5. Usage performance indicators working capital

Improving the use of working capital with the development of entrepreneurship is becoming increasingly important, since the material and financial resources released in this case are an additional internal source of further investment. Rational and effective use working capital helps to increase the financial stability of the enterprise and its solvency. Under these conditions, the enterprise timely and fully fulfills its settlement and payment obligations, which allows it to successfully carry out commercial activities.

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

Under the turnover of working capital is understood the duration of one complete circulation of funds from the moment of the transformation of working capital in cash into inventories and until the release of finished products and its sale. The circulation of funds ends with the transfer of proceeds to the account of the enterprise.

The turnover rate of working capital is calculated using three interrelated indicators:

- turnover ratio (the number of turnovers made by working capital for a certain period (year, half year, quarter));

- the duration of one revolution in days,

- the amount of working capital per unit of products sold.

The calculation of the turnover of working capital can be carried out both according to the plan and actually.

The planned turnover can be calculated only for the normalized turnover of funds, the actual one - for all working capital, including non-standardized ones. Comparison of planned and actual turnover reflects the acceleration or deceleration of the turnover of normalized working capital. With the acceleration of turnover, working capital is released from circulation, with a slowdown, there is a need for additional involvement of funds in circulation.

The turnover ratio is defined as the ratio of the amount of proceeds from the sale of products, works, services to the average balance of working capital according to the formula (Fig. 7.29):

K about \u003d P / C,

where P is the net proceeds from the sale of products, works, services, rubles;C - average balances of working capital, in rubles.

Rice. 7.29. Methodology for calculating the turnover ratio

The turnover of working capital can also be presented in days, that is, reflect the duration of one turnover (Fig. 7.30).

The duration of one revolution in days is determined by the formula:

O \u003d C: R / D or O \u003d D / K about,

where O is the duration of one revolution in days;C - balances of working capital (average annual or at the end of the upcoming (reporting) period), rubles;P - revenue of marketable products (at cost or in prices), rubles;D - the number of days in the reporting period.

Rice. 7.30. Calculation of the duration of one revolution in days

To determine the duration of one turnover of receivables, you can use the indicator of sales in selling prices. First, the volume of sales for one day is calculated, and then the urgency of the receivables.

The calculation is made according to the formula:

OD = DZ: Oh,

where OD is the duration of the turnover of receivables (in days);DZ - accounts receivable at the end of the year;O is the volume of sales per day.

The period required for the conversion of all working capital into cash is the sum of the duration of one turnover of inventory in days and the urgency (duration) of one turnover of receivables.

The working capital utilization factor is the reciprocal of the turnover ratio (Fig. 7.31). It characterizes the amount of working capital per unit (1 ruble, 1 thousand rubles, 1 million rubles) of sold products. At its core, this indicator represents the capital intensity of working capital and is calculated as the ratio of the average balance of working capital to the volume of product sales for the analyzed period. Calculated according to the formula:

K z \u003d C / P,

where K z - working capital utilization factor;C - average balance of working capital, rub.;P - proceeds (net) from the sale of products, works, services, rub.

Rice. 7.31. Load Factor Calculation

Example: Over the past year, the volume of marketable products at cost amounted to 350,000 thousand rubles. The average balance of working capital for the same period is 47,800 thousand rubles. Determine the performance indicators for the use of working capital by the enterprise.

The calculation is carried out in the following sequence:

1. The turnover ratio is determined: 350,000 / 47,800 = 7.3 turns. That. for the year, working capital made 7.3 rounds. In addition, this indicator means that for every ruble of working capital, 7.3 rubles of sold products accounted for.

2. The duration of one revolution is calculated: 360 / 7.3 = 49.3 days

3. The load factor is determined: 47,800 / 350,000 = 0.14.

In addition to these indicators, the indicator of return on working capital can also be used, which is determined by the ratio of profit from the sale of the company's products to the average balances of working capital (Fig. 7.32).

Rice. 7.32. Profitability current assets

Turnover can be defined as general and as private.

General turnover characterizes the intensity of the use of working capital in general for all phases of the circulation, without reflecting the features of the circulation of individual elements or groups of working capital.

Private turnover reflects the degree of use of working capital in each phase of the cycle, in each specific phase of the cycle, in each group, as well as for individual elements of working capital.

To determine the impact of structural changes, the balances of individual elements of working capital are compared with the volume of marketable products (T), which was taken when calculating the total turnover of working capital. In this case, the sum of the indicators of private turnover of individual elements of working capital will be equal to the indicator of the turnover of all working capital of the enterprise, that is, the total turnover.

The quantitative result of the efficiency of the use of working capital is their release from circulation (with an acceleration of turnover) or additional involvement in economic turnover (with a slowdown in the turnover of working capital) (Fig. 7.33).

Rice. 7.33. Consequences of acceleration and deceleration of working capital turnover

Release can be absolute or relative.

Absolute release of working capital takes place when the actual balance of working capital is less than the standard or the balance of working capital for the previous (base) period while maintaining or increasing the volume of sales for this period.

The relative release of working capital takes place in cases where the acceleration of the turnover of working capital occurs simultaneously with the growth in production at the enterprise, as a result, the growth rate of sales outstrips the increase in working capital.

The funds released at the same time cannot be withdrawn from circulation, as they are in inventories of goods and materials, which ensure the growth of production.

The relative release of working capital, like the absolute one, has a single economic basis and value, or means for the economic entity additional cost savings and allows for an increase in the scale entrepreneurial activity without any additional financial resources.

Example: It is known that for the previous year, the proceeds from the sale of products (in pg) amounted to 6,000 million rubles, for the current year (in tenge) - 7,000 million rubles. The average balance of working capital in the previous year (OS pg) - 600 million rubles, in the current year (OS tg) - 500 million rubles. The number of days in period D is 360 days. Determine the magnitude of the absolute and relative release of working capital from economic turnover.

The calculation is made in the following sequence:

1. The turnover ratios are calculated:

Previous year (KO pg) = 6,000 / 600 = 10 revolutions

Current year (KO tg) = 7,000 / 500 = 14 turns

2. The duration of one revolution in days is determined:

In the previous year (D pg) = 360 / 10 = 36 days

In the current year (D tg) = 360 / 14 = 25.71 days

3. Load factors are determined:

Previous year (KZ pg) = 600 / 6000 = 0.1

Current year (KZ tg) = 500 / 7000 = 0.07142

4. Two methods can be used to calculate the release of working capital.

Method 1: The total amount of release of funds from the economic turnover is calculated according to the formula V = (D tg - D pg) × V tg / D; absolute release: V ab = OS pg - OS tg; relative release: B rel = B - B ab.

According to the task:

B \u003d (25.71 - 36) × 7000 / 360 \u003d (-200) million rubles.

Vab = 500 - 600 = (-100) million rubles

Votn \u003d (-200) - (-100) \u003d (- 100) million rubles.

Method 2: The total amount of release from economic circulation is calculated by the formula B = (KZ tg - KZ pg) × V tg; absolute release: V ab \u003d OS pg - (V tg / KO pg); relative release: V rel = (V tg -V pg) / KO tg.

According to the task:

B \u003d (0.07142-0.1) × 7000 \u003d (-200) million rubles.

Vab \u003d 600 - (7000 / 10) \u003d (-100) million rubles.

Votn \u003d (6000 - 7000) / 10 \u003d (-100) million rubles.

The efficiency of the use of working capital depends on many factors, which can be divided into external factors that influence regardless of the interests of the enterprise, and internal factors that the enterprise can and should actively influence.

External factors include: the general economic situation, tax legislation, conditions for obtaining loans and interest rates on them, the possibility of targeted financing, participation in programs financed from the budget. These and other factors determine the scope in which the company can manipulate the internal factors of working capital.

Significant reserves for increasing the efficiency of the use of working capital lie directly in the enterprise itself. In manufacturing, this applies primarily to inventories. Being one of the components of working capital, they play big role in ensuring the continuity of the production process. At the same time, inventories represent that part of the means of production that is temporarily not involved in the production process.

Rational organization of inventories is an indispensable condition for increasing the efficiency of the use of working capital. The main ways to reduce inventories come down to their rational use, the elimination of excess stocks of materials, the improvement of rationing, the improvement of the organization of supply, including by establishing clear contractual terms of supply and ensuring their implementation, optimal selection of suppliers, and streamlined transport. Important role belongs to the improvement of the organization of warehouse management.

Accelerating the turnover of working capital allows you to release significant amounts and thus increase the volume of production without additional financial resources, and use the released funds in accordance with the needs of the enterprise.

ANALYSIS OF THE TURNOVER
CAPITAL

5.1. Indicators
turnover
capital

The term "working capital" (its synonym in domestic accounting - working capital) refers to the current assets of the enterprise. Working capital ensures continuity production process.

In the practice of planning, accounting and analysis, working capital is divided according to the following criteria:

• by functional role in the production process: working capital and circulation funds. Working capital includes inventories (raw materials, materials, fuel), work in progress, semi-finished products own production, Future expenses. Circulation funds are finished products and goods for resale, goods shipped, cash, settlements with other enterprises and organizations. Such a division is necessary for a separate analysis of the residence time of working capital in the process of production and circulation;
• on the practice of control, planning and management: standardized working capital and non-standardized working capital. The enterprise may have standards for inventories, semi-finished products of its own production, finished products, goods for resale;
• by sources of working capital formation: own working capital and borrowed working capital. The value of own working capital is determined as the difference between the result of section IV of the balance sheet "Capital and reserves" section I "Non-current assets" and section III "Losses". Borrowed working capital is formed in the form of bank loans, as well as accounts payable. They are provided to the enterprise for temporary use;

• by liquidity (speed of conversion into cash): absolutely liquid funds, quickly realizable working capital, slowly realizable working capital;
• according to the degree of risk of investing capital:
• working capital from minimal risk investments: cash, short-term financial investments;
• working capital with a low investment risk: accounts receivable (excluding doubtful), inventories (excluding stale), balances of finished products and goods (excluding not in demand);
• working capital with an average investment risk: low-value and wearing items, work in progress, deferred expenses;
• high-risk working capital: doubtful receivables, stale inventories, finished products and goods that are not in demand;
• by material content: objects of labor (raw materials, materials, fuel, etc.), finished products and goods, cash and funds in settlements.

The financial position of the enterprise is directly dependent on how quickly the funds invested in assets are converted into real money.

Accelerating the turnover of working capital reduces the need for them: less stocks of raw materials, materials, fuel, work in progress are required, and therefore, leads to a decrease in the level of costs for their storage, which ultimately contributes to an increase in profitability and improvement financial condition enterprises.

The slowdown in the turnover time leads to an increase in the required amount of working capital and additional costs, and hence to a deterioration in the financial condition of the enterprise.

The rate of turnover of funds is a complex indicator of the organizational and technical level of production and economic activity. Working capital ensures the continuity of the production process.

The duration of the funds in circulation is influenced by external and internal factors.

To factors external character include the scope of the enterprise, industry affiliation, the scale of the enterprise, the economic situation in the country and the related business conditions of the enterprise.

Internal factors - price policy enterprises, structure of assets, methodology for estimating reserves.

The turnover rate of working capital is estimated by such indicators as:

1. Turnover ratio, or turnover rate

K about = , (5.2)

where D - the duration of one turnover of working capital (in days);

T - reporting period (in days).

Reducing the turnover time, as already noted, leads to the release of funds from circulation, and its increase leads to an additional need for working capital.

3. Coefficient of fixing working capital

K a =

SO

Vp

. (5.3)

The coefficient of fixing working capital shows the amount of working capital per 1 rub. sold products.

In table. 5.1. the calculation of indicators of turnover of working capital is given.

Table 5.1

Working capital turnover indicators

Indicators	Previous period	Reporting period	Deviations
1. Revenue from the sale of products, works and services, thousand rubles.	12 596	27 138	+ 14 542
2. Average balances of all working capital, thousand rubles.	130 939	185 640	+ 54 701
3. Turnover ratio, number of revolutions	0,0962	0,1462	+ 0,05
4. Duration of one revolution (days)	3742,3	2462,6	- 1279,7
5. Coefficient of fixing working capital	10,395	6,841	- 3,554

As can be seen from Table. 5.1, the turnover of working capital accelerated by 0.05 turnover and amounted to 0.1462 turnover per year, or 2462.6 days, respectively, which should be assessed as a negative fact, since one turnover is equal to 6.84 years.

But at the same time, it should be noted that the turnover of working capital accelerated by 1279.7 days.

The acceleration of capital turnover helps to reduce the need for working capital (absolute release), increase production volumes (relative release) and, therefore, increase profits. As a result, the financial condition of the enterprise improves, solvency is strengthened.

The slowdown in turnover requires the attraction of additional funds to continue the economic activity of the enterprise, at least at the level of the previous period.

the value absolute savings (attraction) of working capital can be calculated in two ways.

Firstly, the release (attraction) of working capital from circulation can be determined by the formula

∆ CO \u003d CO 1 - CO o × K vp, (5.4)

where ∆ SO- the amount of savings (-) or attraction (+) of working capital;

CO 1, CO o- the average value of the working capital of the enterprise for the reporting and base period;

Kvp- growth factor of proceeds from sales of products (in relative units), K vp =

Vp1

V p0

.

At the analyzed enterprise, in accordance with the data in Table. 5.1

∆СО \u003d 185 640 - 130 939 × 2.1545 \u003d - 96468.1 (thousand rubles).

Second, you can use the formula

∆CO = (D L1 - D LO) × V 1 one, (5.5)

where D L1, D LO - the duration of one turnover of working capital in days;

V 1 one. - one-day sales of products (thousand rubles).

Let's calculate the release of working capital at the analyzed enterprise based on the indicators of Table. 5.1:

∆СО = (2462.6 - 3742.3) × 75, 38333 = -96468.1 (thousand rubles),

i.e. on this enterprise due to the acceleration of the turnover of working capital, 96468.1 thousand rubles were released:

The magnitude of the increase in the volume of production due to the acceleration of working capital (ceteris paribus) can be determined using the method of chain substitutions:

∆V p \u003d (K ob1 - K ob0) × CO 1. (5.6)

At the enterprise under consideration, due to the acceleration of the turnover of working capital, the increase in production amounted to 9282 thousand rubles. (∆V p = + 0.05 × 185 640).

The influence of the turnover of working capital on the increase in profits of the AR can be calculated by the formula

- 794 = 412.72 (thousand rubles)

Economics of the enterprise: lecture notes Dushenkina Elena Alekseevna

3. Circulation and indicators of turnover of working capital

Working capital is in constant motion. During one production cycle, they make a circuit consisting of three stages, changing their shape.

At the first stage enterprises spend money to pay bills for the supplied items of labor. Circulating assets from the monetary form are transferred to the commodity. At the second stage the acquired working capital goes directly into the production process and is first converted into inventories and semi-finished products, and after the completion of the production process into finished products. At the third stage finished products are sold, as a result of which circulating assets from the sphere of production come into the sphere of circulation and again take on a monetary form. These funds are directed to the acquisition of new objects of labor and enter into a new circuit. This does not mean that circulating capital passes successively from one stage of the circuit to another. On the contrary, he is simultaneously in all three stages of the circuit. Something at every moment is bought, produced, sold and bought again. This is what ensures the continuity and uninterrupted production and sale of products.

Working capital turnover indicators:

The simplest of them is working capital turnover ratio. It is defined as the cost of goods sold (sales proceeds) for a certain period, divided by the average working capital balance for the same period.

Index average duration of one turnover in days. The peculiarity of this indicator in comparison with the previous one is that it does not depend on the duration of the period for which it was calculated. The duration of turnover in days can be calculated as the quotient of dividing T (T is the duration of the period for which the indicators of days are determined) by the turnover ratio. In the practice of financial calculations, when calculating turnover rates, it is customary to consider the duration of any month equal to thirty, a quarter - ninety and a year - 360 days.

Average daily turnover of capital- as sales revenue (cost of goods sold) for a certain period, divided by the number of days in this period.

Coefficient of fixing working capital- the reciprocal of the turnover ratio. It characterizes the average balance of working capital per one ruble of sales proceeds.

The effectiveness of the use of objects of labor can be assessed by the indicator material consumption, which is defined as the ratio of the cost of raw materials, fuel, materials to the volume of production (in rubles). The reverse is called material efficiency and is calculated as the ratio of production volume to the cost of raw materials, materials, fuel.

Working capital after fixed assets occupy the second place in terms of the total amount of resources that determine the economy of the enterprise. The amount of working capital must be sufficient to produce products in the quantity requested by the market, and at the same time not leading to an increase in production costs.

From book Business Law author Smagina I A

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The effective functioning of any enterprise is impossible without competent and rational use working capital. Depending on the type of activity, stage life cycle or even the time of year, the amount of working capital for an organization may be different. However, it is the availability and competent use of these resources that determine how successful and long the activity of any economic entity will be.

In order to assess the literacy of the use of working capital of a company, there are many coefficients that analyze the speed of circulation, sufficiency, liquidity and many other equally important characteristics. One of the most important indicators necessary to determine the financial condition of the organization is the turnover ratio of working capital.

Turnover ratio (K about), or the rate of turnover, shows how many times during the study period the company is able to fully wrap its own working capital. Thus, this value characterizes the efficiency of the firm. The larger the value obtained, the more successful company uses the resources it has.

Formula and calculation

The turnover ratio shows the number of revolutions that make working capital for the considered period of time. It is calculated as:

Where:

• Q p is the volume of products sold in wholesale prices of the organization, excluding VAT;
• F ob.av. - the average balance of working capital found for the study period.

If we recall the approximate form of the cycle of circulation of funds in an enterprise, it turns out that the money that the organization invests in the work of its company returns to it after some time in the form of finished products. The company sells these products to its customers and again receives a certain amount of money. Their value is the income of the organization.

In this way, general scheme"Money-goods-money" implies the cyclical nature of the company's activities. The turnover ratio in this case shows how many such cycles the organization's funds can make in a certain period of time (most often in 1 year). Naturally, for the efficient and fruitful operation of the enterprise, it is necessary that this value was as high as possible..

Required indicators for calculation

The turnover ratio of working capital can be determined using the data presented in the financial statements of the organization. The quantities needed to determine it are shown in the first and second forms of financial statements.

So, in the general case, the volume of sales is calculated as the revenue received by the organization in one cycle (since in most cases an annual coefficient is used for analysis, in the future we will take into account the time period t = 1). Revenue for the specified period is taken from the report on financial results(former income statement), where it is shown in a separate line, as the amount received by the enterprise from the sale of works, goods or services.

The average balance of working capital is found from the second section of the balance sheet and is calculated as:

Where F 1 and F 0 are the values ​​of the company's working capital for the current and past period of time. Note that if the calculations use data for 2013 and 2014, then the resulting coefficient will represent the rate of turnover of funds specifically for 2013.

In addition to the turnover ratio in economic analysis there are other quantities that analyze the speed of circulation of the organization's working capital. Many of them are also closely related to this indicator.

So, one of the values ​​accompanying the turnover ratio is duration of one revolution (T about). Its value is calculated as the quotient of dividing the number of days corresponding to the analyzed period (1 month = 30 days, 1 quarter = 90 days, 1 year = 360 days) by the value of the turnover ratio itself:

Based on this formula, the duration of one revolution can also be calculated as:

Another important indicator used in the analysis of the financial condition of the organization is load factor of funds in circulation K load. This indicator determines the amount of working capital required to receive 1 ruble of proceeds from the sale of products. In other words, the ratio shows how many percent of the organization's working capital accounts for one unit of the final result. Thus, in another way, the load factor can be called the capital intensity of working capital.

It is calculated using the following formula:

As you can see from the methodology for calculating this indicator, its value is the inverse of the value of the turnover ratio. And this means that the lower the value of the load indicator, the higher the efficiency of the organization.

Another generalizing factor in the efficiency of the use of working capital is the value profitability (R ob.av.). This coefficient is characterized by the amount of profit received for each ruble of working capital, and shows the financial efficiency of the organization. The formula for its calculation is similar to the values ​​​​used to find the turnover ratio. However, in this case, instead of the proceeds from the sale of products, the numerator uses the profit of the enterprise before tax:

Where π is profit before tax.

Also, as in the case of the turnover ratio, the greater the value of return on capital, the more financially stable the company's activities.

Turnover ratio analysis

Before turning to the analysis of the turnover ratio itself and looking for ways to increase the efficiency of the organization, let's define what is generally meant by the concept of "working capital of the company".

The working capital of an enterprise is understood as the amount of assets that have a useful life of less than one year. Such assets may include:

• reserves;
• unfinished production;
• finished products;
• cash;
• short-term financial investments;
• accounts receivable.

In most cases, the turnover ratio in the company has approximately the same value over a long period of time. This value may depend on the types of the company's main activities (for example, for trade enterprises this indicator will be the highest, while in the field of heavy industry its value will be quite low), its cyclicality (some firms are characterized by a surge in activity in certain seasons) and many other factors.

However, in general, in order to change the value of this ratio and increase the efficiency of using the company's assets, it is necessary to correctly approach the policy of working capital management.

Thus, the reduction of stocks can be achieved through a more economical and rational use of resources, reducing the material intensity of production and the magnitude of losses. In addition, a significant improvement can be achieved through more effective management supplies.

The reduction in the value of work in progress is carried out by rationalizing the production cycle and reducing the cost of inventories. And reducing the amount of finished goods in stock can be achieved with the help of more advanced logistics and aggressive marketing policy organizations.

Note that a positive impact on even one of the above values ​​already has a significant impact on the turnover ratio. In addition, it is possible to achieve an increase in the efficiency of the use of working capital in an enterprise in indirect ways. Thus, the value of the indicator will be higher with the growth of the organization's profit and sales volumes.

If, when constructing the dynamics of the turnover ratio over a long period of time, one can note a stable decrease in its value, this fact may be a sign of a deterioration in the financial condition of the company.

Why might it go down?

There are several reasons for reducing the value of the turnover ratio. Moreover, its value can be influenced by both external and internal factors. For example, if the general economic situation in the country worsens, the demand for luxury goods may fall, the appearance on the market of new models of electrical engineering will reduce the demand for old ones, and so on.

There can also be several internal reasons for the decrease in the turnover rate. Among them should be highlighted:

• errors in the management of working capital;
• logistics and marketing errors;
• an increase in the company's debt;
• use of outdated production technologies;
• change in the scope of activities.

Thus, most of the reasons for the deterioration of the situation at the enterprise associated with management errors and low qualification of workers.

At the same time, in some cases, the value of the turnover ratio may decrease due to the transition to a new level of production, modernization and the use of new technologies. In this case, the value of the indicator will not be associated with the low efficiency of the company.

Consider a certain organization "Alpha". After analyzing the company's activities in 2013, we learned that the proceeds from the sale of products at this enterprise amounted to 100 thousand rubles.

At the same time, the amount of working capital was 35 thousand rubles in 2013 and 45 thousand rubles in 2012. Using the data obtained, we calculate the asset turnover ratio:

Since the resulting coefficient is 2.5, we can note that in 2013, the duration of one turnaround cycle for Alpha was:

So one the production cycle enterprise "Alpha" takes 144 days.