An increase in the turnover period of equity capital means. Analysis of enterprise capital turnover indicators

In this article we will look at turnover working capital, as one of the most important indicators for assessing the financial condition of an enterprise.

Working capital turnover

Working capital turnover (English Turnover Working Capital) – an indicator related to the company and characterizing the intensity of use working capital(assets) of the enterprise/business. In other words, it reflects the rate of conversion of working capital into cash during the reporting period (in practice: year, quarter).

Formula for calculating working capital turnover

Working capital turnover ratio (analogue: fixed asset turnover ratio, K ook) – represents the ratio of sales revenue to the average working capital.

The economic meaning of this coefficient is an assessment of the effectiveness of investing in working capital, that is, how working capital affects the amount of sales revenue. The formula for calculating the working capital turnover indicator on the balance sheet is as follows:

In practice, the analysis of turnover is supplemented with the coefficient of fixation of working capital.

Working capital consolidation ratio– shows the amount of profit per unit of working capital. The calculation formula is inversely proportional to the working capital turnover ratio and has the following form:

– shows the duration (duration) of the turnover of working capital, expressed in the number of days necessary for the payback of working capital. The formula for calculating the working capital turnover period is as follows:

Analysis of working capital turnover

The higher the value of the working capital turnover ratio, the higher the quality of working capital management at the enterprise. In financial practice, there is no single generally accepted value for this indicator; the analysis must be carried out in dynamics and in comparison with similar enterprises in the industry. The table below shows various types turnover analysis.

Video lesson: “Calculation of key turnover ratios for OJSC Gazprom”

Resume

Working capital turnover is the most important indicator of the business activity of an enterprise and its dynamics directly reflect the financial stability of the enterprise in the long term.

Turnover or business activity ratios of an enterprise– show the effectiveness of the enterprise (organization) using its capital and funds. These ratios show the rate of capital turnover and its conversion into cash. Turnover ratios directly determine the degree of solvency of an enterprise (ability to pay its obligations), financial stability and financial risk. Turnover ratios in their calculations do not use net profit as profitability ratios, but revenue from the sale of goods and services. This allows us to evaluate not the profitability of the enterprise, but its intensity and turnover rate of resources, assets, inventories, cash, accounts receivable and accounts payable.

This article will discuss the main enterprise turnover ratios most often used in financial practice, such as:

1. Asset turnover ratio
2. Turnover ratio equity
3. Current assets turnover ratio
4. Inventory turnover and asset cost ratio
5. Accounts receivable turnover ratio
6. Accounts payable turnover ratio
7. Cash turnover ratio

The asset turnover ratio is the ratio of revenue from products sold to all assets of the enterprise. This ratio shows the efficiency of use of assets and shows the number of turnovers of the entire capital for the period and the amount of cash that a unit of assets brought.

There are no standard values ​​for the asset turnover ratio, so it is necessary to directly study the dynamics of changes in this indicator over time for one enterprise or industry. In capital-intensive industries, asset turnover will be lower than in trade areas. The higher the asset turnover ratio, the greater the efficiency of asset utilization. This indicator differs from return on assets indicators in that it does not show the profitability of the enterprise, but characterizes the intensity of turnover. Therefore, turnover formulas use not net profit, but the enterprise’s revenue for the reporting period. The formula for calculating the asset turnover ratio is as follows:

Asset turnover ratio= Sales revenue / Average assets for the period

Asset turnover ratio= line 10 Form No. 2 / (0.5 * (line 300 beginning of the year + line 300 end of the year))

The equity capital turnover ratio is calculated as the ratio of the volume of product sales (revenue) to the average annual cost of equity capital. The equity turnover ratio shows the activity and speed of the enterprise's use of its own capital.
There are no standard values ​​for the equity capital turnover ratio; it is necessary to study the dynamics of changes in this indicator for one enterprise. The formula for calculating the equity turnover ratio is as follows:

Equity turnover ratio= Revenue from sales of products / Average cost of equity capital for the period

Equity turnover ratio= line 10 Form No. 2 / 0.5* (line 490 at the beginning of the year + line 490 at the end of the year)

The turnover ratio of current assets shows the activity of use and the speed of circulation of current assets. This ratio characterizes how much current assets made a full turnover in one year and how much revenue they brought. Current assets include accounts receivable, cash, inventories and deferred expenses, short-term financial investments. The higher the value of this coefficient, the more effective the enterprise. Formula for calculating the turnover ratio of current assets:

Current assets turnover ratio= Net revenue from product sales / Average annual cost of current assets

Current assets turnover ratio= line 10 Form No. 2 / 0.5 (line 290 at the beginning of the year + line 290 at the end of the year)

The inventory turnover and asset cost ratio shows the intensity of inventory use and turnover rate.
There are no standard values ​​for the turnover ratio. This indicator must be analyzed over time for a specific enterprise or industry. A decrease in the turnover ratio indicates the accumulation of excess inventory in the company's warehouses. The higher the ratio of inventory turnover and asset costs, the higher the activity of the enterprise in creating cash. An excessively high inventory turnover and asset cost ratio indicates severe inventory shortages and rapid depletion. Formula for calculating the inventory turnover ratio and asset costs:

Inventory turnover and asset cost ratio= Net revenue from product sales / Average annual cost of inventories

Inventory turnover and asset cost ratio= line 10 Form No. 2 / 0.5*[(line 210+line 220) at the beginning of the year + (line 210+line 220) at the end of the year]

The accounts receivable turnover ratio shows the rate of turnover of accounts receivable. There are no clear standard values ​​for the accounts receivable turnover ratio; they vary depending on the industry, but the higher the ratio, the faster consumers repay their obligations, which is beneficial for the enterprise. The formula for calculating the accounts receivable turnover ratio is as follows:

Accounts receivable turnover ratio= Revenue from sales of goods and services / Average annual value of accounts receivable

Accounts receivable turnover ratio= line 10 Form No. 2 / 0.5*[(line 230+line 240) at the beginning of the year + (line 230+line 240) at the end of the year]

The accounts payable turnover ratio shows the speed and intensity of repayment of the enterprise's obligations to borrowers and characterizes the number of turnovers in the repayment of accounts payable for the reporting period, which is usually one year. Normative value The accounts payable turnover ratio depends on the industry and the nature of the enterprise's activities. The formula for calculating the accounts payable turnover ratio is as follows:

Accounts payable turnover ratio= Revenue from sales of goods and services / Average amount of accounts payable

Accounts payable turnover ratio= line 10 Form No. 2 / 0.5 * (line 620 at the beginning of the year + line 620 at the end of the year)

The cash turnover ratio shows the intensity of use of the enterprise's funds and shows the number of turnover for the reporting period. The formula for calculating the cash turnover ratio is as follows:

Cash turnover ratio= Revenue from sales of goods and services / Average amount of funds

Cash turnover ratio= line 10 Form No. 2 / 0.5 * (line 260 at the beginning of the year + line 260 at the end of the year)

Conclusions
Turnover ratios are an important indicator of the efficiency of use of resources by an enterprise. These indicators, unlike profitability indicators, show turnover rate and intensity, because their calculation formulas use revenue values ​​(rather than net profit as in profitability ratios). Turnover ratios are studied in dynamics to analyze the direction and assess the nature of their changes for one enterprise, a group of similar enterprises and one industry.

Turnover indicators are of great importance for assessing the financial condition of a company, since the speed of turnover of funds has a direct impact on the solvency of the enterprise.

The turnover ratio of any balance sheet item is calculated as the ratio of revenue to the annual average value of this item.

The most general indicators of the speed of turnover of an enterprise's funds are the turnover ratio of total assets (total capital) and the duration of their turnover.

The total asset turnover ratio is calculated as follows:

where is the average annual value of total assets. According to the balance sheet, it is calculated using the arithmetic average formula.

The duration of one turnover of funds is calculated as follows:

where T is the number of calendar days in the analyzed period (in the ACDP an approximate number of days is used: in a year - 360; in a quarter - 90; in a month - 30).

The indicator characterizes how many days on average one cycle of funds turnover takes.

The economic effect of changing the rate of turnover of funds is called relative savings (overspending) of funds. A positive economic effect (savings) occurs as a result of accelerated capital turnover. Relative savings (overexpenditure) of funds in the reporting period compared to the previous one is calculated as the product of one-day revenue (in one) in the reporting period by the change in the duration of funds compared to the previous period (∆P about):

We will assess the rate of turnover of funds of OJSC Belgorodasbestotsement.

Table 7

Indicators of turnover of capital and assets of the enterprise

Analyzing the calculations, we can conclude that the average annual value of total capital has increased by 70,281 thousand rubles. A negative trend is the increase in the duration of one turnover of total capital from 156.52 days to 190.48 days, while the value of the turnover ratio decreased (from 2.30 to 1.89). Compared to last year, the number of days of debt capital turnover increased from 16.06 days to 24.06. The decrease was just over a week. This situation is explained by an increase in long-term liabilities while simultaneously increasing short-term ones. As for equity turnover, the turnover ratio decreased from 2.56 to 2.17, which contributed to an increase in the period of one turnover by 25.28 days.

The average annual value of current assets for the period under review increased by 53,928 thousand rubles, while the turnover ratio decreased from 3.11 to 2.55, as a result of which the duration of one turnover increased by 25.43 days. One-day turnover in the reporting year amounted to 3380.65 thousand rubles. Savings in current assets amounted to 85,969.93 thousand rubles.

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 whole series 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 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.

Turnover analysis is one of the leading areas of analytical study financial activities organizations. Based on the results of the analysis, assessments of business activity and the effectiveness of asset and/or capital funds management are made.

Today, the analysis of working capital turnover raises many disputes between practical economists and theoretical economists. This is the most vulnerable point in the entire technique. financial analysis activities of the organization.

What characterizes turnover analysis

The main purpose for which it is carried out is to assess whether the enterprise is able to make a profit by completing the “money-product-money” turnover. After necessary calculations the conditions for material supply, settlements with suppliers and customers, sales of manufactured products, etc. become clear.

So what is turnover?

This economic value, which characterizes a certain time period during which the complete circulation of funds and goods takes place, or the number of these circulations during a designated time period.

Thus, the turnover ratio, the formula of which is given below, is equal to three (the analyzed period is a year). This means that in a year of operation, an enterprise earns more money than the value of its assets (that is, they turn over three times in a year).

The calculations are simple:

K about = sales revenue / average assets.

It is often necessary to find out the number of days it takes to complete one revolution. To do this, the number of days (365) is divided by the turnover ratio for the analyzed year.

Commonly used turnover ratios

They are necessary to analyze the business activity of an organization. Fund turnover indicators show the intensity of use of liabilities or certain assets (the so-called turnover rate).

So, when analyzing turnover, the following turnover ratios are used:

Own capital of the enterprise,

Working capital assets,

Full assets

Inventories,

Debts to creditors,

Accounts receivable.

The higher the calculated total asset turnover ratio, the more intensively they work and the higher the indicator of business activity of the enterprise. Industry characteristics do not always have a positive effect on turnover. Thus, in trade organizations through which large volumes of money pass, turnover will be high, while in capital-intensive enterprises it will be significantly lower.

When comparing the turnover ratios of two similar enterprises belonging to the same industry, you can see a difference, sometimes significant, in the efficiency of asset management.

If the analysis shows a high receivables turnover ratio, then there is reason to talk about significant efficiency in payment collection.

This coefficient characterizes the speed of movement of working capital, starting from the moment of receiving payment for material assets and ending with the return of funds for sold goods (services) to bank accounts. The amount of working capital is the difference between the total amount of working capital and the balance of funds in the bank accounts of the enterprise.

If the turnover rate increases with the same volume of goods (services) sold, the organization uses smaller amounts of working capital. From this we can conclude that material and financial resources will be used more efficiently. Thus, the working capital turnover ratio indicates the entire set of processes economic activity, such as: reducing capital intensity, increasing productivity growth rates, etc.

Factors influencing the acceleration of working capital turnover

These include:

Reducing the total time spent on the technological cycle,

Improvement of technology and production process,

Improving the supply and marketing of goods,

Transparent payment and settlement relations.

Money cycle

Or, as it is also called, working capital is the time period of cash turnover. Its beginning is the moment of acquiring labor, materials, raw materials, etc. Its end is the receipt of money for goods sold or services provided. The value of this period shows how effective working capital management is.

Short cash cycle ( positive characteristic activities of the organization) makes it possible to quickly return funds invested in current assets. Many enterprises that have a strong position in the market, after analyzing their turnover, receive a negative working capital ratio. This is explained, for example, by the fact that such organizations have the opportunity to impose their conditions on both suppliers (receiving various payment deferrals) and customers (significantly reducing the payment period for goods (services) supplied).

Inventory turnover

This is the process of replacement and/or complete (partial) renewal of inventory. It occurs through the transfer of material assets (that is, capital invested in them) from the inventory group to the production and/or sales process. Analysis of inventory turnover makes it clear how many times the remaining inventory was used during the billing period.

Inexperienced managers create excess reserves for reinsurance, without thinking that this excess leads to the “freezing” of funds, excess expenses and a decrease in profits.

Economists advise avoiding such deposits of inventories that have low turnover. And instead, by accelerating the turnover of goods (services), freeing up resources.

Inventory turnover ratio is one of the important criteria for assessing the activity of an enterprise

If the calculation shows a ratio that is too high (compared to averages or the previous period), this may indicate a significant shortage of inventory. If on the contrary, then the stocks of goods are not in demand or are very large.

It is possible to obtain a characteristic of the mobility of funds invested in the creation of inventories only by calculating the inventory turnover ratio. And the higher the business activity of the organization, the faster the funds are returned in the form of proceeds from the sale of goods (services) to the accounts of the enterprise.

There are no generally accepted standards for the cash turnover ratio. They are analyzed within one industry, and the ideal option is in the dynamics of a single enterprise. Even the slightest decrease in this ratio indicates excess inventory accumulation, ineffective warehouse management, or the accumulation of unusable or obsolete materials. On the other hand, a high indicator does not always characterize the business activity of an enterprise well. Sometimes this indicates inventory depletion, which can cause process disruptions.

It affects inventory turnover and the activities of the organization's marketing department, since high profitability of sales entails a low turnover ratio.

Accounts receivable turnover

This ratio characterizes the speed of repayment of accounts receivable, that is, it shows how quickly the organization receives payment for goods (services) sold.

It is calculated for a single period, most often a year. And it shows how many times the organization received payments for products in the amount of the average debt balance. It also characterizes the policy of selling on credit and the effectiveness of working with customers, that is, how effectively receivables are collected.

The accounts receivable turnover ratio does not have standards and norms, since it depends on the industry and technological features of production. But in any case, the higher it is, the faster the receivables are covered. At the same time, the efficiency of an enterprise is not always accompanied by high turnover. For example, sales of products on credit give a high balance of receivables, while the turnover rate is low.

Accounts payable turnover

This ratio shows the relationship between the amount of money that needs to be paid to creditors (suppliers) by the agreed date and the amount spent on purchases or on the purchase of goods (services). Calculation of accounts payable turnover makes it clear how many times its average value was repaid during the analyzed period.

Financial stability and solvency are reduced with a high share of accounts payable. At the same time, it gives you the opportunity to use “free” money for the entire duration of its existence.

The calculation is simple

The benefit is calculated as follows: the difference between the amount of interest on the loan equated to the amount of debt (that is, a hypothetically taken loan) for the time it is on the organization’s balance sheet, and the volume of accounts payable itself.

A positive factor in the activity of an enterprise is considered to be the excess of the accounts receivable ratio over the accounts payable turnover ratio. Lenders prefer more high coefficient turnover, however, it is beneficial for the company to keep this ratio at a lower level. After all, unpaid amounts of accounts payable are a free source for financing the current activities of the organization.

Resource efficiency, or asset turnover

Makes it possible to calculate the number of capital turnover for a particular period. This turnover ratio, the formula exists in two versions, characterizes the use of all assets of the organization, regardless of the sources of their receipt. An important fact is that only by determining the resource efficiency ratio can one see how many rubles of profit accrue for each ruble invested in assets.

The asset turnover ratio is equal to the quotient of revenue divided by the value of assets on average for the year. If you need to calculate turnover in days, then the number of days in a year must be divided by the asset turnover ratio.

The leading indicators for this category of turnover are the period and speed of turnover. The latter is the number of capital turnover of the organization over a certain period of time. This period is understood as the average period during which the return of funds invested in the production of goods or services occurs.

Asset turnover analysis is not based on any norms. But the fact that in capital-intensive industries the turnover ratio is significantly lower than, for example, in the service sector is definitely understandable.

Low turnover may indicate insufficient efficiency in working with assets. Do not forget that sales profitability standards also affect this category of turnover. Thus, high profitability entails a decrease in asset turnover. And vice versa.

Equity turnover

It is calculated to determine the rate of equity capital of an organization for a particular period.

Capital turnover own funds organization is intended to characterize various aspects financial activity of the enterprise. For example, from an economic point of view, this coefficient characterizes the activity of the monetary turnover of invested capital, from a financial point of view - the speed of one turnover of invested funds, and from a commercial point of view - excess or insufficient sales.

If this indicator shows a significant excess of the level of sales of goods (services) over invested funds, then, as a consequence, an increase in credit resources will begin, which, in turn, makes it possible to reach a limit beyond which the activity of creditors increases. In this case, the ratio of liabilities to equity increases and credit risk increases. And this entails the inability to pay these obligations.

Low capital turnover of own funds indicates their insufficient investment in the production process.