Analysis of the business activity of an enterprise includes an assessment of its activities, economic potential and the efficiency of capital use. Such documents as "Balance Sheet" and "Profit and Loss Statement" help to analyze the efficiency of the enterprise and its financial condition.
The concept and essence of the business activity of the enterprise
Business activity of an enterprise in a broad sense means the activity of an enterprise aimed at promoting its products on the market, increasing production volumes, economic growth of the enterprise as a whole, and improving financial performance. In particular, the concept of business activity of an enterprise includes the characteristics of its commercial and industrial and economic activities.
The business activity of an enterprise depends on various factors: the specifics of the enterprise, the market, competitors, production and price factors. An analysis of the business activity of an enterprise helps to characterize its main production activities. For example, the efficiency of an enterprise when analyzing its business activity is indicated by the growth of such indicators as: revenue from the sale of products on the market, the rate of implementation of new products, profit from the sale of a unit of production, and others. When analyzing the business activity of an enterprise, an assessment should be made of the performance of the production plan of the enterprise and its use of resources.
Indicators of business activity of the enterprise
The business activity of the enterprise ensures its financial stability. The indicators of profitability, turnover of funds and other financial indicators that characterize the efficiency of the enterprise help to analyze the business activity of the enterprise. Thus, when analyzing the financial condition of the enterprise, one should pay attention to the turnover rates and the efficiency of the enterprise's use of resources as a whole.
It is the assessment of the turnover indicators of the enterprise that gives an idea of the level of its profitability. At the same time, various indicators of the turnover of an enterprise are analyzed, for example, such as: the turnover ratio of working capital, accounts receivable and payable, inventories, fixed assets and capital.
For example, the asset turnover ratio of an enterprise indicates how much revenue the enterprise brings from the sale of each unit of assets for a certain period. The higher this indicator, the faster the capital of the enterprise turns around. On the contrary, with low turnover rates, the company is forced to attract additional funds into circulation.
Consequently, the asset turnover ratio characterizes the intensity of the use of assets in the activities of the enterprise. Thus, the more efficiently the assets are used, the higher the business activity of the enterprise.
