Slow down the process of capital turnover. Analysis of capital turnover indicators and its components, assessment of business activity and intensity of use of the enterprise’s capital for two years, assessment of the reasons for changes in turnover of current assets and calculations

The capital turnover ratio shows how many turnovers the funds invested in the property of the enterprise make during the analyzed period (year). The turnover ratio of total and working capital in 2010 decreased compared to 2009, therefore, we can conclude that the business activity of the enterprise has decreased.

The capital intensity ratio is the inverse of the capital turnover ratio. It shows how much capital falls on one monetary unit of revenue. The capital intensity ratio of total and working capital increased in 2010, respectively, by 0.12 and 0.01.

The duration of capital turnover is an indicator characterizing the efficiency of use of funds. It is equal to the period of time between the investment of capital until its return, increased by the amount of profit.

On this enterprise turnover duration total capital in 2010 it increased and amounted to 493 days. From this we can conclude that the use of capital is inefficient, since the return Money, invested in capital, will happen in more than a year.

The duration of working capital turnover also increased in 2010 and amounted to 66 days. The return of funds invested in working capital will occur in almost two months, therefore, we can conclude that the use of working capital is ineffective.

In the process of subsequent analysis, it is necessary to study the change in working capital turnover at all stages of its circulation, which will allow us to trace at what stages the slowdown in capital turnover occurred. For this purpose, the average balances individual species current assets must be divided by the amount of one-day sales turnover.

One-day revenue from product sales is calculated:

In 2010 this figure was:

The total duration of working capital turnover is calculated as follows:

The total duration of working capital turnover in 2010 was:

The calculation results are presented in Table 1.4.

Table 1.4 - Analysis of the duration of working capital turnover

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Analysis of capital turnover indicators and its components, assessment of business activity and intensity of use of the enterprise's capital for two years, assessment of the reasons for changes in the turnover of current assets and calculation of the economic effect of changes in their turnover

Capital turnover refers to the speed at which funds pass through individual stages of production and circulation. Capital turnover is characterized by two main indicators.

1) Turnover ratio - shows how many turnovers the funds invested in the property of the enterprise make in a year. If it grows, then business activity increases.

Turnover ratio = Revenue / Average annual cost

2) Duration of one revolution:

Duration of one revolution = 360 / Turnover ratio

When calculating turnover ratios, the numerator always includes the financial result in the form of revenue, and the denominators always include the average value of the asset or liability for the period, the turnover of which is being analyzed. Turnover ratios can be grouped into the following groups:

· Asset turnover ratios;

· Accounts receivable turnover ratios;

· Accounts payable turnover ratios;

· Inventory turnover ratios.

1. Asset turnover ratios

Total capital turnover ratio - this indicator reflects the turnover rate of the entire capital of the enterprise (number of turnovers per period):

Total capital turnover ratio () = Revenue (B) / Average annual value of total capital ()

Total capital turnover period (in days) = Duration of the reporting period (360 days) / Total capital turnover ratio)

Current asset turnover ratio (current asset turnover) - this coefficient characterizes the turnover rate of all mobile devices of the enterprise:

Current assets turnover ratio () = Revenue (B) / Average annual cost of current assets ()

Period of turnover of current assets (in days) = Duration of the reporting period (360 days) / Turnover ratio of current assets ().

Equity turnover ratio - shows the rate of turnover of equity capital or the activity of funds at risk to shareholders:

Equity turnover ratio () = Revenue (B) / Average equity capital ()

Equity turnover period (in days) = Duration of the reporting period / Equity turnover ratio ()

2. Accounts receivable turnover ratio

Shows the rate of turnover of receivables, measures the speed of repayment of the organization's receivables, how quickly the company receives payment for goods sold (work, services) from its customers.

The receivables turnover period (receivables turnover in days) characterizes the average repayment period of receivables and is calculated as:

Accounts receivable turnover period = Duration of the reporting period (360 days) / Accounts receivable turnover ratio ()

3. Accounts payable turnover ratio

This is an indicator of how quickly an enterprise repays its debts to suppliers and contractors. It shows how many times the company pays the average amount of its accounts payable, in other words, the coefficient shows the expansion or reduction of commercial credit provided to the company.

Accounts payable turnover period = Duration of the reporting period / Credit turnover ratio. debt)

The period of turnover of accounts payable (turnover of accounts payable in days) reflects the average period of repayment of the enterprise's debts (except for obligations to banks and other loans).

4. Inventory turnover ratio

The indicator reflects the inventory turnover of the enterprise for the analyzed period:

Inventory turnover and cost ratio) = Cost (C) / Average annual cost of inventories ()

In addition to the above coefficients, the business activity of an organization can be assessed using the cash turnover indicator.

Cash turnover

The indicator indicates the nature of the use of funds in the enterprise:

Cash turnover ratio) = Revenue (B) / Average amount of cash ()

Cash turnover indicators characterize the speed of transformation of assets into cash, as well as the speed of repayment of liabilities; indicators reflect the degree of business activity and operational efficiency of the organization. . An assessment of the organization’s capital turnover indicators is presented in Table 8.

Table 8 Assessment of the organization’s capital turnover indicators

	Indicator name	Calculation procedure	Meaning	Change
Last year	Reporting year
	Turnover for the year, thousand rubles.
	Average annual value of total capital, thousand rubles.
	Total capital turnover ratio
	Duration of one turnover of total capital, days
	Average annual equity capital, thousand rubles.
	Equity turnover ratio
	Duration of one turnover of equity capital, days
	Average annual amount of borrowed capital, thousand rubles.
	Debt capital turnover ratio
	Duration of one turnover of borrowed capital, days
	Average annual value of current assets, thousand rubles.
	Current assets turnover ratio
	Duration of 1 turnover of current assets, days, including:
	Duration of one inventory turnover and VAT on purchased values, days
	Duration of one receivables turnover, days
	Duration of one turnover of short-term financial investments, days
	Duration of 1 cash turnover, days
	Duration of one turnover of other current assets, days
	One-day turnover, thousand rubles.
	Saving (overexpenditure) of current assets due to changes in their turnover

Based on Table 8, we can conclude that the average annual value of total capital has increased by 44,015.5 thousand rubles.

The duration of turnover of total capital decreased from 450.8626 days to 444.7824 days. This is a positive trend, as is the increase in the turnover ratio of the organization’s total capital by 0.0109. This means an increase in the company's business activity in the reporting year.

Compared to last year, the number of days of debt capital turnover decreased from 53.9939 days to 52.1190. As for the turnover of equity capital, the turnover ratio increased by 0.0097, which contributed to a decrease in the period of one turnover by 4.2053 days, and this, in turn, indicates the introduction of equity capital into circulation.

The average annual value of current assets for the period under review increased by 37442.5 thousand rubles, while the turnover ratio decreased from 7.4520 to 6.9167, as a result of which the duration of one turnover increased by 3.7387 days. Acceleration of turnover working capital reduces the need for them: less inventory is required, which leads to a reduction in storage costs and ultimately contributes to increased profitability and improved financial condition of the organization.

As for individual elements of current assets, we can note a decrease in the duration of one inventory turnover by 0.0018 days (from 0.0204 to 0.0185 days). As well as reducing the duration of one receivables turnover from 0.0015 to 0.0012 days. That is, according to these indicators, there was an increase in turnover, which is a positive trend.

There have also been changes in the duration of one turnover of short-term financial investments. The number of days increased from 0.0227 to 0.0433 days. The acceleration of the turnover of most elements of current assets led to savings, which amounted to 27488.0610 thousand rubles, despite the fact that the one-day turnover in the reporting year amounted to 7352.2822 thousand rubles.

To characterize the use of capital, it is advisable to calculate a number of coefficients:

Turnover of immobilization assets;

Turnover of all current assets;

Accounts receivable turnover;

Accounts payable turnover;

Equity turnover;

Operating ratio.

Total capital (assets) turnover ratio generally characterizes the level of economic activity of an enterprise, that is, the efficiency of the enterprise’s use of all available resources, regardless of the sources of their attraction. This coefficient shows how many times during the reporting period the full cycle of production and circulation is completed, or how many monetary units each unit of assets brought from the sale of products.

The total capital turnover ratio (Ok) is calculated using the formula:

where B is revenue from sales of products

C a - the average annual value of all assets (the amount at the beginning and end of the year, divided by 2).

Typically, the value of the total capital turnover ratio of a particular enterprise is compared with the industry average. If this ratio is lower for the enterprise, then it is necessary to increase sales volume or, if this is not possible, to reduce certain types of assets. If this coefficient is considered in dynamics, then its growth can mean either an acceleration of the circulation of enterprise funds, or an inflationary increase in prices for sold products.

Immobilized assets ratio (Oi.a. ) shows how efficiently enterprises use their fixed assets and other fixed assets. This indicator is calculated using the formula:

where C i.a. - average annual non-current assets (the amount at the beginning and end of the year, divided by 2).

The duration of one revolution is (in days):

Ratio of all current assets (Оо.а) is one of the most important indicators the efficiency of the enterprise, since it characterizes the number of turnovers of all working capital. It is generally believed that the shorter the duration of one revolution, the more efficiently working capital is used.

This coefficient is calculated by the formula:

where C o.a. - average annual value of current assets (the amount at the beginning and end of the year, divided by 2).

The duration of one revolution is equal (in days):

(20.13)

It should be noted that for each enterprise at a certain point in time there is its own optimal structure of working capital. Therefore, the main criterion is to ensure rapid turnover of current assets.

Accounts receivable turnover ratio (Od.z.) characterizes the effectiveness of collection of receivables and the enterprise’s credit policy in relation to its customers. An increase in this indicator indicates an expansion of credit to product consumers. It is usually believed that if accounts receivable turn over faster than material assets, this means a high intensity of receipt of cash loans to the enterprise’s account. In this case, the debt-to-equity ratio may be greater than 1.0.

The accounts receivable turnover ratio is calculated using the formula:

where C d.z. - average annual accounts receivable (amount at the beginning and end of the year, divided by 2).

The duration of the receivables turnover is equal (in days):

(20.15)

Accounts payable turnover ratio ( O k.z.) characterizes the terms of settlements of the enterprise with its partners. It is calculated by the formula:

where C short circuit - average annual accounts payable (the amount at the beginning and end of the year, divided by 2).

The duration of the accounts payable turnover is equal (in days):

(20.17)

It is advisable to compare the repayment period of accounts payable with the repayment period of receivables, that is, compare the conditions for receiving and granting deferred payments to your partners. If accounts payable are provided for a longer period. than the accounts receivable, then such conditions are acceptable for the enterprise.

Equity turnover ratio (O average) characterizes various aspects of the enterprise’s activities: from a commercial point of view, it reflects either an increase in product sales, or a lack of equity capital; from financial - the rate of turnover of invested capital; from the economic side - the activity of funds that the enterprise risks. The equity capital turnover ratio shows the efficiency of its use.

It is calculated by the formula:

where C r.s. - the average annual value of equity capital and reserves (the amount at the beginning and end of the year, divided by 2).

The duration of one turnover of equity capital is equal (in days):

(20.19)

Operating ratio (Kop.) is calculated as the ratio of costs of production and sales of products to revenue from sales of products:

where Z is the cost of production and sales of products.

An increase in the operating ratio may mean: an increase in prices for material resources, the inability to control production costs, or the need to increase the selling prices of agricultural products. As a rule, this coefficient ranges from 0.5 to 0.9. A coefficient value greater than 0.9 means extreme inefficiency of the enterprise, and less than 0.5 indicates that all production and sales costs may not have been taken into account.

When assessing the financial condition of an enterprise, especially important have profitability indicators that characterize the profitability of products, all assets and equity capital.

Since capital turnover is closely related to its profitability and serves as one of the most important indicators characterizing the intensity of use of an enterprise’s funds and its business activity, in the process of analysis it is necessary to study capital turnover indicators in more detail and establish at what stages of the circulation the slowdown or acceleration of the movement of funds occurred.

It is necessary to distinguish between the turnover of the entire total capital of the enterprise, including fixed and working capital.

The capital turnover rate is characterized by the following indicators:

• turnover ratio (L^);
• duration of one revolution (P rev).

Turnover ratio shows how many turnovers the capital made during the reporting period and is calculated using the formula

The inverse of the capital turnover ratio is called capital intensity(Ke):

Capital turnover period: or

where D is the number of calendar days in the analyzed period (year - 360 days, quarter - 90, month - 30 days).

Average balances of total capital and its components are calculated according to the average chronological: 1 / 2 amounts at the beginning of the period plus balances at the beginning of each next month, plus Y 2 balances at the end of the period and the result is divided by the number of months in reporting period. The necessary information for calculating turnover rates is available in balance sheet and the financial results report.

In our example (Table 12.30), the duration of one turnover of the entire capital is:

Compared to last year, the turnover of total capital accelerated by 25.7 days.

The turnover of capital depends, on the one hand, on the speed of turnover of fixed and working capital, and on the other, on its organic structure: the larger the share of fixed capital, which turns over slowly, the lower the turnover ratio and the longer the duration of the turnover of the entire total capital, and vice versa .

The dependence of the total duration of capital turnover can be expressed as follows:

where P total - average duration turnover of total capital; P about - the duration of the turnover of working capital; D about - the share of working capital in the total amount.

To calculate the influence of these factors, we use the chain substitution method:

Change in the duration of turnover of total capital: 521.2 -547 = -25.8 days.

Including due to:

• increase specific gravity working capital
• 543 - 547 = -4 days;
• accelerating the rate of working capital turnover

Analysis of the duration of capital turnover

Table 12.30

521.2-543 = -21.8 days.

At the next stage of the analysis, it is necessary to study the change in the turnover of working capital at all stages of its circulation, which will allow us to trace where the acceleration or deceleration of its turnover occurred.

The calculation of the capital turnover period at individual stages of the circulation can be determined by dividing the average balance of individual types of current assets by the amount of one-day sales turnover:

Table data 12.30 show that the duration of the turnover of capital invested in current assets decreased by 9.4 days, mainly due to the acceleration of its turnover at the production stage. At the same time, there was a slowdown in the turnover of capital in finished products.

The duration of capital turnover is not the same in different industries. In some he turns faster, in others - slower. It largely depends on the duration production cycle and the process of circulation of goods. Production time is subject to technological process, technology, production organization.

IN agriculture The production process is very long. In crop production, working capital turns over in about a year. On farms specializing in the cultivation of large cattle, depending on the intensity of production, the duration of working capital turnover ranges from one to two years. In pig farming farms, capital can turn around in half a year, in poultry farming - in two to three months, etc.

The economic effect as a result of accelerating capital turnover is expressed in the relative release of funds from circulation, as well as in an increase in the amount of revenue and profit. The faster the capital turns over, the less of it is required to support operating activities, as a result of which the company incurs fewer expenses for paying interest on loans and borrowings, as well as for storage material assets, which helps reduce costs and increase profits.

The amount of funds released from circulation due to acceleration (-E) or additionally attracted funds into circulation (+E) in the event of a slowdown in capital turnover is determined by multiplying the one-day sales turnover by the change in the duration of the turnover:

In our example, due to the acceleration of working capital turnover by 9.4 days, funds in the amount of 4,648 thousand rubles were released from the turnover. If capital had turned around in the reporting year not in 221.8 days, but like last year - in 231.2 days, then to ensure actual revenue in the amount of 178,000 thousand rubles. the enterprise would need to have in circulation not 109,675 thousand rubles, but 114,323 thousand rubles. working capital, i.e. 4648 thousand more.

Since profit can be represented as a product of factors

then the increase in its amount due to changes in the capital turnover ratio can be calculated by multiplying the increase in the latter by the basic level of the return on sales ratio and by the actual average annual amount working capital:

Due to the acceleration of capital turnover in the reporting year, the analyzed enterprise increased profit in the amount of 1 million 170 thousand rubles.

At the end of the analysis, measures are developed to accelerate the turnover of working capital.

The main ways to accelerate capital turnover are as follows:

• reduction of production cycle duration due to production intensification (use of latest technologies, seeds, fertilizers, increasing the level and quality of animal feeding, mechanization and automation of production processes, increasing the level of labor productivity, better use of fixed assets, labor, land and material resources, etc.);
• improving the organization of material and technical supply in order to uninterruptedly provide production with the necessary material resources and reduce the time that capital remains in reserves;
• speeding up the process of shipping products and processing settlement documents;
• reducing the time spent in accounts receivable.

Section 1. Analysis of capital turnover.

Section 2. Control capital turnover.

Total coefficient capital turnover - this is a coefficient reflecting the rate of asset turnover; shows the number of revolutions per .

Turnover ratio- this is a financial coefficient showing the intensity of use (turnover rate) of certain assets or obligations. Turnover ratios are indicators of the business activity of an enterprise.

Capital turnover analysis

Investor Encyclopedia. 2013 .

See what “capital turnover” is in other dictionaries:

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