The current assets turnover ratio shows the conclusion. Finding data for calculations

Turnover or business activity ratios of an enterprise– show the effectiveness of the enterprise (organization) using its capital and funds. These ratios show the rate of capital turnover and its conversion into cash. Turnover ratios directly determine the degree of solvency of an enterprise (ability to pay its obligations), financial stability and financial risk. Turnover ratios in their calculations do not use net profit as profitability ratios, but revenue from the sale of goods and services. This allows us to evaluate not the profitability of the enterprise, but its intensity and turnover rate of resources, assets, inventories, Money, accounts receivable and accounts payable.

This article will discuss the main enterprise turnover ratios most often used in financial practice, such as:

  1. Asset turnover ratio
  2. Equity turnover ratio
  3. Turnover ratio current assets
  4. Inventory turnover and asset cost ratio
  5. Accounts receivable turnover ratio
  6. Accounts payable turnover ratio
  7. Cash turnover ratio


The asset turnover ratio is the ratio of revenue from products sold to all assets of the enterprise. This ratio shows the efficiency of use of assets and shows the number of turnovers of the entire capital for the period and the amount of cash that a unit of assets brought.

There are no standard values ​​for the asset turnover ratio, so it is necessary to directly study the dynamics of changes in this indicator over time for one enterprise or industry. In capital-intensive industries, asset turnover will be lower than in trade areas. The higher the asset turnover ratio, the greater the efficiency of asset use. This indicator differs from return on assets indicators in that it does not show the profitability of the enterprise, but characterizes the intensity of turnover. Therefore, turnover formulas use not net profit, but the enterprise’s revenue for the reporting period. The formula for calculating the asset turnover ratio is as follows:

Asset turnover ratio= Sales revenue / Average assets for the period

Asset turnover ratio= line 10 Form No. 2 / (0.5 * (line 300 beginning of the year + line 300 end of the year))


The equity capital turnover ratio is calculated as the ratio of the volume of product sales (revenue) to average annual cost own capital. The equity turnover ratio shows the activity and speed of the enterprise's use of its own capital.
There are no standard values ​​for the equity capital turnover ratio; it is necessary to study the dynamics of changes in this indicator for one enterprise. The formula for calculating the equity turnover ratio is as follows:

Equity turnover ratio= Revenue from sales of products / Average cost of equity capital for the period

Equity turnover ratio= line 10 Form No. 2 / 0.5* (line 490 at the beginning of the year + line 490 at the end of the year)


The turnover ratio of current assets shows the activity of use and the speed of circulation of current assets. This ratio characterizes how much current assets made a full turnover in one year and how much revenue they brought. Current assets include accounts receivable, cash, inventories and deferred expenses, short-term financial investments. The higher the value of this coefficient, the more effective the enterprise. Formula for calculating the turnover ratio of current assets:

Current assets turnover ratio= Net revenue from product sales / Average annual cost of current assets

Current assets turnover ratio= line 10 Form No. 2 / 0.5 (line 290 at the beginning of the year + line 290 at the end of the year)


The ratio of inventory turnover and asset costs shows the intensity of inventory use and turnover rate.
There are no standard values ​​for the turnover ratio. This indicator must be analyzed over time to specific enterprise or industry. A decrease in the turnover ratio indicates the accumulation of excess inventory in the company's warehouses. The higher the ratio of inventory turnover and asset costs, the higher the activity of the enterprise in creating cash. An excessively high inventory turnover and asset cost ratio indicates severe inventory shortages and rapid depletion. Formula for calculating the inventory turnover ratio and asset costs:

Inventory turnover and asset cost ratio= Net revenue from product sales / Average annual cost of inventories

Inventory turnover and asset cost ratio= line 10 Form No. 2 / 0.5*[(line 210+line 220) at the beginning of the year + (line 210+line 220) at the end of the year]


The accounts receivable turnover ratio shows the rate of turnover of accounts receivable. There are no clear standard values ​​for the accounts receivable turnover ratio; they vary depending on the industry, but the higher the ratio, the faster consumers repay their obligations, which is beneficial for the enterprise. The formula for calculating the accounts receivable turnover ratio is as follows:

Accounts receivable turnover ratio= Revenue from sales of goods and services / Average annual value of accounts receivable

Accounts receivable turnover ratio= line 10 Form No. 2 / 0.5*[(line 230+line 240) at the beginning of the year + (line 230+line 240) at the end of the year]


The accounts payable turnover ratio shows the speed and intensity of repayment of the enterprise's obligations to borrowers and characterizes the number of turnovers in the repayment of accounts payable for the reporting period, which is usually one year. Normative value The accounts payable turnover ratio depends on the industry and the nature of the enterprise's activities. The formula for calculating the accounts payable turnover ratio is as follows:

Accounts payable turnover ratio= Revenue from sales of goods and services / Average amount of accounts payable

Accounts payable turnover ratio= line 10 Form No. 2 / 0.5 * (line 620 at the beginning of the year + line 620 at the end of the year)


The cash turnover ratio shows the intensity of use of the enterprise's funds and shows the number of turnover for the reporting period. The formula for calculating the cash turnover ratio is as follows:

Cash turnover ratio= Revenue from sales of goods and services / Average amount of funds

Cash turnover ratio= line 10 Form No. 2 / 0.5 * (line 260 at the beginning of the year + line 260 at the end of the year)

conclusions
Turnover ratios are an important indicator of the efficiency of use of resources by an enterprise. These indicators, in contrast to profitability indicators, show turnover rate and intensity, because in their calculation formulas they use revenue values ​​(rather than net profit as for profitability ratios). Turnover ratios are studied in dynamics to analyze the direction and assess the nature of their changes for one enterprise, a group of similar enterprises and one industry.

Current assets- one of the resources without which the commercial activities of an enterprise are impossible. Calculation and analysis of indicators turnover current assets characterizing the effectiveness of managing this resource will be discussed in this article.

Current assets, their composition and indicators for analysis

A systematic analysis of the commercial activities of an enterprise as an element of effective management is based on the calculation of a number of indicators and the standardization of their values. A comparison of actual and standard indicators makes it possible to identify various patterns in business processes, eliminate risks, and make timely and correct decisions. management decisions.

The main source of information for calculating analytical ratios is financial statements.

A significant part of the calculations is based on information about movement and balances current assets.

TO current assets relate the following types enterprise assets:

  • inventories, including raw materials, supplies, goods for resale and goods shipped, finished goods, deferred expenses;
  • VAT on purchased assets;
  • accounts receivable;
  • financial investments;
  • cash.

In accordance with PBU 4/99 “Accounting statements of an organization”, data on current assets enterprises are contained in section II of the balance sheet. Often in the literature you can find the terms “working capital” or “funds in circulation”.

Magnitude current assets used when calculating the following indicators:

  • profitability;
  • liquidity;
  • financial stability.

Let's look in more detail at analysis turnover of current assets, which is one of the aspects characterizing the business activity of an enterprise.

Why do we need analysis of turnover of current assets?

Dynamics of indicators characterizing turnover working capital, must be disclosed in the information accompanying financial statements(clauses 31, 39 PBU 4/99), as part of a group of coefficients that allow interested users of financial statements to evaluate financial stability, liquidity and business activity of the enterprise. Current assets and their fair valuation are subject to careful verification during the audit of financial statements.

Proper management of funds in circulation allows you to effectively attract credit sources to finance current activities. To assess the creditworthiness of an enterprise, banks use well-known indicators for assessing financial and economic activity. Based on the ranking of these indicators, the company is assigned a certain rating, which determines the terms of the loan, including the loan rate, the amount of collateral and the loan term. Current assets can also be used as collateral for loan obligations.

The presence of a system of analytical coefficients greatly facilitates the dialogue with tax authorities if it is necessary to explain the reasons for seasonal losses. Current assets may cause VAT deductions to exceed the amount of VAT accrued.

Let's consider the procedure for calculating turnover indicators.

Current assets turnover ratio

The turnover ratio shows how many times in the period under review current assets transformed into cash and back. The coefficient is calculated using the formula:

Cob = B / CCOA,

where: Kob is the turnover ratio of current assets ;

B - revenue for the year or other analyzed period;

SSOA - average cost current assets for the period of analysis.

Pay attention to the calculation average cost current assets. In order to obtain the most correct value of the turnover ratio, it makes sense to divide the analyzed period into equal intervals and calculate the average cost using the following formula:

SSOA = (SOA0 / 2 + SOA1 + SOAn / 2) / (n - 1),

where: ССОА - average cost current assets for the period of analysis;

SOA0 is the balance of funds in circulation at the beginning of the analyzed period;

SOA1, SOАn - balance of funds in circulation at the end of each equal interval of the analyzed period;

n is the number of equal time periods in the analyzed period.

This method of calculating the average value of funds in circulation will allow us to take into account seasonal fluctuations in balances, as well as the influence of external and internal factors.

However, the value of the calculated turnover ratio gives only general information about the state of business activity of the enterprise and is of no value for management without analyzing its dynamics and comparison with standard indicators.

Turnover of current assets: formula in days

The most informative indicator from the point of view of managing the commercial activities of an enterprise is the turnover of current assets in days or other units of time (weeks, months). This indicator can be calculated using the formula:

Ob = K_dn / Kob,

where: About - turnover in days;

K_dn — number of days in the analysis period;

Kob is the turnover ratio of current assets.

Standard values ​​of turnover in days and turnover ratio are established by the enterprise independently based on an analysis of a combination of factors, such as contract terms, industry characteristics, region of activity, etc.

Current assets have different structure depending on the type of activity. For example, if a company provides services and does not have inventories, the emphasis in the analysis of current asset turnover will be on accounts receivable. Effective management of this type of funds in circulation will give the company the opportunity to release funds frozen in accounts receivable and thereby improve financial position enterprises.

How to set a standard for accounts receivable turnover? It is necessary to compare the turnover of accounts receivable with the turnover of accounts payable. The greater the excess in days of accounts payable turnover over the accounts receivable turnover, the greater the economic effect from managing accounts receivable will be.

Analysis of the dynamics of receivables turnover indicators will make it possible to identify negative trends in the event that debts that are impossible to collect appear in the receivables.

Results

Current assets Enterprises are a rapidly changing resource that reacts most acutely to changes in the external and internal business environment. Turnover indicators current assets are an important indicator of the effectiveness of the commercial activities of an enterprise.

It is necessary to calculate the coefficient to assess the rate of conversion of working capital into money. It is closely related to the efficiency of sales management at the enterprise: an increase in the indicator in dynamics characterizes an increase in sales and profits. To calculate the indicator, you will need data on revenue and the average annual cost of fixed assets.

 

How efficiently are working capital used? Is there a shortage of assets? Are there problems with the money in circulation?

What are working capital?

This revolving funds who participate in the process of production and marketing of products. They provide the process of exchanging money for raw materials, raw materials for products, products for money.

Working capital is the cost of all items of labor involved in production process. They change their form (from natural to monetary) and are included in the cost of production.

The cost of this indicator includes:

  • Costs of materials, raw materials.
  • Costs of creating, storing and selling products.
  • Money received from sales.

Every enterprise has working capital; they are needed for organization uninterrupted operation companies. Their lack can lead to production downtime due to the inability to purchase raw materials, pay wages personnel, payment of taxes, utility bills. The deficit has a negative impact on current processes and the further development of the enterprise; a cash gap may form (lack of money to finance upcoming expenses).

At insufficient quantities The company attracts borrowed money from its own working capital (credits, advances, borrowings, deferments in payments to the budget).

More information on the topic can be obtained from the video:

Assessing the efficiency of using working capital

To assess the effectiveness of working capital management, there is a working capital turnover ratio (CRT). It determines the number of revolutions during which raw materials manage to turn into money. Calculated for any period - month, quarter, year.

K OOS indicates how many times funds are turned over over a certain period, at what speed.

Formula for calculation:

  • B - revenue;
  • ΔOC is the average amount of working capital.

ΔOA is calculated using the formula:

  • OS NP - current assets at the beginning of the period;
  • OS KP - current assets at the end of the period.

To calculate the environmental impact ratio, you can use balance sheet data. The formula in this case will be like this:

  • Page 2010 is the value of string 2010 from Form 2.
  • Page 1200 NG - the value of line 1200 at the beginning of the year (form 1).
  • Page 1200 KG - the value of line 1200 at the end of the year (form 1).

Calculation of K OOS using an example

To make it easier to calculate the working capital turnover ratio, you can use an Excel table (download example).

Conclusions from the table. In 2014, revenue indicators and the volume of fixed assets fell, but despite this, the environmental impact ratio increased by 1.06. This means that the number of turnovers has increased over the year. Further, since 2014, there has been growth in all indicators. Consequently, the enterprise operates more and more efficiently every year.

Normal value of the indicator

The working capital turnover ratio always takes a positive value, but it can be anything - it all depends on the industry and the specific enterprise. The Environmental Protection Code does not have any standard by which one can evaluate whether 1 or 100 is too much or too little. Each company will have different results. And to understand the current economic situation, they need to be compared with values ​​from previous years and the industry average. Direct competitors will be of particular interest. If there is growth (as in the example above) - this is positive sign. A decrease is a reason to think about organizing the production/sales process. Therefore, we must strive to increase the coefficient.

Important! Changes in environmental protection can be influenced not only by internal ones, but also external factors(changes in tax legislation, state sanctions policy, decline in the entire industry, reduction in state support, etc.).

You can increase the value of the indicator in several ways:

  • Reduce the amount of debt of the enterprise.
  • Reduce the turnaround time for raw materials/goods.
  • Stimulate demand.
  • Reduce production costs.
  • Strengthen the company's image among clients.
  • Update the material and technical base, introduce new technologies.
  • Improve the quality of services provided and goods sold.
  • Reduce inventory.
  • Initiate personnel changes.

It is also important to analyze the indicator with other economic indicators (liquidity ratio, asset turnover, etc.). Data must be taken for similar periods of time.

Monitoring environmental protection helps to notice in a timely manner a situation that threatens the company’s work and to adjust management decisions in a timely manner, because the faster the funds are turned over, the sooner the company’s expenses will be recouped. The slowdown in turnover leads to an increase in the need for working capital.

Turnover analysis is one of the leading areas of analytical study financial activities organizations. Based on the results of the analysis, assessments of business activity and the effectiveness of asset and/or capital funds management are made.

Today, the analysis of working capital turnover raises many disputes between practical economists and theoretical economists. This is the most vulnerable point in the entire methodology of financial analysis of an organization’s activities.

What characterizes turnover analysis

The main purpose for which it is carried out is to assess whether the enterprise is able to make a profit by completing the “money-product-money” turnover. After the necessary calculations, the conditions for material supply, settlements with suppliers and customers, sales of manufactured products, etc. become clear.

So what is turnover?

This is an economic quantity that characterizes a certain time period during which the complete circulation of funds and goods takes place, or the number of these circulations during a designated time period.

Thus, the turnover ratio, the formula of which is given below, is equal to three (the analyzed period is a year). This means that in a year of operation, an enterprise earns more money than the value of its assets (that is, they turn over three times in a year).

The calculations are simple:

K about = sales revenue / average value assets.

It is often necessary to find out the number of days it takes to complete one revolution. To do this, the number of days (365) is divided by the turnover ratio for the analyzed year.

Commonly used turnover ratios

They are necessary to analyze the business activity of an organization. Fund turnover indicators show the intensity of use of liabilities or certain assets (the so-called turnover rate).

So, when analyzing turnover, the following turnover ratios are used:

Own capital of the enterprise,

Working capital assets,

Full assets

Inventories,

Debts to creditors,

Accounts receivable.

The higher the calculated total asset turnover ratio, the more intensively they work and the higher the indicator of business activity of the enterprise. Industry characteristics do not always have a positive effect on turnover. So, in trade organizations, through which large volumes of money pass, turnover will be high, while in capital-intensive enterprises it will be significantly lower.

When comparing the turnover ratios of two similar enterprises belonging to the same industry, you can see a difference, sometimes significant, in the efficiency of asset management.

If the analysis shows a high receivables turnover ratio, then there is reason to talk about significant efficiency in payment collection.

This coefficient characterizes the speed of movement of working capital from the moment of receipt of payment for material assets and ending with the return of funds for goods sold(services) to bank accounts. The amount of working capital is the difference between the total amount of working capital and the balance of funds in the bank accounts of the enterprise.

If the turnover rate increases with the same volume of goods (services) sold, the organization uses smaller amounts of working capital. From this we can conclude that material and financial resources will be used more efficiently. Thus, the working capital turnover ratio indicates the entire set of processes of economic activity, such as: a decrease in capital intensity, an increase in the rate of productivity growth, etc.

Factors influencing the acceleration of working capital turnover

These include:

Reducing the total time spent on the technological cycle,

Improvement of technology and production process,

Improving the supply and marketing of goods,

Transparent payment and settlement relations.

Money cycle

Or, as it is also called, working capital is the time period of cash turnover. Its beginning is the moment of acquisition work force, materials, raw materials, etc. Its end is receiving money for goods sold or services provided. The value of this period shows how effective the management is working capital.

Short cash cycle ( positive characteristic activities of the organization) makes it possible to quickly return funds invested in current assets. Many enterprises that have a strong position in the market, after analyzing their turnover, receive a negative working capital ratio. This is explained, for example, by the fact that such organizations have the opportunity to impose their conditions on both suppliers (receiving various payment deferrals) and customers (significantly reducing the payment period for the goods (services) supplied).

Inventory turnover

This is the process of replacement and/or complete (partial) renewal of inventory. It occurs through the transfer of material assets (that is, capital invested in them) from the inventory group to the production and/or sales process. Analysis of inventory turnover makes it clear how many times the remaining inventory was used during the billing period.

Inexperienced managers create excess reserves for reinsurance, without thinking that this excess leads to the “freezing” of funds, excess expenses and a decrease in profits.

Economists advise avoiding such deposits of inventories that have low turnover. And instead, by accelerating the turnover of goods (services), freeing up resources.

Inventory turnover ratio is one of the important criteria for assessing the activity of an enterprise

If the calculation shows a ratio that is too high (compared to averages or the previous period), this may indicate a significant shortage of inventory. If on the contrary, then the stocks of goods are not in demand or are very large.

It is possible to obtain a characteristic of the mobility of funds invested in the creation of inventories only by calculating the inventory turnover ratio. And the higher the business activity of the organization, the faster the funds are returned in the form of proceeds from the sale of goods (services) to the accounts of the enterprise.

There are no generally accepted standards for the cash turnover ratio. They are analyzed within one industry, and perfect option- in the dynamics of a single enterprise. Even the slightest decrease in this ratio indicates excess inventory accumulation, ineffective warehouse management, or the accumulation of unusable or obsolete materials. On the other hand, a high indicator does not always characterize the business activity of an enterprise well. Sometimes this indicates inventory depletion, which can cause process disruptions.

Affects inventory turnover and the activities of the organization’s marketing department, since high profitability sales entails a low turnover ratio.

Accounts receivable turnover

This ratio characterizes the speed of repayment of accounts receivable, that is, it shows how quickly the organization receives payment for goods (services) sold.

It is calculated for a single period, most often a year. And it shows how many times the organization received payments for products in the amount of the average debt balance. It also characterizes the policy of selling on credit and the effectiveness of working with customers, that is, how effectively receivables are collected.

The accounts receivable turnover ratio does not have standards and norms, since it depends on the industry and technological features production. But in any case, the higher it is, the faster the receivables are covered. At the same time, the efficiency of an enterprise is not always accompanied by high turnover. For example, sales of products on credit result in a high accounts receivable balance, while its turnover rate is low.

Accounts payable turnover

This coefficient shows the relationship between the amount of money that needs to be paid to creditors (suppliers) by the agreed date and the amount spent on purchases or on the purchase of goods (services). Calculation of accounts payable turnover makes it clear how many times its average value was repaid during the analyzed period.

Financial stability and solvency are reduced with a high share of accounts payable. At the same time, it gives you the opportunity to use “free” money for the entire duration of its existence.

The calculation is simple

The benefit is calculated as follows: the difference between the amount of interest on a loan equal to the amount of debt (that is, a hypothetically taken loan) for the time it is on the organization’s balance sheet, and the volume of accounts payable itself.

A positive factor in the activity of an enterprise is considered to be the excess of the accounts receivable ratio over the accounts payable turnover ratio. Lenders prefer more high coefficient turnover, however, it is beneficial for the company to keep this ratio at a lower level. After all, unpaid amounts of accounts payable are a free source for financing the current activities of the organization.

Resource efficiency, or asset turnover

Makes it possible to calculate the number of capital turnover for a particular period. This turnover ratio, the formula exists in two versions, characterizes the use of all assets of the organization, regardless of the sources of their receipt. An important fact is that only by determining the resource efficiency ratio can one see how many rubles of profit accrue for each ruble invested in assets.

The asset turnover ratio is equal to the quotient of revenue divided by the value of assets on average for the year. If you need to calculate turnover in days, then the number of days in a year must be divided by the asset turnover ratio.

The leading indicators for this category of turnover are the period and speed of turnover. The latter is the number of capital turnover of the organization over a certain period of time. This interval is understood as average term, for which the funds invested in the production of goods or services are returned.

Asset turnover analysis is not based on any norms. But the fact that in capital-intensive industries the turnover ratio is significantly lower than, for example, in the service sector is definitely understandable.

Low turnover may indicate insufficient efficiency in working with assets. Do not forget that sales profitability standards also affect this category of turnover. Thus, high profitability entails a decrease in asset turnover. And vice versa.

Equity turnover

It is calculated to determine the rate of equity capital of an organization for a particular period.

Capital turnover own funds organization is designed to characterize various aspects of the financial activity of the enterprise. For example, from an economic point of view, this coefficient characterizes the activity of the monetary turnover of invested capital, from a financial point of view - the speed of one turnover of invested funds, and from a commercial point of view - excess or insufficient sales.

If this indicator shows a significant excess of the level of sales of goods (services) over invested funds, then, as a consequence, an increase in credit resources will begin, which, in turn, makes it possible to reach a limit beyond which the activity of creditors increases. In this case, to equity the liability ratio increases and credit risk increases. And this entails the inability to pay these obligations.

Low capital turnover of own funds indicates their insufficient investment in the production process.

To assess the efficiency of a company, a wide variety of values ​​and indicators are used - one of the most important is the working capital turnover ratio. Let's look at the main nuances, formulas and carry out calculations, tell you what can affect the increase in the efficiency of the enterprise.

Working capital turnover ratio - educational program

A company can function effectively only if its working capital is used wisely and rationally. Depending on the type of activity, " life cycle"(even the time of year matters), given value may vary. However, it is the correct use of them that determines how successful the company will be and how long its activities will generate money.

In order to correctly assess the use of working capital, there are a lot of coefficients to study - they study the speed of circulation, the level of liquidity and others important characteristics. One of the most important indicators that will help determine the financial condition of the company is the working capital turnover ratio, which shows how many times during the reporting period the company turned over its own working capital by 10%.

In other words, this value shows the efficiency of the enterprise - the higher it is, the better the enterprise uses its resources.

Formulas and given calculations for the coefficient

As we have already said, this coefficient reflects the number of revolutions that working capital makes in a certain time. The formula for calculation is as follows:

Kob = Qp/F ob.av., where:

  • Qp – volume of products sold at wholesale prices (excluding VAT).
  • F ob.sr – the average balance of working capital that was discovered over a certain period.

In general, the cycle of circulation of funds for a company is a cycle when the funds invested by organizations in their work are returned again after a certain period, but in the form of a finished product. The organization sells the resulting products to customers and again receives money, the amount of which has another name - income.

Thus, general scheme“money-product-money” shows the cyclical nature of the organization. In this case, the coefficient allows you to show how many similar “circles” the company makes over a certain period of time (most often they take the year as the reporting year). Naturally, for a company to function normally, there should be as many such cycles as possible.

What indicators are needed for calculations?

All data to determine the coefficient must be taken from the company’s reporting documentation - the necessary information is placed in the first and second forms of accounting.

So, if we talk about general cases, then the volume of goods sold by a company is calculated as the revenue that the company received in one cycle (in the future we will adhere to a time period equal to t=1). We take revenue for the specified time from the statement of financial results (profits and losses), where it is written on a separate line as the amount received by the company from the sale of services or goods.

The average balance of working capital is located in the second section of the balance sheet and is calculated using the following formula:

Ф ob.sr = Ф1+Ф0/2, where:

  • F1, F0 – the amount of the company’s working capital for current and past periods.

It is worth noting that if we use data for 2015 and 2016, the resulting ratio will be presented as the turnover rate for 2015.

In addition to the working capital turnover ratio, there are some other values ​​in the analysis that help to find out the speed of circulation of capital - many of them are related to this indicator.

So, first of all, this is the duration of one revolution (Tob). To determine given value, you need to calculate the quotient of dividing the number of days that correspond to the period being checked (a year is 360 days, a quarter is 90 days, a month is 30 days) by the value of the coefficient:

Tob = T/ Cob.

Considering this formula, then with its help you can calculate the duration of one revolution, for which the following formula is used:

Tob = T * F ob.av/ Qp.

Another important indicator, which are used to evaluate financial condition– load factor of funds in circulation (Kzagr). Using this indicator, you can determine the amount of working capital that is required to receive one ruble of revenue from the sale of goods.

In other words, this ratio is called the capital intensity of working capital. For calculation, use the following formula:

Kzagr = F ob.av/ Qp.

As you may have noticed, this value is the inverse of the turnover ratio. This means that the lower this value, the better the company’s efficiency.

Another important indicator for analysis is profitability (Rob.av.), characterized by the amount of profit that the company receives for each ruble of working capital.

Its main task is to show financial efficiency company activities. the formula for calculating profitability is similar to the values ​​​​that are used when calculating the turnover ratio, but instead of sales revenue, profit before taxes is used. The formula is as follows:

Rob.sr. = p/ Ф ob.sr., where

  • n is the company’s profit before taxes.

The higher this value is, the better the company performs.

Turnover Ratio Analysis – Step by Step

Before we take a step-by-step look at how to analyze the ratio and how to find ways to increase it, you need to understand what exactly is meant by this indicator.

Working capital of an organization is usually understood as the amount of assets that have a lifespan. useful application for a period of less than a year. These include:

  • Inventories.
  • Finished goods in warehouse.
  • Cash.
  • Unfinished production.
  • Financial investments for a short period.
  • Accounts receivable to the enterprise.

Most often this coefficient is approximately same value for a long time. But this value also depends on the type of activity chosen by the company (for example, for companies in the trade sector this indicator will be the highest, and if we are talking about enterprises in the industrial sector, it will be low), cyclicality (for example, some enterprises are characterized by a “surge” in sales in a certain season) and other factors.

In general, in order to change this value and increase the efficiency of using assets, you should competently approach the organization’s working capital management policy.

For example, to reduce inventories, it is necessary to rationally use available resources, reduce the material intensity of production, losses, and defects. In addition, you should take a competent approach to supplies and their organization, minimizing, for example, costs for delivery or storage. To reduce the amount of work in progress, you need to rationally approach production cycles, reducing the cost of inventory. And to reduce the number finished products In the warehouse, you need to competently build the company’s logistics and marketing policies.

It is worth noting that even one of the increases listed above can quickly lead to an increase in the turnover ratio. In addition, there are indirect ways to increase the efficiency of using working capital. For example, the indicator will be higher if the company’s profit grows or sales volume increases.

But if, during the analysis, a decrease in value is observed over a long period of time, this may indicate a deterioration in affairs in the company.

For what reasons does the coefficient fall?

There are several reasons that can lead to a decrease in the working capital turnover ratio - this indicator is influenced not only by internal, but also by external factors. For example, if a country is experiencing a sharp economic downturn, it is not surprising if the demand for a product falls, and at the same time everything worsens. economic indicators organizations.

There are also internal reasons. Among them, the following stand out:

  • Errors in management.
  • Logistics problems.
  • Insufficiently well-tuned marketing campaign.
  • Use of outdated equipment.

Most of the problems with reducing this value are associated with low level employee qualifications and management errors. True, in some cases the indicator may decrease for some time due to the modernization of the organization, the transition to new equipment, the use latest technologies. In this case, the change in the ratio is not related to problems in the company.

Simple example for calculation

There is a company called Ecohouse. After analyzing its activities for 2015, we received information that revenue from the sale of goods amounted to 100 thousand rubles. The amount of working capital for the period under study was 35 thousand rubles in 2014 and 45 thousand in 2015. Using this information, let's make calculations:

Kob = 100 rubles/((45+35) /2).

The coefficient will be equal to 2.5, which means that the value of the turnover cycle of the Ecohouse company in 2014 was:

Tob = 360/25.

According to this formula, the company's production cycle is 144 days.

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