When calculating some indicators of financial analysis, the average annual value of assets is required. Why can't you just use balance sheet data at the end of the period? You will find the answer in the article. In addition, you will learn how this value is calculated, where it is applied, and what of the company's property is never involved in its calculation.
The average annual value of assets on the balance sheet: how to calculate
This is one of the simplest indicators in financial analysis. To calculate it, you do not need to memorize complex formula. It all comes down to the rules of mathematics about calculating averages.
If you know the values of two numbers, how do you find their arithmetic mean? The answer is obvious - add and divide by two. Now let's translate this simple rule into the language of balance lines, and we will get four formulas at once: both in general for the entire value of assets, and for individual components.
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For which indicator is the average value calculated |
Formula indicating lines in the balance sheet (BB) |
What does the resulting value show |
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1 For assets |
(1600 BB at the beginning of the year + 1600 BB at the end of the year) ÷ 2 |
The average balance valuation of the property of the enterprise, which is under its ownership |
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1600 BB - BB currency |
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2 For non-current assets |
(1100 BB at the beginning of the year + 1100 BB at the end of the year) ÷ 2 |
Average balance valuation of property with maturity exceeding 12 months |
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1100 - the result of the I section of the BB |
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3 For current assets |
(1200 BB at the beginning of the year + 1200 BB at the end of the year) ÷ 2 |
The average balance sheet value of property that is in the turnover of the enterprise for less than one year or the normal operating cycle of the enterprise |
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1200 - the result of the II section of the BB |
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4 For net assets |
[(1600 BB at the beginning of the year - 1400 BB at the beginning of the year - 1500 BB at the beginning of the year + 1530 BB at the beginning of the year) - (1600 BB at the end of the year - 1400 BB at the end of the year - 1500 BB at the end of the year + 1530 BB at the end of the year years)] ÷ 2 |
The average balance sheet value of the property of the enterprise, which was acquired exclusively at the expense of equity. Otherwise - "cleared" from the obligations of the company |
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1400 - the result of the IV section of the BB, 1500 - the result of the V section of the BB, 1530 - deferred income |
All formulas use the values of indicators at the beginning of the year. Where can I get them, if in the balance of the usual commercial organization contains data only for 31 December? You can use simple rule from accounting: the final remainder of one day is initial balance next day.
- as of December 31, 2017 - equate to January 1, 2018. And this is the cost at the beginning of the analyzed year;
- as of December 31, 2018 - the value at the end of the analyzed year.
Pay attention to the order of the columns in the balance sheet. Starting from the financial statements for 2011, it is as follows:
- the first column with numbers corresponds to the earliest date in time;
- middle column - the date that precedes the reporting date;
- the rightmost column is the latest date shown.
Thus, one balance sheet can be used to calculate average annual indicators for two years at once.
There is one very revealing technique. It is based on the calculation of the average annual value of assets. The output is a conclusion about the type of development of your organization (extensive or intensive). Download the Excel file and simply substitute the numbers from your company's reporting.
How to calculate the average annual cost of non-current and working capitalWhy Calculate Average Annual Asset Value
Here are two answers to this question.
First answer. The balance sheet shows a picture of the life of the enterprise in the moment, that is on a specific day and even for a specific hour. When you look at an asset, you see what property the company has on reporting date. Tomorrow the situation will definitely change:
- there will be new debts of counterparties, and part of the old debts will be paid off;
- new goods will be purchased, and those that were in stock will be written off due to sale, damage or shortage;
- the day of payment of salaries will come, and a cash outflow will form for this, etc.
If an analyst decides to smooth out all such jumps and understand what the average property valuation for a certain period is, then the indicator of the average annual value of assets will come to his aid.
It turns out that the first reason for the calculation is to level out fluctuations in the value of property, and on this basis to make a correct comparison for different years.
Second answer. Let's compare how the "headers" of the tables for the balance sheet and the income statement look like. financial results.
The difference is obvious. All indicators of income, expenses and financial results, in contrast to balance sheet values, are calculated cumulative for a certain period. Revenue cannot be received as of December 31, 2019. It is formed for the whole year. Or, let's say, for a month, a quarter, a half-year.
What gives such understanding? The opportunity to realize, and therefore not to forget the rule: if in one calculation formula data from the balance sheet and the income statement are used simultaneously, the former are taken in the average annual value. If this is not done, then it will turn out that the analyst is trying to link together an instant (point) assessment with an assessment for the period. It is not correct.
Where is the average annual value of assets involved in financial analysis? For example, in the formulas of profitability and turnover, as well as in factor models. For convenience, we have collected some of these indicators and factor analysis formulas in the table. All of them relate, first of all, to the average annual value of assets in general. However, turnover and profitability are calculated in the same way for non-current, current and net assets.
Table 2 - Where the average annual value of assets comes in handy
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Indicator/ratio |
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Revenue ÷ Average annual asset value |
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Net income ÷ Average annual asset value |
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3 Two- and three-factor dupont models |
Return on Assets = Return on Sales × Asset Turnover |
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Return on Equity = Return on Sales × Asset Turnover × Equity Multiplier |
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4 The Golden Rule of Business Economics |
100% < Темп роста среднегодовой стоимости активов < Темп роста выручки < Темп роста net profit |
Average annual asset value: all formulas Other approaches to calculating the average value of assets per line in the balance sheet
The above formulas for calculating the average annual value of assets by lines in the balance sheet are the most common option. But what if you want to calculate a score over a period that is longer than one year? Or, for example, do you not like the fact that only data at the beginning and end of the year are taken to calculate the average annual value, and intermediate values \u200b\u200bbetween these dates are not affected at all? After all, this directly affects the accuracy of the final indicator.
Obviously, judging the average value of assets for the year on only two values is like trying to get through to someone and knowing only two digits of their phone number.
In such cases, the chronological average formula for the moment series will help:
X - the average annual value of any indicator, including assets in general, as well as non-current, current and net assets;
n is the number of reporting dates for which the calculation is made.
For example, you decide to use one balance sheet to calculate the average annual value of assets (A) for two years at once - 2017 and 2018. Then the formula is interpreted as follows:
And if your organization forms a balance sheet on a monthly basis (in theory, it should be so), and you decide to calculate the average value of assets based on the data of all twelve months of the reporting year, then use the formula:
What information is not included in the asset balance
In reality, the average annual value of a firm's assets on the books of accounts is likely to be greater than what is shown on the balance sheet. How is this possible, if the balance is reduced by accounting accounts? The reason is the so-called regulatory accounts, which reduce the amounts on the balance lines. We will not go into the intricacies of accounting, but simply name what exactly does not fall into the balance sheet, and therefore does not form the average annual value of assets. This will be part of the cost:
- Fixed assets and intangible assets, which corresponds to the depreciation accrued on them;
- Materials, goods, finished products, for which a reserve for depreciation has been created material assets. Such a reserve is created when the reserves have hopelessly lost their original characteristics, become morally obsolete or have become much cheaper than the cost of acquisition;
- Goods in organizations retail when they are accounted for at selling prices. We are talking about the part of the cost that is formed by the trade margin. The margin is the unearned income of the enterprise from the future sale of these goods. It is precisely because of his “unearned” that he is excluded from the asset;
- Accounts receivable in the amount of the allowance for doubtful debts. If the receivable contains debts that have expired, there is no security and there is a high probability of default, then a reserve is created. Its value is excluded from the balance sheet, and, therefore, from the average annual value of assets. This is done so that users financial reporting enterprises saw the assessment of funds in the calculations as close to reality as possible. That is, their value, which is really expected by the organization to be received in the near future and in which there are no bad debts.
How to find the average annual value of assets - an example
The calculation of the average annual value of assets is usually not difficult. At the same time, it underlies a rather interesting and at the same time simple methodology for determining the type of enterprise development. Let's see how it is implemented in practice. To do this, you need to calculate:
- average annual value of assets;
- average annual value of net assets;
- their turnover and profitability.
Calculations are based on data from the balance sheet and income statement of PJSC Saratov Oil Refinery (Refinery) for 2018.
Table 3 - Excerpt from the balance sheet, million rubles
Table 4 - Extract from the statement of financial results (OFR), million rubles.
Table 5 - Calculated indicators
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Index |
Growth rate, units |
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5.1 Average annual value of assets, million rubles (arithmetic mean of row 3.1 by years) |
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5.2 Average annual value of net assets, million rubles (arithmetic mean of the values over the years that are obtained as [line 3.1 - line 3.2 - line 3.3 + line 3.4]) |
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5.3 Asset turnover, turnover (line 4.1 ÷ line 5.1) |
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5.4 Turnover of net assets, turnover (line 4.1 ÷ line 5.2) |
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5.5 Return on assets, r./r. (line 4.2 ÷ line 5.1) |
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5.6 Return on net assets, r./r. (line 4.2 ÷ line 5.2) |
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5.7 Geometric mean for turnover change, units. (square root of the product of rows 5.3 and 5.4 over column 4) |
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√(1.029 × 1.010) |
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5.8 Geometric mean for the change in profitability, units. (square root of the product of rows 5.5 and 5.6 over column 4) |
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√(1.299 × 1.275) |
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5.9 Coefficient of extensiveness, % ([line 5.7 - 1] ÷ [line 5.8 - 1] × 100) |
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5.10 Intensity factor, % (100 - line 5.9) |
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Conclusions:
- an increase in the average annual value of assets is always a good sign, which indicates that the company is not “eating away” its capital, but, on the contrary, is increasing it;
- Comparison of the growth rate of the average annual value of assets (110.8%) with the growth rate of revenue (114.0%) gives another signal about the development of the enterprise. This is so because every ruble that is invested in assets provides the organization with an increase in income in the amount of more than one ruble;
- increase in the average annual cost of net PJSC assets Saratov Refinery (12.9%) exceeds the increase in property (10.8%). This means that the share of the organization's liabilities is reduced, and the share of equity capital is growing, because net assets are formed exclusively at the expense of own sources. All this is an indicator of strengthening financial stability;
- the average growth rate for asset turnover and net assets is 101.9%, and for profitability - 128.7%. That is, the increase in profit per ruble of property exceeds the increase in income by the same amount. This situation is very desirable for any company. It means that costs either decrease or grow more slowly than revenues, as in the case of the Saratov Refinery;
- the ratio of factors of extensive and intensive development in the enterprise's activities is 6.7% to 93.3%. And this is also a very positive thing. It turns out that although new resources are involved in the turnover of the enterprise, business growth is determined mainly not by this, but by an increase in the quality of their use.
Important: when, as a result of calculations, you get a negative value of the extensiveness coefficient. This happens when profitability decreases against the background of an increase in turnover. How to interpret such a situation? How extremely negative. In this case, do not be confused by the significant value of the intensity factor, which, at the same time, will also exceed 100%. Remember that this technique has a similar distortion. The general rule for its use is as follows: both coefficients should ideally be positive, and the intensity value should be at least 50%.
Every enterprise, regardless of its form of ownership, has working capital, the value of which is the total value of available production assets and all assets in monetary terms. During one production cycle, part of it is used, which is an indicator of the company's net assets in circulation. Based on the received figures of the balance sheet for the reporting period, and in this case This calendar year, you can determine what the average annual value of current assets took place based on the results of the company's activities.
We apply a simple formula and analyze the resulting number
The average value of assets in the balance sheet is calculated as follows:
This average number reflects how much the organization's resources have changed in comparison with the previous period and whether it is necessary to use property more efficiently in the future. With normal housekeeping, own assets at the end of the cycle always return to their original value in the context of individual elements, and the commercial side of production increases its turnover.
We summarize the result of the enterprise
Before the average annual value of assets in the balance sheet is displayed, it is necessary to calculate the amounts of separate elements of the balance sheet, and these are:
- Raw materials and materials;
- Finished products;
- Cash;
- Accounts receivable;
- Work in progress and deferred expenses;
Above were the lines of the second section of the balance sheet regarding current assets. And in terms of non-current assets, information is filled in on fixed assets and intangible assets, construction in progress, securities.
It should be remembered! Pure book value assets is the difference between the sum of current assets and short-term debt obligations of the firm. But not all the assets and liabilities of the company are taken into account! We lower the value of shares and the debt of the founders in authorized capital, and reserve fund and deferred income.
What is the asset management policy?
The asset structure has three types of management:
- Aggressive;
- Conservative;
- Moderate.
Each of the listed models monitors the growth of current current assets, determining their share and duration of turnover in order to avoid falling into the category of insolvent companies.
An important point: the receipt of loans and borrowings is reflected in the growth of current assets, which in a particular case will be noticeably shifted and their proportionality will be violated. equity participation that will change financial stability enterprises.
What is the most accurate cost?
- The price indicator of a similar property on the market, which is closer in its characteristics, is taken as a basis;
- The expert applies the income approach: cash flow, obtained from the operation or lease of a particular asset after some time, where the amount is discounted and the cumulative final result is displayed taking into account the rate of inflation;
- The amount of depreciation is deducted from the weighted average cost of such an object, which is determined by multiplying by the conditional correction factor.
In practice, a weighted average is derived, taken after the calculation of each of these three options, and according to the value obtained, the asset is put on the balance sheet.
If there is a need to “divide” the business, then the property is assessed by units as prescribed in the first method. But you should not refuse to use other more accurate approaches, because accounting does not like relative data. When it comes to the alienation of assets, then in order to determine the real value of the object of the transaction, it is necessary to evaluate it at the time of its conclusion.
Nobody took responsibility
Analytical data shows how good was the level of turnover of the company's resources and what was the percentage of capital gain. The calculation of the average annual value of current assets regulated by the accounting procedure indicates the reliability of the result obtained. The legal field imposes great responsibility on the chief accountant, who puts his signature upon delivery to the relevant government bodies balance sheet and financial reporting.
Asset classification
The company's assets include value expression resources that provide the production process of the enterprise. Assets include:
- Non-current assets (structures, buildings, machinery and equipment, transport, etc.),
- revolving funds ( cash, debts of debtors, short-term investment of funds, etc.).
Asset accounting is mandatory for most Russian enterprises. All assets are concentrated on the left side of the balance sheet and are divided according to their purpose:
- The first section of the balance sheet is represented by non-current assets (fixed assets and intangible assets), which are accounted for in accordance with the residual value minus depreciation (line 1100 of the balance sheet);
- The second section of the balance sheet is represented by working capital, which are directly involved in the production process (line 1200 of the balance sheet).
The formula for the average annual value of assets on the balance sheet
To calculate the average amount of assets of the enterprise for the year, it is necessary to add the value of assets at the beginning and end of the year. This sum is then divided by 2 or multiplied by 0.5.
The formula for the average annual value of assets on the balance sheet uses accounting data.
IN general view the formula for the average annual value of assets on the balance sheet is as follows:
SA cf = (SAnp + SAkp) / 2
Here CA av is the average annual value of assets,
SANP - the value of assets at the beginning of the period,
SAkp - the value of assets at the end of the period (year).
The formula for the average annual value of assets on the balance sheet allows you to calculate both the assets of the enterprise as a whole and separately for current and non-current assets.
Calculation features
The total assets of the enterprise are recorded in line 1600 of the balance sheet, which is compiled by accountants at the end of each year. Using this formula, balance sheet indicators for several years are used, while the indicator for line 1600 is taken from the balance sheet for each year, summed up and subsequently divided by 2.
In the case of settlements on current assets, the formula for the average annual value of assets on the balance sheet will require information from line 1200 of the balance sheet. If it is necessary to calculate non-current assets, then the accountant uses the indicators for line 1100 of the balance sheet.
How to find the average value of assets
You need to use indicators in a similar way by finding the average value of assets and comparing balance sheet data for the corresponding years.
The value of the average annual value of assets on the balance sheet
The average annual value of assets, which is calculated by analysts, is used in the future when calculating coefficients that can characterize the state and efficiency of any enterprise:
- return on assets,
- Asset turnover ratio, etc.
Also, the indicator is used in order to find the reasons that led to changes in the operation of the enterprise, and to make decisions in the field of resource management.
Average annual value of assets can give a more accurate understanding of the size and value of assets, while it levels out circumstances that could distort the real amount of assets.
If the indicators of asset turnover of different enterprises for different years are compared, then it is necessary to check the uniformity of the assessment average annual amount assets.
Examples of problem solving
Average Assets: Balance Sheet Formula
Yurkova, S.V. Yurkov
Enterprise economy
Electronic textbook
Typical example 3. WORKING ASSETS
Task 1
Determine and analyze the structure of working capital of enterprises according to the following data:
Solution
The structure of current assets represents the share of each element in total amount. Let's define the structure of working capital of both enterprises:
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Elements working capital |
Enterprise 1 |
Enterprise 2 |
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Structure, % |
Amount, million rubles |
Structure tour, % |
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Productive reserves |
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Unfinished production |
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Future expenses |
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Finished products |
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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 due to the specifics of the production process. A higher share of work in progress may indicate a longer production cycle or a higher cost of processed raw materials or materials. In combination with a large share of finished products, this suggests that the second enterprise is most likely among those that produce products with more high proportion added value.
Task 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:
The turnover ratio is determined by the formula
Cob = R / obs.
To calculate the duration of the turnover in days, the formula is used
BEFORE = D ObS / R.
Therefore, first you need to calculate the average annual balances of working capital and sales volume for the year:
obs= / 4 = 2,475 thousand rubles,
R= 3,000 + 3,500 + 2,900 + 3,100 = 12,500 thousand rubles,
Cob\u003d 12,500 / 2,475 \u003d 5 rpm,
BEFORE= 360 2,475 / 12,500 = 71 days
Thus, working capital made 5 turnovers per year, while the duration of one turnover averaged 71 days.
Task 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 sales 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 the turnover for 2003:
BEFORE= 82 - 2 = 80 days.
Taking into account the new duration, we calculate the need for working capital:
80 days = 360 obs/ 68 956,
obs= 15,323 thousand rubles.
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Go back to Balance assets
An asset on the balance sheet is said to be "current" if it is expected to change its form within one year from the date of the balance sheet. Such assets are tangible productive reserves(MPZ), receivables and cash. The balance sheet may also reflect current assets - short-term investments. The one year period is a rough rule of thumb for establishing a more fundamental distinction between those assets that will be used in business operations (fixed capital) and those assets that are part of working or trading capital. So, just as investments can be long-term or short-term, cars can be fixed assets (if they are part of a company's fleet of vehicles) or current assets (if they are part of a car dealer's inventory). Strictly speaking, no one can expect the current asset to turn into cash within a year, but it must be in circulation as stated above. For example, inventories can be sold to buyers on credit, which slows down cash flow. The connection of current assets with the implementation increases the value of their market value(usually net worth possible implementation). Thus, although taking into account original cost market price fixed capital is usually neglected, but it is not ignored for current assets.
The formula for the average annual value of assets on the balance sheet
First, the notes to the balance sheet can show the market value of some current assets. Secondly, the assessment of balance sheet indicators is carried out using the rule of the lowest of two values: cost and market value. During periods of rising prices, this usually results in the use of historical cost. However, the constantly implied possibility of a lower market value is an example of the use of the inherent principle of conservatism in accounting. In British balance sheets, current assets are shown after fixed capital, as well as in ascending order of liquidity (the last heading is "Cashier"). It is customary for American balance sheets to start with current assets. The expression net current assets (or "working capital") means current assets minus current liabilities. The ratio of current assets to current liabilities called the liquidity ratio.
Current assets are the resources of the enterprise that are not intended for long-term use. These include inventories and costs, short-term receivables and other liquid assets, which can be turned into money during the production cycle or year. You can find current assets using financial statements companies.
1. Open the company's balance sheet for the date you need. The cost of current assets at the beginning and at the end of the period is indicated in line 290 (total of section II of the balance sheet). Determine their dynamics for the period by calculating the difference between these figures.
2. Calculate the average value of current assets for the period using the formula: Атс = (Ат1+Ат2)/2, where:
Am1 - current assets of the enterprise at the beginning of the period;
Am2 - current assets of the enterprise at the end of the period. Then you can analyze the effectiveness of their use.
3. Calculate the return on assets of the enterprise according to the formula: Ra = P / Ats x 100%, where:
- П - net profit for the analyzed period;
- ATS - the average value of the current assets of the enterprise for the period.
Determine the amount of the company's net profit on line 190 of the Profit and Loss Statement.
4. Divide the amount of the net profit of the enterprise by the calculated average cost enterprise assets.
Multiplying the resulting ratio by 100%, get the profitability of the company's assets for the analyzed period. This indicator characterizes the amount of profit attributable to each ruble of their value. It is considered optimal if it is 18-20%.
5. Find the turnover of current assets using the formula:
About \u003d (V / Ats) * Kdn, where:
B - sales revenue for the reporting period (excluding VAT);
Ats - the average value of the current assets of the enterprise;
Kdn - the number of days of the reporting period.
Take the revenue from the income statement for the analyzed period. After dividing it by the average value of current assets, multiply the resulting figure by the number of days in the reporting period.
6. Calculate the turnover of current assets for previous reporting periods, analyze the dynamics of changes. The lower the score, the better. economic efficiency reduction of the asset turnover period is expressed in the release of additional funds from circulation and, as a result, in an increase in the profit of the enterprise.
7. Keep in mind that as the turnover period decreases, less inventory is required. This reduces storage costs. Accordingly, a slowdown in turnover leads to an increase in the value of current assets and additional costs. Thus, timely calculation and analysis of the state of assets will make it possible to make the right decisions on managing their use.
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Revolving production assets- this is the part of working capital that is consumed in each production cycle and the cost of which, in contrast to fixed production assets fully transferred to newly created products (works, services).
The in-kind content of working capital is the objects of labor that are in production stocks (raw materials, basic and auxiliary materials, fuel, etc.) and entered into the production process, the costs of future years for the development of new products and the improvement of technology, low-value and fast-wearing items , the cost of which does not exceed 10 thousand rubles. or whose service life is less than 12 months, regardless of cost.
circulation funds- these are funds that ensure the continuity of the production process and the sale of products (works, services) of the enterprise. They are used to serve the sphere of circulation, conduct supply and marketing activities.
The circulation funds consist of products ready for sale, shipped products for which documents have not been submitted to the bank for payment or are in transit, accounts receivable and cash on hand, on settlement accounts in banks and in settlements necessary for the purchase of raw materials, materials, fuel, etc., payment of wages.
The in-kind content of working capital is studied on the left side of the balance sheets of enterprises, which is called an asset. Hence, the individual elements of working capital are called assets .
The funds advanced for the formation of working capital are studied on the right side of the balance sheets, called liabilities. Hence, the individual sources of working capital are called liabilities .
Working capital is formed from two main sources:
1) own, that is, funds allocated to the enterprise during its formation and replenished in the future,
2) borrowed funds (loans).
Own working capital- this is a part of working capital, which characterizes the property independence and financial stability of the enterprise. They are formed primarily through deductions from profits.
Borrowed funds- this is the source of the formation of working capital; funds received in the form of bank loans (credits) and from other sources; are temporarily at the disposal of the enterprise and are used on a par with their own working capital.
The main source of financing for the growth of own working capital is the profit of the enterprise. Additional need for working capital, due to temporary needs, is provided short-term loans banks.
In addition to their own and borrowed money in the turnover of enterprises are constantly involved funds - accounts payable all kinds.
Circulation of working capital The enterprise includes three stages:
At the first stage, working capital is transferred from the monetary form to the commodity one (production stocks and labor force are acquired),
On the second - production stocks with the participation of tools and work force turn into finished products(works, services),
On the third - finished products (works, services) are sold, funds are released and again take the form of money.
The circuit is considered completed when the funds for sold products credited to the company's account. The first and third stages of the circuit belong to the sphere of circulation, the second - to the sphere of production. The continuity of the production process provides for the availability of working capital in each of the three stages.
Average annual cost of working capital- calculated as average chronological, input and disposal of working capital are timed to the middle of the month:
Where OS n.g, OS k.g- the cost of working capital at the beginning and end of the year, respectively,
OS i- the cost of working capital on the 1st day i-th month, starting from February ( i= 2) and ending with December ( i = 12).
The efficiency of the use of working capital of the enterprise is characterized by such indicators as the turnover of working capital and the turnover ratio.
Working capital turnover- this is the duration of their complete circulation, performed from the first stage (acquisition) to the last (sale of finished products, works, services) in days:
Where OS Wed- average for the period T working capital balance
R- sales revenue for the period T,
T- duration of the period, days.
Example. The balance of working capital for the enterprise amounted to: on January 1 - 110 thousand rubles, on February 1 - 115 thousand rubles, on March 1 - 125 thousand rubles, on April 1 - 130 thousand rubles. Sales of products for the first quarter amounted to 900 thousand rubles. Calculate the turnover of working capital.
Solution. Average balances of working capital for the period:
One day earnings:
Working capital turnover:
Working capital turnover ratio is the number of turnovers made by working capital for a given period:
Example. For the conditions of the previous example, calculate the turnover ratio of working capital.
Solution. Turnover ratio:
that is, for the quarter, the working capital of the enterprise made 7.5 turnovers.
Turnover indicators are related by the ratio:
In order to increase the efficiency of the functioning of working capital, enterprises carry out not only their accounting, but also rationing, for which they calculate:
1) norms of working capital in days,
2) norms of working capital in monetary terms.
Standard is a technical and economic indicator that reflects limit value parameter, resource usage level.
Working capital ratio- this is the minimum amount of cash needed by the enterprise (firm) to meet the total need for working capital. In general, the calculation of the standard individual element working capital can be performed by the formula:
Where BUT- the standard of a separate element of working capital,
ABOUT- turnover for this element for the period (for example, the consumption of materials for the year, quarter, month, etc.),
T- the duration of the period in days (a year is taken equal to 360 days, a quarter - 90 days, a month - 30 days),
H- the norm of the stock of working capital for this element in days,
FROM- one-day consumption of this element.
Example. According to the cost estimate for the year, the need for materials is 720 thousand rubles. The stock rate is 15 days (that is, the material must be delivered 15 days before it goes into production). Calculate the standard of working capital for materials.
Solution. One day material consumption:
Working capital ratio for materials:
This means that during the year the enterprise must maintain a stock of materials at the level of 30 thousand rubles.
In the economic literature, the grouping of working capital of an enterprise is accepted, according to which working capital is divided into:
1) in terms of turnover for:
a) circulating production assets(field of production),
b) circulation funds(sphere of circulation);
2) on the element of working capital for:
a) productive reserves(raw materials, materials, fuel, spare parts, low-value and wearing items),
b) cost of unfinished products(work in progress, deferred expenses),
c) finished products(products in warehouses, shipped products),
d) cash and settlements(cash, receivables and other settlements);
3) by coverage normalization to:
a) normalized(productive reserves),
b) non-standardized(cash and funds in settlements);
4)by source of formation to:
a) own,
Back to Asset Value
The average value of assets is the arithmetic average of the value of the company's assets at the beginning and end of the year.
Average asset value formula:
Average asset value = (Asset value at the beginning of the year + Asset value at the end of the year) / 2
Determine the value of the company's assets at the beginning and end of the year according to the balance sheet. Its value is reflected in line 300 "Balance total".
Calculate the average annual asset value using the formula:
Asp \u003d (A1 + A2) / 2, where:
- A1 - the value of the company's assets at the beginning of the year,
- A2 - the value of assets at the end of the year.
To do this, add up the data for term 300 “Balance Total” at the beginning and at the end of the year. By dividing the amount received by two, you will find the average annual value of the company's assets for the analyzed period.
Calculate, if necessary, using the same formula, the average annual value of non-current and current assets, using the results of the balance sheet in section I " Fixed assets” or under section II “Current assets”. Having made similar calculations according to the financial statements for previous periods, analyze changes in the composition of the organization's property, identify the reasons that influenced these changes, make the necessary decisions on good governance company resources.
Tip 1: How to Calculate Average Annual Asset Value
Estimated data on the average annual value of assets are also used in calculating property profitability ratios, asset turnover ratios and other indicators characterizing financial condition enterprises. Analysis and identification of factors influencing changes in them, allows you to effectively manage the assets of the enterprise in the course of its economic activity.
The formula for the average annual value of assets on the balance sheet
Admission turnover rate formula
The formula for the acceptance rate is as follows:
Cop \u003d (Qpr. / Qav.) * 100%
Here Qpr. - the number of hired workers,
Q cf. - the average number of employees for the analyzed period.
The numerator of the turnover ratio formula for hiring is determined by the number of hiring orders issued in the studied period of time. At the same time, the admission of part-time workers and persons working under civil law contracts is not taken into account.
The indicator in the denominator of the formula is the average number of employees, that is, the average number of employees in accordance with the lists of the analyzed periods.
Average number of employees
To calculate the average payroll number of employees, information is required on the number of employees for all days of the study period, which is recorded in the timesheets, reflecting the number of employees and the number of hours worked.
The average headcount for a year, six months or a quarter is determined in a similar way, the average headcount for the months of the period is added up and divided by the number of months (three, six, twelve, etc.).
The value of the turnover ratio for acceptance
The turnover ratio formula for admission, calculated for different periods, to track and control the personnel situation for the company as a whole and for each of its divisions (department).
The personnel service, analyzing the indicator of turnover on admission, can timely develop a set of measures in the following areas:
- Reduce staff turnover
- Increase employee motivation
- Carry out the process of movement of employees within the enterprise.
With the regular calculation of the turnover indicator for admission, you can get accurate information about the movement and dynamics of the admission of employees to the enterprise.
With the help of the turnover coefficient formula for admission, the growth rate of the admission of new personnel and its need, as well as the correspondence of the growth of new employees to the real needs of the enterprise, are estimated.
More often this indicator used when comparing with the employee attrition rate. If a high hiring turnover rate is accompanied by a high attrition rate, then one speaks of a high employee turnover. Personnel workers through the use of simple calculations have the ability to analyze the causes and dynamics of the movement of employees in the company.
Examples of problem solving
Average Assets: Balance Sheet Formula
The essence of the concept
Resource turnover (asset turnover), better known as asset turnover (OA), is a measure by which you can calculate the turnover of capital investments over a certain period of time.
OA illustrates how efficiently an organization is using its available funds.
Using the calculated values of the group of turnover indicators (OA, receivables and payables, stocks, etc.), it is possible to determine the level of productivity and effectiveness of the use of property and liabilities of the enterprise.
Asset turnover - balance sheet formula
KOA = Revenue / CTA, where CTA is the Average Annual Asset Value.
OA value for the period (days) = duration of the reporting period in days / KOA.
The indicator can also be calculated using the lines of the balance sheet from form 1 " Balance sheet"and form 2" Statement of financial results ":
KOA \u003d line 2110 from form 2 OFR / (line 1600 from BB at the beginning and end of the year) / 2,
- line 2110 from form 2 - revenue;
- (line 1600 from form 1 at the beginning and at the end of the year) / 2 - CTA.
Calculation example:
KOA \u003d 1,730,000 / (500,000 + 650,000) / 2 \u003d 3.01.
Thus, for each ruble of investments in reserves, 3.01 rubles of revenue are accounted for.
In the case when KOA is less than or equal to 1, the value of OA is low, that is, investments are not covered by the proceeds received.
There is no approved standard based on the results of OA calculations. Each enterprise, when analyzing the results of the calculated OA coefficient, should be guided by industry and organizational specifics. The higher the value of this coefficient, the faster the turnover of capital and, accordingly, the greater the level of profit per 1 ruble of investments for a particular organization.
Important to remember
When calculating the KOA, it is necessary to analyze not only the coefficient itself, but also the structure of the enterprise's property.
If in reporting period there is a significant increase in funds, this can be explained by the purchase of goods and materials, the growth of accounts receivable or the commissioning of new non-current fixed assets.
If the reverse situation is fixed, which is accompanied by a decrease in the number of inventories, then this will lead to a reduction in revenue and financial instability of the organization.