The effective functioning of any enterprise is impossible without competent and rational use working capital. Depending on the type of activity, stage life cycle or even the time of year, the amount of working capital of an organization may be different. However, it is the availability and proper use of these resources that determines how successful and long-lasting the activities of any business entity will be.

In order to assess the correct use of a company's working capital, there are many coefficients that analyze the speed of circulation, sufficiency, liquidity and many other equally significant characteristics. One of the most important indicators necessary to determine the financial condition of an organization is the working capital turnover ratio.

Turnover ratio (K rev), or turnover rate, shows how many times during the period of time under study the enterprise is able to completely turn over its own working capital. Thus, given value characterizes the efficiency of the company. The larger the value obtained, the more successfully the company uses its available resources.

Formula and calculation

The turnover ratio shows the number of revolutions made by working capital over the period of time under consideration. It is calculated as:

Where:

• Q p is the volume products sold at wholesale prices of the organization excluding VAT;
• F ob.av. – the average balance of working capital found during the period under study.

If we recall the approximate form of the cash circulation cycle at an enterprise, it turns out that the money that an organization invests in the work of its company returns to it after some time in the form of finished products. The company sells these products to its customers and again receives a certain amount of money. Their value is the income of the organization.

Thus, the general scheme “money-product-money” implies the cyclical nature of the company’s activities. The turnover ratio in this case shows how many similar turnovers the organization’s funds can make in a certain period of time (most often in 1 year). Naturally, for the effective and fruitful operation of an enterprise it is necessary that this value was as large as possible.

Necessary indicators for calculation

The working capital turnover ratio can be determined using the data presented in the financial statements of the organization. The quantities needed to determine it are shown in the first and second forms financial statements .

So, in general case the volume of products sold is calculated as the revenue received by the organization in one cycle (since in most cases an annual coefficient is used for analysis, in the future we will take into account the time period t=1). Revenue for the specified period is taken from the income statement (formerly the income statement), where it is shown in a separate line as the amount received by the enterprise from the sale of work, goods or services.

The average balance of working capital is found from the second section of the balance sheet and is calculated as:

Where F 1 and F 0 are the amounts of the company’s working capital for the current and past period time. Note that if the calculations use data for 2013 and 2014, then the resulting coefficient will represent the rate of funds turnover specifically for 2013.

In addition to the turnover ratio in economic analysis, there are other values ​​that analyze the turnover rate of an organization's working capital. Many of them are also closely related to this indicator.

Thus, one of the values ​​accompanying the turnover ratio is duration of one revolution (T rev). Its value is calculated as the quotient of dividing the number of days corresponding to the analyzed period (1 month = 30 days, 1 quarter = 90 days, 1 year = 360 days) by the value of the turnover ratio itself:

Based on this formula, the duration of one revolution can also be calculated as:

Another important indicator used when analyzing the financial condition of an organization is utilization rate of funds in circulation K load. This indicator determines the amount of working capital required to receive 1 ruble of revenue from product sales. In other words, the coefficient shows how many percent of the organization’s working capital falls on one unit of the final result. Thus, in another way the load factor can be called the capital intensity of working capital.

It is calculated using the following formula:

As can be seen from the methodology for calculating this indicator, its value is the inverse of the value of the turnover ratio. And this means that how less value load indicator, the higher the efficiency of the organization.

Another generalizing factor in the efficiency of using working capital is the value profitability (R ob.av.). This ratio is characterized by the amount of profit received for each ruble of working capital and shows the financial efficiency of the organization. The formula for calculating it is similar to the values ​​​​used to find the turnover ratio. However, in this case, instead of revenue from sales of products, the enterprise’s profit before tax is used in the numerator:

Where π is profit before tax.

Also, as in the case of the turnover ratio, than more value return on capital, the more financially stable the enterprise’s activities.

Turnover ratio analysis

Before moving on to analyzing the turnover ratio itself and looking for ways to increase the efficiency of an organization, let’s define what is generally meant by the concept of “working capital of a company.”

Working capital of an enterprise is understood as the amount of assets that have a lifespan beneficial use less than one year. Such assets may include:

• stocks;
• unfinished production;
• finished products;
• cash;
• short-term financial investments;
• accounts receivable.

In most cases, a company's turnover ratio is approximately same value over a long period of time. This value may depend on the types of core activities of the company (for example, for trade enterprises this indicator will be the highest, while in the field of heavy industry its value will be quite low), its cyclical nature (some companies are characterized by a surge in activity in certain seasons) and many other factors.

However, in general, in order to change the value of this ratio and increase the efficiency of using the company’s assets, it is necessary to competently approach the working capital management policy.

Thus, a reduction in inventories can be achieved through a more economical and rational use of resources, reducing the material intensity of production and the amount of losses. In addition, significant improvements can be achieved through more efficient supply management.

The amount of work in progress is reduced by rationalizing the production cycle and reducing the cost of inventory. And reducing the amount of finished products in stock can be achieved with the help of more advanced logistics and aggressive marketing policies of the organization.

Note that a positive impact on even one of the values ​​presented above already has a significant impact on the turnover ratio. In addition, it is possible to achieve an increase in the efficiency of using working capital at an enterprise in indirect ways. Thus, the value of the indicator will be higher with an increase in the organization’s profit and sales volumes.

If, when plotting the dynamics of the turnover ratio over a long period of time, one can note a stable decrease in its value, this fact may be a sign of a deterioration in the financial condition of the company.

Why might it be declining?

There are several reasons for reducing the turnover ratio. Moreover, its value can be influenced by both external and internal factors. For example, if the general economic situation in the country worsens, the demand for luxury goods may fall, the appearance of new models of electrical equipment on the market will reduce the demand for old ones, and so on.

There may also be several internal reasons for a decrease in turnover rate. Among them it is worth highlighting:

• errors in working capital management;
• logistics and marketing errors;
• growth of the company's debt;
• use of outdated production technologies;
• change in the scale of activity.

Thus, most of the reasons for the deterioration of the situation at the enterprise associated with management errors and low qualifications of workers.

At the same time, in some cases the value of the turnover ratio may decrease due to the transition to new level production, modernization and use of new technologies. In this case, the value of the indicator will not be associated with the low efficiency of the company.

Let's consider a certain organization "Alpha". Having analyzed the company’s activities for 2013, we learned that revenue from sales of products at this enterprise amounted to 100 thousand rubles.

At the same time, the amount of working capital was equal to 35 thousand rubles in 2013 and 45 thousand rubles in 2012. Using the data obtained, we calculate the asset turnover ratio:

Since the resulting coefficient is 2.5, we can note that in 2013 the Alpha company had the duration of one turnover cycle:

Thus, one production cycle of the Alpha enterprise takes 144 days.

Turnover ratio– a parameter by calculating which one can estimate the rate of turnover (use) of specific liabilities or assets of the company. As a rule, turnover ratios act as parameters of an organization's business activity.

Turnover ratios– several parameters that characterize the level of business activity in the short and long term. These include a number of ratios - working capital and asset turnover, accounts receivable and payable, as well as inventories. This category also includes equity and cash ratios.

The essence of the turnover ratio

The calculation of business activity indicators is carried out using a number of qualitative and quantitative parameters - turnover ratios. The main criteria for these parameters include:

Business reputation of the company;
- presence of regular customers and suppliers;
- width of the sales market (external and internal);
- competitiveness of the enterprise and so on.

For a qualitative assessment, the obtained criteria must be compared with similar parameters from competitors. At the same time, information for comparison should be taken not from financial statements (as is usually the case), but from marketing research.

The criteria mentioned above are reflected in relative and absolute parameters. The latter include the volume of assets used in the company’s work, the volume of sales of finished goods, and the volume of its own profit (capital). Quantitative parameters are compared in relation to different periods (this can be a quarter or a year).

The optimal ratio should look like this:

Growth rate of net income > Growth rate of profit from the sale of goods > Growth rate of net assets > 100%.

3. Turnover ratio of current (working) assets displays how quickly it is accessed and used. Using this coefficient, you can determine how much turnover current assets made over a certain period (usually a year) and how much profit they brought.

The efficiency of using working capital is characterized by a system of economic indicators, and, above all, the turnover of working capital and the duration of one turnover. The turnover of working capital refers to the duration of the complete circulation of funds from the moment of acquisition of working capital (purchase of raw materials, supplies, etc.) to the release and sale of finished products. The circulation of working capital is completed by crediting the proceeds to the company's account.

The turnover of working capital at an enterprise depends on the following factors:

duration of the production cycle;

quality of products and their competitiveness;

efficiency of working capital management at the enterprise in order to minimize them;

solving the problem of reducing material consumption of products;

method of supplying and marketing products;

working capital structures, etc.

The efficiency of working capital turnover is characterized by the following indicators:

1. Working capital turnover ratio. Shows the number of revolutions that working capital makes during the analyzed period. The higher the turnover ratio, the better the working capital is used.

Cob=N/Esro(1)

Where Cob- working capital turnover ratio;

N- revenues from sales;

EURO- average annual cost of working capital.

Euro = (Start of year + End of year)/2 (2)

Where EURO- average annual cost of working capital;

Start of the year- cost of working capital at the beginning of the year;

End of the year- cost of working capital at the end of the year.

2. Load factor of funds in circulation. It is the inverse of the direct working capital turnover ratio. It characterizes the amount of working capital spent per 1 ruble. sold products. The lower the utilization rate of funds, the more efficiently the working capital is used at the enterprise, and its financial position improves.

Kz = Euro/N x100 (3)

Where Kz- load factor of funds in circulation

N- revenues from sales;

EURO- average annual cost of working capital;

100 - conversion of rubles to kopecks.

3. Coefficient of duration of one turnover of working capital. It shows how long it takes for the company to return its working capital in the form of revenue from sales of products. A decrease in the duration of one revolution indicates an improvement in the use of working capital.

TE = T/Kob (4)

Where THOSE- duration of the 1st turnover of working capital;

T

Cob- turnover ratio;

Comparison of turnover ratios over the years allows us to identify trends in the efficiency of using working capital. If the working capital turnover ratio has increased or remained stable, then the enterprise operates rhythmically and uses financial resources rationally. A decrease in the turnover ratio indicates a decline in the rate of development of the enterprise and its poor financial condition. The turnover of working capital may slow down or accelerate. As a result of accelerating turnover, that is, reducing the time it takes working capital to pass through individual stages and the entire circuit, the need for these funds is reduced. They are being released from circulation. The slowdown in turnover is accompanied by the involvement of additional funds in the turnover. Relative savings (relative overexpenditure) of working capital is determined by the following formula:

E = Euro-Esrp x(Nreport/N prev) (5)

Where E– relative savings (overexpenditure) of working capital;

E sro- average annual cost of working capital for the reporting period;

E srp- average annual cost of working capital of the previous

Nreport- revenue from sales of the reporting year;

Nbefore- revenue from sales of the previous year.

Relative savings (relative overexpenditure) of working capital:

E = 814 - 970.5x375023/285366 = - 461.41 (thousand rubles) - savings;

The general assessment of working capital turnover is presented in Table 5

Table 5

General assessment of working capital turnover

Conclusion: The general assessment of working capital shows that for the analyzed period:

The duration of the turnover of working capital has improved by 0.44 days compared to the previous period, that is, funds invested in current assets go through a full cycle and again take cash form 0.44 days earlier than in the previous period;

A decrease in the utilization rate of funds in circulation by 0.13 indicates that working capital has become more efficiently used at the enterprise compared to last year, i.e. financial situation improves;

An increase in the turnover ratio by 166.66 indicates better use of working capital;

The acceleration of turnover of working capital led to their release from circulation in the amount of 461.41 thousand rubles.

Accounts receivable is the amount of debts owed to an enterprise or organization from legal entities and individuals. The most general recommendations for managing accounts receivable are:

Monitor the status of settlements with customers for deferred (overdue) debts;

If possible, target a larger number of buyers in order to reduce the risk of non-payment by one or more large buyers;

Monitor the status of accounts receivable and accounts payable - a significant excess of accounts receivable poses a threat to the financial stability of the enterprise and makes it necessary to attract additional sources of financing.

The information base for the analysis of receivables is the official financial statements: accounting report - form No. 1 (section "Current assets"), form No. 5 "Appendix to the balance sheet" (section "Receivables and payables" and references thereto).

For accounts receivable, as well as for working capital, in general, the concept of “turnover” is used. Turnover is characterized by a group of coefficients. To assess accounts receivable turnover, the following indicators are used:

1. Accounts receivable turnover ratio.

Shows how effectively the company organized the collection of payments for its products. A decrease in this indicator may signal an increase in the number of insolvent customers and other sales problems.

Cobd =N/Esrd (6)

Where N- revenues from sales;

Cobd

Esrd- average annual value of accounts receivable.

2. Period of repayment of receivables.

This is the length of time required for the enterprise to collect debts for sold products. It is defined as the reciprocal of the accounts receivable turnover ratio and multiplied by the period.

TEDz = T/Kob (7)

Where TEDZ- duration of the 1st turnover of working capital;

T- duration of the 1st period (360 days);

Cobd- Accounts receivable turnover ratio.

3. Share of receivables in the total volume of current assets. Shows what share receivables occupy in the total amount of current assets. An increase in this indicator indicates an outflow of funds from circulation.

Ddz = Edzkon/TAkon x 100% (8)

Where Jedzkon- accounts receivable at the end of the year;

TAcon- current assets at the end of the year.

Ddz- share of accounts receivable

All calculated data are grouped and listed in table 6.

Table 6

Accounts receivable turnover analysis

Conclusion: analysis of accounts receivable turnover shows that the state of settlements with customers has improved compared to last year:

The average repayment period for receivables decreased by 1.87 days;

An increase in the accounts receivable turnover ratio by 73.49 turns shows a relative decrease in commercial lending;

The share of accounts receivable in the total volume of working capital decreased by 8.78%, which indicates an increase in the liquidity of current assets, and therefore, a slight improvement in the financial condition of the enterprise.

Inventory management (IPM).

The accumulation of mineral resources has positive and negative sides.

Positive sides:

The fall in the purchasing power of money forces the enterprise to invest temporarily free funds in stocks of materials, which can then be easily sold if necessary;

The accumulation of inventories is often a necessary measure to reduce the risk of non-delivery or under-delivery of raw materials and materials necessary for the production process of the enterprise.

Negative sides:

The accumulation of inventories inevitably leads to an additional outflow of funds due to an increase in costs associated with storing inventories (rental of warehouse premises and their maintenance, costs of moving inventories, insurance, etc.), as well as an increase in costs associated with losses due to obsolescence, damage , theft and uncontrolled use of inventories, due to an increase in the amount of tax paid, and due to the diversion of funds from circulation.

To assess inventory turnover, the following indicators are used:

1. Inventory turnover ratio. Shows the turnover rate of inventories.

Kmpz =S/Esrmpz (9)

Where Esrmpz- average annual cost of inventories; S- cost;

Kmpz- inventory turnover ratio.

The cost price is taken from Form No. 2 - Profit and Loss Statement. The higher this indicator, the less funds are associated with this least liquid item, the more liquid the structure of current assets and the more stable the financial position of the enterprise. It is especially important to increase turnover and reduce inventories if the company has a large debt. In this case, creditor pressure may be felt before anything can be done with the inventory, especially in unfavorable conditions.

2. Shelf life of MPZ.

An increase in this indicator indicates the accumulation of inventories, and a decrease indicates a reduction in inventories. The turnover rates of finished products and inventories, as well as the shelf life of inventories and finished products, are calculated similarly.

Tmpz = T / Kmpz (10)

Where Tmpz- shelf life of MPZ;

T- duration of the 1st period (360 days);

Kmpz- inventory turnover ratio.

An increase in this indicator indicates the accumulation of inventories, and a decrease indicates a reduction in inventories. The turnover rates of finished products and inventories, as well as the shelf life of inventories and finished products, are calculated similarly. Data from the analysis of inventory turnover are presented in table. 7.

Table 7

Analysis of inventory turnover

Conclusion: analysis of inventory turnover shows that during the analyzed period:

The turnover rate of inventories increased by 0.5 revolutions, and the shelf life of inventories decreased by 0.8 days compared to last year. Consequently, the enterprise does not accumulate inventories;

The turnover rate of industrial inventories decreased by 20.8 revolutions, and the shelf life of industrial inventories increased by 1.43 days compared to last year. Consequently, the enterprise is accumulating inventories;

The turnover rate of finished products increased by 2.19 turns, and the shelf life of finished products decreased by 2.15 days. Thus, finished products do not accumulate at the enterprise.

where is the turnover ratio;

Revenue from sales of products, works, services (thousands.

Average working capital (thousand rubles).

The turnover ratio shows the number of complete turns (times) made by working capital during the analyzed period of time. With an increase in the indicator, the turnover of working capital accelerates, which means the efficiency of using working capital improves.

2. Duration of one revolution

where is the duration of one turnover of working capital (in days);

Average working capital (thousand rubles);

Reporting period (in days);

A reduction in turnover time, as already noted, leads to the release of funds from circulation, and an increase in it leads to an additional need for working capital.

3. Working capital consolidation ratio

where is the coefficient of fixation of working capital;

Average working capital (thousand rubles);

Revenue from product sales (thousand rubles).

Accelerating capital turnover helps to reduce the need for working capital (absolute release), increase production volumes (relative release) and, therefore, increase profits. As a result, the financial condition of the enterprise improves and solvency strengthens.

The slowdown in turnover requires the attraction of additional funds to continue the economic activities of the enterprise at least at the level of the previous period.

Analysis of accounts receivable is of particular importance during periods of inflation, when the immobilization of own working capital becomes especially unprofitable. This analysis begins by looking at its absolute and relative amounts of accounts receivable.

An increase in accounts receivable may be caused by:

imprudent credit policy of the enterprise in relation to customers, indiscriminate choice of partners;

the onset of insolvency and even bankruptcy of some consumers;

too high a rate of increase in sales volume;

difficulties in selling products.

A sharp reduction in accounts receivable may be a consequence of negative aspects in relationships with customers (reduction in credit sales, loss of product consumers).

The question of comparing receivables and payables is very relevant.

The management of any enterprise, as well as its investors and creditors, are interested in the company’s performance indicators. To conduct a comprehensive analysis, various techniques are used.

IN mandatory study profitability and business activity indicators. If the first group considers net profit in the analysis process, then the second group considers sales revenue. The research is carried out using a system of indicators. One of the first to be studied is the turnover ratio, the formula of which takes into account all the company’s assets. Next, its structural components are examined. Liability indicators also participate in the analysis. This allows you to understand how quickly the company turns available resources into money and pays off debt obligations.

The concept of the turnover cycle

The capital turnover ratio of an enterprise allows you to assess the speed at which the enterprise’s capital goes through its full cycle. A company that owns resources uses them to manufacture products, sell them and make a profit.

The period during which the organization’s funds go through all stages is called the turnover cycle. First, resources are converted into finished products. Then it is sent for sale. Customers purchase goods or services and the money is returned back to the organization.

The faster the full cycle occurs, the more revenue the company receives from sales. Therefore, she is interested in accelerating turnover. Analysis of business activity allows us to identify limiting factors. Asset turnover ratio, the formula of which considers it structural elements, makes it possible to harmoniously distribute and use property.

Turnaround period

The turnover ratio, the formula of which shows a numerical result, is not always absolutely informative. Its dynamic growth indicates a positive trend for the organization. But this indicator does not reveal information about the duration of the cycle.

Therefore, such coefficients are presented in days. The analyst can then determine exactly how long the period lasts. This allows you to find the optimal coefficient value. The researcher evaluates the turnover cycle of permanent and current assets, accounts payable. But it is precisely movable property and This analysis reflects the company’s system of interaction with suppliers, its sales and material support for current activities.

Cost cycle

It is current assets that are of great interest to analysts in the presented analysis. Therefore, the assessment uses the working capital turnover ratio, the formula of which is discussed below.

In order to have information about the factors influencing this indicator, the financial manager must consider the cycle duration of the components of current assets. Their duration (except for monetary funds) is summed up.

This is how the cost cycle indicator is obtained. The longer it is, the more financial sources the company puts into circulation. They accumulate in it.

The faster the cost cycle occurs, the more funds are released from circulation. They can be used more constructively.

General formula

The calculation of the ratio or assets has a general form. This is explained by the identical indicator with which this or that item of property or capital is compared. The formula looks like this:

Cob = Calculation Base/Asset (or Liability).

The turnover ratio, the formula of which is used by the financial services of enterprises, assumes taking into account the average annual value of the indicator. Only the article being evaluated changes. The numerator of the formula is also selected depending on the coefficient being studied.

When considering accounts receivable and advance payments to customers, their average annual value is compared with revenue from sales of products. If the rate of turnover of debt on loans and advances to suppliers is calculated, the calculation base is the cost price. She also participates in the consideration of indicators of turnover of finished products and work in progress.

The inventory turnover ratio, the formula of which corresponds to the above method, takes material costs as its base.

Financial statements

To determine business activity indicators, financial reporting data is used. The denominator is found according to Form No. 1 “Balance Sheet”, and the numerator is found according to Form No. 2 “Profit and Loss Statement”. The asset turnover ratio, the formula of which was discussed above, according to the reporting, has the following form:

Kob = s. 2110 (form 2)/s. 1600 avg. (Form 1).

To determine the turnover ratio of current assets, the data from line 1200 of the balance sheet is taken as the denominator. The indicator determining the turnover of permanent assets in the previous formula applies the data reflected in article 1150 of the balance sheet.

IN general view The calculation of the turnover of current liabilities looks like this:

Kotp = s. 2110 (form 2)/s. 1300 avg. (Form 1).

If investors need to estimate the speed of movement, the presented method uses the sum c. 1500 and c. 1400. To calculate the turnover of debtors' debt, data from p. 1230, and reserves - the amount of c. 1210 and p. 1220.

Reserves

When assessing inventory movements, it is more advisable to use a methodology that shows the result in days. This is one of the most important characteristics that a financial service determines. There must be enough reserves so that the production cycle runs smoothly and without interruptions. But materials should not accumulate, “froze” in current assets companies.

The inventory turnover ratio, the formula of which was discussed earlier, allows you to determine the period in days:

Tz = Material costs/Inventories (average)*360.

If the reporting period takes a different number of days, its duration is taken into account. In general, the amount of sales revenue is used for calculation in the numerator. But if we're talking about about inventories, their movement is determined by the amount of material costs.

To optimize the indicator and speed up the cycle, it is necessary to reduce the amount of “dead” inventory that is not purchased with each new operating period.

Accounts receivable, finished goods

The turnover ratio, the calculation formula for which examines current assets such as accounts receivable and finished goods, is also of interest to analysts. If a significant amount of funds accumulates in these balance sheet items, this negatively affects the company's performance. If, after the analysis, the turnover period of debtors' debt is determined to be too long, it is necessary to change the system of settlements with customers.

Perhaps you should switch to an advance, non-cash payment type. The amount of bad debt is also determined.

If the company accumulates significant amount finished goods and work in progress, the sales system is being revised, equipment is being modernized.

Current assets

The duration of the turnover periods of balance sheet items is added up. This allows you to evaluate the efficiency of operating the company's property. In general, the company’s mobile resources allow us to study the working capital turnover ratio (the formula was presented earlier).

An increase in the duration of the cost cycle negatively affects a number of other indicators. It increases as its absolute value decreases. Return on equity also decreases. In this case, a whole system of measures is developed to optimize the structure of the company's property.

Accounts payable

Analysts look at more than just the speed of an organization's asset cycle. They also examine the capital turnover ratio (the formula was discussed earlier). This technique shows how many times during the operating period the company pays off its obligations with creditors.

Therefore, for the calculation, it is the current debt that is taken into account. Often, an enterprise that has a large amount of receivables also has a significant number of current liabilities. This is a negative trend. Such an organization is limited in its ability to attract borrowed capital, purchase materials and resources for production on credit. By optimizing the asset structure, it is possible to improve liability indicators.

Economic effect

A special place in financial and economic analysis is occupied by turnover ratios. Balance formulas allow you to find factors limiting development. A qualitative assessment of business activity makes it possible to determine how effectively a company conducts its business activities.

All indicators obtained during the analysis are considered in dynamics and compared with similar ratios of competing companies. If the turnover ratio, the formula of which allows you to evaluate the structure of the balance sheet, decreases, the cycle period accelerates. At the same time, the organization expands its sales markets, it has regular suppliers and buyers. This is a competent commercial policy of the enterprise.

The acceleration of the turnover period indicates a simultaneous increase in return on capital. The company uses its assets efficiently. Therefore, the presented system of indicators must be analyzed by the financial service of the organization.