Having your own working capital is the key to successful operation of an enterprise. The indicator is used to assess the real volume of an organization's resources and indicates whether there is free money. This is an absolute value and is expressed in monetary terms. To calculate it, it is most convenient to refer to the balance sheet data.

Managing an enterprise involves making decisions that will lead to profit in the future. The main source of income generation is the results of conducting core activities, the implementation of which requires resources. One of the key assets of any enterprise is its own working capital. They belong to current assets and are considered the most liquid, i.e. can be quickly converted into hard cash.

Definition

Own working capital (SOC) is the cost of the excess of current assets over short-term liabilities. In another way, this source of financing is called working capital. These are funds that are deposited on the company’s balance sheet and are used to finance current activities.

SOS show how much money a company has, the amount of capital it can freely manage, including to cover short-term liabilities.

Sources of SOS formation:

• reserve and other financial funds;
• targeted financing of the organization from the state.

Economic sense

SOS play a huge role in determining the financial stability of an organization. They characterize the degree of solvency of the company. A shortage of own working capital negatively affects the conduct of core activities and can lead to loss of solvency, that is, bankruptcy.

Calculation of own working capital is the main stage of economic analysis of an enterprise.

Calculation formula

Own working capital is found in several ways. This is always an absolute value and is expressed only in monetary terms, in contrast to the various coefficients derived from it.

1 formula:

SOS = AO - O K, where:

• JSC - current assets;
• O K - short-term liabilities.

Current assets are circulating funds and circulation funds. These include raw materials, supplies, fuel, finished products, and accounts receivable. The indicator is expressed in money.

According to the balance, the SOS value is found as follows:

SOS = page 1200 - page 1500, where:

• Page 1200 - line value 1200 (total for section II);
• Page 1500 - line value 1500 (total for section IV).

2 formula:

SOS = (K C + O D) - A B, where:

• K C - own capital;
• O D - long-term liabilities;
• A B - non-current assets.

The balance sheet looks like this:

SOS = page 1300 + page 1400 - page 1100, where:

• Page 1300 - line value 1300 (total capital);
• Page 1530 - line value 1400 (long-term liabilities);
• Page 1100 - line value 1100 (cost of non-current assets).

For all formulas, data for calculations should be taken for a certain period. If there are figures for the beginning and end of the period, you can find the average value in this way (using the example of Ks - equity capital):

Δ K S = (K S LF + K S KP) / 2, where:

• K S NC - the amount of equity capital at the beginning of the period;
• K S KP - the amount of equity capital at the end of the period.

Calculation example

For ease of calculation, let’s take the balance sheet data. It is best to use the first formula with two variables. An example calculation can be downloaded in excel.

Table 1. Calculation example, thousand rubles.

Month and year	Line 1200	Line 1500
January 2017
February 2017
April 2017
August 2017
September 2017
October 2017
November 2017
December 2017
Total for the year
Average per month

Thus, the company experienced a surplus of its own working capital in all months of 2017, except one. The deficit was noted only in March and amounted to minus 230 thousand rubles. In general, for the remaining months the amount of own working capital was relatively stable. On average for the year, the amount of SOS was equal to 327.1 thousand rubles.

Standard value

The cost of working capital can take on both positive and negative values. A SOS reading above zero is considered normal. More specific figures depend on the company’s field of activity, its size and the characteristics of the business. In some cases, a small excess will be enough, in others, own working capital must be above a certain level.

A negative value of own working capital (shortage) negatively affects the stable position of the company as a whole. In most cases, this leads to solvency problems. However, in some areas, the value of working capital may be below zero, and this will be a normal situation.

Companies with a very fast operating cycle can afford a negative SOS value. A case in point is fast food chains, which are able to turn inventory into cash in record time.

Important! If a surplus occurs, it is advisable to store it in current accounts rather than keep it in inventory or pay additional expenses from working capital. In the future, this money can be used to finance higher goals (for example, expansion of production).

SOS analysis

In itself, the indicator of own working capital does not carry any information. It must be analyzed in parallel with inventories as the least liquid assets and other sources of financing (amount of loans, etc.). What is important here is the ratio and its change in dynamics.

The goals of SOS analysis for the head of the company:

• identify the cost of the organization’s fixed working capital;
• determine the amount of surplus or deficit of SOS;
• identify a possible threat to solvency;
• establish how the situation has changed in dynamics.

You can understand whether the company has enough SOS using its own working capital ratio. This indicator is used to determine the insolvency (bankruptcy) of an enterprise.

Conclusions

Having your own working capital is a prerequisite for a stable financial and economic position of an enterprise. This source is used to finance the material and technical base, replenish supplies, purchase patents and other resources. In the absence of this source, borrowed assets are used: short-term and long-term loans, borrowings, loans. For successful business operations, it is important that the SOS value is positive, that is, a surplus is formed, however, companies with a high turnover rate can afford to successfully operate with a negative SOS value (fast food, some types of services).

The production process requires not only buildings and equipment, product licenses and other types of fixed assets and intangible assets. The production process also requires raw materials, spare parts and semi-finished products, as well as other resources that are included in working capital. Working capital, along with non-current assets, is the most important production factor

Working capital- this is money invested in raw materials, fuel, work in progress, finished but not yet sold products, as well as money necessary to service the circulation process

A characteristic feature of working capital is the high speed of their turnover. The functional role of working capital in the production process is fundamentally different from fixed capital. Working capital ensures the continuity of the production process.

The material content of working capital is objects of labor, as well as means of labor with a service life of no more than 12 months.

Material elements of working capital (labor items) are consumed in each production cycle. They completely lose their natural form, therefore they are fully included in the cost of manufactured products (work performed, services rendered).

Composition, structure and classification of working capital

Under composition of working capital it is necessary to understand the elements included in their composition (Fig. 1):

Industrial inventories (raw materials and basic materials, purchased semi-finished products, auxiliary materials, fuel, spare parts...);

Work in progress;

Deferred expenses;

Finished products in warehouses;

Products shipped;

Accounts receivable;

Cash in the company's cash register and bank accounts.

Raw materials is a product of the extractive industries.

Materials represent products that have already undergone certain processing. Materials are divided into basic and auxiliary.

Basic– these are materials that are directly included in the composition of the manufactured product (metal, fabric).

Auxiliary – these are the materials necessary to ensure the normal production process. They themselves are not included in the finished product (lubricants, reagents).

Semi-finished products– products completed by processing at one processing stage and transferred for processing to another processing stage. Semi-finished products can be own and purchased. If semi-finished products are not produced at

own enterprise, but are purchased from another enterprise, they are classified as purchased and are included in production inventories.

Figure 1 – Elemental composition of working capital

Work in progress – These are products (works) that have not passed all stages (phases, processing stages) provided for by the technological process, as well as incomplete products that have not passed testing and technical acceptance.

Deferred expenses- these are expenses of a given period that are subject to repayment at the expense of the cost of subsequent periods.

Finished products represents fully finished finished products or semi-finished products received at the enterprise warehouse.

Accounts receivable– money that individuals or legal entities owe for the supply of goods, services or raw materials.

Cash– these are funds located in the cash register of the enterprise, in bank accounts and in settlements.

Based on the elemental composition of working capital, you can calculate them structure, which represents the share of the cost of individual elements of working capital in their total cost.

According to the sources of education, working capital is divided into own and borrowed (borrowed). Own working capital is formed at the expense of the enterprise's own capital (authorized capital, reserve capital, accumulated profit, etc.). Borrowed working capital includes bank loans, as well as accounts payable. They are provided to the company for temporary use. One part is paid (credits and borrowings), the other is free (accounts payable).

In different countries, different ratios (standards) are used between equity and debt capital. In Russia, the ratio is 50/50, in the USA – 60/40, and in Japan – 30/70.

According to the degree of controllability, working capital is divided into standardized and non-standardized. Standardized assets include those working capital that ensures continuity of production and contributes to the efficient use of resources. These are inventories, deferred expenses, work in progress, finished goods in warehouse. Cash, shipped products, and accounts receivable are classified as non-standardized working capital. The absence of standards does not mean that the amounts of these funds can be changed arbitrarily. The current procedure for settlements between enterprises provides for a system of sanctions against the growth of non-payments.

Standardized working capital is planned by the enterprise, while non-standardized working capital is not an object of planning.

The company's assets are the value expression of the resources that support the production process. The company's property complex includes non-current assets (administrative and production buildings, equipment, machines, vehicles), as well as working capital, the structure of which includes such types of property as:

Money in cash and in bank accounts;

Inventories - inventory, raw materials, manufactured products, goods for sale and other materials;

Debts from debtors for services/goods supplied but not yet paid for;

Short-term financial investments and other assets.

All current assets are accumulated in the second section of the balance sheet and are considered as current assets, that is, participating in turnover.

The article will discuss such a concept as the average annual cost of working capital. Let's find out how this indicator is calculated and what it means.

Working capital on the balance sheet

As already noted, in the balance sheet hierarchy, current assets are collected in the second section of the BO-1 report. Each type of property has a separate line:

▪ 1210 - MPZ;

▪ 1220 - VAT on acquired property;

▪ 1230 - obligations of debtors;

▪ 1240 - Fin. attachments;

▪ 1250 - cash, cash equivalents;

▪ 1260 - others.

The total final cost of working capital is recorded in line 1200 of the balance sheet. It accumulates the absolute value of cash balances in the company for each position at the beginning of a given analyzed period and its end. In accounting, the value of assets on the balance sheet is called book value.

Book value of property

Economists analyze book value based on research objectives. For example, when it is necessary to find out the size of the balance of property as a whole for a section or for each position separately, determine the dynamics (growth or decrease in the value of assets) and, based on a comparison of absolute indicators, draw conclusions about the state of working capital on a certain date. In addition to internal users of the information available in financial statements, companies are required to inform various external users - founders, creditors, insurers, investors, providing them with various information, including the availability of assets.

Where is the book value used?

Information on the book value of assets is very necessary when analyzing the business activities of a company - the main tool in assessing the production and financial condition of the company. Using this indicator, intra-company coefficients are calculated:

▪ return on assets, which determines the amount of profit received for each ruble invested in the purchase of raw materials and production;

▪ asset turnover, indicating the efficiency of their use.

By comparing the initial and final values ​​that determine the value, the economist can draw conclusions about the growth or decrease in the amount of current assets in monetary terms for a given period, determine the relative values ​​characterizing the growth rate of indicators for each line of the second section of the balance sheet. However, the figures only provide information about the availability of property on a certain date, not always reflecting the real picture, since in the life of an enterprise the intensity of work is not the same, and this leads to uneven purchases and consumption of working capital, for example, in companies that depend on seasonality cycles.

It is more expedient to analyze the state of assets over short periods of time or calculate an indicator such as the average annual cost of working capital. The value of this indicator is calculated to make many economic calculations.

Why is the average annual cost of working capital calculated?

A detailed analysis of changes in the structure and composition of property, including working capital, is impossible without calculating the average value of property for the year. How is the average annual cost of working capital calculated? Analysts turn to balance sheet line 1200, and if it is necessary to calculate any one type of property, for example inventory, to the line corresponding to this position. The calculation formula is:

O av = (O n + O k) / 2,

where O n - the amount of working capital at the beginning of the analyzed period, O k - at the end of the period, 2 - the number of reporting dates.

Calculation example

Let's look at an example of how the average annual cost of working capital is calculated (balance sheet formula). The initial data is presented in the table of balance sheet values ​​of working capital.

Let's calculate the value using the above formula based on balance data:

About av = (8411 + 9300) / 2 = 8856 thousand rubles. - the average current assets for the year (line 1200 in the balance sheet) amounted to 8856 thousand rubles.

Using the same calculation algorithm, the average annual cost of working capital (thousand rubles) is calculated by position:

▪ inventories (line 1210) - O av = (5200 + 5450) / 2 = 5325 thousand rubles;

▪ VAT on purchased materials - O av = (242 + 210) / 2 = 226 thousand rubles;

▪ accounts receivable - O av = (510 + 620) / 2 = 565 thousand rubles;

▪ cash - O av = (2460 + 3020) / 2 = 2740 thousand rubles.

The average annual cost of working capital, the calculation formula for which is presented in the review, is used by economists to calculate coefficients demonstrating the financial condition of the company, the level of stability, as well as determining the reasons (positive and negative) that led to changes. Based on the analysts' findings, the company's management makes decisions on the further management of available resources.

Formula for calculating the average chronological

A type of arithmetic average, which includes value, is the chronological average, calculated from the totality of values ​​at different moments or for different periods of time.

In mathematics, it is used to find the average level in time series. In accounting, the chronological average characterizes in more detail the value of an individual asset at equal intervals of time. The calculation formula is:

О ср/хр = (½ x О 1 + О 2 + О 3 + ….+ О n -1 x ½) / n-1, where

O - balance as of a certain date, n - number of reporting dates.

Calculation of the average chronological

Returning to the example presented above, let’s supplement the initial data on the cost of inventory at the beginning of each month:

Let's calculate the average chronological average for the oil reserves quarterly for 2016:

1 sq. О avg/hr = (1/2 x 5200 + 4960 + 5460 + ½ x 5530) / 4-1 = 5261.66 thousand rubles;

2 sq. O av/hr = (1/2 x 5530 + 5360 + 4980 + ½ x 4890) / 4-1 = 5183.33 thousand rubles;

3 sq. О avg/hr = (1/2 x 4890 + 4780 + 4980 + ½ x 5180) / 4-1 = 4931.66 thousand rubles;

4 sq. O av/hr = (1/2 x 5180 + 5450 + 5550 + ½ x 5450) / 4-1 = 5438.33 thousand rubles;

Thus, the average amount of inventories for the 1st quarter is 5261.66 thousand rubles, for the 2nd - 5183.33 thousand rubles, for the 3rd - 4931.66 thousand rubles, for the 4th - 5438 .33 thousand rub. By analyzing the resulting numerical series, the economist can draw a conclusion about the availability of reserves in each quarter and establish the dynamics of changes depending on the company’s activities or industry affiliation. By calculating the average chronological value, the values ​​of the indicators are undoubtedly more accurate. These values, used in economic calculations, provide the most realistic figures. This is important primarily for internal users - company management. External users are quite satisfied with absolute indicators of the book value of assets.

Calculation of turnover ratio

A general indicator of the use of working capital in a company is the turnover ratio, defined as the ratio of turnover (revenue) to the average cost of working capital for the year:

To r/p = B: About avg, where B is revenue, About avg is the average annual cost of working capital. The formula demonstrates the number of completed turnovers of the average balance of funds invested in current assets during the production process.
Using the above example and supplementing it with information from the Profit and Loss Statement on the amount of revenue (326,000 thousand rubles), we calculate the turnover ratio:

K rev = 326,000 / 8856 = 36.8 times, i.e., during the year, funds invested in production in the amount of the average balance turn over 36.8 times.

In addition, turnover is calculated in days, i.e., they find out how many days the company will receive revenue equal to the average annual cost of working capital. The calculation is carried out according to the formula:

K rpm = 365 / K rpm.

K rpm = 365 / 36.8 = 9.92 days will be required for the company to receive revenue in the amount of the average cost of working capital for the year.

Normal value of coefficients

There are no general standard values ​​for turnover values.

Ratios are usually analyzed over time or in comparison with similar industry companies. We only note that a very low ratio indicates excessively accumulated working capital assets, which should intensify efforts to increase the liquidity of assets.

Circulation of working capital. Turnover indicators.

Working capital is in constant motion. The circulation of capital covers three stages: procurement, production and marketing.

Any business starts with a certain amount of cash, which is invested in a certain amount of resources for production.

At the production stage, resources are embodied in goods, works or services. The result of this stage is the transition of working capital from the production form to the commodity form.

After the sale of the produced product, working capital from the commodity form again passes into money. The sizes of the initial amount of money and proceeds from the sale of products (works, services) do not coincide in size. The resulting financial result of the business (profit or loss) explains the reasons for the discrepancy.

The time required for a complete turnover of working capital is called turnover time (period) working capital.

The time (duration) of turnover of working capital is one of the indicators turnover. Another indicator of turnover is the turnover ratio.

Turnover ratio- this is the number of revolutions that working capital makes over a certain period; it is calculated using the formula

Where R– volume of products sold for the period under review; OS– the average amount of working capital for the same period.

The time (duration) of turnover is usually called turnover in days. This indicator is determined by the formula

Where D– the number of days in a given period (360, 90, 30); TO about– turnover ratio.

After substituting the corresponding values ​​into the formula, you can obtain a detailed expression for the turnover indicator:

At each stage of the circulation of working capital, it is possible to determine the private turnover of each element of working capital:

Partial turnover indicators can be calculated based on specific turnover. A special turnover for material inventories is their consumption for production, for work in progress - the receipt of goods at the warehouse, for finished products - shipment, for shipped products - their sale.

Average for the period, the amounts of working capital used in calculating turnover indicators are determined using the average chronological formula. The average annual amount (average annual working capital balances) is found as the arithmetic average of four quarterly amounts:

The quarterly average amount is calculated as the average of three monthly averages:

The expression used to calculate the average monthly amount has the form

The amount of working capital at the disposal of the enterprise must be large enough so that the circulation process is not interrupted. At the same time, the presence of excess working capital negatively affects the results of its activities.

Rationing of working capital

Sources of working capital formation (WCF) are divided into two types

1.Own OBS:

n working capital (funds from the owners of the enterprise);

n profit is the main source;

n stable liabilities (funds equivalent to own):

Wages arrears;

Debt to the budget;

Debt for packaging;

Prepayment.

2. Funds raised:

¨ borrowed (short-term bank loans);

¨ state loan;

¨ other (remains of funds, reserves not used for their intended purpose).

To ensure the uninterrupted production and sale of products, as well as for the effective use of working capital at enterprises, their rationing is carried out. With its help, the overall need of the enterprise for working capital is determined.

Consumption standards are considered to be the maximum permissible absolute values ​​of consumption of raw materials, fuel and electrical energy for the production of a unit of product.

Rationing the consumption of certain types of material resources requires compliance with certain scientific principles. The main ones should be: progressiveness, technological and economic feasibility, dynamism and ensuring a reduction in standards.

In practice, three methods of rationing working capital are used:
1) analytical- provides for a thorough analysis of available inventory items with the subsequent extraction of excess items from them;

2) coefficient- consists in clarifying the current standards of own working capital in accordance with changes in production indicators;
3) direct counting method- scientifically based calculation of standards for each element of regulated working capital.

When establishing norms and standards for the planned year, it is recommended to use the experimental-statistical and calculation-analytical method.

Working capital norm- the value corresponding to the minimum, economically justified volume of reserves. It is usually set in days.

OS standard- the minimum required amount of funds to ensure the continuity of the enterprise.

The OS norm (N a.os) is determined by the formula:

N a.os = Z tech + Z str + Z tran + Z tech + P r,

where Z current is the current stock (the main type of stock, the most significant value in the OS norm); 3 pages - safety stock;

Z tran - transport stock;

Z techn - technological stock;

P r - time required for acceptance.

The current stock is determined by the formula:

where C p is the cost of delivery;

I is the interval between deliveries.

Safety stock (the second largest type of stock) is determined by the formula:

Transport stock is defined as the excess of cargo turnover time (the time it takes to deliver goods from the supplier to the buyer) over the document flow time.

Technological stock is the time required to prepare materials for production.

The OBS standard is determined by the formula:

Nobs= P * Na.os,

where P is the average daily consumption of working capital;

N a.os - OBS norm.

The OBS standard can also be found using the formula:

where B is the consumption (output) for the OBS element for the period (rub.);

T - duration of the period (days);

N a.os - working capital norm for an element (days).

Working capital standard in production inventories defined:

Z av.s * N z,

where З ср.с – average daily consumption in value terms;

N s - stock norm in days.

Standardization of fixed assets in work in progress (N np) is carried out according to the formula:

N np = VP avg. * P c * K,

where VP avg – average daily output at production cost;

P c - duration of the production cycle;

K is the coefficient of increase in costs, which, with a uniform increase in costs, is determined by the formula:

where F e - one-time costs;

F n - increasing costs;

C - cost.

With an uneven increase in costs

K = CWed/P

where C av is the average cost of a product in work in progress;

P is the production cost of the product.

Working capital standard for deferred expenses (N b.p.) is determined by the formula:

N b.p. = RBP beginning + RBP pre – RBP s,

where RBP beginning is the carryover amount of deferred expenses at the beginning of the planned year;

RBP pre - deferred expenses in the coming year, provided for in the estimates;

RBP c - deferred expenses to be written off against the cost of production for the coming year.

Working capital standard in finished product balances defined:

N g.p = VGP days. * N W.skl. ,

where is VGP day. - cost of one-day production of finished products;

N z.skl - the norm of their stock in the warehouse in days.

The total working capital standard is the sum of working capital standards calculated for individual elements.

Indicators of efficiency of use of working capital

The most important indicators of the efficiency of using working capital are the turnover ratio, the duration of the turnover of working capital and the load factor of working capital.

The working capital turnover ratio characterizes the number of turnovers of working capital during a certain period.

where B is sales revenue (volume of products sold), rub.;

ObS - average annual cost of working capital, rub.

Average annual working capital balance calculated by the formula

where ObS0 is the amount of working capital at the beginning of the period, p.

ObСn is the amount of working capital on the nth date, rub.

n is the number of dates under consideration.

Example. Determine the average annual cost of working capital. The amount of working capital as of January 1 is 100 thousand rubles; April - 130 thousand rubles; July 1 - 115 thousand rubles; October 1 - 135 thousand rubles; December 31 - 140 thousand rubles.

Solution: ObS= (0.5*100+130+115+135+0.5*140)/(5-1)=125 thousand rubles.

The turnover ratio is often referred to as the turnover rate. From formula 4.8 it is clear that it shows how many rubles of products per ruble of working capital. If the turnover ratio does not change, then the need for working capital increases in direct proportion to the growth of revenue.

Turnover ratio– this is the main indicator of the efficiency of using working capital.

The higher the turnover ratio, the higher the efficiency of using working capital, since more products are removed from one ruble of working capital. If the volume of production does not need to be increased, then the faster the circulation of working capital is carried out (that is, the higher the value of the turnover ratio), the less may be the amount of resources diverted to service reproduction.

Example. Determine the turnover of working capital for the previous example and the amount of absolute release of working capital if the turnover rate increases by 1.2 times. The volume of products sold is 600 thousand rubles.

Solution. Cob = 600/125 = 4.8. The absolute release is calculated using the formula

ObS abs = ObSb – ObSpl, (4.10)

where Ob WITH pl – planned value of working capital, rub.;

ObSb – basic value of working capital, rub.

ObSpl = 600/(4.8 × 1.2) = 104.2 thousand rubles.

Release amount = 125-104.2 = 20.8 thousand rubles.

The inverse indicator of the turnover ratio is the working capital consolidation ratio.

Consolidation factor(K fixed) shows the amount of working capital per ruble of products sold.

Duration of turnover - the period of time during which working capital makes one complete circuit .

Duration of turnover calculated by the formula:

, (4.12)

where F is the duration of the calendar period, days;

Kob – turnover ratio for period F.

The duration of the calendar period is taken in round numbers - 360 days per year, 90 per quarter, 30 per month.

When the duration of the turnover is reduced, working capital is released from circulation, and vice versa - an increase in the duration of the turnover causes the need for additional funds.

Accelerating the turnover of working capital always leads to a relative release of working capital.

The relative release of working capital is calculated using the formulas:

ObS from = ObSb× IV-Oppl., (4.13)

ObS from=(Db-Dpl)× Vpl/F, (4.14)

where Iv is the index of growth in the volume of products sold in the plan year compared to the base year;

Db, Dpl – the duration of turnover in the base and plan years, respectively;

Vpl – volume of products sold in the planned year.

Example. Determine the absolute and relative release of working capital in the planning year.

In the reporting year, the amount of working capital was 100 thousand rubles with a sales volume of 400 thousand rubles. It is planned to increase sales volume by 25% and reduce the duration of working capital turnover by 10 days.

Solution:

Iv = (100+25)/100 = 1.25

Db = 360 × 100/400 = 90 days. Dpl=90 – 10 = 80 days

ObSpl = 80 × 400 × 1.25/360 = 111 thousand. r.

ObS abs = 100-111 = -11 thousand. r.

Thus, there was no absolute release of working capital in the planning year, but on the contrary, working capital increased by 11 thousand rubles.

ObSot=(90-80)*400*1.25/360=13.9 thousand rubles.

The relative release of working capital in the planning year amounted to 13.9 thousand rubles.

EFFECTIVENESS OF USE OF WORKING CAPITAL

Performance indicators for 2008:

Kob = 95178 thousand rubles. / 24502 ​​thousand rubles. = 3.9 rev.

Kz = 24502 ​​thousand rubles. / 95178 thousand rubles. = 0.3

D = 365 days / 3.9 revolutions. = 94 days

Performance indicators for 2009:

Kob = 143099 thousand rubles. / 37822 thousand rubles = 3.8 rev.

Kz = 37822 thousand rubles. / 143099 thousand rubles. = 0.3

D = 365 days / 3.7 = 99 days

Release of ObS = (95,178 thousand rubles / 3.9 rev.) - (95,178 thousand rubles / 3.8 rev.) = - 642 thousand rubles.

Performance indicators for 2010:

Kob = 227546 thousand rubles. / 93304 thousand rubles = 2.4 rev.

Kz = 93304 thousand rubles. / 227546 thousand rubles = 0.4

D = 365 days / 2.4 = 152 days

Release of ObS = (143,099 thousand rubles / 3.8 rev.) - (143,099 thousand rubles / 2.4 rev.) = - 21,967 thousand rubles.

According to the calculations, we can conclude that in 2009 working capital was used more efficiently than in 2010 (Kob 2009 > Kob 2010, Kz 2009

But, if we consider only 2010, then working capital was used effectively.

References:

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The concept of working capital and their role in the activities of the enterprise

Definition 1

Working capital of an economic entity in a general sense is usually understood as funds advanced into the funds of an enterprise in order to ensure the continuity of production processes and sales of its products.

In fact, circulating assets are objects of labor that have a monetary (value) valuation and meet the following criteria:

• full use during one production cycle;
• continuous change of natural material form;
• transferring value to the final product.

Working capital consists of production working capital and circulation funds, each of which includes a number of elements (Figure 1).

Figure 1. Composition and structure of working capital of a business entity. Author24 - online exchange of student works

Note 1

As a rule, working capital is formed mainly from production assets, represented mainly by inventories (raw materials, consumables, fuel, etc.). The circulation funds account for about 30% of all working capital.

A similar ratio of individual elements of an enterprise’s working capital characterizes its structure. At the same time, it should be understood that it is not of an obligatory nature and can be modified depending on the specific business conditions and the industry specifics of the enterprise.

One way or another, working capital is an integral part of the enterprise’s property and plays a huge role in its financial and economic activities. It is they, in the process of their circulation, that ensure the continuity of the reproduction process, constantly changing their forms (cash - production inventories and raw materials for the manufacture of products - finished products - cash, and so on).

Estimated indicators of the efficiency of using working capital

Working capital, acting as an economic resource of a business entity, requires analysis and assessment of the effectiveness of their use. The use of working capital is determined by their essence and the characteristics of the circulation (Figure 2).

Figure 2. Mechanism of circulation of working capital of the enterprise. Author24 - online exchange of student works

In the process of their circulation, working capital constantly changes its form. Cash is used to purchase raw materials and supplies, which are transformed into finished products during the production process. Finished products produced by the enterprise are subject to market sale, as a result of which the enterprise receives revenue. Thus, working capital again acquires a monetary form and then the cycle repeats.

In order to analyze the efficiency of using working capital and identify elements potentially dangerous to the financial stability of the enterprise, a number of indicators are used.

The main ones are:

• average annual value (balance) of working capital;
• usage rates;
• performance indicators.

Let's look at them in more detail.

The average annual balance of working capital of an economic entity is understood as the average value of the working capital of the enterprise over the past two years. It shows how much working capital, on average, was available to a business entity for the analyzed period. Its calculation allows you to smooth out possible fluctuations in the indicator.

The utilization indicators are the turnover and load ratio, as well as the duration of turnover of the working capital of a business entity. They reflect the nature and speed of circulation of working capital.

Finally, indicators of the efficiency of working capital, represented by the corresponding coefficient and the amount of their release, characterize the effect brought by financial investments in current assets.

Let us consider the method of their calculation in more detail.

Methodology for calculating indicators of the use of working capital

The methodology for calculating indicators for the use of working capital of an economic entity and their efficiency is based on the economic meaning of the indicators. The basic formulas for their calculation are presented below.

The average annual balance of working capital ($OS$) is defined as the arithmetic average of the total value of working capital for the analyzed period. Its value can be determined by the formula

$OS = (OS_0 + OS_1) / 2$

where $OS_0$ and $OS_1$ are working capital for the analyzed and preceding periods.

The turnover ratio ($Kob$) is defined as the ratio of the volume of revenue of an enterprise received as a result of the sale of its products to the average value of working capital for the period. The formula for its calculation is clearly presented below:

$Kob = Revenue / OS$

In fact, this coefficient shows how many cycles the working capital of an economic entity manages to complete during a period, in other words, how many cycles they go through.

The inverse indicator of the turnover ratio is the working capital load factor ($Zob$). Accordingly, it can be found using the formula:

$Zob = 1 / Kob = OS / Revenue$

This coefficient shows how much is the amount of working capital of an economic entity per 1 ruble of products sold.

Also, one of the main indicators of the use of working capital is the duration of their turnover ($Add$). In fact, it shows how much time the working capital of an enterprise needs to completely go through one circulation cycle. Its value is determined by the formula:

$Add = D / Cob$

where $D$ is the duration of the period.

Thus, the higher the turnover ratio of working capital, the less time it takes for them to complete one turnover. Accordingly, the faster the circulation of working capital occurs, and therefore they bring greater benefits.

In addition, to assess the efficiency of using working capital, an indicator such as the efficiency coefficient ($Kef$) is used. It reflects the amount of working capital per 1 ruble of profit of an economic entity. Accordingly, its value is determined by the formula:

$Ef = Profit / OS$

Note 2

As a rule, net profit is used in the numerator to calculate this indicator.

Of particular importance when analyzing working capital and assessing their use is the acceleration of turnover, which contributes to an increase in savings. To do this, the release of working capital ($OSvysv$) is determined, the value of which is calculated using the formula:

$OSvysv = Revenue (Dobb – Dobp) / D$

Where $Dobb$ and $Dobb$ are the average turnover time in the base and planned periods.

The presented indicators can be calculated both for the entire set of working capital and for their individual elements, for example, accounts receivable.

When assessing the composition and structure of working capital, specific gravity indicators can also be used, determined by dividing an individual element by the entire set of working capital.