Business activity in the financial aspect. Introduction. Payables repayment period

Information base for analyzing business performance indicators

The well-being of an enterprise depends on the efficiency of conducting its main economic activities; this is an important condition for its continuous functioning, which serves in modern conditions the key to survival and the basis for the stable position of the enterprise.

Assessing business performance has an impact on the economic, investment and production activities of an enterprise, so it is necessary to analyze indicators for assessing business performance.

In this regard, we will consider the methodology for analyzing indicators for assessing business performance and determine the information base for such an assessment.

The main information base for assessing business performance is financial reporting. The purpose of financial statements is to present information about the financial position, results of operations and changes in the financial position of a company. This information is needed by a wide range of users to make economic decisions.

The balance sheet is a document that reflects the results of the calculation and double decomposition of the company's capital as of the reporting date. Capital is the only independent and system-forming indicator of the balance sheet, determining the composition and grouping of all its articles and total indicators. Therefore, it would be more correct to say that the balance sheet reflects the state of capital, and not a certain financial state.

Financial results are the main criterion for business performance. In addition, a company's net income, as shown on the income statement, is the upper limit on the funds that can be distributed as dividends to shareholders.

Assessing the performance of the business as a whole over the past period is the most important task, which can be solved by using data from the profit and loss statement.

This provides information about past transactions and other events that is extremely important to users when making economic decisions.

Enterprise efficiency assessment based on information from financial statements of an enterprise should help in determining the criterion aspects on the basis of which it is possible to draw conclusions regarding the objective effectiveness of the economic activity of the enterprise.

“Reporting is based on facts that have already happened and reflects the state of capital as of the reporting (already past) date and its changes for the reporting (already past) period.” Consequently, the forecast function of reporting is not the main one, but a secondary one. Forecasts, among other things, are based on events that have already happened and on already accumulated resources.

In the context of assessing the performance of an enterprise, the purpose of accounting reports is to provide users with useful information. Currently, almost all enterprises have recognized the feasibility and need to satisfy the information needs of numerous users, who can be grouped into three main groups:

1. Those working directly at this enterprise;
2. Those located outside the enterprise, but having a direct financial interest in the business;
3. Having an indirect interest in business.

Information about the financial position of the enterprise is presented in the form of a balance sheet or balance sheet. This report shows the assets i.e. what the enterprise owns and its sources of financing from accounts payable or share capital. The balance sheet serves as an indicator to assess the financial condition of the enterprise. It is intended to assist the user in assessing the ability of an enterprise to meet its obligations.

Assets include equipment, long-term accounts receivable, current accounts receivable, inventories, cash and bank balances, and prepaid expenses. Liabilities (liabilities) include equity, short term loans and obligations, accounts payable, debt to the budget and personnel of the enterprise.

Assets give a certain idea of ​​the economic potential of the enterprise, liabilities show the amount of funds received by the enterprise and their sources. The structure of a balance sheet asset can be represented in the form of a diagram shown in Fig. 1.

Rice. 1. Balance sheet asset structure

The liabilities of the balance sheet reflect the sources of funds of the enterprise as of a certain date. They are divided into sources own funds(capital and reserves), long-term liabilities (loans and borrowings) and short-term liabilities (credits, borrowings, settlements and other liabilities).

Sources of own funds include: authorized capital, additional capital, reserve, accumulation and social funds, targeted financing and retained earnings of previous years. Borrowed funds include: long-term and short-term loans and borrowings, accounts payable, and other liabilities.

The structure of the balance sheet liability can be represented in the form of a diagram shown in Fig. 2.

Rice. 2. Structure of balance sheet liability

Reporting is a set of information about the results and operating conditions of an enterprise over the past period of time, presented by the relevant economic entity for the purpose of analysis, control and management of activities. Accounting statements contains information about sold products, works and services, the costs of their production, the state of economic assets and the sources of their formation, financial results work.

Methodology for analyzing indicators for assessing the efficiency of an enterprise

The assessment of business performance is based on data from the balance sheet and income statement, which present the most important results of the business entity's activities. However, depending on the purpose of the assessment, different users are interested in certain indicators of financial performance. The main managers of the enterprise are interested in the volume of profit received and its structure, as well as the factors influencing its value. Tax Inspectorate – the amount of taxable profit. Shareholders - net profit and the amount of dividends paid per share, the possibility of making a profit in the near and foreseeable future. However, regardless of the purpose of the assessment, the performance indicators of the enterprise's economic activities are a criterion aspect of the company's effectiveness.

To assess the performance of a commercial enterprise, it is not enough to use an analysis of absolute profit values, since the presence of profit does not mean that the enterprise is working well. The absolute amount of profit does not allow one to judge the degree of profitability of a particular enterprise, transaction, or idea. Many commercial enterprises that have received the same amount of profit have different sales volumes and different costs.

“To determine the effectiveness of costs incurred, to assess the effectiveness and economic feasibility of an enterprise’s activities, it is not enough to just determine absolute indicators; it is necessary to use a relative indicator.” Therefore, to assess the level of operational efficiency, the resulting result - profit - is compared with the costs or resources used, which allows us to obtain a more objective picture. The comparison of profits with costs or resources is characterized by profitability indicators. "Profitability is a relative indicator of economic efficiency that shows the efficiency, profitability, profitability of an enterprise or entrepreneurial activity. This indicator characterizes the level of return on costs and the degree of use of funds." Thus, profitability indicators are relative characteristics of the financial results and efficiency of the enterprise.

There are profitability indicators used to assess the effectiveness of advanced resources and costs used in business activities, and indicators on the basis of which the profitability and efficiency of capital use are determined.

Return on capital characterizes the amount of profit from each ruble invested in the enterprise's funds.

The main indicators of return on capital are:

• return on assets (property);
• return on current assets;
• return on equity.
• return on investment.

The return on property is calculated as follows:

P property = Profit at the disposal of the enterprise / Average value of assets * 100%

This indicator reflects how many units of profit are received per unit of asset value, regardless of the source of funds. This indicator serves to determine the efficiency of using capital of different organizations and industries, since it gives a general assessment of the profitability of capital invested in production, both own and borrowed, attracted on a long-term basis.

Profit at the disposal of an enterprise is understood as the profit remaining after paying taxes and paying off expenses attributable to net profit.

Return on current assets can be determined by the formula:

P current assets = Profit at the disposal of the enterprise / Average value of current assets * 100%

An indicator for assessing the degree of return on invested capital is return on equity. Return on equity capital is expressed by the ratio of net profit (Pch) to sources of equity capital (Is). This indicator characterizes the amount of profit per ruble of equity capital. The return on equity ratio also plays a role important role when assessing the level of quotation of an enterprise's shares on the stock exchange.

Return on equity (Rsk) is expressed by the formula:

Rsk = Pch / Is * 100%

If an enterprise focuses its activities on the future, it needs to develop an investment policy. In this case, investment means long-term financing. Information about funds invested in an enterprise can be calculated from balance sheet data as the sum of own sources of funds and long-term liabilities or as the difference between total assets and current liabilities. Return on investment (Ri) is calculated as follows:

Ri = Pdn / (B - Ok) * 100%

where Pdn is profit before tax,

B – balance currency,

Ok – short-term liabilities.

The return on investment indicator is considered in the practice of financial analysis as a way to assess the “skill” of financial managers in managing investments. Since the company's management cannot influence the amount of taxes paid, for a more accurate calculation of the indicator, the amount of profit before income taxes is used in the numerator.

The difference between the profitability indicators of all assets and equity capital is due to the attraction of external sources of financing. If borrowed funds generate higher returns than paying 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 funds, the impact of borrowed funds on the activities of the enterprise should be assessed negatively.

Return on sales and return on costs indicators are also calculated. Return on sales (RP) characterizes the ratio of net profit (Pch) to the amount of sales revenue (VR), expressed as a percentage:

Рп = Пч / Вр * 100%

Return on sales is an estimated indicator of the production and economic activity of a business entity. It reflects the level of demand for products, works and services, how correctly the business entity determines the product range and product strategy.

Cost profitability (Рз) characterizes the ratio of net profit to the amount of production and sales costs (З), expressed as a percentage:

Rz = Pch / Z * 100%

Return on costs demonstrates the efficiency of economic activity as a whole; the calculation takes into account production costs, commercial and administrative expenses. The cost return indicator shows how many kopecks of profit are per ruble of expenses.

The dynamics of changes in profitability indicators depends, on the one hand, on factors influencing the value of the numerator of the profit indicator on the basis of which it is calculated: sales profit, taxable, net. On the other hand, it depends on the factors influencing the value of the denominator: the amount of assets, investments, sales, total cost. The main factors for increasing profitability are the implementation of measures to improve the efficiency of the enterprise's economic activities.

Practical aspects of analyzing business performance indicators

Let's look at practical example methodology for assessing the efficiency of an enterprise. To do this, we will analyze the profit indicators of a conditional enterprise in order to estimate the income received by the enterprise, reduced by the amount of expenses incurred, in the context of reporting and analytical data. An assessment of the business efficiency of an enterprise will be carried out on the basis that the dynamics of the profit indicators of an economic entity characterizes its business activity and financial independence. Positive dynamics absolute indicators profit creates the basis for self-financing of the enterprise’s economic activities on the principles of economic calculation.

The summary analytical table shows the dynamics of the enterprise's profit indicators over 3 years.

Now let's analyze business performance indicators for this fictitious enterprise.

Analyzing the data in the table, it should be noted that over a three-year period the company showed improvement key indicators profit. The exception was gross profit, since, starting from 2014, administrative expenses are partially taken into account as part of the cost price, and partially transferred to commercial expenses. The result was a significant cost growth rate, which exceeded the revenue growth rate, and a decrease in gross profit.

The increase in revenue in 2015 compared to 2013 amounted to almost 1.8 billion rubles, the growth rate reached 34.62%. Cost increased by more than 2 billion rubles, the growth rate was 43.5%. However, taking into account the internal reasons for the increase in costs, one can judge that there is no negative structural influence of this factor. At the same time, it is not possible to objectively assess the relationship between the dynamics of sales profit, the growth of which was 21.28%, an increase of 93.7 million rubles, compared to commercial and administrative expenses, for the same internal reasons. However, taking into account the lag in the growth rate of profit from sales from the growth rate of revenue, it can be judged that the company has not used internal reserves to increase the final financial result, a relative reduction in costs, as well as rational optimization of commercial and administrative expenses.

During the analyzed period, other expenses and income showed a strong decrease, but other expenses in 2015 almost doubled other income, which affected the slowdown in the growth rate of profit before tax, which amounted to only 11.38%.

It should also be noted that the company’s net profit for the analyzed period increased by 57 million rubles, the growth rate was 19.75%, which, against the backdrop of a decrease in tax payments, indicates the successful application of preferential mechanisms to reduce tax payments and increase the efficiency of the enterprise’s financial discipline.

For the period from 2013 to 2015, there are no fluctuations of a probabilistic or stochastic nature in relation to sales profit, profit before tax and net profit. This indicates the effective economic activity of the enterprise as a whole and the implementation of a consistent policy in relation to economic development as an independent economic entity. In addition, during this period there is no stable negative dynamics for all profit indicators, which characterizes the maintenance of the enterprise’s profitability by the presence of prospects for carrying out economic activities in the future.

Next, it is necessary, taking into account the specifics of the enterprise’s activities, its scope of economic activity and the characteristics of the indicators, to assess the effectiveness of the business, taking into account the factors of increasing sales volumes and net profit and the factors that prevented a more significant increase in profit volumes. In case enterprise efficiency assessment showed the unsatisfactory state of the business, appropriate conclusions should be drawn about the unfavorable prospects of the organization.

As an example of factors for increasing or decreasing sales volumes and net profit, we give the following:

• significant expansion or contraction of activities;
• changes in the structure of income and expenses;
• change in the financial policy of the enterprise;
• increasing costs or reducing them.

Profitability indicators characterize the efficiency of an enterprise. Profitability is a relative indicator of the level of profitability of production activities. Unlike profit, which characterizes the absolute results of activity, profitability shows the relationship between the effect and the amount of costs incurred, thereby determining the level of financial security and strength of position.

Using formulas (1), (2), (3), (4), (5) and (6), we calculate profitability indicators based on the data above and present the results in the table.

Analyzing the results of the calculations made, it should be noted that there was a negative change in all profitability indicators in 2015, both compared to 2014 and compared to 2013. Consequently, business performance assessment shows the unsatisfactory state of the enterprise’s economic activity.

When assessing business efficiency, it should be taken into account that the level and dynamics of profitability indicators at an enterprise are objectively influenced by the entire set of internal production and economic factors:

• level of organization of economic activity;
• structure of capital and its sources;
• degree of use of available resources;
• volume of sales;
• the amount of costs incurred.

Return on property, which characterizes the return on every ruble invested in the assets of an enterprise, allows us to judge the decrease in the operating efficiency of the enterprise. In addition, it is necessary to take into account the extremely low value of the indicator, which indicates an insufficient level of rationalization of the financial and economic activities of the enterprise, since the overall assessment of the return on capital invested in production, both own and borrowed, attracted on a long-term basis, is slightly more than 6 kopecks for every ruble invested.

The profitability of current assets, demonstrating the enterprise’s ability to provide a sufficient amount of profit in relation to the working capital used, allows us to conclude that the return on the use of current assets is relatively low.

Return on equity, which makes it possible to determine the real efficiency of using capital invested by the owners of the enterprise, indicates a fairly high return on equity compared to other indicators. It should be noted that the observed negative dynamics of change this indicator in the long term may significantly complicate financial economic activity enterprises.

Return on investment, which characterizes the profitability of capital investments and is a financial and economic reflection of the competitiveness of the enterprise, in connection with the observed dynamics of the decline in the indicator, allows us to judge the decrease in the potential level of competitiveness of the enterprise. At the same time, the long-term nature of the enterprise’s activities partially explains the long periods of negative dynamics, but is not a factor that levels out the unfavorable prospects.

The dynamics of return on sales, which characterizes the economic efficiency of the enterprise's core activities, indicates a slight decrease in demand for the results of economic activities. Despite a slight increase in sales profitability in 2014, in 2015 this figure decreased, which suggests insufficient objectification of the enterprise’s economic activities and the need to revise the strategy for further development.

The dynamics of cost profitability, which determines the efficiency of business activities as a whole, shows a similar trend as profitability of sales. It should be noted that the reduction in the value of this indicator is a consequence of a decrease in the efficiency of using own and borrowed funds to carry out the main economic activities of the enterprise.

Thus, it can be judged that a decrease in profitability indicates that the enterprise has difficulties that the enterprise is experiencing in relation to the effective implementation of its main economic activities. It can be judged that there is an objective need for the enterprise to revise its policy regarding basic commercial issues in order to increase the amount of profit received.

Based on the results of the assessment of indicators, in order to improve business efficiency, the enterprise needs to find possible areas for increasing the efficiency of using net profit.

Conclusions

Analysis of indicators for assessing business performance as part of the analysis of financial statements is necessary for managing the main economic activities of an enterprise on the basis of making informed management decisions.

Information base for analyzing indicators business performance assessments serves as financial statements that provide information about the financial position, results of operations and changes in the financial position of the company. The balance sheet shows the assets, i.e. what a business owns and its sources of financing from accounts payable or equity. The balance sheet serves as an indicator to assess the financial condition of the enterprise. For the purpose of assessing business performance, financial statements are the main source of information, which contains the entire set of information about the results and operating conditions of the enterprise over the past period of time.

Business performance assessment according to financial statements, it is used to analyze, control and manage the economic activities of the enterprise.

Analyzing business performance indicators is not an end in itself.

Based on the results of the analysis, conclusions are drawn about possible ways to increase the efficiency of the economic activity of the enterprise. The methodology for analyzing indicators for assessing business performance allows us to identify possible directions, ways of developing and improving the economic activity of an enterprise in accordance with the results obtained.

Literature

1. Dontsova L.V., Nikiforova N.A. Analysis of accounting (financial) statements. – M.: Business and Service, 2015.
2. Tolpegina O.A., Tolpegina N.A. Comprehensive economic analysis of economic activity. – M.: Yurayt, 2013.
3. Gubina O.V., Gubin V.E. Analysis of financial and economic activities. – M.: Infra-M, 2014.
4. Lyubushin N.P. Comprehensive analysis of financial and economic activities. – M.: Finance and Statistics, 2014.
5. Petrova A.N. Economic content profit and loss statement. // Economic Sciences. – 2012. – No. 7. – P. 157-159.
6. Chechevitsyna L.N. Analysis of financial and economic activities. – Rostov-on-Don: Phoenix, 2014.
7. Kuter M.I. Theory accounting. – M.: Finance and Statistics, 2013.

Business activity in the financial aspect is manifested, first of all, in the speed of turnover of the enterprise’s funds. Analysis of business activity consists of studying the levels of dynamics of various financial ratios - turnover indicators, which allows us to characterize the results and effectiveness of current main production activities.

To calculate the main indicators of the turnover of enterprise funds, we use the following formulas:

1) The asset turnover ratio is calculated as the ratio of proceeds from sales to the average value of assets for the period. This indicator characterizes the efficiency of the enterprise’s use of all available resources, regardless of the sources of their formation, i.e. shows how many times during the analyzed period the full cycle of production and circulation is completed.

OA = Revenue/((Assets at the beginning of the year + Assets at the end of the year)/2),

The growth of this indicator over several periods indicates more efficient management of the enterprise's assets.

2) Equity turnover is calculated as the ratio of sales revenue to the average equity capital for the period.

Osk = Revenue/((SK beginning year + SK con. year)/2),

From a financial point of view, the equity turnover ratio determines the rate of equity turnover.

Too high values ​​of this indicator indicate a significant excess of sales over invested capital, which, as a rule, means an increase in credit resources. In this case, the ratio of liabilities to equity increases, which negatively affects the financial stability and financial independence of the enterprise.

A low level of the ratio means inactivity of own funds. In this case, it is necessary to find new sources of income in which you can invest your own funds.

3) The turnover ratio of current assets is calculated as the ratio of proceeds from sales to the average value of current assets for the period.

OTA = Revenue/((TA beginning year + TA ending year)/2),

The dynamics of this coefficient are of great interest. Negative dynamics indicate a deterioration in the financial position of the enterprise. In this case, in order to maintain normal production activities, the enterprise is forced to raise additional funds.

The components of current assets are inventories and accounts receivable. In this regard, to find out the reasons for the dynamics (for example, a decrease) in the overall turnover of current assets, changes in the speed and period of turnover should be analyzed accounts receivable and stocks.

4) The inventory turnover ratio is calculated as the ratio of the cost of production to the average for the period of inventory, work in progress and finished goods in the warehouse.

Oz = C/((W beginning of year + W end of year)/2),

where C is the cost of products produced in the billing period;

W beginning of the year, W end of the year. - the amount of inventory balances, work in progress and finished goods in the warehouse at the beginning and end of the period.

5) The reverse indicator is more visual and convenient for analysis - circulation time in days. It is calculated by the formula:

Pos = Tper/Oz,

where Tper is the duration of the period in days.

The calculated turnover periods for specific components of current assets and current liabilities have a real economic interpretation.

Assessing turnover is the most important element of analyzing the efficiency with which an enterprise manages inventories. The acceleration of turnover is accompanied by additional involvement of funds into turnover, and the slowdown is accompanied by the diversion of funds from economic turnover, their relatively longer necrosis in reserves (otherwise - the immobilization of one’s own working capital). In addition, it is obvious that the company incurs additional costs for storing inventory, associated not only with warehouse costs, but also with the risk of damage and obsolescence of the goods.

6) The accounts receivable turnover ratio is calculated as the ratio of sales revenue to the average amount of accounts receivable for the period.

Odz = Revenue/((DZnp + DZkp)/2),

where ДЗнп, ДЗкп - accounts receivable at the beginning and end of the period.

7) The receivables turnover period is calculated using the formula:

Podz = Tper/Odz,

The receivables turnover period characterizes the average duration of deferred payments provided to customers.

Accounts receivable management involves, first of all, control over the turnover of funds in settlements. The acceleration of turnover over a number of periods is considered a positive trend. Great value To reduce payment terms, they select potential buyers and determine the terms of payment for goods provided for in contracts.

8) The accounts payable turnover ratio is calculated as the ratio of sales revenue to the average amount of accounts payable for the period:

Okz = C/((KZnp + KZkp)/2),

where KZnp, KZkp - accounts payable at the beginning and end of the period.

9) The turnover period of accounts payable is calculated using the formula:

Show = Tper/Okz,

The payables turnover period characterizes the average duration of deferred payments provided to the company by suppliers. The larger it is, the more actively the enterprise finances current production activities at the expense of direct participants in the production process (through the use of deferred payment of bills, regulatory deferment of taxes, etc.).

Table 3.1

Analysis of the dynamics of enterprise business activity indicators

The calculations reflected in Table 3.1 show that the dynamics of the criteria for the enterprise’s business activity during the reporting period are ambiguous. Thus, sales revenue and net profit increased respectively by 878,575 thousand rubles. (161.36) and 210,705 thousand rubles. By 78,222 thousand rubles. (80.34%) the average value of non-current assets increased by 67,644 thousand rubles. (69.84%) the enterprise's equity capital decreased. At the same time, the average value of assets and the average value of current assets increased respectively by 145,282 thousand rubles. (24.56%) and 67,059 thousand rubles. (13.57%). The average inventory value decreased by almost 6,395 (2.1%).

The dynamics of the first indicator are, of course, positive. An increase in the value of current assets with an increase in non-current assets is unambiguous - an increase in non-current assets due to an increase in fixed assets is a positive trend.

The data in Table 3.1 shows positive dynamics in almost all coefficients. Thus, asset turnover, which reflects the turnover rate of the entire capital of the organization or the efficiency of using all available resources, regardless of their sources, increased by 1.01 turnover, which amounted to 109.78% of the increase. This indicator of business activity is of great analytical importance, since it is closely related to the profitability of the enterprise, and, therefore, affects the effectiveness of its financial and economic activities.

The turnover rate of equity capital increased by 43.1 turns (766.9%). The turnover rate of current assets increased by 1.44 turns (130.91%). An increase in turnover indicates an increase in the efficiency of using assets, equity capital, and inventories.

At the same time, the inventory turnover time decreased by 125 days, and accounts receivable and payable, respectively, by 54 and 23 days. This suggests that the payment discipline of both buyers and the enterprise itself in relations with creditors has improved.

The duration of the operating cycle characterizes total time, during which financial resources are in material form and receivables. The financial cycle characterizes the time during which invested capital (own capital, as well as long-term and short-term loans and borrowings) participates in financing the operating cycle. Their reduction by 179 and 156 days, respectively, indicates that in the reporting year the efficiency of using the enterprise’s financial resources increased.

Thus, in general, the main indicators of business activity show positive dynamics. With the existing growth rates and if they are maintained, the enterprise has reserves for growth in business activity.

Conclusion

The business activity of an enterprise and its level, on the one hand, have a direct impact on the level and dynamics of all the main indicators of the financial and economic activity of the enterprise, on the other hand, they are expressed in the dynamics of these indicators.

In the process of economic analysis, business activity can be measured by both qualitative and quantitative criteria. At the same time, both absolute and relative indicators of the results of the economic activity of the enterprise act as quantitative criteria for business activity. Therefore, the criteria for business activity are, on the one hand, revenue and profit, and on the other hand, the speed and time of turnover of the enterprise’s assets.

Since business activity is expressed in the efficiency of resource use, its level is manifested, first of all, in the asset turnover ratio of the enterprise.

The main information base for analyzing the business activity of an enterprise is the management and accounting data of the enterprise, the quality of which determines its correctness and accuracy, which, in turn, determines the effectiveness of management decisions made by the management of the enterprise based on the results of the analysis of business activity.

The analysis of the economic activities of FSUE Selinvest showed that most of the indicators have positive dynamics. Thus, growth is typical for such indicators as revenue and profit, and the rate of asset turnover has increased.

The company needs to increase its current assets, which will help increase the economic potential of the company. The source can be the net profit of the enterprise and bank loans.

Also, increase the level of control over the implementation of contractual discipline by suppliers and business partners, the use of a prepayment system, which will lead to a reduction in accounts receivable and increase maneuverability cash enterprises.

Find new, more profitable partners (both suppliers and wholesale buyers), which will reduce the cost of goods.

In general, the implementation of the proposed measures will allow the enterprise to increase the level of business activity.

List of used literature

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The business activity of an organization in the financial aspect is manifested, first of all, in the speed of turnover of its funds.

Working capital turnover ratio - shows how effectively an organization uses investments in working capital and how this affects sales volume. (Proceeds from sales \ Net b working capital)

Equity turnover ratio - shows the rate of turnover of equity capital. ( Revenue then sales \ Own capital)

Turnover ratio of total invested capital - characterizes the efficiency of using all resources available to the enterprise, regardless of the sources of their attraction. ( Sales proceeds \ Balance sheet currency)

DZ turnover- shows a forced or voluntary expansion or reduction of commercial credit provided by the enterprise. ( Sales proceeds\DZ)

Distribution turnover period - the average period for which loan repayments occur. ( 360 \DZ turnover)

Inventory turnover- characterizes the mobility of funds that an enterprise invests in creating inventories: the faster the funds invested in inventories are returned to the enterprise in the form of revenue from the sale of finished products, the higher the business activity of the organization. ( Cost of sales\Inventories)

Inventory turnover period- reflects the duration of the period (in days) during which money is “tied up” in this type of asset. ( 360\Inventory turnover)

Short circuit turnover - shows the expansion or reduction of commercial credit provided to the enterprise. A decrease in the ratio means an increase in purchases on credit. ( Cost of sales \ KZ)

Short circuit turnover period - The turnover period of accounts payable reflects the average repayment period of a commercial loan of an enterprise. ( 360 \ Short circuit turnover)

Organizational profitability reflects the degree of profitability of its production and economic activities.

Product profitability– shows how much profit is generated per ruble of products sold. A low ratio indicates a decrease in demand for the company’s products and services and, as a result, financial problems in the company and a drop in profits from product sales.

K = profit from sales (net) \ revenue from sales

OS profitability– shows how much profit each ruble invested in the operating system brings.

K = profit from sales \ average annual cost of fixed assets

Return on current assets c – shows how much profit each ruble invested in current assets brings.

K = net profit \ average annual value of current assets

Return on equity of the enterprise– shows the efficiency of using equity capital. The dynamics of the coefficient affects the level of quotation of the company's shares: a decrease in the coefficient lowers the quotation.

K = net profit \ equity

Return on total invested capital-provides efficient use of all property of the enterprise. A low ratio indicates a drop in demand for products and an overaccumulation of assets.

K = net profit \ balance sheet currency

1.Equity turnover ratio

(rate of equity turnover)

K1= p.2110/p.1300

K1= 1.05 K1 = 1.06

2.Asset turnover ratio

(shows how many times during the period under review the full cycle of production and circulation occurs, or how many monetary units each unit of assets brought in sales of products))

K2= s.2110/s.1600

K2= 0.59 K2 =0.53

3. Working capital turnover ratio

(turnover speed characterizes the amount of revenue from sales of products by the average cost of working capital.)

K3 = s.2110/s.1200

K3 = 3.27 K3 =3.08

4. Accounts receivable turnover ratio

(represents the ratio of sales revenue received during the analyzed period minus indirect taxes to the average annual amount of receivables)

K4= p.2110/p.1230

5.Receivables turnover period

(represents the duration of receivables turnover in calendar days)

6. Accounts payable turnover ratio

(reflects the enterprise’s ability to repay accounts payable, and also shows the cost of products sold per 1 ruble of accounts payable)

K6= p.2110/p.1520

7.Receivables turnover period

(reflects accounts payable turnover in calendar days)

8. Inventory turnover ratio

(shows how many times on average a company's inventory is sold over a certain period of time)

K8 = p.2120/p.1210

9. Inventory turnover period

(time in days during which inventory is converted into goods sold)

10.Fixed asset turnover ratio

(characterizes the efficiency of the enterprise's use of fixed assets)

Business activity in the financial aspect is manifested primarily in the speed of funds turnover. Analysis of business activity consists of studying the levels of dynamics of various financial ratios - turnover indicators. They are very important for the organization.

Firstly, the size of the annual turnover depends on the speed of funds turnover.

Secondly, the size of the turnover and, consequently, the turnover rate is associated with the relative value of semi-fixed expenses: the faster the turnover, the less these expenses are for each turnover.

Thirdly, the acceleration of turnover at one or another stage of the circulation of funds entails an acceleration of turnover at other stages.

Fourthly, the financial position of the organization, its solvency depends on how quickly the funds are invested in assets. Converts into real money.

The turnover of funds invested in the property of an enterprise can be assessed:

The turnover rate is the number of turnovers that the organization’s capital and its components make during the analyzed period.

Turnover period - the average period during which funds invested in production and commercial operations are returned to the organization’s economic activities.

Information on the amount of revenue is taken from the “profit and loss statement”). The average value of assets for calculating business activity ratios is determined from the balance sheet in the form of an arithmetic average:

Average assets =

The turnover rate is calculated using the formula:

; once.

The turnover time is calculated using the formula:

; days, where t is the analyzed period in days.

Analysis of business activity begins with studying the dynamics of turnover. To do this, fill out table 2.8.

Table 2.8.

Analysis of the dynamics of business activity indicators

The algorithm for calculating business activity indicators is presented in Table 2.9.

Table 2.9.

Business activity ratios

№	Indicator	Calculation method
	Total capital turnover ratio (resource productivity)
2.	Working capital turnover ratio
3.	Turnover period of current assets, days.
4.	Capital productivity
5.	Turnover ratio equity
	Turnover of funds in settlements, turnover
	Receivables maturity date
8.	Cash turnover, times
	Accounts payable turnover
	Repayment period for accounts payable

At this stage, it is necessary to determine the effect of accelerating (slowing down) the turnover of working capital, as well as the impact on the change in profit of changes in the turnover of total capital.

The effect of accelerating (decelerating) turnover of working capital is determined by the formula:

The influence of turnover on profit is determined by the formula:

DP cob = Dn WB · Rpr. f ·SVB f

According to the analysis results:

Assess business activity;

Determine the gain (loss) of profit from changes in turnover;

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. Working capital turnover ratios are especially important for companies.

How to determine working capital turnover ratios

Liquidity ratios can help determine whether a company has excess or insufficient levels of working capital (overcapitalization or excessive credit sales).

Current and quick liquidity ratios

For some manufacturing companies, raw materials that need to be used in the production of the final product may accumulate in large quantities in inventory. Finished products can be stored in a warehouse long time or be sold under conditions of a long deferred repayment. In a business where inventory turnover is slow, most inventory is not easily converted into liquid assets because the operating cycle is too long. For these reasons, we calculate an additional liquidity ratio known as the quick ratio, or litmus test ratio.

Quick liquidity ratio, or “litmus test” ratio = (Current assets - inventories) / Current liabilities

This ratio should ideally be at least 1 for companies with slow inventory turnover. For companies with rapid inventory turnover, the quick ratio may be less than 1, unless the company is facing cash flow problems.

Receivables repayment period

An approximate measurement of the average time it takes a company's customers to pay for the delivery of goods is called the maturity ratio accounts receivable .

Accounts Receivable Ratio (in days) = Average Trade Receivables Balance / Average Daily Credit Sales (or Sales Revenue)

An equivalent indicator is the receivables turnover period.

Accounts Receivable Turnover Period = (Average Trade Receivables Balance / Annual Credit Sales or Annual Revenue) x 365 days

Trade receivables do not match the total amount of the Accounts Receivable line item on the balance sheet, which also includes prepayments and other receivables. The amount of trade receivables should be highlighted in the breakdown of total receivables in the notes to the financial statements.

But the estimate of the receivables' maturity is only an estimate, and the following assumptions should be kept in mind:

1. The value presented on the balance sheet may be used instead of the average. However, we should not forget that the balance sheet value may be unnaturally large or small compared to the “normal” level for the company.
2. In contrast to the accounts receivable indicator on the balance sheet, revenue in income statement does not include value added tax. Thus, we have a not entirely correct comparison. If the values ​​are heavily distorted by value added tax, an appropriate adjustment will be required.
3. Average accounts receivable may not provide a complete picture of year-end sales if sales are growing rapidly.

Payables repayment period

Similar measurements can be taken with respect to accounts payable.

The accounts payable period reflects the average period (in calendar days) required to pay for supplies received on credit.

Accounts Payable Ratio (days) = Average Trade Accounts Payable Balance / Average Daily Credit Purchases (or Cost of Sales)

Accounts payable repayment period, or accounts payable turnover period = (Average trade accounts payable balance / Annual credit purchases or annual cost of sales) x 365 days

If credit purchase information cannot be readily obtained, cost of sales data can be used instead. However, do not forget that some elements of cost (for example, labor costs) do not apply to accounts payable on trade operations. It is also worth noting that purchases on credit (cost of sales) do not include value added tax in the income statement.

Inventory turnover period

The inventory turnover period shows how long the product is kept in the warehouse.

Another ratio that will be useful to calculate is the inventory turnover period. This is another estimate that can be obtained from published financial statements. It shows the average number of days that inventory is kept in the warehouse. Like the middle period , the inventory turnover period is calculated only approximately, distortions caused by seasonal fluctuations in inventory levels are quite possible. However, this indicator can be trusted to track changes over time.

Inventory turnover ratio = Account balance Inventory / Average daily cost for the period

In addition, the indicator can be calculated using another formula.

Inventory turnover ratio = Average account balance Inventory / Cost

You can calculate the inventory turnover period like this:

Inventory turnover period = (Account balance Inventory / Cost) X 365 days

An increasing inventory turnover period indicates:

• a drop in sales or
• accumulation of too high levels of inventories, possibly due to excess investment in these assets.

If a company produces goods for resale, the inventory turnover period will be divided into 3 types.

For raw materials = (Balance of Raw Materials and Supplies accounts / Purchases of raw materials and supplies) x 365 days

For work in progress = (Average balance of Work in Process accounts / Cost for the period) x 365 days

For finished products = (Average account balance of Finished Goods / Cost for the period) x 365 days

Where averages are not available, end-of-period data can be used.

If an inventory breakdown is not provided, simply use the general ratio.

Overall ratio = Average account balance Inventory / Cost

If we add up the inventory turnover period and the accounts receivable period, it will give us a measure of how quickly inventory is converted into cash and thus we will get an idea of ​​the liquidity of the company.

All ratios calculated above will vary depending on the industry, which means it is possible and important to compare the obtained ratios with the ratios of similar companies operating in the same industry.

Working capital requirements

In addition to working capital turnover indicators, we consider it necessary to draw attention to risk factors :

Current assets can be financed either by long-term borrowings or short-term liabilities.

Liquidity ratios are indicators of the risk of cash flow problems and bankruptcy. If a company suddenly finds itself unable to meet its short-term obligations (for example, if a bank suspends its overdraft facility or suppliers demand earlier payment), there is a risk of bankruptcy if the company cannot quickly convert enough current assets into cash. To prevent the occurrence of such negative consequences, the following measures can be taken:

1. Obtain the necessary funds for investing in current assets. Short-term liabilities are often a relatively inexpensive method of financing (trade payables typically do not involve interest costs), so companies may decide that, in order to obtain greater profits, it is worth taking on some insolvency risk by increasing short-term liabilities by obtaining as much credit as possible from the supplier.

2. Take into account the required volume of current assets. The amount of current assets required will depend on the nature of the company's business. For example, a manufacturing company may require more inventory than a service company. As the company's production volume increases, the required volume of current assets will also increase.

Even with effective processes for managing inventory levels, accounts receivable and cash flows there remains a certain degree of selection of the overall level of current assets necessary to maintain the required volume of production. Company policy based on low levels inventories, tight credit terms and minimal cash balances can be contrasted with a policy based on large volumes of inventories (for safety or to create reserve stocks), easier credit terms and large amounts of cash (as a preventative measure).

3. Overcapitalization and working capital. If there is an oversupply of inventory, receivables, and cash, and a shortage of accounts payable, this means that the company is overinvesting in current assets. Working capital will be excess, and in this respect the company will become overcapitalized: The return on investment will be less than optimal, and long-term funds will be frozen without objective reason, although they could be invested in other investments that provide profit.

Under sound management, overcapitalization of working capital should not occur and indicators of excess working capital will be unfavorable financial profitability ratios.