Turnover ratios have great value to assess the financial condition of the enterprise, since the speed of capital turnover, that is, the speed of its conversion into monetary form, has a direct impact on the solvency of the enterprise.
In addition, an increase in the rate of capital turnover reflects, other things being equal, an increase in the production and technical potential of the enterprise.
For this purpose, 8 turnover indicators and one complex indicator - the “business activity index” are calculated, giving the most generalized idea of the economic activity of the enterprise.
1. The total asset turnover ratio shows how many times during a period the full cycle of production and circulation is completed, generating the corresponding income. It is calculated by dividing the volume of net sales revenue by the average value of assets for the period (formula 1).
2. Fixed asset turnover represents capital productivity, i.e., characterizes the efficiency of using fixed production assets (funds) of an enterprise for a period. It is calculated by dividing the volume of net sales revenue by the average value of fixed assets for the period according to their residual value (formula 2).
An increase in the capital productivity ratio can be achieved both due to the relatively low share of fixed assets and due to their high technical level. Of course, its value varies significantly depending on the industry and its capital intensity. However, the general patterns here are such that the higher the coefficient, the lower the costs of the reporting period. A low ratio indicates either insufficient sales volume or too high level of investment in these types of assets.
3. An important indicator for analysis is the turnover ratio of material working capital, that is, the speed of their implementation. In general, the higher the value of this ratio, the less funds are tied up in this least liquid item, the more liquid the working capital structure is, and the more stable the financial condition of the enterprise. And, conversely, overstocking, other things being equal, has a negative impact on the business activity of the enterprise. The coefficient is calculated using the formula, where the numerator is the volume of net sales revenue, and the denominator is the average value of inventory and costs for the period (formula 3).
A high value of this indicator indicates a more liquid structure of working capital and, accordingly, a more stable financial condition of the enterprise.
4. The working capital turnover ratio shows the rate of turnover of the enterprise’s material and monetary resources for the period and is calculated as the ratio of the volume of net sales revenue to the average working capital for the period (formula 4).
There is a certain relationship between working capital and sales volume. Too small a volume of working capital limits sales, while too much indicates an insufficiently efficient use of working capital.
5. The equity capital turnover ratio is calculated using the formula, where the numerator is net sales revenue, the denominator is the average amount of equity capital for the period (formula 5).
This indicator characterizes various aspects of activity: from a commercial point of view, it determines either a surplus of sales or a lack thereof; from financial - the rate of turnover of invested equity capital; from the economic side - the activity of funds at risk to the owners of the enterprise (shareholders, the state or other owners).
If the ratio is too high, which means a significant excess of sales over invested capital, then this entails an increase in credit resources and the possibility of reaching the limit where creditors are more involved in the business than owners. In this case, the ratio of liabilities to equity increases, the security of creditors decreases, and the company may have serious difficulties associated with a decrease in income.
On the contrary, a low ratio means the inactivity of part of one's own funds. In this case, the coefficient indicates the need to invest one’s own funds in another source of income that is more appropriate to the given conditions.
6. Turnover of invested capital - shows the rate of turnover of long-term and short-term investments of the enterprise, including investments in its own development. The numerator is net sales revenue, the denominator is the average amount of invested capital for the period (formula 6).
It is useful to compare the values of this ratio with the values for the same period of the operating capital turnover ratio. When analyzing these coefficients in dynamics, you can see how much faster or slower the capital that is temporarily withdrawn from production activities turns in comparison with the capital involved in production.
7. The rate of turnover of permanent capital is determined by the coefficient obtained by dividing the volume of net sales revenue by the average value of permanent capital for the period (formula 7).
This ratio shows how quickly the capital in long-term use of the enterprise turns over. The essence of the values of this coefficient is similar to the indicator of equity capital turnover with the only difference being that when analyzing this coefficient it is necessary to take into account the influence of the enterprise's long-term liabilities.
8. The turnover of operating capital is calculated using the formula, where the numerator is net sales revenue, the denominator is the average value of operating capital over the period (formula 8).
By analyzing the values of this coefficient, you can see a slowdown or acceleration in the turnover of capital directly involved in production activities. The resulting values of this coefficient are cleared, in comparison with the indicator of total asset turnover, from the influence of enterprise investments that do not have a direct impact on sales volume, with the exception of investments in their own development.
9. The business activity index characterizes the efficiency of entrepreneurship in the main activities of the enterprise for the period in the field of working capital management. It is calculated by multiplying the values for the analyzed period of working capital turnover (excluding short-term investments) by the profitability of core activities (formula 9).
The values of this coefficient in dynamics reflect the growth or decline of the enterprise’s business activity in entrepreneurial (core) activities.
1. 3 Profitability indicators
The profitable operation of an enterprise is determined by the profit it receives. To analyze profitability, the program calculates two groups of profitability ratios: return on capital and return on activity.
1.3.1 Return on equity
Return on equity group ratios show how effectively a company uses its capital to generate profits.
Return on total assets based on book profit is the most common indicator. This coefficient shows how many monetary units were raised by the enterprise to receive a ruble of profit, regardless of the source of raising these funds. The value of the indicator is calculated by dividing the balance sheet profit by the average value of all assets for the period (formula 10).
By comparing the above coefficient with the profitability ratio of all assets based on net profit (2), it is possible to identify the impact on the profitability of tax deductions and other payments from profit, i.e. determine the rigidity of the fiscal policy of the state and local authorities (formula 11).
The return on equity indicator determines the efficiency of using the owners' funds invested in the enterprise, allows comparison with the possible income from investing these funds in other enterprises (securities), and serves as an important criterion when assessing the level of stock quotes on the stock exchange. The ratio is calculated by dividing book profit by the average equity capital for the period (formula 12).
A useful technique in the analysis is to compare the return on total assets and return on equity. The difference between these indicators is due to the company’s attraction of external sources of financing. If an enterprise, by attracting borrowed capital, receives more profit than it must pay interest on this borrowed capital, then the difference can be used to increase the return on equity capital. However, if the return on assets is less than the interest paid on borrowed capital, the impact of raised funds on the activities of the enterprise should be assessed negatively.
Using the return on working capital ratio, the amount of book profit earned by each ruble of working capital is calculated.
Quantitative values of the coefficient when analyzed over time show changes in the efficiency of its use by the enterprise. The numerator reflects the amount of balance sheet profit, the denominator reflects the average amount of working capital for the period (formula 13).
Return on investment shows how effectively an enterprise conducts investment activities, with the exception of investments in its own development.
The coefficient is calculated using the formula, where the numerator is the amount of income for securities and from equity participation in joint ventures, the denominator is the sum of average values for the period of long-term and short-term financial investments (formula 14).
The return on permanent capital ratio shows the profitability of using the entire capital of an enterprise that is in its long-term use. The value of the coefficient is determined by dividing the volume of balance sheet profit by the average value of permanent capital for the period (formula 15).
business capital turnover profitability
The most complete picture of the profitability of an enterprise's production activities is provided by the return on operating capital ratio.
It is determined by the ratio of the volume of results from sales of products to the average amount of capital for the period directly employed in production activities (formula 16).
It is of interest to compare the values of the return on operating capital and investment ratios.
If the values of the return on investment indicator are greater than the values of the return on operating capital, then we can conclude that it is more profitable for the enterprise to carry out investment activities rather than engage in the production and sale of products.
1.3.2 Profitability of activities
The coefficients of the profitability group make it possible to assess the profitability of all areas of the enterprise’s activities. They are calculated according to the income statement.
1. The profitability ratio of all operations on balance sheet profit shows how efficiently and profitably the enterprise conducts its activities in all areas and what is the share of balance sheet profit in income. The coefficient is calculated using the formula, where the numerator is the volume of balance sheet profit, the denominator is net sales revenue plus income from other sales and from non-operating operations (formula 17).
2. The profitability ratio of all operations for net profit in comparison with the profitability ratio of all operations for balance sheet profit shows the “tax pressure” on the enterprise’s income from all areas of activity, as well as the level of net profit in income. The calculation is made according to the formula, where the numerator is the volume of net profit, the denominator is net sales revenue plus income from other sales and from non-operating operations (formula 18).
3. The profitability of sold products relative to the costs of their production determines the effectiveness of the costs incurred by the enterprise for the production and sale of products. The coefficient is calculated by the ratio of the volume of results from sales to the amount of costs for the production of sold products (formula 19).
The dynamics of the coefficient may indicate the need to revise prices or strengthen the enterprise’s control over the cost of products sold.
4. The profitability ratio of the main activity shows the profitability of the main activity of the enterprise, cleared of other income and results, which allows the user to determine the efficiency and plan the receipt of balance sheet profit from the main activity.
The coefficient is calculated by dividing the volume of sales results by the volume of net sales revenue (formula 20).
5. The profitability of other operations determines the efficiency of the enterprise in areas not related to its core activities.
The coefficient is calculated by dividing the volume of results from other sales and from non-operating operations by income from other sales and from non-operating operations (formula 21).
It is of undoubted interest to compare the values of the profitability ratios of other operations and the profitability of core activities and determine which areas of activity are more profitable for the enterprise.
6. The net income indicator is calculated using the formula, where the numerator is the sum of depreciation volumes of fixed assets and intangible assets plus net profit, the denominator is net revenue from sales of products plus income from other sales and income from non-sales operations (formulas 22, 23, 24).
This group of indicators allows you to estimate possible free financial resources for future periods and shows how many kopecks of net profit per ruble of net proceeds from sales of products and from other income the enterprise receives.
Chapter 2. Analysis and assessment of business activity of an enterprise in the conditions of the Russian economy
2.1 Analysis and assessment of business activity of Gefest LLC
The building materials plant Gefest LLC is located at the address: Murmansk, st. Pozdnyakova, 6.
Gefest LLC has a flexible organizational and production structure that is able to adequately respond to changes in the external environment (macroeconomic parameters).
An analysis of the financial condition of Gefest LLC was carried out on the basis of financial statements for the second half of 2003, 2004, two months of 2005, consisting of balance sheet(form 1), profit and loss statement (form 2).
The results of calculating profitability indicators are shown in Table 1.
In order to maintain the secrecy of commercial information, the reviewed and analyzed financial documents of Hephaestus LLC for the periods indicated above will not be presented as Appendices in this work.
One of the areas of analyzing the performance of an enterprise is assessing the business activity of the analyzed enterprise.
Business activity in the financial aspect is manifested in the speed of turnover of its funds and the dynamics of turnover indicators.
The financial position of an organization and its solvency depend on how quickly funds invested in assets turn into real money.
Calculation of profitability and turnover indicators is given in Table 1.
Table 1
|
Indicator name |
Analyzed period |
Industry average |
||||
|
2nd half of 2003 |
1st half of 2004 |
2nd half of 2004 |
2 months 2005 |
For half a year |
||
|
Return on sales |
||||||
|
Profitability of core activities |
||||||
|
Overall profitability of the reporting period |
||||||
|
Return on equity |
||||||
|
Total turnover period |
||||||
|
Duration of storage of inventories (raw materials, materials) |
||||||
|
Duration of storage of finished products |
||||||
|
Turnover period of funds in settlements (accounts receivable) |
||||||
|
Accounts payable turnover period |
||||||
|
Turnover period for advances received from customers |
||||||
|
Turnover period of equity capital |
Throughout the entire analyzed period, the profitability indicators of Gefest LLC had stable, but rather low values.
The company cannot yet ensure an acceptable level of profitability of its activities, since it is at the development stage and is constantly investing free funds in the development of production.
Implementation costs investment projects are included in the cost of production, which affects low profitability values.
After the full implementation of these projects, in our opinion, the company will be able to increase the efficiency of its activities.
At Gefest LLC its value throughout the analyzed period is high (more than two years), which indicates that the enterprise has not yet reached an acceptable level for normal conditions development level of resource turnover duration.
It should be noted the high turnover rate of accounts receivable (about 1.5 months), accounts payable (less than 1 month), and advances received from customers, which is certainly a positive factor.
The average turnover rate is the turnover of inventories and finished products, which is associated with the specifics of the products being manufactured.
A long turnover period has an indicator of equity capital turnover, the dynamics of its change repeats the dynamics of changes in the general turnover period.
Analysis of turnover indicators showed that the enterprise has not yet been able to reach a level of resource turnover duration acceptable for normal development conditions by all indicators.
2.2 General conclusions on assessing the business activity of Gefest LLC
LLC "Gefest" belongs to the category of enterprises with insufficient solvency, low profitability, average speed of resource turnover and a high degree of financial independence and stability.
The main conclusions can be drawn based on those presented in paragraph 2.1. data:
1. financial position is significantly better than the industry average - all indicators of financial stability are significantly higher than the industry average;
2. the profitability indicators of the evaluated enterprise are below the industry average, which is associated with the high costs of the enterprise for the implementation of investment projects included in the cost of production;
3. It should be noted the high business activity of the enterprise in comparison with other enterprises in the industry - the turnover periods of assets and liabilities of Gefest LLC are much lower than the industry average.
However, the positioning of the assessed enterprise is higher than the industry average - most liquidity and financial stability indicators are higher than the industry average, resource turnover indicators are also characterized by a higher turnover rate.
Favorable forecasts for the economic development of Russia and industry in the field of mechanical engineering production allow us to expect a positive impact of external factors on the activities of Hephaestus LLC, as well as the implementation of planned investment projects will help to achieve more efficient activities of the company under evaluation.
Conclusion
Business activity analysis reveals how effectively an enterprise uses its funds.
As has already been described in paragraphs 2, 3 of Chapter 1 of this course work, indicators characterizing business activity include turnover and profitability ratios.
Currently in Russia there is a fairly large number software products, which allow you to automate the process of economic analysis, including analysis of business activity.
Based on the results of the analysis of the Gephaestus LLC enterprise, we can conclude that it is necessary to revise some aspects of its business activity, in particular reducing costs.
List of used l literature
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20. Finance and Statistics, 1996.
21. Financial business plan: Textbook. Manual / Edited by full member Academician. investments of the Russian Federation V.M. Popova. M.: Finance and Statistics, 2000 - 480 Sheremet A.D., Saifulin R.S. Enterprise finance. - M.:INFRA - M, 343 p.
22. Sheremet A.D., Saifulin R.S., Negashev E.V. Methodology of financial analysis. - M.: INFRA-M, 2001. - 207 p.
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Coursework
on the topic: “Analysis and assessment of the business activity of an enterprise”
Introduction………………………………………………………………………………..
Chapter 1. Analysis and assessment of indicators of business activity and enterprise performance……………………………………………………….
1.1.Basic coefficients for assessing business activity…………………………6
1.2.Turnover ratios………………………………………………………………
1.3. Profitability ratios……………………………………………………………………
1.3.1.Return on capital………………………………………………………
1.3.2. Profitability of activities………………………………………………………………...
Chapter 2. Analysis and assessment of business activity of an enterprise in the conditions of the Russian economy…………………………………………………………………………………………………………
2. 1. Analysis and assessment of business activity of Gefest LLC………………………..
Conclusion……………………………………………………………………………..
List of sources used………………………………………………………………
Introduction
The business activity of an enterprise in the financial aspect is manifested primarily in the speed of turnover of its funds.
The profitability of an enterprise reflects the degree of profitability of its activities.
Analysis of business activity and profitability consists of studying the levels and dynamics of various financial turnover and profitability ratios, which are relative indicators of the financial performance of an enterprise.
The business activity of an enterprise in the financial aspect is manifested in the rate of turnover of its funds.
That. the financial position of an enterprise is directly dependent on how quickly funds invested in assets are converted into real money.
Relative business activity ratios allow you to analyze how efficiently an enterprise uses its funds.
Such coefficients usually include various turnover indicators.
Based on the dynamics of business activity indicators, one can judge the state of affairs at the enterprise, the efficiency of services, planning the needs for certain resources, i.e. marketing supply services, correct choice of clients, forms of settlements with suppliers and customers, timely collection and repayment of debts.
Chapter 1. Analysis and assessment of indicators of business activity and efficiency of the enterprise.
1. 1. Basic coefficients for assessing business activity.
You can present a list of coefficients used and applied in assessing the business activity of an enterprise:
1. Asset turnover ratio.
Shows the number of turnovers made by assets during the analyzed period.
2. Duration of one revolution.
Characterizes the duration of one turnover of all advanced capital (assets) in days.
3.Turnover ratio of non-current assets.
Shows the turnover rate of the enterprise's non-mobile assets for the analyzed year.
4. Duration of one turnover of non-current assets, days.
Characterizes the duration of one turnover of non-mobile assets in days.
5. Turnover ratio of current assets.
Shows the turnover rate of the enterprise's mobile assets for the analyzed period.
6. Duration of one turnover of current assets, days.
Expresses the duration of turnover of mobile assets for the analyzed period, i.e. duration of the production cycle of the enterprise.
7. Inventory and cost turnover ratio.
Shows the rate of inventory turnover and costs.
8. Duration of one turnover of inventories and costs, days.
Shows the rate of transformation of inventories and costs from material to monetary form. A decrease in the indicator is a favorable trend.
9. Accounts receivable turnover ratio.
Shows the number of turnovers made by receivables during the analyzed period. As turnover accelerates, the value of the indicator decreases, which indicates an improvement in settlements with debtors.
10. Duration of one turnover of receivables, days.
Characterizes the average repayment period of receivables. A decrease in the indicator is a favorable trend.
11. Equity turnover ratio.
Reflects the activity of equity capital. Growth in dynamics means an increase in the efficiency of using equity capital.
12. Duration of one turnover of equity capital, days.
Characterizes the rate of turnover of equity capital. A decrease in the indicator in dynamics reflects a trend favorable for the enterprise.
13. Accounts payable turnover ratio. Shows the speed of settlements with creditors. Acceleration has an adverse effect on the liquidity of the enterprise.
The overall property turnover ratio reflects the efficiency of using available funds, regardless of their sources. It determines how many times a year the full cycle of production and circulation is completed, generating profit, or determines how many monetary units of sold products were transferred by each unit of assets (property of the enterprise).
Financial turnover indicators are important for any enterprise:
1) firstly, the speed of turnover of advanced funds depends
volume of sales revenue;
2) secondly, with the amount of revenue from sales, and therefore,
and the relative amount of commercial and administrative expenses is associated with asset turnover; the faster the turnover, the less these expenses are for each turnover;
3) thirdly, acceleration of turnover at a certain stage,
The individual circulation of enterprise funds leads to an acceleration of turnover at other stages of the production cycle (at the stages of supplying production, sales and payments for finished products).
The production (operating) cycle is characterized by the period of turnover of inventories (material inventories, work in progress, finished products) and accounts receivable. The financial cycle expresses the difference between the duration of the production cycle (in days) and the average period of circulation (repayment) of accounts payable.
One of the important factors in increasing the efficiency of management of current assets is the reduction of the financial cycle (the period of turnover of net working capital), while maintaining an acceptable ratio between receivables and payables, which can serve as one of the criteria for managing the finances of an enterprise.
Since the duration of the production cycle is greater than the duration of the financial cycle for the period of turnover of accounts payable, this decrease in the financial cycle usually leads to a reduction in the operating cycle, which characterizes a positive trend in the activity of the enterprise.
In general, accelerating the turnover of current assets reduces the need for them and allows the enterprise to free up part of its working capital.
Turnover of funds invested in the property of the enterprise
evaluated using:
1) Turnover speed - the number of revolutions made per
the analyzed period fixed and working capital.
Fund turnover rate is a complex indicator
organizational and technical level of production and economic
activities. As a result of the acceleration of turnover, material elements of working capital are released, less raw materials and supplies are required and, consequently, monetary resources previously invested in inventories and reserves are released. The released resources can be used to improve the financial condition of the enterprise.
2) Period - the average period for which they are returned to
economic activities of the enterprise, funds invested in
tangible and intangible assets.
Turnover ratios are of great importance for assessing the financial condition of an enterprise, since the rate of capital turnover,
that is, the speed of its transformation into monetary form has a direct impact on the solvency of the enterprise.
In addition, an increase in the rate of capital turnover reflects, other things being equal, an increase in the production and technical potential of the enterprise.
For this purpose, 8 turnover indicators and one complex indicator - the “business activity index” are calculated, giving the most generalized idea of the economic activity of the enterprise.
1. The total asset turnover ratio shows how many times during a period the full cycle of production and circulation is completed, generating the corresponding income. It is calculated by dividing the volume of net sales revenue by the average value of assets for the period (formula 1).
2.Turnover of fixed assets is
capital productivity, i.e., characterizes the efficiency of using fixed production assets (funds) of an enterprise for a period. It is calculated by dividing the volume of net sales revenue by the average value of fixed assets for the period according to their residual value (formula 2).
An increase in the capital productivity ratio can be achieved both due to the relatively low share of fixed assets and due to their high technical level. Of course, its value varies significantly depending on the industry and its capital intensity. However, the general patterns here are such that the higher the coefficient, the lower the costs of the reporting period. A low ratio indicates either insufficient sales volume or too high level of investment in these types of assets.
3. An important indicator for analysis is the coefficient
turnover of material working capital, that is, the speed of their implementation. In general, the higher the value of this ratio, the less funds are tied up in this least liquid item, the more liquid the working capital structure is, and the more stable the financial condition of the enterprise. And, conversely, overstocking, other things being equal, has a negative impact on the business activity of the enterprise. The coefficient is calculated using the formula, where the numerator is the volume of net sales revenue, and the denominator is the average value of inventory and costs for the period (formula 3).
A high value of this indicator indicates a more liquid structure of working capital and, accordingly, a more stable financial condition of the enterprise.
4.The working capital turnover ratio shows
the rate of turnover of the enterprise's material and monetary resources for the period and is calculated as the ratio of the volume of net sales revenue to the average working capital for the period (formula 4).
There is a certain relationship between working capital and sales volume. Too small a volume of working capital limits sales, while too much indicates an insufficiently efficient use of working capital.
5.Equity turnover ratio
is calculated using the formula, where the numerator is net sales revenue, the denominator is the average amount of equity capital for the period (formula 5).
This indicator characterizes various aspects of activity: from a commercial point of view, it determines either a surplus of sales or a lack thereof; from financial - the rate of turnover of invested equity capital; from the economic side - the activity of funds at risk to the owners of the enterprise (shareholders, the state or other owners).
If the ratio is too high, which means a significant excess of sales over invested capital, then this entails an increase in credit resources and the possibility of reaching the limit where creditors are more involved in the business than owners. In this case, the ratio of liabilities to equity increases, the security of creditors decreases, and the company may have serious difficulties associated with a decrease in income.
On the contrary, a low ratio means the inactivity of part of one's own funds. In this case, the coefficient indicates the need to invest one’s own funds in another source of income that is more appropriate to the given conditions.
6. Turnover of invested capital - shows the speed
turnover of long-term and short-term investments of the enterprise, including investments in its own development. The numerator is net sales revenue, the denominator is the average amount of invested capital for the period (formula 6).
It is useful to compare the values of this ratio with the values for the same period of the operating capital turnover ratio. When analyzing these coefficients in dynamics, you can see how much faster or slower the capital that is temporarily withdrawn from production activities turns in comparison with the capital involved in production.
7. The rate of turnover of permanent capital is determined by the coefficient
obtained by dividing the volume of net sales revenue by the average value of permanent capital for the period (formula 7).
This ratio shows how quickly the capital in long-term use of the enterprise turns over. The essence of the values of this coefficient is similar to the indicator of equity capital turnover with the only difference being that when analyzing this coefficient it is necessary to take into account the influence of the enterprise's long-term liabilities.
8. Operating capital turnover is calculated
according to the formula, where the numerator is net sales revenue, the denominator is the average value of operating capital for the period (formula 8).
By analyzing the values of this coefficient, you can see a slowdown or acceleration in the turnover of capital directly involved in production activities. The resulting values of this coefficient are cleared, in comparison with the indicator of total asset turnover, from the influence of enterprise investments that do not have a direct impact on sales volume, with the exception of investments in their own development.
entrepreneurship in the main activity of the enterprise for the period in the field of working capital management. It is calculated by multiplying the values for the analyzed period of working capital turnover (excluding short-term investments) by the profitability of core activities (formula 9).
The values of this coefficient in dynamics reflect the growth or decline of the enterprise’s business activity in entrepreneurial (core) activities.
1.3. Profitability indicators.
The profitable operation of an enterprise is determined by the profit it receives. To analyze profitability, the program calculates two groups of profitability ratios: return on capital and return on activity.
3.1. Return on Equity
Return on equity group ratios show how effectively a company uses its capital to generate profits.
Return on total assets based on book profit is the most common indicator. This coefficient shows how many monetary units were raised by the enterprise to receive a ruble of profit, regardless of the source of raising these funds. The value of the indicator is calculated by dividing the balance sheet profit by the average value of all assets for the period (formula 10).
By comparing the above coefficient with the profitability ratio of all assets based on net profit (2), it is possible to identify the impact on the profitability of tax deductions and other payments from profit, i.e. determine the rigidity of the fiscal policy of the state and local authorities (formula 11).
The return on equity indicator determines the efficiency of using the owners' funds invested in the enterprise, allows comparison with the possible income from investing these funds in other enterprises (securities), and serves as an important criterion when assessing the level of stock quotes on the stock exchange. The ratio is calculated by dividing book profit by the average equity capital for the period (formula 12).
A useful technique in the analysis is to compare the return on total assets and return on equity. The difference between these indicators is due to the company’s attraction of external sources of financing. If an enterprise, by attracting borrowed capital, receives more profit than it must pay interest on this borrowed capital, then the difference can be used to increase the return on equity capital. However, if the return on assets is less than the interest paid on borrowed capital, the impact of raised funds on the activities of the enterprise should be assessed negatively.
Using the return on working capital ratio, the amount of book profit earned by each ruble of working capital is calculated. Quantitative values of the coefficient when analyzed over time show changes in the efficiency of its use by the enterprise. The numerator reflects the amount of balance sheet profit, the denominator reflects the average amount of working capital for the period (formula 13).
Return on investment shows how effectively an enterprise conducts investment activities, with the exception of investments in its own development.
The coefficient is calculated using the formula, where the numerator is the sum of income from securities and from equity participation in joint ventures, the denominator is the sum of average values for the period of long-term and short-term financial investments (formula 14).
The return on permanent capital ratio shows the profitability of using the entire capital of an enterprise that is in its long-term use. The value of the coefficient is determined by dividing the volume of balance sheet profit by the average value of permanent capital for the period (formula 15).
The most complete picture of the profitability of an enterprise's production activities is provided by the return on operating capital ratio.
It is determined by the ratio of the volume of results from sales of products to the average amount of capital for the period directly employed in production activities (formula 16).
It is of interest to compare the values of the return on operating capital and investment ratios.
If the values of the return on investment indicator are greater than the values of the return on operating capital, then we can conclude that it is more profitable for the enterprise to carry out investment activities rather than engage in the production and sale of products.
3.2. Profitability of activities
The coefficients of the profitability group make it possible to assess the profitability of all areas of the enterprise’s activities. They are calculated according to the income statement.
1. The profitability ratio of all operations on balance sheet profit shows how efficiently and profitably the enterprise conducts its activities in all areas and what is the share of balance sheet profit in income. The coefficient is calculated using the formula, where the numerator is the volume of balance sheet profit, the denominator is net sales revenue plus income from other sales and from non-operating operations (formula 17).
2. The profitability ratio of all operations for net profit in comparison with the profitability ratio of all operations for balance sheet profit shows the “tax pressure” on the enterprise’s income from all areas of activity, as well as the level of net profit in income. The calculation is made according to the formula, where the numerator is the volume of net profit, the denominator is net sales revenue plus income from other sales and from non-operating operations (formula 18).
3. The profitability of sold products relative to the costs of their production determines the effectiveness of the costs incurred by the enterprise for the production and sale of products. The coefficient is calculated by the ratio of the volume of results from sales to the amount of costs for the production of sold products (formula 19).
The dynamics of the coefficient may indicate the need to revise prices or strengthen the enterprise’s control over the cost of products sold.
4. The profitability ratio of the main activity shows the profitability of the main activity of the enterprise, cleared of other income and results, which allows the user to determine the efficiency and plan the receipt of balance sheet profit from the main activity.
The coefficient is calculated by dividing the volume of sales results by the volume of net sales revenue (formula 20).
5. The profitability of other operations determines the efficiency of the enterprise in areas not related to its core activities.
The coefficient is calculated by dividing the volume of results from other sales and from non-operating operations by income from other sales and from non-operating operations (formula 21).
It is of undoubted interest to compare the values of the profitability ratios of other operations and the profitability of core activities and determine which areas of activity are more profitable for the enterprise.
6. The net income indicator is calculated using the formula, where the numerator is the sum of depreciation volumes of fixed assets and intangible assets plus net profit, the denominator is net revenue from sales of products plus income from other sales and income from non-sales operations (formulas 22, 23, 24). 
This group of indicators allows you to estimate possible free financial resources for future periods and shows how many kopecks of net profit per ruble of net proceeds from sales of products and from other income the enterprise receives.
Chapter 2. Analysis and assessment of the enterprise’s business activity in
conditions of the Russian economy.
2. 1 . Analysis and assessment of business activity of Gefest LLC.
The building materials plant Gefest LLC is located at the address: Murmansk, st. Pozdnyakova, 6.
Gefest LLC has a flexible organizational and production structure that is able to adequately respond to changes in the external environment (macroeconomic parameters).
An analysis of the financial condition of Gefest LLC was carried out on the basis of financial statements for the second half of 2003, 2004, and two months of 2005. as part of the balance sheet (form 1), profit and loss statement (form 2).
The results of calculating profitability indicators are shown in Table 1.
In order to maintain the secrecy of commercial information, the reviewed and analyzed financial documents of Gefest LLC for the periods indicated above will not be presented in this work as Appendices.
One of the areas of analyzing the performance of an enterprise is assessing the business activity of the analyzed enterprise.
Business activity in the financial aspect is manifested in the speed of turnover of its funds and the dynamics of turnover indicators.
The financial position of an organization and its solvency depend on how quickly funds invested in assets turn into real money.
Calculation of profitability and turnover indicators is given in Table 1.
Name indicator |
Analyzed period | Middle-left value | |||
2nd half of the year |
1st half of the year |
2nd half of the year |
half year |
||
| Return on sales | 0,03 | 0,05 | 0,11 | 0,04 | 0,13 |
| Profitability of core activities | 0,03 | 0,05 | 0,13 | 0,04 | 0,15 |
| Overall profitability of the reporting period | 0,02 | 0,05 | 0,08 | 0,04 | 0,13 |
| Return on equity | 0,00 | 0,01 | 0,02 | 0,01 | 0,04 |
| Total turnover period | 989,83 | 601,54 | 653,05 | 763,02 | 1341,30 |
| Duration of storage of inventories (raw materials, materials) | 53,17 | 36,11 | 45,00 | 46,73 | 124,20 |
| Duration of storage of finished products | 62,14 | 48,36 | 78,74 | 90,95 | 35,27 |
| Turnover period of funds in settlements (accounts receivable) | 46,05 | 45,90 | 45,88 | 47,57 | 274,34 |
| Accounts payable turnover period | 40,77 | 39,17 | 29,72 | 25,66 | 204,89 |
| Turnover period for advances received from customers | 4,93 | 2,75 | 12,97 | 25,17 | 84,91 |
| Turnover period of equity capital | 911,67 | 524,15 | 556,48 | 644,34 | 613,81 |
Table 1.
Throughout the entire analyzed period, the profitability indicators of Gefest LLC had stable, but rather low values.
The company cannot yet ensure an acceptable level of profitability of its activities, since it is at the development stage and is constantly investing free funds in the development of production.
The costs of implementing investment projects are included in the cost of production, which affects the low profitability values.
After the full implementation of these projects, in our opinion, the company will be able to increase the efficiency of its activities.
capital turnover.
At Gefest LLC, its value throughout the analyzed period is high (more than two years), which indicates that the enterprise has not yet reached a level of resource turnover duration acceptable for normal development conditions.
It should be noted the high turnover rate of accounts receivable (about 1.5 months), accounts payable (less than 1 month), and advances received from customers, which is certainly a positive factor.
The average turnover rate is the turnover of inventories and finished products, which is associated with the specifics of the products being manufactured.
A long turnover period has an indicator of equity capital turnover, the dynamics of its change repeats the dynamics of changes in the general turnover period.
Analysis of turnover indicators showed that the company has not yet
according to all indicators, it was able to reach a level of resource turnover duration acceptable for normal development conditions.
2.2. General conclusions on assessing business activity LLC "Hephaestus"
Gefest LLC belongs to the category of enterprises with insufficient solvency, low profitability, average resource turnover and a high degree of financial independence and sustainability.
The main conclusions can be drawn based on those presented in paragraph 2.1. data:
1. financial position is significantly better than the industry average –
all financial stability indicators are significantly higher than the industry average;
2. The profitability indicators of the company being evaluated are lower
industry average, which is associated with the high costs of the enterprise for the implementation of investment projects included in the cost of production;
3. It should be noted the high business activity of the enterprise in terms of
Compared to other enterprises in the industry, the asset and liability turnover periods of Gefest LLC are much lower than the industry average.
However, the positioning of the assessed enterprise is higher than the industry average - most liquidity and financial stability indicators are higher than the industry average, resource turnover indicators are also characterized by a higher turnover rate.
Favorable forecasts for Russia's economic development and
industry in the field of mechanical engineering production allow us to expect a positive impact of external factors on the activities of Hephaestus LLC, as well as the implementation of planned investment projects will help to achieve more efficient activities of the enterprise under evaluation.
Conclusion
Business activity analysis reveals how effectively an enterprise uses its funds.
As has already been described in paragraphs 2, 3 of Chapter 1 of this course work, indicators characterizing business activity include turnover and profitability ratios.
Currently in Russia there is a fairly large number of software products that allow you to automate the process of economic analysis, including analysis of business activity.
Based on the results of the analysis of the Gefest LLC enterprise, we can conclude that it is necessary to revise some aspects of its business activity, in particular, reducing costs.
Literature a
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The concept of “business activity” is characterized by a system of indicators of the efficiency of the enterprise’s use of all available resources (fixed, current, labor). The system of business activity indicators includes various turnover indicators. These indicators are very important, as they show the speed of funds turnover (return in cash) and have a direct impact on solvency.
Turnover indicators:
1. asset turnover ratio (K OA)
Sales revenue
K OA = ; (1)
Amount of assets
This coefficient shows how many times during a period the full cycle of production and circulation is completed, or how many monetary units of sold products were brought by each monetary unit invested in assets. The asset turnover ratio characterizes the efficiency of the enterprise's use of all available resources.
2. working capital turnover ratio (K ORK)
Sales revenue
TO ORK = ; (2)
Working capital
The working capital turnover ratio shows how efficiently an enterprise uses current assets.
Business activity indicators are closely related to the concept of “competitiveness”. When assessing the competitiveness of an enterprise, their business activity indicators are compared (it is necessary to take into account the specifics of the enterprise and compare enterprises that produce similar products).
Balance sheet structure analysis
The first source of information for assessing the creditworthiness of business organizations should be their balance sheet with an explanatory note to it. Analysis of the balance sheet allows you to determine what funds the company has and what size loan these funds provide. However, for a reasonable and comprehensive conclusion about the creditworthiness of bank clients, balance sheet information is not enough. This follows from the composition of the indicators. Analysis of the balance sheet gives only a general judgment about creditworthiness, while in order to draw conclusions about the degree of creditworthiness it is necessary to calculate qualitative indicators that assess the prospects for the development of enterprises and their viability.
Analysis of the structure and dynamics of the balance sheet liabilities
When considering the liability side of the balance sheet, the closest attention should be paid to studying the sections where loans and other borrowed funds are reflected: it is necessary to request credit agreements for those loans, the debt for which is reflected in the balance sheet and not repaid on the date of the loan request, and make sure that it is not expired.
The presence of overdue debt on loans from other banks is a negative factor and indicates obvious miscalculations and disruptions in the borrower’s activities, which may be planned to be temporarily compensated with the help of a loan. If the debt is not overdue, it is necessary, if possible, to ensure that the loan is repaid before the repayment of other loans. When assessing the status of accounts payable, it is necessary to make sure that the borrower is able to pay on time with those whose funds he uses in one form or another: in the form of goods or services, advances, etc.
Table 1
Analysis of the dynamics of the liability balance
| No. | Title of articles | Amount at the beginning of the year (t.r.) | Amount at the end of the year (t.r.) | Ud. weight at the beginning of the year (%). | Ud. weight at the end of the year (%). | Changes | |||
| amount + (-) | beat weight + (-)% | in % at the beginning of the year | in % of total | ||||||
| Capital and reserves | 55,42% | 47,87% | -6806 | -7,55% | -2,89% | -12,88% | |||
| Long-term liabilities | 10,40% | 6,56% | -12876 | -3,84% | -29,12% | -24,37% | |||
| Short-term liabilities, | 34,18% | 45,52% | 11,34% | 49,71% | 136,81% | ||||
| including: | |||||||||
| borrowed funds | 20,36% | 29,28% | 8,93% | 61,71% | 101,14% | ||||
| accounts payable | 13,21% | 15,69% | 2,48% | 33,55% | 35,67% | ||||
| other liabilities | 0,62% | 0,55% | -0,07% | 0% | 0% | ||||
| Total balance | 100,00% | 100,00% | 0,00% | 12,42% | 100,00% |
The amount of equity at the end of the year decreased by 6,806 thousand rubles, and the share decreased by 7.55%, which is a negative trend in the activity of the enterprise.
There were no long-term liabilities at the beginning of the year, and they did not appear at the end of the year; This is due to the fact that at the present stage banks are reluctant to issue long-term loans to enterprises, and if they do, then only to the most reliable clients.
Borrowed funds increased by 53,440 thousand rubles, the share increased by 8.93%, which is a negative trend, as the financial dependence of the enterprise increased.
As for accounts payable, its amount also increased (by 18,849 thousand rubles). This is also a negative trend, increasing the financial dependence of the enterprise. The balance sheet shows that the main amount of accounts payable falls on debt to suppliers and contractors, as well as to the budget and personnel of the enterprise.
Analysis of the structure and dynamics of a balance sheet asset
When working with a balance sheet asset, you must pay attention to the following: in case of registration of a pledge of fixed assets (buildings, equipment, etc.), inventories, finished products, goods, other inventories and expenses, the pledgor’s ownership of these values must be confirmed by including their value in composition of the relevant balance sheet items.
The balance of funds in the current account must correspond to the data in the bank statement as of the reporting date. When analyzing receivables, it is necessary to pay attention to the timing of their repayment, since the receipt of debts can become one of the sources for the borrower to repay the requested loan.
Table 2
Analysis of balance sheet asset dynamics
| No. | Title of articles | Amount at the beginning of the year (t.r.) | Amount at the end of the year (t.r.) | Ud. weight at the beginning of the year (%). | Ud. weight at the end of the year (%). | Changes | |||
| amount + (-) | beat weight + (-)% | in % at the beginning of the year | in % of total | ||||||
| Non-current assets, including | 48,37% | 36,87% | -29401 | -11,49% | -14,29% | -55,64% | |||
| fixed assets | 33,69% | 25,09% | -23329 | -8,60% | -16,28% | -44,15% | |||
| intangible assets | 0,05% | 0,01% | -167 | -0,04% | -86,53% | -0,32% | |||
| other assets | 0% | 0% | 0% | 0% | |||||
| Current assets, including: | 51,63% | 63,13% | 11,49% | 37,44% | 155,64% | ||||
| accounts receivable up to 12 months | 31,42% | 32,91% | 1,49% | 17,77% | 44,94% | ||||
| accounts receivable over 12 months | 0% | 0% | 0% | 0% | 0% | ||||
| short-term financial investments | 1,99% | 0,05% | -8188 | -1,93% | -96,96% | -15,50% | |||
| cash | 0,04% | 3,74% | 3,69% | 9770% | 33,47% | ||||
| other current assets | 0% | 0% | 0% | 0% | 0% | ||||
| Total balance | 100% | 100% | 0,00% | 12,42% | 100,00% |
The total amount of the asset increased by 52,838 thousand rubles. This was mainly due to an increase in current assets.
The cost of fixed assets decreased by 23,329 thousand rubles; this was due to the write-off of fixed assets.
Accounts receivable increased significantly – by 23,745 thousand rubles. This is a negative factor, since cash increased only by 17,684 thousand rubles; this factor poses a threat to the financial condition of the enterprise.
A thorough analysis and assessment of debtors who violate the terms of repayment of accounts payable is necessary.
Analysis of the condition and efficiency of use of the enterprise's fixed assets
Fixed assets are understood as funds invested in the totality of material assets related to the means of labor. (Also, fixed assets are means of labor that are repeatedly involved in the production process, while maintaining their natural form and transferring their value to the manufactured products in parts and as they wear out).
Fixed assets occupy the largest share in the total amount of fixed capital, therefore analysis of the condition and use of fixed assets is very important for the enterprise. The result of proper use of fixed assets is profit. In addition, the efficiency of use of fixed assets affects the increase in the production efficiency of an economic entity, and, consequently, the financial stability of the enterprise and the results of its activities. The future of the enterprise also depends on how correctly the analysis of the condition and use of fixed assets is carried out, since a correctly conducted analysis allows timely identification of shortcomings in the efficiency of their use.
Analysis of the condition and use of fixed assets begins with determining the value of their value at the beginning and end of the period. Then their growth rate is determined by comparing the indicator values at the end of the year to the indicator value at the beginning of the year, expressed as a percentage. The analysis examines indicators of the movement and condition of fixed assets, such as renewal, serviceability, disposal and wear rates, capital-labor ratio, technical equipment, capital productivity, capital intensity, labor productivity, which are calculated as follows:
| |
K updates = (3)
To disposal = (4)
K wear = 
(5)
Usability = 1 – Wear (6)
Capital-labor ratio = 
(7)
Technical equipment = (8)
Capital productivity = 
(9)
Capital intensity = 
(10)
Labor productivity = technical equipment* capital productivity of the active part (11)
Table 3
Analysis of the condition of fixed assets
| No. | Indicator | Beginning of the year | End of the year | Growth Rate (%) |
| Cost of fixed assets | 83,72% | |||
| Cost of the active part of fixed assets | 128,67% | |||
| Share of the active part of fixed assets | 20,44% | 31,42% | 153,69% | |
| Accrued depreciation amount | 103,21% | |||
| Wear rate | 0,780 | 0,962 | 123,28% | |
| Usability factor | 0,220 | 0,038 | 17,30% | |
| Renewal factor | - | 0,12 | ||
| Attrition rate | - | 0,222 | ||
| Sales revenue | 155,08% | |||
| Capital productivity | 2,62 | 4,85 | 185,11% | |
| Return on assets of the active part of OPF | 12,81 | 15,44 | 120,53% | |
| Average number of workers | 100% | |||
| Capital-labor ratio | 143,33 | 120,00 | 84% | |
| Technical equipment | 29,30 | 37,70 | 128,67% | |
| Capital intensity | 0,38 | 0,21 | 54,02% | |
| Labor productivity | 375,33 | 582,09 | 155,09% |
Calculations made:
1. Share of the active part in the total cost of the OPF =
The cost of the active part of the OPF
Cost of fixed assets
At the beginning of the year = 20.44%
At the end of the year =31.42%
2. We calculate the wear coefficient using formula (5)
K depreciation at the beginning of the year = 0.780
K depreciation at the end of the year = 0.962
3. We calculate the suitability coefficient using formula (6)
Shelf life at the beginning of the year = 0.220
Expiration date at the end of the year = 0.038
4. Calculate the renewal coefficient using formula (3)
K update = 0.120
5. The retirement rate will be calculated using formula (4)
K disposal = 0.222
6. Calculate capital productivity using formula (9)
Capital productivity at the beginning of the year = 2.62
Capital productivity at the end of the year = 4.85
7. We will calculate the capital productivity of the active part of the OPF using formula (9) (instead of the cost of fixed assets, we will take the cost of the active part of the OPF)
Capital productivity of the active part of OPF at the beginning of the year = 12.81
Capital productivity of the active part of OPF at the end of the year = 15.44
8. Calculate the capital-labor ratio using formula (7)
Capital-labor ratio at the beginning of the year = 143.33
Capital-labor ratio at the end of the year = 120.00
9. Technical equipment will be calculated using formula (7)
Technical equipment at the beginning of the year = 29.30
Technical equipment at the end of the year = 37.70
10. Calculate capital intensity using formula (10)
Capital intensity at the beginning of the year = 0.38
Capital intensity at the end of the year = 0.21
11. Labor productivity will be calculated using formula (11)
Labor productivity at the beginning of the year = 375.33
Labor productivity at the end of the year = 582.09
the value of fixed assets decreased by 16.28%, and the value of the active part of the general fund increased by 28.67%. This is a positive trend in the activities of the enterprise. Also at the end of the year the share of the active part increased.
Depreciation increased by 23.28%, which means very rapid wear and tear of fixed assets; accordingly, serviceability decreased by 82.7%. At the enterprise, the renewal rate is less than the retirement rate. This means that the company writes off more equipment than receives new equipment.
A positive factor is an increase in sales revenue by 55%. Positive factors also include an increase in capital productivity by 85.11% and capital productivity of the active part of the general public fund by 20.53%. Capital productivity shows how many rubles of marketable or sold products each ruble invested in fixed assets brings. An increase in capital productivity indicates an increase in the intensity of use of fixed assets. Due to the fact that sales revenue increased, labor productivity increased by 55% (by the same amount as sales revenue, since average number workers (SSCh) has not changed.
Capital intensity decreased as capital productivity increased. Capital intensity shows the cost of fixed assets per ruble of products produced. A decrease in capital intensity indicates an improvement in the use of fixed assets.
Positive factors include an increase in technical equipment by 28.67%. Technical equipment shows how much equipment per production worker. The increase in technical equipment occurred due to an increase in the cost of production equipment.
A negative trend is a decrease in the capital-labor ratio. The capital-labor ratio characterizes the degree to which the enterprise's employees are equipped with fixed assets. The decrease in the capital-labor ratio by 16% was due to a decrease in the cost of fixed assets.
Let's analyze the indicators characterizing the efficiency of using fixed assets. Such indicators are the capital ratio and technical equipment. We will analyze using factor analysis.
Factor analysis is a gradual transition from the original factor system to the final factor system. Using factor analysis, a full set of factors influencing changes in the performance indicator is revealed.
Factor analysis finds application in economic analysis by using the method of chain substitutions. Consistently replacing each planned indicator in fact, the remaining indicators are left unchanged and determine the final result. To calculate the influence of each factor, the first is subtracted from the second, and the previous one is subtracted from the subsequent one.
The method of differences is used to determine the influence of factors on the result and is a variation of the method of chain substitutions.
The rule for using the method of differences: when determining the influence of a quantitative indicator on a specific result, the qualitative indicator is taken according to plan. When determining the influence of a qualitative indicator, the quantitative indicator is taken in fact.
Table 4
Factor analysis of capital-labor ratio
Total influence: 120,001 – 143.33 = - 23.33
1) 143330/1000 = 143,33
2) 120001/1000 = 120,001
Due to the factor of decreasing the cost of fixed assets, the capital-labor ratio decreased by 23.33 or 16%.
Table 5
Factor analysis of technical equipment
1) 29301/1000 = 29,301
2) 37703/1000 = 37,703
total influence: 37.703 – 29.301 = 8.402
from the increase in the cost of the active part of the military equipment, the technical equipment increased by 8.402 or 28.67%.
Table 6
Factor analysis of capital productivity of the active part of open pension fund
1) 375396/29301 = 12,812
2) 582151/29301 = 19,868
3) 582151/37703 = 15,440
total influence = 7.056 – 4.428 = 2.628
With an increase in sales revenue by 206,755 thousand rubles, the capital productivity of the active part increased by 7,056 (19,868 – 12,812).
Due to an increase in the cost of the active part by 8,402 thousand rubles, the capital productivity of the active part decreased by 4,428 (15,440 - 19,868).
The decisive factor in increasing capital productivity is increasing revenue.
Table 7
Factor analysis of labor productivity
Let's calculate how the change in capital productivity of the active part affected labor productivity:
2,628*37,7=99,151
due to an increase in capital productivity of the active part by 2.628, labor productivity increased by 99.151
Let's calculate how changes in technical equipment affected labor productivity:
8,4*12,81 = 107,604
due to an increase in technical equipment by 8.04, labor productivity increased by 107.604
total influence = 107.604 + 99.151 = 206.76.
In order for an enterprise to carry out its activities normally, it needs working capital. They are understood as objects of labor that are repeatedly involved in the production process, are completely consumed and transfer their value to the cost of the product produced. Also, working capital can be presented in the form of cash advanced to circulating production assets and circulation funds.
Working capital ensures the continuity of the production process, so it is very important for an enterprise to use it effectively. To do this, you need to remember that excess working capital means idle working capital and does not generate income. At the same time, the lack of working capital will slow down the progress of the production process, slowing down the rate of economic turnover of the enterprise's assets. Therefore, an enterprise needs to clearly know how much working capital it needs. The task of managers responsible for planning and organizing the effective use of working capital is to organize the expansion of production volumes and sales of products, the conquest of new markets, in the most rational and economical way, that is, with a minimum amount of working capital. and for this it is necessary to regularly analyze the efficiency of using working capital. It must be remembered that the speed of their turnover will depend on how effectively they are used.
When analyzing the efficiency of using working capital, the values of indicators at the beginning and end of the year are analyzed. Then the rate of their growth is considered by comparing the indicator values at the end of the year to the indicator value at the beginning of the year, expressed as a percentage.
The most important indicators of the use of working capital are the turnover and loading ratios of working capital, as well as the duration of one turnover in days and the coefficient of provision of own working capital, which are calculated using the formulas:
Sales revenue
= (12)
Cost of working capital
Duration of 1 revolution = (13)
To the turnover of working capital
Own sources
To SOS security = (14)
Cost of working capital
Own sources in the formation of working capital =
Capital and reserves - non-current assets (15)
To load working capital = (16)
To the turnover of working capital
Table 8
Analysis of the efficiency of using working capital
| No. | Indicator | Beginning of the year | End of the year | Growth Rate (%) |
| Balance currency | 112,42% | |||
| Cost of working capital | 137,44% | |||
| Share of working capital in assets | 51,63% | 63,13% | 122,26% | |
| Own sources in the formation of working capital | ||||
| SOS security ratio | 0,137 | 0,174 | ||
| Inventory cost | 140,13% | |||
| Share of inventories in current assets | 14,12% | 17,60% | 124,64% | |
| Accounts receivable | 117,77% | |||
| Share of accounts receivable in current assets | 31,42% | 32,91% | 104,75% | |
| Sales revenue | 155,08% | |||
| Working capital turnover ratio | 1,709 | 1,928 | 112,81% | |
| Duration of one revolution | 210,65 | 186,72 | 88,64% | |
| Working capital utilization ratio | 0,585 | 0,519 | 88,64% |
Calculations made:
1. We will calculate our own sources in the formation of working capital using formula (15):
Own sources in the formation of working capital at the beginning of the year = 30010
Own sources in the formation of working capital at the end of the year = 52605
2. We calculate the coefficient of provision with our own working capital using formula (14):
To the SOS security at the beginning of the year = 0.137
To SOS security at the end of the year = 0.174
3. We calculate the working capital turnover ratio using formula (13):
To the turnover of working capital at the beginning of the year = 1.709
To the turnover of working capital at the end of the year = 1.928
4. We calculate the duration of 1 revolution using formula (13):
Duration of one revolution at the beginning of the year = 210.65
Duration of one revolution at the end of the year = 186.72
5. We will calculate the working capital load factor using formula (16):
Load of working capital at the beginning of the year = 1.709
Load of working capital at the end of the year = 1.928
During the analyzed period the following changes occurred:
The total value of assets increased by 12.42%, and the value of current assets increased by 37.44%, which is a positive trend. We also see that the share of current assets increased by 22.26%. But the company does not have enough of its own sources to form current assets, so in addition to its own capital, it also uses borrowed funds. Moreover, at the end of the year, more borrowed funds were involved in the formation of current assets than at the beginning of the year, which indicates an increase in the financial dependence of our enterprise. However, the ratio of own working capital has increased, which is a positive factor.
The share of inventories in current assets increased by 24.64% - this is a negative trend. A negative factor is the increase in accounts receivable by 17.77%, i.e. the company has less money in circulation. The growth in sales revenue had a positive impact on the company's activities. An increase in the working capital turnover ratio indicates that working capital has begun to turn over better. This is a positive thing. The acceleration of the circulation of working capital is also indicated by a decrease in the duration of one revolution by 11.36%.
Based on all of the above, it should be noted that in order to increase the efficiency of using working capital, an enterprise should first of all get rid of or at least try to reduce accounts receivable, since this money can be used as a source of working capital and the enterprise in this case will not need to resort to to borrowed funds.
Table 9
Factor analysis of the coefficient of provision with own working capital:
1) with an increase in own sources of security, SOS increased by 0.103
2) with an increase in the value of current assets, the SOS security ratio decreased by 0.065
total influence = 0.034; check: 0.174 - 0.137 = 0.034
Based on the conducted factor analysis, we can say that the influence of positive factors overshadowed the influence of negative ones, as a result of which the SOS security increased.
Table 10
Factor analysis of the working capital turnover ratio:
3) with an increase in sales revenue by 206,755 thousand rubles, asset turnover increased by 0.941
4) with an increase in the value of current assets by 82,239 thousand rubles, the asset turnover decreased by 0.722
total influence = 0.219; check: 1.928 – 1.709 = 0.219
Based on the factor analysis carried out, we can say that the influence of positive factors overshadowed the influence of negative ones, as a result of which K asset turnover increased.
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Introduction
1. Theoretical foundations of business activity of an enterprise
1.2 Criteria for business activity of an enterprise
2. Analysis of business activity using the example of the enterprise JSC IESK
Introduction
information business activity enterprise
Business activity of enterprises is one of the central factors of the efficiency of a market economy. The criteria for its assessment are often reduced in the literature to the characteristics of the financial condition of enterprises. At the same time, such an assessment is also necessary at the macro level, which is valid in most countries of Western Europe.
Business activity commercial organization is manifested in the dynamism of its development, its achievement of its goals, which is reflected in natural and cost indicators, in the effective use of economic potential, and the expansion of markets for its products.
In market conditions, the activities of enterprises in the production and sale of products are mainly determined by the relationship between supply and demand for products. Consequently, the release of products that meet social and personal needs and the search for consumers are one of the main tasks facing the enterprise. In this regard, the development of business and market activity of an enterprise determines the level of its financial condition.
Business activity stands the most important factor, which determines the financial stability of enterprises. This factor is influenced by: sustainability of economic growth, compliance with the specified pace of development of the enterprise, degree of implementation accepted plans production, the level of efficiency in the use of available production resources, the breadth of markets for the enterprise's products, including the availability of export supplies, the presence of specific prospects for the development of the enterprise.
The necessary business activity is designed to ensure the ratio of the following dynamics indices:
Thus, the relevance of the chosen topic is due to the significance of the category of business activity in the economy of an enterprise.
The purpose of the course work is to analyze the business activity of the enterprise OJSC Irkutsk Electric Networks.
1. Consider the theoretical foundations of business activity and the role of its indicators in the system of comprehensive economic analysis,
2. conduct an analysis of the business activity of the enterprise JSC IESK.
The subject of research in this work is the methodology for analyzing business activity and financial condition and their information base. The object of the study is the enterprise JSC IESK.
The course work consists of an introduction, two sections, a conclusion, a list of sources used and applications.
During the research, legislative and regulatory acts of the Russian Federation, orders and letters of the Ministry of Finance of the Russian Federation, data from the State Committee on Statistics of the Russian Federation, and international accounting and reporting standards were used. Special literary reference sources were also used: economic, financial reference books and textbooks, Regulations and instructions of the Ministry of Finance.
1. Theoretical foundations of business activity of an enterprise
1.1 Sources of information for analyzing the business activity of an enterprise
Sources of information for analyzing the business activity of an enterprise are the balance sheet (Form No. 1) and the profit and loss statement (Form No. 2).
Balance is the most representative form of financial reporting, showing the state of the enterprise’s funds (asset) and their sources (liabilities) as of a certain date. In the balance sheet, the totals of assets and liabilities must be equal. When drawing up a balance, the sum of the totals for analytical accounts is equal to the corresponding synthetic account.
Assets Enterprises are resources that should bring benefits to the enterprise in the future. The assets of the enterprise must be their own, that is, owned by the enterprise, and not be leased. Assets must be previously acquired and not in the state of acquisition at the time of reporting. The balance sheet consists of two sections: non-current assets and current assets.
Non-negotiableassets
Intangibleassets(110) - are assets that do not have a material form, which are used in the production and sale of products for more than a year and bring economic benefits to the organization. Intangible assets include: software, databases, technologies, rights and licenses, trademarks and brands; all of them must be documented with documents confirming the existence of the asset itself and the organization’s exclusive right to use them.
In Russia, the valuation of intangible assets, such as the value of brands and the business reputation of the company, occurs only when the company is sold and is the difference between the purchase price of the company and book value its assets.
Amortization of intangible assets is written off monthly to the cost of production according to standards calculated by the enterprise based on the original cost and useful life.
Basicfunds(120) - the cost of objects, means of production that are used in the production process long time and transfer their value to the cost of production through depreciation. Objects of fixed assets are buildings and structures, machines and mechanisms, machinery. During the useful life of an object of fixed assets, depreciation is not suspended, except in cases where the fixed assets are undergoing reconstruction or modernization by decision of the head of the enterprise.
Unfinishedconstruction(130) - shows the costs of construction and installation work carried out by contract or in-house, the acquisition of buildings, equipment, vehicles and durable tools, design and survey work and other work, the cost of which is reflected in the cost of capital construction projects before commissioning.
ProfitableinvestmentsVmaterialvalues(135) - reflect income-generating investments provided for a fee for temporary possession and use under a financial lease (leasing) or rental agreement for the purpose of generating income. The specified property is reflected in the balance sheet at its residual value.
Postponedtaxassets(145) - reflect amounts tax obligations, accrued for transfer, but attributed to payment in the next period.
II. Negotiableassets
Reserves(210)
a) raw materials, supplies and similar valuables (211)
b) costs in work in progress (213) - these are the costs incurred for the production of products that have not yet been accepted for execution
c) deferred expenses - expenses for which the costs are gradually or monthly transferred to the cost of products, for example, a subscription to the “Financial Director” magazine
Taxonaddedprice(220) - fixed for tax purposes in order to increase the accuracy of calculations and to avoid double taxation.
Accounts receivabledebt(230, 240) - the amount of expected payments for realized values.
Short termfinancialinvestments(250) - investments in subsidiaries and affiliates, corporate bonds, as well as loans provided to other organizations.
Cashfunds(260) - money in the bank on current accounts or at the cash desk of the enterprise.
Liabilities of an enterprise are also called sources of property formation. Liabilities on the balance sheet are presented in the following sections.
CapitalAndreserves
Statutorycapital(410) - reflected in accordance with constituent documents, the value is established in accordance with the law in the prescribed manner. In joint stock companies, the authorized capital consists of the par value of shares acquired by shareholders. Authorized capital society is determined minimum size property guaranteeing the interests of its creditors.
Additionalcapital(420) - shows the amounts of additional valuation of non-current assets, share premium (amounts received in excess of the normal cost of issued shares, minus the costs of their sale); a fixed part of retained earnings remaining at the disposal of the enterprise in the amount allocated for capital investments; gratuitously received values.
Sparecapital(430) - shows the amount of balances of reserve and other similar funds that can be formed in accordance with the constituent documents and legislation of the Russian Federation.
Unallocatedprofit(uncoveredloss)(470)
Long-termobligations- obligations that must be repaid within a period exceeding one year, i.e. As a rule, they represent sources of financing of non-current assets.
Long-term liabilities include long-term loans, long-term borrowings and other long-term liabilities. Basic examples of long-term liabilities are long-term notes payable, obligations for pension and lease payments, and bonds issued by a company as a source of borrowed funds to finance its operations.
V. Short termobligations- are a source of financing current assets. The presence of short-term loans and borrowings indicates insufficient financial stability of the enterprise.
The amount for the asset (300) and liability (700) is called “ currencyballnsa" The larger the balance sheet currency, the more funds the company has at its disposal. An increase in the balance sheet currency indicates an increase in production volume, that is, an increase in inventories, work in progress, as well as an increase in equity and liabilities. Decrease - indicates a decrease in production volume and a reduction in the number of funds used and a decrease in their sources.
ReportOprofitsAndlosses
The profit and loss statement contains data on the income, expenses and financial results of the enterprise on an accrual basis from the beginning of the year to the reporting date.
The profit and loss statement provides information reflecting the formation of net profit for the reporting period. The report groups the enterprise's income and expenses and their algebraic sum is reflected as profit or loss for the reporting period.
Earnings are increases in assets or decreases in liabilities of a company that are caused by the company's normal business activities and result in an increase in equity. These include revenue from the sale of products or the provision of services, fees, interest, dividends, rent, etc.
Expenses are a decrease in the enterprise's funds or an increase in its liabilities that arise in the process of the enterprise's economic activities in order to make a profit and lead to a decrease in equity capital. Expenses include: cost of goods sold, non-production and administrative expenses, interest, rent, taxes, wages.
Other profits (occasional profits) and other losses represent increases or decreases in equity as a result of random transactions that are not characteristic of ordinary business activities.
The report usually begins with the item sales revenue, which reflects gross revenue from sales of products, works, services, or with the item net sales revenue, which represents sales revenue minus discounts and returned goods.
The income statement contains five types of profit:
1) gross profit - calculated as revenue from the sale of works, goods, services without VAT minus the cost of products sold;
2) profit (lesion) from sales - calculated as gross profit minus commercial and administrative expenses;
3) profit (lesion) to taxation - calculated as profit from sales plus/minus the balance of operating and non-operating income and expenses;
4) profit (lesion) from ordinary activities - calculated as profit before tax minus income tax calculated in accordance with the Tax Code of the Russian Federation (20%);
5) clean (unallocated) profit or uncovered lesion - calculated as the difference between profit from ordinary activities and the balance of extraordinary income and expenses.
1.2 Criteria for business activity of an enterprise
The business activity of an enterprise is measured using a system of quantitative and qualitative criteria.
Quality criteria - breadth of the product sales market, business reputation of the enterprise, its competitiveness, the presence of regular suppliers and buyers of finished products, etc.
Qualitative criteria are compared with similar parameters of competitors operating in the industry under consideration.
Quantitative criteria business activity is characterized by absolute and relative indicators.
Among absolute indicators it is necessary to highlight the volume of sales of finished products, profit and the amount of capital advanced into production. It is advisable to compare these dynamics parameters over a number of years. The optimal ratio between them:
T p > T in > T a > 100%, where
T p - profit growth, %;
T in - growth rate of sales revenue, %;
T a - growth rate of advanced capital or growth rate of assets, %.
Thus, profits should increase at a faster rate than other parameters. This means that production costs should be reduced and the company's assets used more efficiently.
However, even for efficiently operating enterprises, deviations from the specified ratio of indicators are possible. The reasons may be the development of new types of products and technologies, large investments in the renewal and modernization of fixed assets, reorganization of the management and production structure. These factors are often caused by external economic conditions and require significant capital investments that will pay off in the future.
Table 1
Turnover indicators
|
Indicator |
Calculation formula |
Reflects |
|
|
1. Total asset turnover ratio |
Revenue from product sales / Average assets |
turnover rate (in the number of revolutions per period) of all assets of the enterprise |
|
|
2. Current assets turnover ratio |
Revenue from sales of products /Average value of current assets |
turnover rate of the enterprise's current assets |
|
|
3. Accounts receivable turnover ratio |
Revenue from product sales / Average accounts receivable |
turnover rate of the company's accounts receivable |
|
|
4. Accounts payable turnover ratio |
Revenue from product sales /Average accounts payable |
rate of turnover of the company's accounts payable |
|
|
5. Capital productivity of fixed assets and non-current assets |
Sales revenue / Average value of fixed assets |
return on non-current assets per 1 rub. non-current assets for the period |
|
|
6. Equity turnover ratio |
Sales revenue / Average equity |
rate of turnover of the enterprise's equity capital |
Relative indicators business activity of an enterprise is characterized by the efficiency of resource use and can be represented in the form of a system of financial ratios:
Table 1 presents turnover indicators that should be used when assessing business activity. The average value of indicators is defined as the chronological average for a certain period (based on the amount of available data); in the simplest case, it can be defined as half the sum of indicators at the beginning and end of the reporting period.
1.3 Example of calculating indicators of business activity of an enterprise
1) coefficient turnover assets - shows the turnover rate of the entire advanced capital of the enterprise, i.e. the number of revolutions it makes during the analyzed period.
2) coefficient turnover non-current assets - shows the turnover rate of the enterprise’s non-mobile assets for the analyzed period.
3) coefficient turnover negotiable assets - shows the turnover rate of mobile assets for the analyzed period.
4) coefficient turnover reserves - shows the turnover rate of inventories, raw materials, materials, work in progress, etc.
5) coefficient turnover accounts receivable debt - shows the number of turnovers made by accounts receivable for the analyzed period. As turnover accelerates, the value of the indicator decreases, which indicates an improvement in settlements with debtors.
6) coefficient turnover own capital - reflects the activity of equity capital. An increase in the indicator in dynamics means an increase in the efficiency of using equity capital. Duration characterizes the rate of turnover of equity capital. The decrease in the indicator reflects a trend favorable for the enterprise.
7) coefficient turnover creditor debt - acceleration of the indicator adversely affects the liquidity of the enterprise. If the turnover of accounts payable is less than the turnover of accounts receivable, then the company may have a balance of free cash. The duration of one turnover characterizes the period of time during which the company covers its urgent debt. Slowing turnover, i.e. an increase in the period indicates a favorable situation for the enterprise.
2. Analysis of business activity using the example of the enterprise JSC IESK
2.1 General characteristics of the company JSC "IESK"
Open Joint Stock Company "Irkutsk Electric Grid Company" (JSC "IESK") (OGRN 1093850013762, registered on June 30, 2009 by the Interdistrict Inspectorate of the Federal Tax Service No. 17 for the Irkutsk Region at the address: 664033, Irkutsk, Lermontov St., 257) is a legal entity , created as a result of reorganization in the form of transformation of the Limited Liability Company "Irkutsk Electric Grid Company" (OGRN 1063808009814, registered on 02/08/2006 by the Inspectorate of the Federal Tax Service for the Right Bank District of Irkutsk).
The limited liability company Irkutsk Electric Grid Company (IESK LLC) was created in 2006 on the basis of the network assets of OJSC Irkutskenergo in order to fulfill the requirements of Federal Law No. 36-FZ “On the peculiarities of the functioning of the electric power industry in the transition period...”. The structure of IESK LLC includes 5 branches.
OJSC Irkutskenergo with a total length of networks of more than 35,000 km. voltage from 0.4 kV to 500 kV. The total fleet of equipment of IESK LLC amounted to 195,311 conventional units.
Until December 31, 2008 the only participant LLC "IESK" was OJSC "Irkutskenergo". After the reorganization carried out by OAO Irkutskenergo in 2008 in the form of a spin-off from 01/01/2009, the sole participant of IESK LLC became OAO Irkutsk Electric Networks, created as a result of the spin-off from OAO Irkutskenergo.
In 2009, extraordinary General meeting shareholders of OJSC Irkutsk Electric Networks, a decision was made to reorganize OJSC Irkutsk Electric Networks in the form of merger with OJSC IESK, created as a result of reorganization in the form of transformation of LLC IESK.
On December 31, 2009, the reorganization of JSC IESK was completed by the merger with OJSC Irkutsk Electric Networks, whose activities were discontinued on December 31, 2009.
OJSC IESK, in accordance with current legislation, is the legal successor of LLC IESK and OJSC Irkutsk Electric Networks in relation to all rights and obligations of reorganized legal entities acquired in the course of their activities.
JSC "IESK" is included in the Register of economic entities with a market share of a certain product of more than 35%, as an economic entity providing transmission services electrical energy within engineering network communications in the territory of the Irkutsk region, with a market share of more than 50% (Order of the Office of the Federal Antimonopoly Service for the Irkutsk Region No. 7-r dated August 20, 2009). JSC "IESK" is not included in the list of strategic enterprises and strategic joint stock companies. JSC "IESK" is a natural monopoly entity and is included in the Register of natural monopoly entities in the fuel and energy complex, section I "Electric and (or) thermal energy transmission services" under registration number 38.1.69 (Order of the Federal Tariff Service of the Russian Federation No. 169-e dated 07/17/2007 “On the inclusion of an organization in the Register of natural monopoly entities in the fuel and energy complex, in respect of which state regulation and control is carried out” and Order of the Federal Tariff Service of the Russian Federation No. 315-e dated 08/11/2009 “On amendments to the Register of entities natural monopolies, subject to state regulation and control”).
The structure of JSC IESK includes 5 branches:
Western Electric Networks (Tulun);
Central electrical networks (Angarsk);
Southern Electric Networks (Irkutsk);
Northern Electric Networks (Bratsk);
Eastern Electric Networks (Irkutsk).
Position of the company in the industry:
JSC IESK services electrical networks of the Irkutsk region with voltages from 0.4 kV to 500 kV with a length of more than 39,600 km and 8,570 substations with a total capacity of 26,078 MVA.
JSC "IESK" has a stable financial position and high level reliability of power supply to consumers.
As part of the technology audit in 2012, a comparative analysis was carried out with Russian and foreign power grid companies.
According to the results of the comparison, JSC IESK (taking into account the error in the use of analogue indicators) is among the top five electric grid companies in the Russian Federation in terms of reliability.
The main feature of JSC IESK is the significant length of high-voltage networks from the north of the Irkutsk region to the south, about 600 km. At the same time, the northern region, on whose territory the largest sources are located, the Bratsk Hydroelectric Power Station and the Ust-Ilimsk Hydroelectric Power Station, is surplus, and the southern Irkutsk-Cheremkhovo region is deficient.
The main counterparties for the transmission of electricity: enterprises of the aluminum industry (Bratsk Aluminum Smelter, Irkutsk Aluminum Smelter); Rusenergosbyt LLC, acting in the interests of Russian Railways OJSC; Irkutskenergosbyt LLC, acting in the interests of consumers of the Irkutsk region.
JSC IESK independently performs the functions of selling electricity to consumers through the central sales department and energy sales departments.
Organizational structure management of JSC IESK is presented in Figure 1.2.
Posted on http://www.allbest.ru/
Figure 1.2
The figure shows that JSC IESK has a linear-functional organizational structure. The main objective of the company is to ensure contractual terms of power supply to consumers through reliable and efficient operation of equipment. The organizational structure is typical for a complex enterprise engaged in the operation of networks, capable of carrying out the planned construction of new facilities without the involvement of contractors. JSC IESK independently performs the functions of selling electricity to consumers through the central sales department and energy sales departments located in the area of electrical networks.
The average number of personnel of JSC IESK for 2012 was 3,256 people, which is at the level of 2011. The average monthly salary increased by 9.4% compared to the previous year and amounted to 41,715 rubles.
In JSC "IESK" the largest share is made up of workers in the economically active age from 25 to 45 years - 53% (1758 people), 61% are the category of workers. Middle age employees are 42 years old, 46% of employees have worked in the electric power industry for 10 years or more.
To achieve the goals of the Company's activities, maintain consistently high results of professional activities, increase labor potential and ensure professional growth of employees, JSC IESK implements personnel training. In 2012, 1,232 people were covered by all forms of training, and 1,746 person courses were organized. Actual training costs amounted to 19,093 thousand rubles.
In order to effectively train the personnel reserve for promotion to management positions, 109 employees of JSC IESK took part in trainings to develop personal and managerial competencies.
As part of the training of young specialists, targeted training of students in specialized universities continued.
2.2 General assessment of the structure of assets and their sources
For the analysis, a comparative analytical balance was compiled based on initial data taken from the balance sheet of JSC IESK, posted on the company’s website.
Table 2.1 shows the asset, table 2.2 the liability and table 2.3 the profit and loss statement of JSC IESK.
Table 2.1
|
ASSETS |
Codep. |
On31.12.2012 |
On31.12.2011 |
On31.12.2010 |
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I. NON-CURRENT ASSETS |
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Intangible assets |
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Research and development results |
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Fixed assets |
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including: |
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fixed assets |
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Unfinished construction |
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Profitable investments in material assets |
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Financial investments |
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Deferred tax assets |
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Other non-current assets |
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TOTAL for section I |
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II. CURRENT ASSETS |
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including: |
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raw materials, supplies and other similar assets |
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Finished products and goods for resale |
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Other inventories and costs |
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Value added tax on purchased assets (19) |
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Accounts receivable |
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Including: |
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buyers and customers |
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Bills receivable |
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Advances issued |
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Other debtors |
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Financial investments (excluding cash equivalents) |
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Cash and cash equivalents |
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Other current assets |
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On-farm expenses |
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TOTAL for section II |
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Based on the data in the table, we can come to the conclusion that in 2012, compared to the previous year, the value of the organization’s assets (balance sheet) increased by 4,3331,211 rubles, due to a decrease in accounts receivable by 1,622,581 rubles. and an increase in cash by 20,764 rubles. At the end of 2012, the composition of fixed assets increased by 4,931,444 rubles, this is a favorable factor for the enterprise. The organization's assets increase due to non-current and current assets; therefore, during the reporting period, proportionally distributed funds were invested in current assets and non-current assets. A favorable factor is that the company has observed a decrease in inventories by 28,715 rubles, this indicates that the company has seen an increase in inventory turnover, i.e. “overstocking” of products does not occur at the enterprise.
Table 2.2
|
PASSIVE |
Codep. |
On31.12.2012 |
On31.12.2011 |
On31.12.2010 |
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III. CAPITAL AND RESERVES |
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Authorized capital (share capital, authorized capital, contributions of partners) |
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Own shares purchased from shareholders |
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Revaluation of non-current assets |
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Additional capital (without revaluation) |
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Reserve capital |
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Including: |
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Reserves formed in accordance with legislation |
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Reserves formed in accordance with the constituent documents |
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Retained earnings (uncovered loss) of previous years |
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Retained earnings (uncovered loss) of the reporting year |
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TOTAL for Section III |
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IV. LONG-TERM LIABILITIES |
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Borrowed funds |
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Deferred tax liability |
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Provisions for contingent liabilities |
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Other obligations |
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TOTAL for section IV |
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V. SHORT-TERM LIABILITIES |
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Borrowed funds |
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Accounts payable |
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Including: |
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Suppliers and contractors |
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Debt to the organization's personnel |
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Debt to state extra-budgetary funds |
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Debt on taxes and fees |
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Other loans |
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Bills payable |
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Advances received |
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Debt to participants (founders) for payment of income |
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Deferred income |
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Estimated liabilities |
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Other obligations |
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On-farm expenses |
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Total for Section V |
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The liability side of the balance sheet contains data on the sources of formation of property owned by the organization. Here, first of all, it is necessary to study the structure of sources and its dynamics. To study the sources of an organization’s property, it is necessary to consider its own funds, as well as long-term and short-term liabilities, the ratio of the share of equity capital, and the use of borrowed funds in the form of short-term and long-term loans.
The sources of the organization's property are represented by its own funds, short-term and long-term liabilities. For 2012, the value of sources amounted to 48,096,864 rubles; over the year it increased by 4,321,211 rubles. Compared to the previous period, this is good result, the growth was mainly due to an increase in retained earnings from previous years by RUB 898,072. and due to the revaluation of non-current assets by 1,888,278 rubles. The structure of borrowed funds during the reporting period underwent a number of changes. Thus, the share of accounts payable for the analyzed periods increased by 722,422 rubles, this is an unfavorable factor, since the organization worsened its financial position, and it is financially dependent. An unfavorable factor is that the company is experiencing incomplete repayment of all its long-term obligations, i.e. long-term loans increased by RUB 1,750,150.
Table 2.3
Profit and loss reports
|
Nameindicator |
Codep. |
For12 month2012 year |
For12 month2011 year |
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Connection services |
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Other services |
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Cost of sales |
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Energy transport and distribution services |
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Connection services |
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Other services |
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Gross profit(loss) |
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Business expenses |
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Administrative expenses |
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Profit (loss) from sales |
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Income from participation in other organizations |
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Interest receivable |
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Interest payable |
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Other income |
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Other expenses |
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Profit (loss) before tax |
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Current income tax |
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Permanent tax liabilities (assets) |
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Change in deferred tax liabilities |
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Change in deferred tax assets |
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Net profit (loss) |
Analyzing the profit and loss statement, it can be noted that the company did not develop dynamically in the period under review. Thus, the level of income from the core activities of JSC IESK amounted to 14,341,389 rubles at the end of 2011, which is less by 705,467 rubles. compared to 2012. The amount of management expenses for the analyzed periods increased by RUB 48,328. During the analyzed periods, the company observed an increase in other expenses by 74,093 rubles, therefore, this is a negative trend. In 2012, there was an increase in gross profit by 155,833 rubles, and profit before tax and net profit decreased by 14,767 rubles, 41,821 rubles. respectively. The company is experiencing a deterioration in its key indicators; this is an unfavorable trend.
Taking into account the fact that the company increased the share of retained earnings by 898,072 rubles, and the revaluation of non-current assets by 1,888,278 rubles, we can conclude that the source of all economic assets is equity capital. The share of equity capital in 2012 was 97.8%, and in 2011 - 99.9%; the decrease in the share of equity capital is unfavorable compared to 2011, as it shows, although small, a deterioration in the financial condition of the organization.
2.3 Analysis of business activity of JSC IESK
Business activity in the financial aspect is manifested, first of all, in the speed of funds turnover. Analysis of business activity consists of studying the levels and dynamics of various financial ratios - turnover indicators, which are very important for assessing the activity of an enterprise.
coefficient turnover assets for 2011 :
Cob.ac. = 14,341,389/(43,775,653+41,051,947)/2 = 0.33
coefficient turnover assets for 2012 :
Cob.ac. = revenue / average asset value / 2
Cob.ac. = 15,046,856/(48,096,864+43,775,653)/2 = 0.33
Nob.ak = number of days in the billing period/Kob.ak
Noob.ac. = 365/0.33 = 1,106 days.
In addition to the turnover ratio, turnover is calculated in the number of days that one turnover takes. To do this, 365 days are divided by the annual turnover ratio. In our case, the asset turnover ratio is 0.33 for 2011 and 0.33 for 2012, which shows that assets turn over on average in 1,106 days (i.e., during this period revenue is received equal to the value of the organization’s assets) .
An increase in the coefficient over time is a positive factor. In our calculations, the indicators for 2011 and 2012 are the same, there was no increase or decrease, which can be attributed to a negative factor.
coefficient turnover non-current assets for 2011 year:
Cob.in. = 14,341,389/(40,742,824+37,385,464)/2 = 0.37
No.ext. = 365/0.37 = 986 days.
coefficient turnover non-current assets for 2012 year :
Cob.in. = revenue / average cost of non-current assets
Cob.in. = 15,046,856/(46,626,620+40,742,824)/2 = 0.34
No.ext. = number of days in the billing period/Cob.in.
No.ext. = 365/0.34 = 1,074 days.
Shows how effectively fixed (non-current) assets are used. If fixed assets are not used in sales, then fixed costs increase. In 2011, the non-current assets turnover ratio was 0.37. In 2012 - 0.34. In 2011 it was higher by 0.03. A decrease in the ratio means a slowdown in inventory turnover, which is, although insignificant, a negative indicator of business activity.
coefficient turnover negotiable assets for 2011 year:
Cob.ob.ac. = 14,341,389/(3,022,829+3,666,483)/2 = 4.3
Nob.b.ac. = 365/4.3 = 84 days
coefficient turnover negotiable assets for 2012 year:
Cob.ob.ac. = revenue / average value of current assets
Cob.ob.ac. = 15,046,856/(1,470,244+3,022,829)/2 = 0.66
Nob.ob.ac = number of days in the billing period/Cob.ob.ac.
Nob.b.ac. = 365/0.66 = 553 days.
The turnover ratio of current assets shows the activity of use and the speed of circulation of current assets. This ratio characterizes how much current assets made a full turnover in one year and how much revenue they brought. Thus, in 2011, the turnover of current assets was 84 days, and in 2012, for 553 days, the performance of the enterprise decreased by 3.64, which is a negative indicator of business activity.
coefficient turnover reserves for 2011 year:
Cob.zap. = 12,070,757/(171,570+216,075)/2 = 6.2
No.rep. = 365/6.2 = 59 days
coefficient turnover reserves for 2012 year:
Cob.zap. = cost of sales of goods/average cost of inventories
Cob.zap. = 12,620,391/(210,285+171,570)/2 = 6.6
No.rep. = number of days in the billing period/Cob.rep.
No.rep. = 365/6.6 = 55 days
The inventory turnover ratio shows the intensity of inventory use and turnover rate. A decrease in the turnover ratio indicates the accumulation of excess inventory in the company's warehouses. The higher the inventory turnover ratio, the higher the activity of the enterprise in creating cash. The coefficient for 2012 is 0.4 higher than for 2011, which shows a more rational use of the organization's reserves.
coefficient turnover accounts receivable debt for 2011 year:
Cob.d.z. = 14,341,389/(2,845,098+3,360,526)/2 = 2.3
Noob.d.z. = 365/2.3 = 158 days.
coefficient turnover accounts receivable debt for 2012 year:
Cob.d.z. = revenue / average value of accounts receivable
Cob.d.z. = 15,046,856/(1,222,517+2,845,098)/2 = 3.6
Noob.d.z. = number of days in the billing period/Cob.d.z.
Noob.d.z. = 365/3.6 = 101 days.
The accounts receivable turnover ratio shows the rate of turnover of accounts receivable. The higher the ratio, the faster consumers repay their obligations, which is beneficial for the enterprise. The 2012 figure is 1.3 times higher than the 2011 figure, which means that consumers paid more conscientiously in 2012.
coefficient turnover own capital for 2011 year:
Kob.s.k. = 14,341,389/(36,426,051+34,065,864)/2 = 0.04
Nob.s.k. = 365/0.04 = 9,125 days.
coefficient turnover own capital for 2012 year:
Kob.s.k. = revenue / average cost of equity capital
Kob.s.k. = 15,046,856/(39,221,130+36,426,051)/2 = 0.04
Nob.s.k. = number of days in the billing period/Cob.s.c.
Nob.s.k. = 365/0.04 = 9,125 days.
The equity turnover ratio shows the activity and speed of the enterprise's use of its own capital. The ratio and number of days for 2011 and 2012 are the same, which can be regarded as a negative trend, because the ratio is quite low and the number of days of turnover is too high and there has been no improvement in 2 years.
coefficient turnover creditor debt for 2011 year:
Kob.k.z. = 14,341,389/(2,502,285+2,077,449)/2 = 6.2
Noob.c.c. = 365/5.2 = 58 days.
coefficient turnover creditor debt for 2012 year:
Kob.k.z. = revenue / average cost of credit debt
Kob.k.z. = 15,046,856/(3,224,707+2,502,285)/2 = 5.2
Noob.c.c. = number of days in the billing period/Kob.k.z.
Noob.c.c. = 365/5.2 = 70 days.
The accounts payable turnover ratio shows the speed and intensity of repayment of the enterprise's obligations to borrowers and characterizes the number of turnovers in the repayment of accounts payable during the reporting period. In 2011, the company fulfilled its obligations on average in 58 days, and in 2012 in 70 days, which is 12 days longer. The debt repayment ratio has worsened.
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