How To Increase The Return On Assets

Table of contents:

How To Increase The Return On Assets
How To Increase The Return On Assets

Video: How To Increase The Return On Assets

Video: How To Increase The Return On Assets
Video: Return On Assets explained 2024, April
Anonim

For the successful implementation of their activities, enterprises must have material conditions and the necessary means of production, which are the main element in the development of production forces. The means of production are subdivided into objects and means of labor. These components in a market economy act in the form of production funds, which ensure the continuous process of production, marketing of products and the development of the social sphere.

How to increase the return on assets
How to increase the return on assets

It is necessary

Taking a set of measures

Instructions

Step 1

Most of the enterprises have fixed assets in the amount of 50% of the entire property. Accordingly, the basis of activity is the main non-production and production assets, which consist of equipment, buildings and other means. The effective use of these funds contributes to the improvement of technical and economic indicators, including an increase in the volume of products, a decrease in the cost, labor input for its manufacture and an increase in profits.

Step 2

Improvement of fixed assets, reduction of turnaround time, timely renewal and continuous growth are inherent in a market economy. The rate of return on assets is significantly different with a tendency to increase if the organization is operating successfully. At the same time, in addition to the cost of fixed assets and depreciation, other factors can affect the return on assets: equipment modernization, changes in the structure of technological equipment, overhaul of equipment, a change in the ratio of non-production and production assets, a change in production capacity and production volume due to the influence of market factors. …

Step 3

The capital productivity is characterized by a rather high variability, therefore, the listed factors have a direct impact on the non-production process.

Step 4

To increase the return on assets, you should take some measures:

Apply new equipment instead of outdated models;

Step 5

Sell equipment that is rarely used in the course of work or is not used at all;

Step 6

To increase the share of basic equipment, which will lead to a change in the structure of fixed assets;

Step 7

Increase the number of shifts, eliminate production downtime, which results in an increase in the utilization rate of machine time;

Step 8

Improve overall production efficiency by increasing labor productivity and eliminating auxiliary funds;

Step 9

Switch to the production of those products that have a high level of added value.

Step 10

At industrial enterprises, the cost indicator of capital productivity is most often used, which characterizes the output of products.

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