The indicator of the business activity of the enterprise is the capital turnover and its dynamics. A high turnover rate indicates an effective management policy and competent business conduct.
It is necessary
- - balance sheet (form No. 1);
- - profit and loss statement (form No. 2).
Instructions
Step 1
Capital turnover - the rate at which assets pass through various stages of the production process. It affects the solvency of the enterprise and its production potential. The high rate of capital circulation ensures the growth of the company's profits.
Step 2
The total capital turnover is characterized by the main indicators:
- turnover ratio;
- turnover period.
Step 3
The total capital turnover ratio shows how many times total assets are turned over during the analyzed period. Its low indicator means that the volume of activity is insufficient for a given amount of assets. The high value contributes to the successful attraction of additional investment for the expansion of production.
Step 4
Calculate the turnover ratio using the formula: K ob.k = (Revenue) / (Average balance sheet currency for the period).
Step 5
When determining the amount of revenue, include in its composition the total income from all activities. Calculate the average indicator of the balance sheet currency in the following way: add ½ the sum of the values at the beginning and end of the period and the integer values of the interim periods, divide the resulting number by the number of analyzed reporting dates.
Step 6
The period of turnover of the aggregate capital of the enterprise reflects the average period of time during which one turnover of assets is carried out, that is, their transformation from material and material form into money. Calculate the duration of the turnover by dividing the number of days in the period under review by the capital turnover ratio.
Step 7
A detailed analysis provides for the calculation of indicators of the turnover of individual components of capital: own and circulating, inventories and cash, accounts receivable and payable. The general formula for turnover is: K about = (Revenue) / (Average value of funds and their sources).
The general formula for the rate of turnover is as follows: T = D / K about, where D is the number of days in the period.
Step 8
After calculating the duration of the turnover of individual elements of assets, calculate the duration of the operating cycle by adding the results obtained for inventories, finished goods, work in progress and receivables. The growth of this indicator over several periods means a decrease in the business activity of the enterprise, a slowdown in capital turnover, an increase in the need for additional financial resources.
Step 9
Then determine the duration of the financial cycle: subtract the duration of the turnover of accounts payable from the value of the duration of the operating cycle. A decrease in the ratio indicates an increase in the company's business activity.
Step 10
At the next stage, calculate the coefficient of sustainability of economic growth using the formula: K set.р = (Net profit - Dividends) / (Equity).
A high value of this indicator indicates the growth and expansion of the enterprise's capabilities.
