See what “capital turnover” is in other dictionaries. Analysis of capital turnover indicators and its components, assessment of business activity and intensity of use of the enterprise’s capital for two years, assessment of the reasons for changes in turnover

For commercial activities, it is very important to know how quickly the advanced capital turns over, i.e. what is the rate of capital turnover. The latter can be measured by the capital turnover time, which is calculated by the formula:

where t is the capital turnover time; A – depreciation charges on fixed capital for one year (12 months); Kav – advanced capital; To about - reimbursed working capital for one year (12 months).

Another indicator of the speed of capital turnover is the number of its turnover per year:

where n is the number of capital turnover for one year (12 months); t is the capital turnover time, expressed either in years or in months; T – time period equal to 1 year (12 months).

By accelerating the turnover of capital, regardless of what field of activity it is advanced into, the entrepreneur seeks to minimize the wasting of resources and funds and receive increasing profits on the value advanced. Accelerating capital turnover is equivalent to increasing the amount of advanced capital or obtaining equal profits on a smaller amount of advanced capital compared to competitors. It must be remembered that in different industries and areas of economic activity the rate of capital turnover can differ significantly due to specific production conditions, characteristics of technological processes and differences in the methods of promoting products from producer to consumer.

Capital turnover and profit

As we already know from Chap. 7, the reduction in the turnover time of capital is reflected in the speed of its turnover, on which the return on capital, or rate of profit, is directly dependent.

4. Loan capital

The starting point for the existence and movement of capital is the monetary form. Money capital is the most mobile and universal form of capital. However, in order to advance a certain amount of money for the implementation of a particular entrepreneurial project, it is necessary to accumulate it. It is not easy to make sufficiently large capital investments for a single enterprise using exclusively its own income and profits.

However, as a result of the circulation of real capital in the process of reproduction, free capital is formed in monetary form. Money capital provided on loan and generating income in the form of interest is called loan capital. The latter appears from the very beginning as value, which becomes a special kind of commodity - capital. Capital-property, lent out, becomes functioning capital, used in the real process of production and circulation, i.e. capital-function. Capital-property implements ownership relations and ensures the assignment of interest; The capital function implements the relationship of disposal of this property and ensures the appropriation of profit.

The time factor plays an important role. The fact is that if, due to a lack of one’s own financial resources, time is lost to organize the production of a product that is in demand or has good sales prospects in the future, then either this market may be occupied by other entrepreneurs, or the structure of needs will undergo significant changes.

To characterize the use of capital, it is advisable to calculate a number of coefficients:

Turnover of immobilization assets;

Turnover of all current assets;

Accounts receivable turnover;

Accounts payable turnover;

Equity turnover;

Operating ratio.

Total capital (assets) turnover ratio generally characterizes the level of economic activity of an enterprise, that is, the efficiency of the enterprise’s use of all available resources, regardless of the sources of their attraction. This coefficient shows how many times during the reporting period the full cycle of production and circulation is completed, or how many monetary units each unit of assets brought from the sale of products.

The total capital turnover ratio (Ok) is calculated using the formula:

where B is revenue from sales of products

C a - the average annual value of all assets (the amount at the beginning and end of the year, divided by 2).

Typically, the value of the total capital turnover ratio of a particular enterprise is compared with the industry average. If this ratio is lower for the enterprise, then it is necessary to increase sales volume or, if this is not possible, to reduce certain types of assets. If this coefficient is considered in dynamics, then its growth can mean either an acceleration of the circulation of enterprise funds, or an inflationary increase in prices for sold products.

Immobilized assets ratio (Oi.a. ) shows how efficiently enterprises use their fixed assets and other non-current assets. This indicator is calculated using the formula:

where C i.a. - average annual non-current assets (the amount at the beginning and end of the year, divided by 2).

The duration of one revolution is (in days):

Ratio of all current assets (Оо.а) is one of the most important indicators of the efficiency of an enterprise, since it characterizes the number of turnovers of all working capital. It is generally believed that the shorter the duration of one revolution, the more efficiently working capital is used.

This coefficient is calculated by the formula:

where C o.a. - average annual value of current assets (the amount at the beginning and end of the year, divided by 2).

The duration of one revolution is equal (in days):

(20.13)

It should be noted that for each enterprise at a certain point in time there is its own optimal structure of working capital. Therefore, the main criterion is to ensure rapid turnover of current assets.

Accounts receivable turnover ratio (Od.z.) characterizes the effectiveness of collection of receivables and the enterprise’s credit policy in relation to its customers. An increase in this indicator indicates an expansion of credit to product consumers. It is usually believed that if accounts receivable turn over faster than material assets, this means a high intensity of receipt of cash loans to the enterprise account. In this case, the debt-to-equity ratio may be greater than 1.0.

The accounts receivable turnover ratio is calculated using the formula:

where C d.z. - average annual accounts receivable (amount at the beginning and end of the year, divided by 2).

The duration of the receivables turnover is equal (in days):

(20.15)

Accounts payable turnover ratio ( O k.z.) characterizes the terms of settlements of the enterprise with its partners. It is calculated by the formula:

where C short circuit - average annual accounts payable (the amount at the beginning and end of the year, divided by 2).

The duration of the accounts payable turnover is equal (in days):

(20.17)

It is advisable to compare the repayment period of accounts payable with the repayment period of receivables, that is, compare the conditions for receiving and granting deferred payments to your partners. If accounts payable are provided for a longer period. than the accounts receivable, then such conditions are acceptable for the enterprise.

Equity turnover ratio (O average) characterizes various aspects of the enterprise’s activities: from a commercial point of view, it reflects either an increase in product sales, or a lack of equity capital; from financial - the rate of turnover of invested capital; from the economic side - the activity of funds that the enterprise risks. The equity capital turnover ratio shows the efficiency of its use.

It is calculated by the formula:

where C r.s. - the average annual value of equity capital and reserves (the amount at the beginning and end of the year, divided by 2).

The duration of one turnover of equity capital is equal (in days):

(20.19)

Operating ratio (Kop.) is calculated as the ratio of costs of production and sales of products to revenue from sales of products:

where Z is the cost of production and sales of products.

An increase in the operating ratio may mean: an increase in prices for material resources, the inability to control production costs, or the need to increase the selling prices of agricultural products. As a rule, this coefficient ranges from 0.5 to 0.9. A coefficient value greater than 0.9 means extreme inefficiency of the enterprise, and less than 0.5 indicates that all production and sales costs may not have been taken into account.

When assessing the financial condition of an enterprise, profitability indicators, which characterize the profitability of products, all assets and equity capital, are especially important.

The capital turnover rate is characterized by the following indicators:

turnover ratio (K about);

lasting one revolution ( P about).

Capital turnover ratio calculated by the formula:

The inverse of the capital turnover ratio is called capital intensity (Ke):

Duration of capital turnover:

Where D - the number of calendar days in the analyzed period (year - 360 days, quarter - 90, month - 30 days).

When determining the turnover of total capital, the amount of turnover must include total revenue from all types of sales. If the turnover indicators of only functioning capital are calculated, then only revenue from sales of products is taken into account. Turnovers and average balances on capital investment accounts, long-term and short-term financial investments are not taken into account in this case.

Capital turnover, on the one hand, depends on the rate of turnover of fixed and working capital, and on the other - from its organic structure: the larger the share of fixed capital, which turns over slowly, the lower the turnover ratio and the higher the duration of turnover of the entire total capital, i.e.:

Where K obs.k- total capital turnover ratio; UD t.a- the share of current assets (working capital) in the total amount of assets; To obt.a- turnover ratio of current assets; P obs.k - duration of turnover of total capital; P obt.a - duration of turnover of current assets.

Using the chain substitution method, we will calculate how these indicators have changed due to the capital structure and the rate of working capital turnover.

During subsequent analysis it is necessary to study the change in the turnover of working capital at all stages of its circulation, which will allow us to trace at what stages the acceleration or deceleration of capital turnover occurred. To do this, the average balances of individual types of current assets must be multiplied by the number of days in the analyzed period and divided by the amount of sales turnover.

The duration of turnover of both all current assets and individual types (Additional assets) may change due to the amount of revenue (IN) and average working capital balances (Ost). To calculate the influence of these factors, the chain substitution method is used:

Hence the change in the duration of working capital turnover due to:

working capital turnover amounts

average working capital balances

including due to changes in average balances:

Economic effect as a result of accelerated capital turnover is expressed in the relative release of funds from circulation, as well as in an increase in the amount of revenue and profit.

The amount of funds released from circulation due to acceleration (-E) or additionally attracted funds into circulation (+E) when capital turnover slows down, it is determined by multiplying the one-day sales turnover by the change in the duration of the turnover:

To establish the influence of the turnover ratio on changes in the amount of revenue, you can use the following factor model:

B = KL X Cob. From here

Vkob = KL 1 X

Vk L =KL X Kobo

Total = V 1 – B 0

Since profit can be represented as a product of factors (P = KL X ROma = KL X Cob X Rpn), then the increase in its amount due to a change in the capital turnover ratio can be calculated by multiplying the increase in the latter by the basic level of the return on sales ratio and by the actual average annual amount of working capital:

P = Cob X Rpno X KL 1

The main ways to accelerate capital turnover:

reducing the duration of the production cycle due to the intensification of production (use of the latest technologies, mechanization and automation of production processes, increasing the level of labor productivity, better use of the enterprise's production capacity, labor and material resources, etc.);

improving the organization of material and technical supply in order to uninterruptedly provide production with the necessary material resources and reduce the time that capital remains in reserves;

speeding up the process of shipping products and processing settlement documents;

reducing the time spent in accounts receivable;

increasing the level of marketing research aimed at accelerating the promotion of goods from the manufacturer to the consumer (including market research, improving the product and forms of its promotion to the consumer, forming the correct pricing policy, organizing effective advertising, etc.).

The turnover rate of total capital indicates the business activity of the enterprise in the financial aspect. The final financial result of the enterprise, its financial position, liquidity and solvency depend on how quickly funds invested in assets turn into real money. This influence is explained by the fact that the speed of capital turnover depends on:

• the amount of advanced capital necessary to achieve the planned volumes of activity and the successful functioning of the enterprise;
• the need for additional sources of financing;
• the amount of operating costs associated with maintaining inventories and storing them;
• the amount of taxes paid;
• the relative value of fixed expenses: the faster the turnover, the less these expenses are for each turnover;
• profit margin and return on total assets and equity capital of the enterprise.

Consequently, such indicators of business activity as the turnover ratio and the duration of one turnover are of great importance for any enterprise; and the conclusions regarding the results of the analysis and the effectiveness of capital management depend on how correctly they are calculated.

It is important to determine the terminology and unambiguous identification of analytical indicators used in financial analysis when studying the rate of turnover of funds. A review of the literature shows that some authors use the term “capital turnover”, others use the term “asset turnover”. For example, G.N. Sokolova believes that within the framework of the analysis, the concept of “turnover” correlates primarily with the tangible form of the enterprise’s capital, i.e. with its assets or property, which makes it possible to calculate turnover indicators based on accounting and reporting data. Based on this, according to G.N. Sokolova, it seems more legitimate and justified to use the terms “asset turnover”, “turnover of current assets”, “turnover of inventories”, “turnover of receivables”, although she notes that “asset turnover characterizes the rate of conversion of funds invested in assets into real money enterprises". From this we can conclude that it is not assets (fixed assets, inventories of raw materials, finished products, accounts receivable) that are turned over, but funds (own and borrowed) invested in the assets of the enterprise. And when we talk about the speed of funds turnover, we mean the time from the moment the funds are spent until they arrive in the current account. Therefore, in the future we will use the terms “turnover of total capital”, “turnover of working capital”, “period of capital being in inventory”, “period of capital being at the production stage”, etc. Capital is a general concept that unites all elements of assets into an integral category, a very important feature of which is the investment in the assets of an enterprise of value that is not consumed, but is renewed after each of its circulation.

It is also necessary to find out what capital turnover ratios reflect - degree of effectiveness or intensity of its use, since in domestic and foreign literature there is no single point of view on this issue.

An analytical review of literary sources on this issue shows that most authors of books on financial analysis, financial management and finance, in particular E.S. Stoyanova, A.M. Kovaleva,

A.I. Kovalev and V.P. Privalov, V.V. Bocharov, K.V. Pivovarov, N.F. Samsonov, E.I. Krylov and V.M. Vlasova, S.M. Pyastolov, T.B. Berdnikova, N.L. Marenkov,

B.V. Kovalev and O.N. Volkova, V.G. Dyakova,

A. A. Bachurin, L. E. Basovsky and many others use asset turnover indicators to summarize the efficiency of capital use.

B. M. Prudnikova and others), which we share, turnover is an indicator characterizing the measure of the intensity of capital movement and its productivity.

Thus, the famous American scientist L.A. Bernstein, focusing on this aspect, writes: “The intensity with which assets are used is measured using turnover ratios.” HELL. Sheremet also believes that “the increase in turnover indicates the intensification of supply, production and sales processes.” N.N. shares the same opinion. Seleznev and A.F. Ionova: “Increasing asset productivity can ensure profit growth without increasing the organization’s financial resources and even with a decrease in production profitability.”

In the process of capital circulation, income is generated and its value increases only if funds are used effectively at all stages of the circulation and the production of profitable products. If an enterprise receives a loss as a result of its activities, then the acceleration of the turnover of funds leads to a deterioration in financial results and the “eating up” of capital. In such a situation, many enterprises prefer to reduce their turnover in order to avoid bankruptcy.

Consequently, the turnover rate acts as a multiplier, which can contribute to both an increase and a decrease in the return on invested capital, from which we can conclude that capital turnover is an indicator of the intensity of its use.

This position is clearly confirmed by the well-known model of the company Ei Ropg.

YUL = K about x d, 6,

Where Legal entity- return on assets;

K o6- asset turnover ratio;

I'm talking about- profitability of turnover.

Depending on the market situation, you can reduce prices to sell more goods. As a result, the profitability of sales will decrease, but the capital turnover will accelerate, which will contribute to an increase in the return on total capital. But the main guideline when developing a tactical and strategic policy for the behavior of an enterprise in the market should be the level of return on total assets and equity capital.

Thus, in the future, when studying the efficiency of capital use, we will consider the speed of its turnover from the perspective of assessing the intensity of its use.

Next Conceptual Question, which requires clarification, concerns the methodology for calculating the turnover ratio and the capital turnover period - what to use as their basis:

• revenue from product sales;
• volume of products sold at wholesale prices;
• cost of goods sold;
• the amount of paid products (positive cash flow);
• private turnover for certain types of current assets. Since revenue includes not only the amount consumed

capital, but also part of the value of the surplus product, a number of authors believe that it overestimates turnover indicators, therefore, to calculate them it is better to use the cost of goods sold.

Other authors are convinced of the opposite - determining turnover indicators based on the cost of goods sold will not adequately reflect the speed of turnover, since as the cost increases, the number of turnovers will increase; conversely, when production costs decrease, the turnover rate will slow down.

In our opinion, the arguments of both authors are not entirely convincing. An increase in the cost of production cannot cause an acceleration of capital turnover, since this will increase not only the amount of turnover, but also the average balances of current assets: work in progress, the cost of finished and shipped products to customers.

The arguments of opponents of the use of revenue, according to whom it overstates turnover indicators, are also not entirely justified. They do not take into account the fact that due to the value of the surplus product, not only the amount of turnover increases, but also the value of the enterprise’s assets (cash, fixed assets, inventories for the next operating cycle on an expanded basis). The total cost of capital increases in a spiral after the completion of each operating cycle (Figure 1.2).

Rice. 1.2. Change in total cost of capital

Let's assume that the initial amount of capital advanced into the assets of the enterprise is 100 thousand. Return on sales - 10%. All earned profits are fully reinvested, and therefore, with each turnover, assets, revenue and cost of goods sold increase. Let's say capital turns over once a quarter. Then the revenue, cost of goods sold and the average balance of the enterprise’s assets will be:

Let's determine the capital turnover ratio (K ()bk U- a) by revenue from sales of products:

oh *” (110 +121+ 133.1 + 146.4)/4” 127.625 _ ’

b) at cost of products sold:

(,bk ~ (100 + 110 + 121 + 133,1) / 4 “ 116,025 ~

As the above data show, the value of the turnover ratio is the same for both revenue and cost of goods sold. Let us only note that the average amount of capital invested in current assets is determined in different ways. In the first case, the amount of capital at the end of the operating cycle is taken into account, taking into account its increment, in the second - its initial value at the beginning of the operating cycle.

Consequently, this is not a good reason to deny the possibility of using revenue when determining the intensity of use of an enterprise's capital. Therefore, most domestic and foreign economists use revenue to calculate turnover ratios and the duration of one capital turnover. These indicators are usually calculated both for the entire advanced capital and for its individual elements and stages of the circulation.

The second controversial point: what revenue should be taken into account - from the shipment of goods or from payment? If revenue is determined not by the cash method, but by the accrual method, then the turnover indicators calculated on its basis do not accurately characterize the rate of capital turnover. Since capital turnover is completed after the receipt of funds in the company’s account, and not upon shipment of products, an increase in accounts receivable due to late payment of invoices by customers can significantly affect capital turnover indicators. From the point of view of the rate of capital turnover, it is important to know the real cash flow, which is the final stage of the process of its circulation. Considering this circumstance, to ensure a more accurate calculation of capital turnover indicators, it is advisable to use positive cash flow ( RAP) from operating activities. In world practice, the ratio of shipping revenue to the amount of capital invested in assets is usually called capital productivity, which also characterizes the measure of the intensity of capital use.

Size data RAP from operating activities can be obtained from the statement of cash flows or determined indirectly:

DDP - Revenue (by shipment) ± Change in accounts receivable balances for the period ± Change in balances of advances received from buyers and customers.

The set of capital turnover indicators is presented in table. 1.7. In this case, when calculating the total capital turnover ratio, it is used RAP not only from the sale of products, works, services, but also from the sale of fixed assets, intangible assets, securities and other assets.

Key indicators of capital turnover

Table 1.7

Index	Calculation method	What characterizes
1. Coefficient turnover total capital	Revenue (by payment)	Rate of turnover total capital
2. Coefficient turnover total capital	Revenue (by payment) Average total capital	Capital turnover rate in the operating cycle
3. Turnover period total capital	Average value d of total capital ^ Revenue (by payment)	Duration of one total revolution capital
4. Capital turnover period in depreciable property	Average value of depreciable property Amount of accrued depreciation for the period	Duration of turnover of capital invested in real estate
5. Period of capital turnover in current assets	average value X d total capital ^ Revenue (by payment)	Duration of one capital turnover in the operating cycle
6. Capital turnover period in certain types of current assets	average value X d/th asset ^	Duration of presence of capital in the i-th form of current assets
	Credit turnover on relevant accounts
7. Capital return	Revenue to _ (by shipment) Average total capital	intensity use capital

In many works, to assess the intensity of capital use, an inverse indicator of the productivity (return) of capital is used - the load (fixation) factor of working capital:

Average total capitalTO --.

Revenues from sales

In essence, this is an indicator of the capital intensity of products. It shows how much total capital is accounted for per ruble of sales. The faster capital turns over, the less of it there is per ruble of output, and vice versa. In terms of the level of synthesis, it is broader than the private indicators of capital intensity, labor intensity, and material intensity, and therefore is of great interest to analysts when studying the intensity of use of enterprise resources.

If this indicator is based on revenue not from shipment, but from payment, then it duplicates the indicator of the duration of turnover, which is determined by dividing the average amount of working capital by one-day revenue, and this indicator is obtained by dividing the same amount of working capital by annual revenue. Consequently, both indicators characterize the rate of capital turnover: the first - in days, the second - in years.

The following question should also be clarified: is there any reason to calculate the turnover ratio for certain types of assets?

In our opinion, such an indicator as the number of capital turnover in certain types of assets (inventories of raw materials, work in progress, finished products, cash, accounts receivable) has neither theoretical nor practical meaning, since capital cannot complete its cycle without going through all its stages. We can only talk about the speed of updating / types of assets.

At the same time, the duration of capital's presence in each type of asset is of great practical interest. It shows how many days capital is “idle” in one or another type of asset, at one or another stage of the circulation, which makes it possible to reveal the reasons for changes in the overall period of capital turnover and more effectively manage this process.

To determine the period of capital at individual stages of the circulation (in inventories of raw materials, work in progress, finished products, accounts receivable), it is advisable to use not the total sales turnover, but the private turnover of the corresponding accounts.

But there is a problem here: which turnover should be taken into account - debit or credit? Many authors use debit turnover for this purpose.

Other authors (O.V. Efimova, A.D. Sheremet, E.V. Negashev) hold the opposite opinion. For example, O.V. Efimova believes that in this case “it is necessary to operate with the amounts “leaving” the account, i.e. reflected on the loan (since debit turnover characterizes the accumulation of property or an increase in the obligations of buyers)":

Turnaround period =

Average account balances X Duration of the period Credit turnover on the account for the period

Average balances in this formula represent the average chronological value of individual types of assets accounted for in a particular account.

Turnover refers to the amount of credit turnover of a particular accounting account for the analyzed period:

• for work in progress - the actual cost of manufactured finished products in the reporting period (credit turnover on the “Main production” account);
• for production inventories - their consumption for production (credit turnover on the “Materials” account), which is not equivalent to material costs, since the latter include the cost of consumed electricity, heat, gas, for which the reserve is not created;
• for balances of finished products - the cost of products shipped to customers (credit turnover on the “Finished Products” account);
• for accounts receivable - the amount of repaid accounts receivable for the reporting period (credit turnover on accounts payable to customers).

To link specific indicators of capital turnover with general indicators, you can use the formula of account mobility by I. Sher, which was further developed in the works of S.B. Barn char.

Then many particular problems will disappear:

• how to calculate private turnover indicators based on revenue or cost of goods sold;
• how to eliminate the incomparability of sales volumes expressed in current prices and the balances of finished products reflected in the balance sheet at actual cost;
• exclude or not exclude depreciation from revenue and average balances of working capital when calculating their turnover rate.

A number of foreign and domestic authors, when calculating the period of capital turnover at the stage of product sales, propose to take into account not the entire amount of payment proceeds, but only sales on credit, which, in their opinion, will contribute to a more accurate calculation of the duration of capital turnover, since this eliminates the influence advance and simultaneous payment. But here the question arises how realistically this indicator will reflect the actual speed of transformation of funds into cash. If sales on credit on terms of subsequent payment occupy a small share in the total volume of products sold, and the main sales are carried out on terms of prepayment or simultaneous payment, then the period of capital at this stage of the circulation will be clearly overestimated. Some buyers pay immediately, others within the established deadlines, and others with a delay, but in general, the ratio of revenue received and average accounts receivable balances quite realistically reflects the rate of turnover of funds at the implementation stage.

The question of the feasibility of calculating the turnover rate of equity and borrowed capital also deserves a comprehensive discussion. Here are a few statements from supporters of calculating the equity capital turnover ratio.

The equity turnover ratio, in their opinion, characterizes the speed of its turnover. “The sharp increase reflects an increase in sales. A significant decrease shows a tendency towards the inactivity of part of one’s own funds.”

“The equity turnover ratio characterizes various aspects of activity: from a financial point of view, it determines the rate of turnover of equity capital, from an economic point of view, it determines the activity of funds at risk of the shareholder. If the ratio is too high, which means a significant excess of sales over invested capital, then this entails an increase in credit resources and the possibility of reaching the limit where creditors are more involved in the business than owners. In this case, the ratio of liabilities to equity increases, the security of creditors decreases, and the company may have serious difficulties associated with a decrease in income. On the contrary, a low turnover ratio means the inactivity of part of the equity capital. In this case, the coefficient indicates the need to invest one’s own funds in another source of income that is more appropriate to the given conditions.”

A number of other authors share a similar opinion.

According to the above statements, the main purpose of calculating this ratio is to establish the degree of financial dependence of the enterprise on creditors. But it is easy to establish even without this coefficient - by the ratio of borrowed resources to equity capital. From the point of view of assessing the influence of the structure of capital sources on the speed of its turnover, this indicator does not give anything, since equity capital cannot turn over faster than borrowed capital. If money has flowed into a single flow, then it moves at the same speed - both own and borrowed. A slowdown in overall cash flow naturally creates a need for additional borrowing, which leads to an increase in financial leverage. Let's illustrate this in table. 1.8.

Table 1.8

Options for calculating the capital turnover ratio

Index	Company
Total assets, million rubles.
Own capital, million rubles.
Borrowed capital, million rubles.
Equity to debt ratio
Revenue from product sales, million rubles.
Total capital turnover ratio
Equity turnover ratio
Debt capital turnover ratio
Ratio of debt and equity turnover ratios

The table data shows that the turnover rate of total capital at both enterprises is the same, since they received the same amount of revenue with the same amount of total capital. But if we judge by the equity capital turnover ratio, then in the first enterprise it turns over more slowly than in the second, but in the first enterprise debt capital turns over four times faster compared to equity capital. Can this really happen? Then why burden the analysis with many coefficients that do not carry any semantic meaning?

There are disagreements regarding the methodology for determining the effect of accelerating capital turnover. Most authors see this effect in the relative release of funds from circulation. While emphasizing the importance of this indicator, it should be noted at the same time that this is a one-sided approach to assessing the rate of capital turnover. The other side of the effect is expressed in an increase in the amount of profit due to the acceleration of capital turnover:

AP=OA I x&K about xY obi> ,

Where OA 1 - average amount of current assets;

AK o6- change in the working capital turnover ratio;

I'm talking about- profitability of base period turnover.

As for the methodology for determining the amount of funds released from circulation as a result of accelerating the turnover of capital, in most cases it is determined as follows:

DOL, = AP b X In one

Where AP about- change in the duration of turnover for the reporting period

In one- one-day revenue from payment in the reporting period.

AOL, = AP,X INі x K

To Region

Using this formula, you can calculate the relative release of funds from circulation for the entire year. But since working capital completely replenishes its value in the process of one turnover, it is the amount of working capital that is saved during the period of this turnover that is of interest.

An important problem in the analysis of economic activity is to ensure the comparability of the indicators being studied, including capital turnover ratios. Very often, when calculating capital turnover ratios, revenue for the reporting period (month, quarter, half year, 9 months) is correlated with the assets of the enterprise, the value of which does not change significantly throughout the year. Naturally, their size will not be comparable across periods of the year. In this case, to ensure comparability of these indicators, it is necessary to bring their level to an annual equivalent, multiplying the found value by 12 months and dividing by the number of months of the reporting period:

^ _ Revenue for the reporting period (by payment) ^ 12

00 Average value of current assets n

This allows us to see what result we will have at the end of the year if revenue increases at the same rate as in the reporting period.

There is also no consensus among experts on the methodology for calculating the speed of repayment of accounts payable.

Example.

Calculation options:

X Days of the period

Balance of accounts payable at the end of the period

Revenue

7000x360 150,000

16,8 days

X Days of the period

Revenue

• 5000x360 1L a
• -= 12 He.
• 150 000

Average accounts payable balance

X Days of the period

Amount of repaid accounts payable for the period

• -5 days
• 5000x360 120,000

The first option for calculating the period for repayment of accounts payable is incorrect, since it does not take into account the average amount of accounts payable, but its balance at the end of the reporting period, which increased significantly by the end of the year, which significantly affected the value of the indicator under study.

It should be noted that measuring the speed of repayment of obligations is a rather difficult problem associated with determining the average amount of borrowed resources used. In our example, the amount of debt of the enterprise during the year was approximately equal to 5,000 million rubles. In the last ten days of the year, the company borrowed another 2,000 million rubles, bringing its debt to 7,000 million rubles. As can be seen from the first calculation option, the ratio of this amount of debt to revenue significantly affects the rate of debt repayment.

Therefore, it is more correct to determine the average amount of borrowed resources not by annual, but by monthly, and even better - by daily debt balances, which is quite possible in the conditions of computer technology for processing accounting and analytical information. This will significantly increase the accuracy of calculating the average period for repayment by an enterprise of its debt obligations. In this case, the basis should not be revenue, but the amount of repaid debt in general and for each type of obligation.

In the second calculation option, an error was made due to the fact that revenue from sales of products was taken into account instead of the amount of repaid accounts payable (debit turnover on accounts payable). Proceeds from the sale of products reimburse the costs of purchasing material resources and services, paying wages to staff, repaying debts to social insurance authorities, the budget for taxes and fees, interest on loans and the principal amount of debt on bank loans, and leasing payments. In theory, revenue from sales of products should be equal to the total amount of debit turnover on all accounts payable, if you do not take into account that often an enterprise pays off creditors not only with revenue, but also with bank loans. In addition, part of the free cash can be stored in bank accounts or in securities.

Therefore, the amount of repaid accounts payable is equal to

Revenue ± Change in cash balances ±

± Change in balances of financial investments ±

± Changes in credit and loan balances.

It may differ significantly from revenue and more accurately characterize the speed of repayment of obligations by the enterprise.

This is especially true when calculating the speed of repayment of certain types of obligations (for bank loans, debts to suppliers, the budget, social insurance authorities, etc.). Here, it is not revenue that should be taken into account, but the amount of debit turnover on the corresponding accounts (60, 68, 69, 70, etc.).

Thus, we have examined the main problematic issues that arise when calculating capital turnover indicators, the solution of which will make it possible to more accurately assess the business activity of an enterprise.

The equity turnover indicator (Equity Turnover) is an indicator of business activity that demonstrates the effectiveness of the company’s equity capital management. The ratio is calculated as the ratio of revenue (net income) to the average annual amount of equity capital. A high value of the indicator indicates the efficient use of owners' capital. The value of the coefficient indicates how many goods and services were sold for each ruble of funds raised from the owners.

Standard value of equity capital turnover:

It is advisable to consider the indicator in dynamics, and also compare it with the values ​​of direct competitors in the industry. An increase in the indicator during the study period indicates the constant optimization of the company’s work in this area.

Directions for solving the problem of finding an indicator outside the standard limits

The solution to low equity capital turnover should be implemented based on current development goals. If a company is on the market without prospects for further growth, with access to cheap borrowed funds, then withdrawing part of its equity capital in the interests of investors will increase the value of the indicator. In most cases, to increase equity capital turnover, it is necessary to work towards increasing sales volumes.

Formula for calculating equity capital turnover:

Equity turnover ratio = Revenue (Net income) / Average annual amount of equity (1)

The average annual amount of equity capital can be calculated as follows:

Average annual equity capital (most correct method) = Sum of equity values ​​at the end of each working day / Number of working days (2)

Average annual equity (if only monthly data is available) = Sum of equity values ​​at the end of each month / 12 (3)

Average annual equity capital (if only annual data is available) = (Equity at the beginning of the year + Equity at the end of the year) / 2 (4)

An example of calculating equity capital turnover:

Company OJSC "Web-Innovation-plus"

Unit of measurement: thousand rubles.

Equity turnover ratio (2016) = 2048/ (485/2+455/2) = 4.36

Equity turnover ratio (2015) = 1569/ (455/2+415/2) = 3.61

Thus, the turnover of equity capital of OJSC “Web-Innovation-plus” is growing, and at the end of the study period, goods were produced and services were provided in the amount of 4.36 rubles for each ruble of attracted funds from the owners. This is a positive trend driven by the company's rapid revenue growth.