The company's working capital is in constant motion. Intuitively, the faster they turn, the less overall need there is for them.

What makes up the duration of turnover of working capital?

Its minimum duration is set by the duration of the production period, i.e. the time during which the manufactured product is in production: it is obvious that before the product is manufactured, the advanced funds will not be able to return to the entrepreneur. However, in reality, the duration of the turnover will be longer, since before they enter production, advanced funds in the form of raw materials, materials, semi-finished products, fuel, etc. will remain in the warehouse for some time, and after production is completed, will remain in the warehouse for some time in the form of finished products.

The duration of the turnover of working capital would be equal to the duration of the three indicated stages if both the purchase of raw materials and materials and the sale of finished products were carried out for cash (meaning without sales on credit). If an enterprise sells its products on credit, then it is forced to wait for the receipt of money for some time after the finished products have left the warehouse, i.e. The duration of turnover increases as the receivables are repaid.

But if the enterprise must make an advance payment for raw materials and other materials, then the duration of the turnover of its working capital will increase even more, since they will have to be advanced several days before the raw materials arrive at the enterprise.

How to determine the duration of a turnover?

You can try to determine it directly according to the scheme described above: we estimate the duration of each stage, and the total duration of the turnover is determined as the sum of the durations of all stages.

This method is sometimes used when determining the need for working capital for a newly designed enterprise, since in such cases other necessary information is often missing. When calculating for existing enterprises, this method is not used, since it gives very rough estimates.

Typically, the duration of turnover is defined as the time after which the funds advanced by him are returned to the entrepreneur, and this is done by comparing the advanced working capital and the revenue received for the products sold. This method is also not free from drawbacks. We'll look at some of them later.

The turnover rate of working capital is characterized by the turnover ratio and the duration of one turnover in days.

The turnover ratio is calculated using the following formula:

where B is revenue from sales of the enterprise’s products, rubles; About average - the average value of working capital, rub.

Thus, the turnover ratio characterizes the number of revolutions made by each ruble invested in the working capital of the enterprise during the period under review.

As a rule, the amount of an enterprise's working capital is fixed at a certain date (beginning of the month, quarter, etc.). At the same time, it is clear that products produced over a period of time must be compared with working capital for the same period. That is why the formula includes the average amount of working capital for the same period for which revenue from product sales is taken.

The average value of working capital for a period in the simplest case is defined as half the sum of the values ​​of working capital at the beginning (Ob Beg) and the end (Ob End) of the period, i.e.

To increase accuracy, if possible, it is better to calculate working capital using a larger number of intermediate data (quarterly, monthly or even daily). For example, the annual average can be defined as the average value of working capital at the beginning and end of the year, or it can also take into account the values ​​at the beginning of the second, third and fourth quarters. In this case, the average annual value is determined by the so-called average chronological formula:

Let's return again to turnover indicators.

The duration of one revolution is determined by the formula

Where T- duration of the period, days.

In financial accounting and analysis, it is customary to take the duration of one month as 30 days, a quarter as 90 days, and a year as 360 days.

For effective management of working capital, it is important to know not only the duration of one turnover, but also its structure, i.e. the duration of turnover of each element of working capital. Typically, the following scheme is used for analysis.

As we have already found out, the working capital of an enterprise (OBC) at each point in time can be represented as the amount of money associated: in advances issued to suppliers (A); stocks of raw materials, materials, etc. (3); work in progress (WP); inventories of finished goods (FP); accounts receivable (Db); liquid funds necessary to service turnover (L).

Let’s write the formula for working capital turnover, using in the numerator not revenue, but cost of goods sold (Sb) (in principle, you can also use revenue, but it is believed that this will be more accurate):

Let us recall that the average value of working capital for the period is taken.

Now let's write a formula to determine the duration of one revolution (L). To do this, divide the duration of the period (T) by the turnover ratio.

Now let’s imagine the working capital of the enterprise as the sum of its component parts (taking each component as an average for the period):

In the resulting formula, each term characterizes the duration of turnover of the corresponding group of working capital. By observing these durations over time, it is possible to identify what is causing the negative change in the total duration, which element of working capital should be paid special attention to, where reduction reserves are laid, etc. The same result will allow us to identify the comparative effectiveness of accelerating the turnover of each element of working capital, for example, by one day.

It should be noted that these formulas have one very big drawback: in reality, the above indicators (at least some of them) are not at all what they say they are, or rather, who we take them to be. The point is that some of the results obtained are quite difficult to interpret economically.

Let's consider such a conditional problem. Suppose Someone bought 100 thousand rubles at the beginning of the quarter. materials, rented premises with equipment, hired workers, evenly processed all the materials during the quarter, produced a certain amount of products, spending only 450 thousand rubles on it, and on the last day of the quarter sold the products wholesale for 500 thousand rubles. and at this point he ceased his activities.

How many turnovers did the money invested in the purchase of materials make, and how many days on average was each unit of material in the warehouse? From the logic of the problem it follows that all costs, including costs for materials, made one revolution, since there were no second and subsequent revolutions, and each unit of material was in the warehouse for an average of half a quarter, i.e. 45 days

Let us now try to determine the number of revolutions using the formula, taking into account that the average balance of material in the warehouse for the quarter was

Then the inventory turnover ratio will be equal to

and the duration of one revolution

As already noted, the economic meaning of one turnover of material inventories can be interpreted as the time during which, on average, materials lie in the warehouse. In this sense, the result obtained above cannot be interpreted at all, since the material was in the warehouse not for 9 days, but much longer.

The use of costs instead of revenue in calculating material turnover does not help the situation. Using 450 thousand instead of 500 thousand in the calculation, we get a turnover ratio of 9, and the duration of one revolution is 10 days.

Therefore, the turnover indicators of individual elements of working capital - they are called private turnover indicators - are calculated using slightly different formulas. In these formulas, instead of revenue for products sold, an indicator is used that characterizes turnover (consumption or output) for the element for which turnover is calculated. In other words, in the proceeds from the sale of products it is necessary to compare with the element in question only that part of it in the formation of which this element was directly involved.

Thus, the material costs of the enterprise (without depreciation) must be compared with the reserves of raw materials, supplies, and fuel, since the material costs were formed by transferring the cost of these reserves to the finished product. Therefore, if a certain enterprise has an average annual stock of raw materials, fuel, materials in the warehouse, etc. amounted to 500 thousand rubles, and material costs for manufactured products (without depreciation) - 3 million rubles, this really means that working capital in materials turned over six times in a year (3 million / 500 thousand), the duration of one turnover is equal to 60 days, or, what is the same, each unit of stock in the warehouse lay on average for 60 days.

It is necessary to compare the cost of production with work in progress; with stocks of finished products - shipment of products at cost (since finished products in the warehouse are accounted for at cost); with accounts receivable - the volume of products sold.

Although the turnover of accounts payable is not related to the turnover of working capital, the approach to determining the rate of turnover of accounts payable is the same. And this indicator itself is of great practical importance.

Let us return once again to the previous conditional example: its further analysis will allow us to better understand the meaning of turnover indicators.

Let us assume that at the beginning of his activity, Someone advanced all the money necessary to produce the planned products.

Since the total cost amounted to 450 thousand rubles, then, therefore, this amount was advanced. At the initial moment for 100 thousand rubles. materials were purchased from it, and the rest of the money was in the current account. In this case, what are the indicators of turnover of working capital and the duration of one turnover?

The initial value of working capital is 450 thousand rubles. (in the material stock and on the current account), the final one is also 450 thousand rubles. (in the stock of finished products), therefore, the average value of working capital is also 450 thousand rubles. If we determine the turnover ratio of working capital through the cost of manufactured products, then it will be equal to 1, and the duration of one turnover will be 90 days, which fully corresponds to our ideas about the nature of the process.

If we determine the turnover ratio through revenue, we will be faced with the fact that the turnover ratio will no longer be equal to 1:

and the duration of the turnover will be less than 90 days. Moreover, if we manage to sell products at a higher price, for example for 675 thousand rubles, then the turnover ratio will be equal to 1.5, and if for 900 thousand rubles, then 2.

This happened because profit intervened in the calculation. Profit is created in the production process and is not transferred by working capital. The amount of profit received per turnover does not affect the rate of turnover, so including it in the calculation distorts the results obtained.

Let's return to our example. Let us now assume that the necessary funds were invested in the event in question in two steps: 200 thousand rubles. at the beginning and 250 thousand rubles. in the middle of the period.

Let's determine the average amount of working capital for the period: in the first half of the period they were equal to 200 thousand rubles, in the second - 450 thousand, and on average 325 thousand rubles. Now let’s find the turnover ratio and the duration of one revolution:

At first glance, another unexpected result, since, let me remind you, we had only one production cycle and it lasted 90 days.

Let's look into the current situation. It can be presented as follows: the first 200 thousand rubles. turned around in 90 days, the second 250 thousand rubles. - within 45 days. And on average we get:

In other words, 65 days. The duration of one turnover is interpreted quite simply: part of the money was in circulation for 90 days, the other part for 45 days, and on average it was 65 days.

The 1.38 revolutions per production cycle is more difficult to interpret. In fact, both components of the capital made one turnover, but they made it in different times and at different speeds: 200 thousand rubles. turned around once in 90 days, and 250 thousand rubles. also once, but within 45 days. It’s easy to calculate that 200 thousand rubles. the turnover ratio is 1, and for 250 thousand rubles. - 2. But this does not mean at all that 250 thousand rubles. actually made two revolutions.

Since the working capital of an enterprise always consists of parts that circulate at different times and at different speeds, the turnover ratio should be understood as the weighted average turnover rate of the various components of the advanced capital, and the duration of one turnover - as the weighted average of the durations of their turnovers.

Let us now turn to the partial turnover ratios, which characterize the turnover of individual components of working capital. First, let's calculate the inventory turnover ratio. As has already been determined, the average stock of materials is 50 thousand rubles, material costs for the period are 100 thousand rubles, hence the inventory turnover ratio is 2, and the duration of one turnover is 45 days. We will get exactly the same result if we try to calculate the indicators of finished goods inventory turnover: they will also be 2 and 45 days. But we are sure that there was only one revolution. More surprises!

In order to explain them, it is important to understand that, using the above formulas, we calculate the turnover of capital tied up in reserve rather than advanced capital. In the example under consideration, the average capital tied up in reserve is indeed 2 times less than the advanced capital (at the beginning 100, and at the end 0, on average 50), therefore the speed of its turnover is 2 times higher, and the duration of one revolution is 2 times less. But at the same time, the duration of the turnover of average associated capital is interpreted differently from that of advanced capital.

The duration of the turnover of capital advanced to the reserve can be understood as the time during which this stock will be in stock, those. will be completely used up. In this example, it is 90 days, and the turnover ratio of the advanced capital is 1 (100 / 100).

The duration of the turnover of capital tied up in a stock can be understood as the time during which on average, each unit of inventory will be in the warehouse. Since part of the stock will be used up on the first day, and part will lie until the very last, 90th day, then in general it will turn out that each unit will remain in the warehouse for 45 days on average.

These circumstances must be taken into account when calculations require moving from the frequency of capital advances to the period of its commitment, and vice versa. For example, move from the delivery interval to the warehouse to the average storage period. With a uniform increase (or decrease) of the stock, this problem is solved by dividing or multiplying by 2; in other cases it is more complicated. We will look at one of these options below.

The question may arise why these problems did not appear when we considered the turnover of all working capital, but began when we moved on to private turnover indicators. In fact, they occur there too, but are less acute.

Let's return again to the original version, when the entrepreneur immediately advances 450 thousand rubles. In this case, we get a turnover ratio of 1, and the duration of the turnover is 90 days, i.e. indicators of turnover of advanced capital. Why? In fact, we obtained indicators of average tied capital. It’s just that in this case the advanced one coincided with the average one: being advanced, it gradually, through the supply of material and processing, passed into the form of finished products, but at the same time it remained equal to 450 thousand rubles all the time.

This, in fact, is the main difference between the study of the turnover of working capital as a whole and the turnover of its individual components: working capital changes its shape in the process of circulation, but at the same time, as a rule, its size changes insignificantly, so the average associated working capital is always approximately equal advanced (an exception to this rule are industries with pronounced seasonality, but there turnover indicators should be calculated differently). The size of the individual components regularly changes over a wide range, and therefore here the advanced funds are almost never equal to the average associated ones.

To complete the presentation, it remains to find out what turnover indicators in the example under consideration will be given by the usual scheme based on the use of cost.

Let's consider the same example. Let 450 thousand rubles be advanced at once. For 100 thousand rubles. The material was immediately purchased, and the rest are on the current account, spent on processing as necessary. Processing occurs instantly, after which the finished products are sent to the warehouse, where they remain until the end of the quarter. Then we have:

Thus, the total period of turnover of working capital is 90 days. - breaks down as follows: 10 days. - inventory turnover; 35 days - cash turnover; 45 days - finished product inventory turnover.

These results should be understood as follows. Out of 90 days quarter 10 days the enterprise worked to “justify” the costs of the material (the cost of products produced in 10 days is exactly equal to the cost of the material), for the next 35 days. “worked off” the advanced funds. Finally, the last 45 days. "worked for a warehouse."

If you look a little more closely at the mechanism of action of this formula, it is easy to see that it divides the total duration of turnover of working capital between the turnover of individual components in proportion to the size of each part: if, as in this example, the average size of inventories is 1/9 of the average value of working capital funds, then the duration of their turnover is equal to 1/9 of the duration of turnover of all current assets. In this case, all revolutions are performed strictly sequentially, since if we assume that the revolutions of some parts occur in parallel, then the sum of the partial durations will not give the total. It is clear that in reality the rule is just the opposite situation: all components of working capital turn around in parallel, so the above interpretation is a serious simplification.

In conclusion, we note that private turnover indicators can also be calculated for individual divisions of the enterprise. It is only important that the above rule is followed: the indicator in the formation of which they directly participated is compared with the working capital of the division.

Let us pay attention to the fact that the sum of the turnover time according to particular indicators, unfortunately, does not coincide with the turnover time of all working capital.

Let's calculate general indicators characterizing the efficiency of using the company's working capital.

The circulation time of working capital is determined by expression 1:

(days of turnover), (2.3.1)

The circulation time indicator reflects the number of days during which current assets complete a complete circulation, i.e., it is measured in days.

The turnover ratio of current assets characterizes the efficiency of use (rate of turnover) of current assets. It shows how many times during a period (per year) current assets are turned over or how many rubles of sales proceeds per ruble of current assets. The higher this ratio, the better.

Formula for calculating the turnover ratio of current assets (Koa):

We calculate the return on current assets using the formula:

PE – net profit; OA – average annual value of current assets.

The profitability of current assets significantly affects the production process, the implementation of production and financial plans.

Relative release (involvement) of working capital occurs in case of acceleration (deceleration) of turnover and can be determined by the formula:

(2.3.4)

where N РП1 is the volume of product sales in the compared period in wholesale prices, rubles; – duration of one revolution in days in the base and compared periods, days.

We summarize the results obtained in Table 13

Table 13 - Analysis of the overall efficiency of working capital of Wimm-Bill-Dann Food Products OJSC for the reporting period

Indicators	Units	Last year	Reporting year	Deviation (+;-)
Net profit
Average annual cost of working capital
Time of circulation of working capital
Speed ​​of circulation of working capital
Coefficient of participation (load) of working capital in turnover
Return on working capital
Relative release (involvement) of working capital

Based on the calculation data obtained in Table 13, we can conclude that Wimm-Bill-Dann Food Products OJSC, the circulation time of current assets decreased at the end of the year by 2201.25 days. The turnover rate of working capital increased by 11.09 revolutions. The coefficient of participation (load) of working capital in turnover decreased by 6.03 rubles. The profitability of working capital at the beginning of the year is 14 kopecks for every 1 ruble, at the end of the year it is 31 kopecks more, which is 45 kopecks. The relative involvement of working capital is 765,794.77 at the end of the year.

Let's calculate indicators for assessing the efficiency of an enterprise's reserves; summarize the results in Table 14

Table 14 - Analysis of the efficiency of the enterprise's reserves for the reporting period

Indicators	Units	Last year	Reporting	Deviation (+;-)
Cost of goods, works, services sold	thousand roubles.
Revenue from sales	thousand roubles.
Average annual inventory value	thousand roubles.
Inventory circulation time
Inventory turnover rate
Inventory return
Relative release (involvement) of funds advanced into reserves	thousand roubles.

Based on the data obtained in Table 14, we can conclude that at Wimm-Bill-Dann Food Products OJSC, the profitability of inventories at the beginning of the reporting period was 38.66 rubles/ruble, at the end of the year 2.93 rubles/ruble. During the reporting period, the profitability of inventories decreased by RUB 3.57. The speed of inventory turnover (Kvol. inventory) is one of the most important factors influencing the overall turnover of working capital. Inventory turnover period (Vzap. c/c) is the average period of time required to transform raw materials into finished products and subsequent sale.

During the analyzed period, at Wimm-Bill-Dann Food Products OJSC, inventory turnover decreased to 2.05 turns, which indicates a drop in production rates, inefficient use of inventories and irrational economic policies in the field of purchasing materials and marketing of finished products. Consequently, Wimm-Bill-Dann Food Products OJSC needs to reconsider its marketing and sales policies, and not allow the accumulation of large stocks of materials and finished products in warehouses.

Let's analyze the turnover of accounts receivable (Table 15)

Table 15 - Analysis of the effectiveness of the enterprise's receivables for the reporting period

Indicators	Units	Last year	Reporting year	Deviation (+;-)
Net profit
Average annual amount of accounts receivable
Receivables circulation time
Receivables turnover rate
Return on accounts receivable
Relative release (involvement) of funds advanced into receivables

The receivables repayment period is the ratio of the duration of the analyzed period to the receivables turnover ratio and is calculated:

During the analyzed period, Wimm-Bill-Dann Food Products OJSC, repayment of accounts receivable decreased by 909.81 days, therefore, its turnover increased. This indicates a decrease in commercial credit provided by the enterprise, the return of diverted funds into circulation and, most importantly, the acceleration of the payment process for sold products. This is a positive change indicating a decrease in diverted funds as accounts receivable and their return to circulation, as a result, the liquidity of working capital increases.

Table 16 - Analysis of the cash efficiency of Wimm-Bill-Dann Food Products OJSC for the reporting period

Indicators	Units	Last year	Reporting year	Deviation (+;-)
Net profit
Average annual cash flow
Cash circulation time
Velocity of funds circulation
Return on working capital
Relative release (involvement) of funds advanced into cash

The average annual amount of cash for the analyzed period decreased by 2,509,293 thousand rubles.

The cash turnover period is as follows 2:

The period of cash turnover decreased by 342.07, which indicates a decrease in the efficiency of their use, a significant decrease in the liquidity of working capital and its turnover, and also indicates the withdrawal of funds from circulation.

We calculate the influence of working capital efficiency factors that determined the change in revenue (Table 17) and the change in the net profit of the enterprise (Table 18).

Table 17 - Analysis of the impact of changes in the average balance and turnover rate of working capital on the dynamics of revenue in the reporting year, thousand rubles.

Indicators	Last year	Reporting year	Impact on revenue, thousand rubles.
				size of influence
1. Revenue, thousand rubles.
2. Average amount of working capital, thousand rubles.			=(16531004+2271808,17)/360
3. Speed ​​of circulation of working capital, turnover			ΔK vol.oa = ΔB(Vir.r.) / ΔOA avg.= 32,455/ 52230,03

The size of average working capital had little effect on the turnover of current assets. Their turnover increased due to an increase in sales revenue, which indicates an increase in production and sales volumes, as well as the rational and efficient use of working capital (the more turnover current assets make in a year, the greater the revenue will be).

Table 18 - Analysis of the impact of changes in the average balance and profitability of working capital on the dynamics of net profit in the reporting year, thousand rubles.

Indicators	Last year	Reporting year	Impact on revenue, thousand rubles.
				size of influence
1. Net profit, thousand rubles.			ΔB(Ext.r.) = T * OA av.1 * [ (1 / Ext.r.1) – (1 / Ext.r.0) ]=360*2271808.17* ((1/25199299)- (1/2700716)
2. Average amount of working capital, thousand rubles.			Act = (Boa 1 – Boa 0) * Calc.p 1 / T 1 = =(16531004+2271808,17)/360
3. profitability of working capital, turnover			R= (Act / ΔB(Vyr.r.))

Thus, the increase in the profitability of working capital led to an increase in the amount of working capital by 52230.03, which in turn influenced the growth of profit by 3245.5 thousand rubles.

To increase the turnover of working capital, the company needs to use working capital more efficiently and change the amount of turnover and its structure, use progressive methods of selling products, etc.

In order to improve accounts receivable management, it is advisable for an enterprise to create reserves for doubtful debts. This will allow, if necessary, to reduce the amount of taxable profit by the amount of losses on doubtful debts.

An important role in reducing accounts receivable can be played by the use of flexible pricing, which encourages the buyer to pay their obligations in a timely manner.

It is recommended to think over the content of contracts with buyers and stipulate in them the payment of a penalty for each day of late payment (for example, in the amount of 1.5% of the contract amount). This will not only strengthen the financial and payment discipline of the business partners, but also provide for the enterprise to receive additional non-operating income.

Typical example 3. WORKING CAPITAL

Problem 1

Determine and analyze the structure of working capital of enterprises using the following data:

Elements of working capital	Amount, million rubles
	Enterprise 1	Enterprise 2
Productive reserves
Unfinished production
Future expenses
Finished products

Solution

The structure of working capital represents the share of each element in the total amount. Let us determine the structure of working capital of both enterprises:

Elements working capital	Enterprise 1		Enterprise 2
		Structure, %	Amount, million rubles	Structure, %
Productive reserves
Unfinished production
Future expenses
Finished products

The calculated structures make it possible to conclude that the second enterprise is more material-intensive than the first. At the same time, the first enterprise has to invest heavily in future expenses. Most likely, these are the costs of preparation and development of production, which are determined by the specifics of the production process. A higher proportion of work in progress may indicate a longer production cycle or a higher cost of processed raw materials or materials. In combination with the large share of finished products, this allows us to make the assumption that the second enterprise is most likely one of those that produces products with a higher share of added value.

Problem 2

Calculate the average quarterly and average annual balances of working capital, as well as the turnover of working capital (duration of turnover) and the turnover ratio for the year, using the following data:

Working capital balances		Volume of products sold
	Amount, thousand rubles		Amount, thousand rubles

The turnover ratio is determined by the formula

K about = R / OS.

To calculate the duration of turnover in days, use the formula

BEFORE = D · ObS / R.

Therefore, first you need to calculate the average working capital balances for the year and the sales volume for the year:

OS = [(2 500 + 2 600) / 2 + (2 600 + 2 400) / 2 + (2 400 + 2 400) / 2 +

+ (2,400 + 2,500) / 2] / 4 = 2,475 thousand rubles,

R= 3,000 + 3,500 + 2,900 + 3,100 = 12,500 thousand rubles,

K about= 12,500 / 2,475 = 5 rev/year,

BEFORE= 360 · 2,475 / 12,500 = 71 days.

Thus, working capital made 5 revolutions per year, while the duration of one revolution averaged 71 days.

Problem 3

The average balance of working capital in 2002 was 15,885 thousand rubles, and the volume of products sold for the same year was 68,956 thousand rubles. In 2003, the duration of the turnover is planned to be reduced by 2 days.

Find the amount of working capital that the company needs, provided that the volume of products sold remains the same.

Solution

First, let's calculate the duration of turnover for 2002:

BEFORE= 360 · 15,885 / 68,956 = 82 days.

Then we determine the duration of turnover for 2003:

BEFORE= 82 – 2 = 80 days.

Taking into account the new duration, we will calculate the need for working capital:

80 days = 360 · OS/ 68 956,

OS= 15,323 thousand rubles.

Previous

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

Definition 1

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

In fact, working capital 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 methodology for 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.

Working capital- this is a set of funds advanced to create circulating production assets and circulation funds that ensure the continuity of the company.

Composition and classification of working capital

Revolving funds- these are assets that, as a result of its economic activities, completely transfer their value to the finished product, take a one-time participation in, changing or losing their natural material form.

Working production assets enter production in their natural form and are entirely consumed during the production process. They transfer their cost completely to the product they create.

Circulation funds associated with servicing the process of circulation of goods. They do not participate in the formation of value, but are its carriers. After completion, production of finished products and their sale, the cost of working capital is reimbursed as part of (work, services). This creates the possibility of systematically resuming the production process, which is carried out through the continuous circulation of enterprise funds.

Structure of working capital- this is the ratio between the individual elements of working capital, expressed as a percentage. The difference in the structures of working capital of companies is determined by many factors, in particular, the characteristics of the organization’s activities, business conditions, supply and sales, location of suppliers and consumers, and the structure of production costs.

Working production assets include:

• (raw materials, basic materials and purchased semi-finished products, auxiliary materials, fuel, containers, spare parts, etc.);
• with a service life of no more than one year or a cost of no more than 100 times (for budgetary organizations - 50 times) the established minimum wage per month (low-value wearable items and tools);
• unfinished production and self-made semi-finished products (labor items that have entered the production process: materials, parts, components and products that are in the process of processing or assembly, as well as self-made semi-finished products that have not been fully completed by production in some workshops of the enterprise and are subject to further processing in other workshops of that the same enterprise);
• Future expenses(immaterial elements of working capital, including costs for the preparation and development of new products that are produced in a given period, but are allocated to products of a future period; for example, costs for the design and development of technology for new types of products, for the rearrangement of equipment).

Circulation funds

Circulation funds— enterprise funds operating in the sphere of circulation; an integral part of working capital.

Circulation funds include:

• enterprise funds invested in finished product inventories, goods shipped but not paid for;
• funds in settlements;
• cash in hand and in accounts.

The amount of working capital employed in production is determined mainly by the duration of production cycles for the manufacture of products, the level of technology development, the perfection of technology and labor organization. The amount of circulating media depends mainly on the conditions for the sale of products and the level of organization of the supply and marketing system.

Working capital is the more mobile part.

In every Circulation of working capital goes through three stages: monetary, production and commodity.

To ensure an uninterrupted process at the enterprise, working capital or material assets are formed, awaiting their further production or personal consumption. Inventories are the least liquid item among current asset items. The following methods of inventory valuation are used: for each unit of purchased goods; by average cost, in particular, by weighted average cost, moving average; at the cost of the first purchases; at the cost of the most recent purchases. The unit of accounting for working capital as inventory is a batch, a homogeneous group, and an item number.

Depending on their purpose, inventories are divided into production and commodity. Depending on the functions of use, stocks can be current, preparatory, insurance or warranty, seasonal and carryover.

• Safety stocks- a reserve of resources intended for the uninterrupted supply of production and consumption in cases of a decrease in supplies compared to those provided.
• Current stocks— stocks of raw materials, materials and resources to meet the current needs of the enterprise.
• Preparatory supplies- Cycle-dependent inventories are required if raw materials are to undergo any processing.
• Carryover stocks- part of unused current inventories that are carried over to the next period.

Working capital is located simultaneously at all stages and in all forms of production, which ensures its continuity and uninterrupted operation of the enterprise. Rhythm, coherence and high performance largely depend on optimal amounts of working capital(working production assets and circulation funds). Therefore, the process of rationing working capital, which relates to current financial planning at the enterprise, is of great importance. Rationing of working capital is the basis for the rational use of a company's economic assets. It consists in developing reasonable norms and standards for their consumption, necessary to create constant minimum reserves and for the uninterrupted operation of the enterprise.

The working capital standard establishes the minimum estimated amount that is constantly required by the enterprise to operate. Failure to fill the working capital standard may lead to a reduction in production and failure to fulfill the production program due to interruptions in production and sales of products.

Standardized working capital— the size of inventories, work in progress and balances of finished products in warehouses planned by the enterprise. Working capital stock norm is the time (days) during which OBS are in production inventory. It consists of the following stocks: transport, preparatory, current, insurance and technological. Working capital standard is the minimum amount of working capital, including cash, necessary for a company or firm to create or maintain carry-over inventories and ensure continuity of work.

Sources for the formation of working capital can be profits, loans (bank and commercial, i.e. deferred payment), share capital, share contributions, budget funds, redistributed resources (insurance, vertical management structures), accounts payable, etc.

The efficiency of using working capital affects the financial results of the enterprise. When analyzing it, the following indicators are used: the availability of own working capital, the ratio between own and borrowed resources, the solvency of the enterprise, its liquidity, turnover of working capital, etc. Turnover of working capital is understood as the duration of the sequential passage of funds through individual stages of production and circulation.

The following indicators of working capital turnover are distinguished:

• turnover ratio;
• duration of one revolution;
• working capital load factor.

Funds turnover ratio(turnover speed) characterizes the amount of revenue from sales of products by the average cost of working capital. Duration of one revolution in days is equal to the quotient of dividing the number of days for the analyzed period (30, 90, 360) by the turnover of working capital. The reciprocal of the turnover rate shows the amount of working capital advanced per 1 ruble. revenue from product sales. This ratio characterizes the degree of utilization of funds in circulation and is called working capital load factor. The lower the working capital load factor, the more efficiently working capital is used.

The main goal of managing enterprise assets, including working capital, is to maximize profit on invested capital while ensuring stable and sufficient solvency of the enterprise. To ensure sustainable solvency, the enterprise must always have a certain amount of money in its account, which is actually withdrawn from circulation for current payments. Part of the funds should be placed in the form of highly liquid assets. An important task in terms of managing working capital of an enterprise is to ensure an optimal balance between solvency and profitability by maintaining the appropriate size and structure of current assets. It is also necessary to maintain an optimal ratio of own and borrowed working capital, since the financial stability and independence of the enterprise and the possibility of obtaining new loans directly depend on this.

Analysis of working capital turnover (analysis of the organization’s business activity)

Working capital- these are funds advanced by organizations to maintain the continuity of the production and circulation process and returned as part of the proceeds from the sale of products in the same monetary form with which they began their movement.

To assess the efficiency of using working capital, working capital turnover indicators are used. The main ones are the following:

• average duration of one revolution in days;
• the number (number) of turnovers made by working capital during a certain period of time (year, half-year, quarter), otherwise - the turnover ratio;
• the amount of employed working capital per 1 ruble of products sold (working capital load factor).

If working capital goes through all stages of the circulation, for example, in 50 days, then the first turnover indicator (the average duration of one turnover in days) will be 50 days. This indicator approximately characterizes the average time that passes from the moment of purchasing materials to the moment of sale of products made from these materials. This indicator can be determined using the following formula:

• P is the average duration of one revolution in days;
• SO - average balance of working capital for the reporting period;
• P - sales of products for this period (less value added tax and excise taxes);
• B is the number of days in the reporting period (in a year - 360, in a quarter - 90, in a month - 30).

So, the average duration of one turnover in days is calculated as the ratio of the average balance of working capital to the one-day turnover of product sales.

The average duration of one turnover in days can be calculated in another way, as the ratio of the number of calendar days in the reporting period to the number of turnovers made by working capital during this period, i.e. according to the formula: P = V/CHO, where CHO is the number of turnovers made by working capital during the reporting period.

Second turnover indicator- the number of turnovers made by working capital during the reporting period (turnover ratio) - can also be obtained in two ways:

• as the ratio of product sales minus value added tax and excise taxes to the average balance of working capital, i.e. according to the formula: NOR = R/SO;
• as the ratio of the number of days in the reporting period to the average duration of one revolution in days, i.e. according to the formula: NOR = W/P .

The third indicator of turnover (the amount of employed working capital per 1 ruble of sold products or otherwise - the working capital load factor) is determined in one way as the ratio of the average balance of working capital to the turnover of product sales for a given period, i.e. according to the formula: CO/R.

This figure is expressed in kopecks. It gives an idea of ​​how many kopecks of working capital are spent to obtain each ruble of revenue from product sales.

The most common is the first turnover indicator, i.e. average duration of one revolution in days.

Most often, turnover is calculated per year.

During the analysis, the actual turnover is compared with the turnover for the previous reporting period, and for those types of current assets for which the organization sets standards - also with the planned turnover. As a result of this comparison, the magnitude of the acceleration or deceleration of turnover is determined.

The initial data for the analysis are presented in the following table:

In the analyzed organization, turnover slowed down, both for standardized and non-standardized working capital. This indicates a deterioration in the use of working capital.

When the turnover of working capital slows down, there is an additional attraction (involvement) of them into circulation, and when it accelerates, working capital is released from circulation. The amount of working capital released as a result of the acceleration of turnover or additionally attracted as a result of its slowdown is determined as the product of the number of days by which turnover accelerated or slowed down by the actual one-day sales turnover.

The economic effect of accelerating turnover is that an organization can produce more products with the same amount of working capital, or produce the same volume of products with a smaller amount of working capital.

Accelerating the turnover of working capital is achieved through the introduction of new equipment, advanced technological processes, mechanization and automation of production into production. These measures help reduce the duration of the production cycle, as well as increase the volume of production and sales of products.

In addition, to accelerate turnover, the following are important: rational organization of logistics and sales of finished products, adherence to savings in the costs of production and sales of products, the use of forms of non-cash payments for products that help speed up payments, etc.

Directly when analyzing the current activities of an organization, the following reserves for accelerating the turnover of working capital can be identified, which consist in eliminating:

• excess inventories: 608 thousand rubles;
• goods shipped but not paid for on time by buyers: 56 thousand rubles;
• goods in safe custody from buyers: 7 thousand rubles;
• immobilization of working capital: 124 thousand rubles.

Total reserves: 795 thousand rubles.

As we have already established, the one-day sales turnover in this organization is 64.1 thousand rubles. So, the organization has the opportunity to accelerate the turnover of working capital by 795: 64.1 = 12.4 days.

To study the reasons for changes in the rate of turnover of funds, it is advisable, in addition to the considered indicators of general turnover, to also calculate indicators of private turnover. They relate to certain types of current assets and give an idea of ​​the time spent by working capital at various stages of their circulation. These indicators are calculated in the same way as inventories in days, but instead of the balance (inventory) on a certain date, the average balance of a given type of current asset is taken here.

Private turnover shows how many days on average working capital remains at a given stage of the circulation. For example, if the private turnover of raw materials and basic materials is 10 days, this means that on average 10 days pass from the moment the materials arrive at the organization’s warehouse to the moment they are used in production.

As a result of summing up private turnover indicators, we will not get an overall turnover indicator, since different denominators (turnovers) are taken to determine private turnover indicators. The relationship between the indicators of private and general turnover can be expressed by the terms of total turnover. These indicators make it possible to establish what impact the turnover of individual types of working capital has on the overall turnover indicator. The components of total turnover are defined as the ratio of the average balance of a given type of working capital (assets) to the one-day turnover of product sales. For example, the term for the total turnover of raw materials and basic materials is equal to:

The average balance of raw materials and basic materials is divided by the daily turnover for product sales (less value added tax and excise taxes).

If this indicator is, for example, 8 days, then this means that the total turnover due to raw materials and basic materials accounts for 8 days. If you sum up all the components of the total turnover, the result will be an indicator of the total turnover of all working capital in days.

In addition to those discussed, other turnover indicators are also calculated. Thus, the inventory turnover indicator is used in analytical practice. The number of turnovers made by inventories for a given period is calculated using the following formula:

Works and services (minus and) are divided by the average value under the item “Inventories” of the second section of the balance sheet asset.

Acceleration of inventory turnover indicates an increase in the efficiency of inventory management, and a slowdown in inventory turnover indicates their accumulation in excessive amounts, ineffective inventory management. Indicators are also determined that reflect the turnover of capital, that is, the sources of formation of the organization’s property. So, for example, equity capital turnover is calculated using the following formula:

Product sales turnover for the year (minus value added tax and excise taxes) is divided by the average annual cost of equity capital.

This formula expresses the efficiency of using equity capital (authorized, additional, reserve capital, etc.). It gives an idea of ​​the number of turnovers made by the organization's own sources of activity per year.

Turnover of invested capital is the turnover of product sales for the year (minus value added tax and excise taxes) divided by the average annual cost of equity capital and long-term liabilities.

This indicator characterizes the efficiency of using funds invested in the development of the organization. It reflects the number of revolutions made by all long-term sources during the year.

When analyzing the financial condition and use of working capital, it is necessary to find out from what sources the financial difficulties of the enterprise are compensated. If assets are covered by stable sources of funds, then the financial condition of the organization will be stable not only at a given reporting date, but also in the near future. Sustainable sources should be considered own working capital in sufficient amounts, non-declining balances of carry-over debt to suppliers on accepted payment documents, the payment terms of which have not arrived, constantly carry-over debt on payments to the budget, a non-declining part of other accounts payable, unused balances of special-purpose funds (accumulation funds and consumption, as well as the social sphere), unused balances of targeted financing, etc.

If the organization’s financial breakthroughs are covered by unstable sources of funds, it is solvent at the reporting date and may even have free funds in bank accounts, but in the near future it will face financial difficulties. Unsustainable sources include sources of working capital that are available on the 1st day of the period (the balance sheet date), but are absent on dates within this period: undue debt for wages, contributions to extra-budgetary funds (above certain sustainable values), unsecured debt to banks for loans for inventory items, debt to suppliers for accepted payment documents, the payment terms of which have not arrived, in excess of the amounts classified as sustainable sources, as well as debt to suppliers for uninvoiced supplies, debt for payments to the budget in excess of amounts classified as sustainable sources of funds.

It is necessary to make a final calculation of financial breakthroughs (i.e., unjustified spending of funds) and sources of covering these breakthroughs.

The analysis ends with a general assessment of the financial condition of the organization and the drawing up of an action plan to mobilize reserves to accelerate the turnover of working capital and increase liquidity and strengthen the solvency of the organization. First of all, it is necessary to assess the organization’s provision with its own working capital, their safety and use for their intended purpose. Then an assessment is made of compliance with financial discipline, solvency and liquidity of the organization, as well as the completeness of use and security of bank loans and loans from other organizations. Measures are being planned for more efficient use of both equity and borrowed capital.

The analyzed organization has a reserve for accelerating the turnover of working capital for 12.4 days (this reserve is noted in this paragraph). To mobilize this reserve, it is necessary to eliminate the reasons causing the accumulation of excess reserves of raw materials, basic materials, spare parts, other inventories and work in progress.

In addition, it is necessary to ensure the targeted use of working capital, preventing their immobilization. Finally, receiving payments from buyers for goods shipped to them that were not paid on time, as well as the sale of goods held in custody by buyers due to refusal to pay, will also speed up the turnover of working capital.

All this will help strengthen the financial condition of the analyzed organization.

Indicators of the availability and use of working capital

Working capital is consumed in one production cycle, materially enters the product and completely transfers its value to it.

The availability of working capital is calculated both on a specific date and on average for the period.

Indicators of the movement of working capital characterize its changes during the year - replenishment and disposal.

Working capital turnover ratio

It is the ratio of the cost of products sold for a given period to the average balance of working capital for the same period:

To turnover= Cost of products sold for the period / Average balance of working capital for the period

The turnover ratio shows how many times the average balance of working capital was turned over for the period under review. In terms of economic content, it is equivalent to the capital productivity indicator.

Average turnover time

Determined from the turnover ratio and the analyzed time period

Average duration of one revolution= Duration of the measurement period for which the indicator is determined / Working capital turnover ratio

Working capital consolidation ratio

The value is inversely proportional to the turnover ratio:

To fastening= 1 / To turnover

Consolidation ratio = average working capital balance for the period / cost of goods sold for the same period

In terms of economic content, it is equivalent to the capital intensity indicator. The consolidation coefficient characterizes the average value of working capital per 1 ruble of sales volume.

Working capital requirement

The enterprise's need for working capital is calculated based on the coefficient of fixation of working capital and the planned volume of product sales by multiplying these indicators.

Provision of production with working capital

It is calculated as the ratio of the actual working capital stock to the average daily consumption or average daily need for it.

Accelerating the turnover of working capital helps to increase the efficiency of the enterprise.

Task

According to the data for the reporting year, the average balance of the enterprise's working capital amounted to 800 thousand rubles, and the cost of products sold during the year at the current wholesale prices of the enterprise amounted to 7,200 thousand rubles.

Determine the turnover ratio, the average duration of one turnover (in days) and the coefficient of consolidation of working capital.

• To turnover = 7200 / 800 = 9
• Average turnover time = 365 / 9 = 40.5
• K securing collective funds = 1/9 = 0.111

Task

During the reporting year, the average balance of the enterprise's working capital was 850 thousand rubles, and the cost of products sold during the year was 7,200 thousand rubles.

Determine the turnover ratio and the working capital consolidation ratio.

• Turnover ratio = 7200 / 850 = 8.47 revolutions per year
• Consolidation coefficient = 850 / 7200 = 0.118 rubles of working capital per 1 ruble of products sold

Task

The cost of products sold in the previous year amounted to 2,000 thousand rubles, and in the reporting year compared to the previous year it increased by 10% with a reduction in the average duration of one turnover of funds from 50 to 48 days.

Determine the average balance of working capital in the reporting year and its change (in%) compared to the previous year.

Solution

• Cost of products sold in the reporting year: 2000 thousand rubles * 1.1 = 2200 thousand rubles.

Average balance of working capital = Volume of products sold / Turnover

To turnover = Duration of the analyzed period / Average duration of one turnover

Using these two formulas we derive the formula

Average balance of working capital = Volume of products sold * Average duration of one turnover / Duration of the analyzed period.

• Average balance of average in the previous year = 2000 * 50 / 365 = 274
• Average balance Total average in the current year = 2200 * 48 / 365 = 289

289/274 = 1.055 In the reporting year, the average balance of working capital increased by 5.5%

Task

Determine the change in the average working capital retention ratio and the influence of factors on this change.

K consolidation = average working capital balance / cost of goods sold

• To consolidate the concern, the base period = (10+5) / (40+50) = 15 / 90 = 0.1666
• To assign to the concern reporting period = (11+5) / (55+40) = 16 / 95 = 0.1684

Index of general change in anchorage coefficient

• = CO (average balance)_1 / RP (sold products)_1 - CO_0/RP_0 = 0.1684 - 0.1666 = 0.0018

Index of change in the consolidation coefficient from changes in the average balance of working capital

• = (SO_1/RP_0) - (SO_0/RP_0) = 0.1777 - 0.1666 = 0.0111

Index of change in the consolidation coefficient from changes in the volume of products sold

• = (SO_1/RP_1) - (SO_1/RP_0) = -0.0093

The sum of the individual indices must equal the total index = 0.0111 - 0.0093 = 0.0018

Determine the general change in the balance of working capital, and the amount of released (involved) working capital as a result of changes in the speed and change in sales volume.

• Average change in working capital balance = 620 - 440 = 180 (increased by 180)

General index of changes in the balance of working capital (CO) = (RP_1*continued 1.turnover_1 / days in the quarter) - (RP_0*continued 1.turnover_0 / days in the quarter)

• Duration of 1 turnover in the reporting quarter = 620*90/3000 = 18.6 days
• Duration of 1 revolution in the previous quarter = 440*90/2400 = 16.5 days

Index of changes in operating assets from changes in the volume of products sold

• = RP_1*prod.1ob._0/quarter - RP_0*prod.1ob._0/quarter = 3000*16.5/90 - 2400*16.5/90 = 110 (increase in the balance of working capital due to an increase in the volume of products sold )

Index of changes in operating assets from changes in the turnover rate of working capital

• = RP_1*cont.1ob._1 / quarter - RP_1*cont.1ob._0/quarter = 3000*18.6/90 - 3000*16.5/90 = 70