In this tutorial:
- Task 1. Growth of capital productivity and production output by the enterprise
- Task 2. Find the capital intensity and capital productivity, the average annual cost of fixed assets and the profitability of production
Problem 1... Growth of capital productivity and production output by the enterprise
How much additional production will the company produce with an increase in the use of fixed assets by 2%, if the annual sales volume is 180 million rubles, average value fixed assets 120 million rubles.A comment.
The phrase "an increase in the use of fixed assets" is translated into normal language as "an increase in capital productivity." This indicator was actively used in Soviet time, in this connection it is recommended to read the article "return on assets". The formulas for return on assets are indicated in the same place. The article describes in detail all the inferiority of using this indicator and the reasons for this.
Note that when a modern economist talks about fixed assets, he means the current residual value (initial cost minus accrued depreciation), and the "Soviet" economist means their initial cost, and it doesn't matter that all fixed assets are already 50-60 years old. Therefore, "increasing utilization" simply means increasing production at existing facilities and nothing more.
Solution.
Return on assets = 180 million / 120 million = 1.5
Now "we provide an increase in capital productivity" by 2%
We get a new volume of products.
120 x 1.53 = 183.6 million
Well find the difference
180 - 183.6 = 3.6 million rubles
A comment... As you can see, the answer could also be obtained by simply multiplying the volume of production by 1.02 (since we have increased the use of production facilities by 2%, then the output will be 2% more). But then there will not be such a chain of crazy calculations, which is so necessary for the teacher ...
Answer: 3.6 million rubles
Task 2. Find the capital intensity and capital productivity, the average annual cost of fixed assets
Using the data in the table below, determine for two years:
- average annual cost of major production assets, return on assets, capital intensity;
- retirement and renewal rates of fixed assets;
- capital-labor ratio;
- shift factor of metalworking equipment;
- overall production profitability.
|
Indicators |
The values |
|
Production of marketable products at wholesale prices, thous. UAH | |
|
The cost of the annual output of marketable products, thousand UAH | |
|
Annual wages fund of employees of the enterprise with deductions for social events, thousand UAH | |
|
Cost of fixed assets at the beginning of the year, thousand UAH | |
|
During the year, fixed assets were put into operation at the beginning of the year, thousand UAH. | |
|
Including by quarters: | |
|
During the year, fixed assets were decommissioned, the total cost of which is, thousand UAH. | |
|
Including by quarters: | |
|
Average annual cost of standardized working capital, thousand UAH | |
|
Average number of employees, thousand people | |
|
Observation data for the operation of metalworking equipment within two working days: | |
|
The number of machine-tool shifts worked in two days | |
|
Number of metalworking equipment, pcs. |
Solution.
Let's find the average annual cost of fixed assets. It can be found by the formula:
OF N- the cost of fixed assets at the beginning of the year, thousand UAH.
OF in i- the cost of fixed assets introduced in the i-th month, thousand UAH.
t pi- the period from the introduction of fixed assets to the end of the year (the number of months of use during the year of fixed assets that are introduced), months.
OF bi- the cost of fixed assets that were retired in i-m month, thousand UAH
t pri- the period from the moment of retirement of fixed assets to the end of the year (the number of months in a year during which the retired fixed assets are not used), months.
n - the number of cases of the introduction of OPF.
m - the number of cases of disposal of OPF.
Let's substitute the values into the formula.
OF cf = 1500 + (300 * 9/12 + 300 * 6/12) - (110 * 9/12 + 190 * 6/12) = 1500 + (225 + 150) -
- (82.5 + 95) = 1500 + 375-177.5 = 1697.5 thousand UAH.
Now let's find the return on assets. Return on assets shows the annual production of marketable products per one hryvnia of the average annual value of fixed assets. It is determined by the formula:
TP- commercial products.
OF Wed... - the average annual cost of fixed assets.
Let's substitute the values into the formula.
FD in = 2000 / 1697.5 = 1.178
Now we will find the capital intensity. This indicator is inverse to the return on assets, shows what part of the average annual value of fixed assets is used for the production of commercial products worth 1 UAH.
Capital intensity can be found by the formula:
PU = 1,697.5 / 2,000 = 0.84875
Now let's find the capital-labor ratio. The capital-labor ratio can be found by the formula:
H r- the average number of employees of the enterprise, people.
OF Wed- the average annual cost of fixed assets.
Let's substitute the values into the formula:
EF o = 1697.5 / 4 = 424.375 UAH / person
Find fixed asset retirement rate... It is calculated as the ratio of the value of fixed assets retired during the year to the total value of fixed assets at the beginning of the year.
Let's substitute the values into the formula.
K select = 300/1500 = 0.2
Find fixed assets renewal rate... It is determined by dividing the value of fixed assets introduced during the year by the total value of fixed assets at the end of the year.
To find the value of fixed assets at the end of the year, we need to add to the total value of fixed assets, the introduced fixed assets and subtract the retired fixed assets.
Substitute the values into the formula.
To obn. = 600 / (1500 + 600-300) = 600/1800 = 0.33
Let's find the shift coefficient of metalworking equipment. It shows how many shifts, on average, each piece of installed equipment is used. This coefficient is found by the formula.
To assess the activities of the enterprise, a fairly wide list of indicators is used, including those that reflect the effectiveness of the organization's financial results at the end of the period.
For these purposes, various turnover ratios are most often used, including capacity and return (capital intensity / capital productivity, material consumption / material supply, etc.).
What is return on assets
Return on assets as one of the basic indicators of turnover and efficiency of an enterprise reflects the potential / actual "return" of money in response to financial investments.
In other words, the characteristic reflects how many rubles of income falls on the ruble of the cost of fixed assets.
Fixed assets are also called fixed assets, non-mobile assets and represent the basic property of the enterprise (buildings, structures, equipment, power lines, transport, patents, licenses, etc.). Income in this calculation refers to the types of profit - revenue or profit from sales.
How to calculate it
For the calculation, it is necessary to use two indicators reflecting certain aspects of the organization's activities - income and the cost of fixed assets.
It is most rational to make a calculation for this type of income as revenue, because it reflects the primary result from the sale of products / provision of services / performance of work.
In some cases, it is more expedient to use profit from sales as income (for example, if the cost of products / services / works is low and takes no more than 30% in total amount revenue).
For the calculation, it is possible to use the full value of fixed assets, or only the active part - only the amount of fixed assets directly related to the production process.
The use of only the active part of fixed assets is necessary if the balance includes non-production buildings, not commissioned machines, unused infrastructure facilities.
Capital productivity of fixed assets: calculation formula and what is measured
Like any indicator of efficiency, capital productivity is relative, that is, it reflects the dependence of the value of one characteristic (income) on another (the value of fixed assets).
For the calculation, you need to find the ratio of revenue or to the value of fixed assets or the active part of fixed assets.
The income and value of fixed assets are measured in monetary units(rubles), so the return on assets is sometimes reflected as the value of rubles / rubles. More often, the calculation result is multiplied by 100% and then the indicator is measured as a percentage.
General calculation formula
In general, the method for calculating the return on assets is as follows:
CP = (TR / V fa)
CP (capital productivity / yield of capital investments) - capital productivity, RUB / RUB;
TR (totalrevenue) - revenue from the main activities of the organization, rubles;
V fa (valueoffixedassets) - the cost of fixed assets, rubles.
Revenue, in turn, is found as the ratio of the price and volume of products produced / services rendered / work performed:
TR = P * Q
TR - revenue for the period, rubles;
P - unit price of product / service / work, rubles;
Q - production volume, rub.
The cost of fixed assets can be found using this algorithm: take the value at the beginning and end of the period and divide by 2. The calculation formula looks like this:
V fa = (V fab + V fae) / 2
V fa - the value of fixed assets (average annual), rubles;
V fab - the cost of fixed assets (beginning of the period), rubles;
V fae - the cost of fixed assets (end of the period), rubles.
Balance calculation formula
To calculate the return on assets, you must have 2 forms accounting- balance sheet and report financial results(Profits and Losses Report). They are also referred to as Form # 1 and Form # 2, respectively.
The amount of revenue can be found in the income statement, and the value of fixed assets can be calculated based on the balance sheet data. The methodology for calculating the return on assets (calculation formula) for the balance sheet is as follows:
CP = (p. 2110 OFR / (p. 1150 BB) * 100%
CP (capital productivity / yield of capital investments) - capital productivity,%;
line 2110 OFR - revenue (statement of financial results), rubles;
line 1150 BB - fixed assets, rub.
For a more objective result, it is necessary to find the average annual value of fixed assets. To do this, you need to add up the indicators of line 1150 of the balance at the beginning and end of the period and divide by 2.
In the calculation, instead of revenue, you can use sales profit. To do this, substitute line 2200 in the formula instead of line 2110 of the income statement.
Balance calculation example
Let us consider the possibility of applying the formula for calculating the return on assets by balance using the example of the Vostok company. The company is engaged in woodworking, which means that the cost is quite high. It is advisable to apply the proceeds in the formula. The organization does not have unused property, therefore, it is possible to calculate full cost fixed assets.
At the end of the period, the organization received the following results:
- line 2110 of the statement of financial results (revenue) 2500 thousand rubles;
- line 1150 of the balance sheet (fixed assets): at the beginning of the period - 1100 thousand rubles, at the end of the period - 1300 thousand rubles.
Substituting these data into the formula for calculating the return on assets on the balance sheet, we get:
CP = 2500 / (1100 + 1300) = 2.08 rubles / rub.
Thus, the return on assets amounted to 2.08 rubles / rub., That is, one ruble invested in fixed assets accounted for 2.08 rubles of the enterprise's proceeds.
What characterizes the rate of return on assets
The considered characteristic reflects the success of the use of fixed assets for the purpose of production and, as a result, income.
It is more rational to consider the indicator in dynamics (over several periods) in order to get a more complete picture of performance. With a sharp increase in the value of fixed assets (for example, due to the launch of a new workshop), the return on assets may fall sharply, therefore it is necessary to analyze other characteristics associated with the use of the enterprise's property and types of profit.
But in general, an increase in the value of fixed assets should subsequently lead to an increase in capital productivity. The positive dynamics of the ratio of proceeds to the value of fixed assets reflects an increase in the intensity of the use of fixed assets.
Return on assets is one of the most important indicators of the efficiency of an enterprise. Calculations over several years will help identify weaknesses in investment and develop a more successful strategy for investing in the organization's fixed assets.
But for a more complete analysis, it is also necessary to take into account other indicators of turnover and efficiency in general.
Return on assets (Ukrainian fund_ddacha, English output / capital ratio)- the volume of gross or marketable output in relation to the value of the company's fixed assets. In the USSR it was used as one of the main indicators economic efficiency use of fixed assets.Return on assets shows how much production the company produces for each unit of the value of fixed assets invested.
Many sources, while maintaining the ideology of the indicator, nevertheless, give slightly different definitions of the rate of return on assets. Also, different authors have different formulas for calculating the return on assets. Therefore, below are several options for the formula for calculating the return on assets with comments. Also, for a complete understanding of the essence of the indicator, read the content of the article "Capital intensity".
Additional definition.
Return on assets (Ukrainian fond_ddacha, English output / capital ratio)- an indicator of the efficiency of using fixed assets, which is defined as the ratio of output (gross, commodity, net) to the average annual value of fixed assets (fixed assets, funds with which these products are produced).
As can be seen from the definition itself, various authors use three variants of the numerator in the formula and three variants of the denominator in various combinations. Thus, nine different values of the indicator can be obtained. Nevertheless, most sources define the rate of return on assets as the ratio of the manufactured commodity output to the average annual value of all fixed assets of the enterprise .
The initial idea behind calculating the indicator is that return on assets characterizes efficiency use of all fixed assets enterprises. That is, this indicator can be compared with the depreciation of fixed assets, profitability of products, etc., and based on this, draw conclusions about the efficiency of the enterprise. The basic verified figure should be a comparison of the volume of output in relation to the value of the fixed assets of the enterprise involved. After that, it is necessary to determine the amount of net profit received by the company and compare it, at least with depreciation charges... Depreciation should be less than the profit earned.
This analysis can be important when deciding whether to buy equipment. In this case, the profit from the use of the equipment in a specific business environment for the standard operating period should exceed the acquisition cost. If given condition(check for efficiency through the rate of return on assets) is performed, then further checks are made on the effectiveness of investments in terms of return on invested capital (ROI).
The formula for calculating the indicator of capital productivity
Basic formula.
Return on assets = Produced Marketable Products / Initial value of fixed assets
Since for calculating the return on assets we are interested in the manufactured products in relation to the invested funds, then it is the initial cost of fixed assets that is taken into account.
It should be noted that many authors disagree about both the numerator and the denominator of the formula for calculating the return on assets (Ukrainian fond_ddachi).
Additional formulas.
Return on assets = Commodity output / ((Fixed assets at the beginning of the period + Fixed assets at the end of the period) / 2)
Since the fixed assets of the enterprise are not in an unchanged state, the specified formula for calculating capital productivity takes into account their change between the reporting dates of the balance sheet. In fact, the denominator contains the arithmetic mean.
Return on assets = Annual output / Average annual cost of fixed assets
In this formula, in the numerator, instead of the value of the volume of marketable output, the annual output is indicated. This replacement, it would seem, does not change the meaning of the indicator itself, but its numerical value can change radically. The point is that the indicator "marketable output" is calculated in conditional internal prices that the enterprise "wants". When we speak simply about the output of products, we assume the prices of specific transactions at which the products of the enterprise are actually sold. Thus, the value of the rate of return on assets, calculated by different formulas, may be different for the same enterprise. You should not be afraid of this - the meaning of calculating this indicator is not in determining its specific current value, but in comparing its dynamics for the same enterprise for different periods or comparing its value for different enterprises of the same industry in the same period (benchmarking) (see below).
Comments on the use of the rate of return on assets
(Ukrainian fund_ddacha, English output / capital ratio)
.
| The rate of return on assets is used to analyze the efficiency of the use of fixed assets. The opposite indicator to the rate of return on assets (Ukrainian fond_ddachi, English output / capital ratio) is the rate of capital intensity. Under "normal conditions" the return on assets should tend to increase | The indicator of funds-add-ons is stagnated when analyzing the efficiency of the main funds. An excellent indicator to the indicator of funds_dachi є indicator of the fundamountness. For the normal minds of the funds, giving is guilty of the mother's tendency to increase. |
| Since the formula takes into account all the fixed assets of the enterprise, it must be remembered that the final value of the rate of return on assets may be affected:
| Oskіlki formula vrahovuє all the main funds of the enterprise, then it is necessary to remember on pidsumkov, the value of the fund_dachi indicator can be integrated:
|
|
|
Thus, due to the significant variability of the indicator under the influence of reasons that are "out of production", as well as the possibility of fluctuations in the rate of return on assets under the influence of production factors, the analysis must take into account the influence of the reasons stated above. so, for example, at an enterprise with a high level of wear and tear of fixed assets, the commissioning of a large modern information system can have a significant negative impact on the rate of return on assets and, without analyzing the reasons, lead to incorrect conclusions.
Nevertheless, to compare the effectiveness of the organization of production and business in enterprises of the same industry, the rate of return on assets can be very useful. And on condition of comparing "similar" industries, the calculation formula can be applied through natural indicators. Thus, an enterprise can conduct its own benchmarking in relation to competitors, using only open statistics and data from officially published financial statements.
To compare the return on assets in kind (for example, the production of brick, concrete, crushed stone, grain and other homogeneous products), you can use the following formula for return on assets:
Return on assets = Production in kind / Average annual cost of fixed assets
| When working with the rate of return on assets, it must be remembered that it does not take into account, for example, a change in product quality. Therefore, the reasons for his fluctuations must always be taken into account to assess the results of the analysis. | With a robot with an indicator of funds, it is necessary to remember that it’s not a fault, for example, changes in the quality of products. |
When analyzing the change in the rate of return on assets, it is necessary to analyze:
| When analyzing the change in the indicator of funds, it is necessary to analyze:
|
| Increase of return on assets can be achieved by: | Adding funds you can reach for the rakhunok: |
|
|
| If you analyze carefully economic essence the rate of return on assets, we can conclude that it is inextricably linked with the indicator of labor productivity. Therefore, when assessing the feasibility of investing in an increase in fixed assets, it is always necessary to take into account the change in labor productivity | As well as respectfully analyzing the economical essence of the indicator of funds, it is possible to go back, but it’s unreasonable in terms of the indicator of productivity of practice. |
Indicator of return on assets (Ukrainian fond_ddacha, English output / capital ratio) in the USSR
If speak about practical application the return on assets indicator, then another "pitfall" may be the fact that according to the old "Soviet" methods, the book value fixed assets without deduction of depreciation. This was done for the purposes of government statistics, in order to further recalculate the indicator in comparable prices. Of course, under the current conditions, this method of calculating the return on assets does not make much economic sense, but when evaluating the data of the state statistics of the USSR, this should be taken into account.In addition, since in the "Soviet era" the fall in the rate of return on assets was categorically unacceptable, the planned volume of production was determined by the product of the volume of fixed assets by the rate of return on assets. But if you look "truth in the eye", then in the USSR there were significant fluctuations in the level of capital productivity, both associated with cyclical processes and the presence of large investments. For example, until 1959, the rate of return on assets had a constant upward trend, and in the period 1961-65 there was a decline. From 1966 to 1970, the rate of return on assets did not change significantly, and later, starting in 1971, it even experienced a drop. In 1985. return on assets in the USSR decreased by 14% in relation to the level of 1980.
Return on assets ratio (Ukrainian fund_ddacha, English output / capital ratio) is highly variable for various industries and depends on the structure and characteristics of production. As of 1975 in the USSR, the average rate of return on assets was 0.45 (in actual prices), v industrial production- 0.5, in agriculture- 0.36, in transport and communications - 0.13, in construction - 1.18.
DEFINITION
Return on assets is a financial indicator that reflects the performance and intensity of use of fixed assets. The formula for return on assets it is used in companies when analyzing their financial condition, showing the effectiveness of fund management in their dynamics.
To calculate the return on assets, the company's balance sheet data can be used. The unit of measurement of return on assets is rubles.
The formula for return on assets and the return on assets ratio show how many goods are sold (released) per unit of production assets. The calculation formula is as follows:
Kf = Vn / OSng
where Кф is the rate of return on assets (rubles),
OSng - fixed assets at the beginning of the year (average annual cost in rubles),
VP - sales proceeds (rubles).
The return on assets ratio is the reciprocal of the capital intensity, so it can be found using the following formula:
Kf = 1 / capital intensity
The return on assets ratio is not standardized; for each company, the management determines its own levels of permissible turnover of production assets. The return on assets must be analyzed over several years in dynamics to assess the nature of the trend.
The formula for return on assets on the balance sheet
When calculating the return on assets, you need to use two forms of accounting:
- Balance sheet, called Form No. 1;
- Statement of financial results (profit and loss statement), referred to as Form No. 2.
The amount of revenue is taken from the statement of financial results, and the value of fixed assets is calculated according to the balance sheet data. The formula for return on assets balance sheet:
Ф = (p. 2110 / p. 1150) * 100%
where Ф is the return on assets (in percent);
line 2110 - proceeds from the statement of financial results (in rubles);
p. 1150 - fixed assets calculated according to the balance sheet (in rubles).
To obtain a more accurate result, the average annual value of fixed assets is determined by adding up the indicators of line 1150 of the balance sheet of the beginning and end of the period and dividing them by 2.
In calculations, instead of revenue, sales profit is often used, while line 2200 (OFR) is substituted into the capital productivity formula instead of line 2110 (OFR).
What the formula for return on assets shows
Return on assets is baseline turnover, reflecting the efficiency of the company and the actual (potential) volume Money in response to financial investments.
Simply put, the return on assets reflects how many rubles of income will fall on each ruble of the value of fixed assets.
Most enterprises consider the rate of return on assets in dynamics, carrying out the calculation over several periods. This makes it possible to assess the performance picture with higher accuracy. If the cost of fixed assets increases sharply (for example, a new shop is launched), then the rate of return on assets may sharply decrease. For this reason, it is recommended to analyze the remaining characteristics that are associated with the use of the company's property and its profits.
When assessing the efficiency of management of production funds, it is required to use the following indicators:
- Return on assets,
- resource intensity,
- resource efficiency,
- material consumption.
In general, an increase in the number of fixed assets in dynamics leads to an increase in capital productivity, which shows an increase in the intensity of the use of fixed assets.
Return on assets management
You can manage the return on assets by managing the size of fixed assets and the company's revenue.
The increase in capital productivity is achieved through the following activities:
- Increase in labor and equipment productivity,
- Automation of production;
- Increased equipment utilization;
- Distribution network development;
- Improving the quality and competitiveness of goods;
- Introduction of new technologies and innovations into the production process.
Examples of problem solving
EXAMPLE 1
| Exercise | The company has the following performance indicators for the current reporting period:
Unit price (P) - 15 rubles, Production volume (Q) - 153690 pieces, The cost of fixed assets at the beginning of 2016 is 116,000 rubles, The cost of fixed assets at the end of 2016 is 140,000 rubles. Find the return on assets. |
| Solution | The revenue is determined by multiplying the price of the product produced by the quantity produced: Bp = 15369 * 15 = 230535 rubles We calculate the cost of fixed assets using the following formula: OS = (OSng + OSkg) / 2 Where OS is the average annual cost of OS, OSng - OS at the beginning of the period, OSkg - fixed asset at the end of the period. OS = (116,000 + 140,000) / 2 = 128,000 rubles. We can determine the return on assets using the following formula: |
The return on assets is understood as economic indicator, which demonstrates the level of efficiency of the actual use of fixed assets of a company, enterprise or industry as a whole. In other words, this indicator reflects the efficiency of the enterprise (organization, company) for the reporting period, and in the aggregate economic analysis of the organization's activities helps to assess financial condition each specific company.
Return on assets reflects the efficiency of the enterprise or company for the reporting period
The most relevant is the calculation of the rate of return on assets for newly opened enterprises or organizations already operating for a long time, because a competent economic analysis, spent at this time, will show the most truthful data on possible financial and economic problems at the enterprise.How to calculate the return on assets: the formula for return on assets
On this moment return on assets can be calculated using several variations of the formulas, but on the way it is calculated quality characteristics this indicator does not change. In practice, only one formula for calculating the return on assets is most often used, which is expressed in the volume of products produced (revenue) for a certain period of time (year) divided by the cost of fixed assets (st-th OF) on average per year. For a more convenient perception, the formula can be written as follows:
- Фо = Revenue / Average annual cost of fixed assets
The capital productivity is calculated using several variations of the formulas, but the qualitative characteristics of this indicator do not change from the method of its calculation.
First of all, the correct calculation of this ratio is necessary for accountants, economists, directors and company managers. The overall success of the enterprise often depends on the directors and managers, therefore, according to the rate of return on assets, it will be possible to determine the success of the enterprise during the management of the organization by this or that person. Also, the derived value of the return on assets indicator will give a chance to the management of the organization to take timely measures to adjust the work of the company, or to confirm the correctness of the choice of the current business strategy.
Thus, the higher the value of return on assets, the better and more efficiently the enterprise functions. It is advisable to evaluate this coefficient in dynamics over the past few years, as this will help to track certain patterns in the work of the company. If the rate of return on assets is constantly kept at a low level, despite the change in the business strategy of the enterprise, then it is worth conducting a comprehensive economic analysis of the company's activities, and based on the data obtained, look for the main reason for the poor performance of the organization.
Note that the return on assets only reflects the possible trouble in the functioning of the enterprise, and does not show the specific reason for the failures. With proper and regular management of the organization's economic activities, the return on assets indicator should demonstrate a systematic growth, which is due to a reduction in downtime of equipment and technological machines, an increase in their productivity and the establishment of the most optimal load of technical resources, as well as technical modernization of production fixed assets.
How to calculate the capital productivity ratio of fixed assets on the balance sheet
If you refer to the main formula for calculating the return on assets, then the denominator should reflect the revenue received for a certain period of time
To calculate the capital productivity of fixed assets according to the balance sheet, you will need to refer to line 010 of the profit and loss statement (form number 2) and line 120 of the balance sheet (form number 1) with the values at the beginning of the reporting period and, accordingly, at its end. Thus, the formula is:
- Фо = p. 010 / 0.5 * (p. 120 n + p. 120 k)
If you refer to the main formula, then the denominator should reflect the received revenue for a certain period of time. The name of line 010 of the profit and loss statement speaks for itself, as it is called “Revenue from the sale of products, goods, works, services,” and as you can see from the formula, the denominator is exactly the revenue. However, it is always worth remembering that the calculation of this line assumes revenue minus excise taxes, export duties and other recurring mandatory payments.
When calculating capital productivity exactly according to the balance in the denominator of the formula, we enter the total value for this line, and then go on to form No. 1 of the balance sheet. Line 120 of the balance sheet "Fixed assets" records a certain part of the company's property that is directly involved in the production and sale of services or goods. These may include cash machines, machines, furniture, tools, etc.
When calculating capital productivity exactly according to the balance in the denominator of the formula, we enter the total value for this line, and then proceed to form No. 1 of the balance sheet
For the formula for capital productivity, you will need the total value on page 120 at the end and at the beginning of the reporting period, since the formula requires an average value for the reporting period. There is nothing complicated in this: you just need to sum up the data at the beginning and end of the year, and divide them by 2 or multiply by 0.5. The result obtained will be the divisor when calculating the return on assets on the balance sheet. For clarity, consider real example based on the Kroverst enterprise. Line 120 on his balance sheet has the following meanings:
- at the beginning (1) of the reporting period - 903 920;
- at the end (2) of the reporting period - 885 220.
And line 010 of the profit and loss statement is expressed by the value 3 112 534. Now we substitute these values into the formula and get the following:
- Фо = 3 112 534 / 0.5 * (885 220 + 903 920) = 3 112 534/05 * 1789 140 = 3 112 534/894570 = 3.4
Thus, for each ruble taken separately, Kroverst's total assets accounted for 3.4 rubles of sales proceeds.
Factors that have an actual impact on the current rate of return on assets
The return on assets ratio clearly responds to all changes in the functioning of the enterprise
The return on assets ratio clearly responds to all changes in the functioning of the enterprise, but nevertheless the following factors may have the most obvious effect on the final result of the ratio:
- age characteristics of the base technological park;
- the degree of intensity of operation of equipment, technical vehicles and vehicles;
- time indicator of the turnover of all technological equipment;
- timely control over the deterioration of technological resources and machines;
- quality and complete set of technological resources of the enterprise.
Return on assets. Calculation formula. Analysis
In the article we will consider the rate of return on assets of fixed assets, as well as the calculation formula for an investment project.
Return on assets. Definition
(English. Fixed assets turnover ratio) - a financial indicator characterizing the intensity and effectiveness of the use of fixed assets. The return on assets ratio is used to analyze the financial condition of the enterprise and shows the effectiveness of the enterprise's funds management when analyzing its dynamics.
The formula for calculating the rate of return on assets of fixed assets
Return on assets ratio shows - how many products were sold (produced) per unit of production assets. The calculation formula is as follows:
To assess the efficiency of management of the company's production assets, the following indicators are used: capital intensity, material intensity, resource intensity, resource efficiency.
Normative value
The return on assets ratio does not have a single standard value. For each enterprise, its own permissible levels of turnover of production assets are determined. The analysis of return on assets is carried out in dynamics over several years, which makes it possible to assess the nature of the trend.
An example of calculating the return on assets
Factor analysis of return on assets
To determine the strength of the influence of various economic factors on the level of capital productivity in practice, they use factor analysis... Consider a two-factor, four-factor and seven-factor model of capital productivity.
Two-factor model of capital productivity
The two-factor model shows how the structure of production assets affects the value of the capital productivity ratio.
F a - the active part of fixed assets;
N is the volume of products manufactured and sold by the enterprise;
F - fixed assets.
Seven-factor model of capital productivity
The model makes it possible to assess the degree of interaction between the level of return on assets of the enterprise and seven factors: the structure of fixed assets, the structure of machinery and equipment in active funds, the shift in operation of machines and equipment, the average cost of a unit of equipment, the duration of a machine shift, and the efficiency of equipment operation. The formula looks like this:
F mash - the average cost of operating machines and machine tools;
T cm - the number of machine shifts;
с is the average cost of equipment;
Q d - the number of machines and machines;
I is the duration of the period under consideration;
T h - the number of hours worked by machines and machine tools.
Four-factor model of capital productivity
This model allows you to determine the nature of the interaction between the level of return on assets of the enterprise and the level of specialization, the coefficient of the average capacity of the enterprise, the structure of fixed assets and the turnover of the active part of production assets.
where:
N oc - the main products of the company;
W is the average annual capacity of the enterprise.
Management of return on assets of the enterprise
Management of return on assets is based on the management of revenue and the size of fixed assets of the enterprise. Increase in capital productivity of an enterprise can be based on the following factors:
- Increase the productivity of labor and equipment.
- Increase equipment load.
- Automate production.
- Introduce new technologies and innovations into production and production.
- Develop a distribution network of buyers.
- To improve the quality and competitiveness of products.
finzz.ru
Return on assets - the formula for calculating the balance. Let's look at a specific example
The economic activity of an enterprise can be analyzed using a variety of indicators. Very often, financial analysis uses data for this. accounting statements, in particular the balance sheet and the statement of financial results - forms No. 1 and No. 2. One of important indicators the work of the enterprise is the return on assets.
Return on assets - definition
V financial analysis this is an indicator that characterizes the effectiveness of investments in fixed assets of an enterprise. It shows what share of the proceeds falls on each ruble invested in them. Thus, the analyst will be able to say how effectively machines, equipment, machinery and other fixed assets are used in economic activity.
The indicator is calculated on the basis of data from regular financial statements.
Return on assets. Balance calculation formula.
The basic formula for the indicator is given below:
Return on assets = sales proceeds: fixed assets.
Thus, the total revenue from the sale of the enterprise must be divided by fixed assets in value terms. We take all data from the financial statements - from the balance sheet, form No. 1 (f-1) and the profit and loss statement (f-2).
The company's revenue is reflected in F-2, line 2110.
The value of all fixed assets of the company can be calculated from the data of F1. Since the balance sheet shows us the data at the beginning and at the end of the reporting period, we need to find the average value of the indicator for the period. For this, the value of line 1150 at the beginning of the period and the same line at the end of the period are summed up and divided by two. That is:
(line 1150 to the beginning + line 1150 to the end): 2
As a result, the formula for return on assets can be rewritten as follows:
Return on assets = line 2110 / ((line 1150 at the beginning + line 1150 at the end): 2)
Return on assets - the formula for calculating the balance. Example
Let's analyze specific example... To do this, we present the data of the accounting statements of Kapriz LLC in an abbreviated form.
We calculate the return on assets of the enterprise:
Return on assets = 3,500,000 / ((163,000 + 170,000): 2) = 21.02
Thus, for every ruble invested in the company's fixed assets, there is a share of 21 rubles in sales proceeds.
The resulting result can be compared with the data of the industry, market niche, competitors. There is no standard indicator with which it could be compared. The return on assets can be analyzed over a number of years. An increase in its value will signal an increase in the efficiency of using the company's fixed assets.
Mezentseva Vasilisa
copdoc.ru
What is return on assets: calculation formula
Fixed assets and the specifics of their operation by the company are of global importance for overall development. Improving the quality of these elements will be the optimal solution to the problems and difficulties of production: increasing the volume of products that are produced through the use of equipment, reducing costs used to form the cost of production, increasing labor productivity.
Such changes are intended to have a tremendous impact on the return on equity, and ultimately on the profitability of operations. For these goals to become a reality, firms must regularly conduct analytical research on the use of funds by calculating general ratios, in particular - capital productivity.
Return on assets shows the level at which the turnover of fixed assets occurs within the enterprise. Thanks to this indicator, the effectiveness of their use in the production process is determined.
Return on assets is an indicator of the efficiency of fixed assets
Influence of various factors on the rate of return on assets
A number of factors influence the success of a firm, with the return on assets being the first of them. But she too is under the influence various parameters, such as:
- armament and reconstruction;
- perfect use of the applied capacities;
- reduction in the cost of a unit of power;
- changes in the structure of funds;
- market development factors;
- the quality of the goods offered.
The profitability of the company depends on these phenomena.
Conducting settlement actions
This indicator can be applied to different economic levels... The capital productivity demonstrates the same phenomena, in particular, the efficiency of production, in relation to the capital used, but the calculations are carried out on different scales:
- company level;
- industry level.
In the first case, the volume of the product produced is applied. In the second, output is within the economic position of the country (GDP). At both levels, there are differences in the calculated actions, however, the indicator is general and characterizes the same phenomenon.
Note: the main task of the indicator is to demonstrate the volume and cost of a product per unit (ruble).
The formula for return on assets looks like this:
Where - FD means a directly calculated indicator,
VP - the volume of production,
SOF - shows the value of funds.
Traditionally within economic activity the base cost of capital for the year is applied, but some book authors suggest taking other metrics into account. Often, the formula contains the total cost at which these funds were acquired, called primary, or a value equal to the sum of funds at the beginning and end of the period, divided by two. General sense settlement transactions remains unchanged.
Indicators of capital productivity and capital intensity
We examined what the return on assets is, it is worth taking into account another serious indicator that has the opposite meaning and understanding. It can be noted that capital intensity and capital productivity are two sides of the coin and characterize the activities of the company in general plan, but from different positions.
The capital intensity indicator is calculated using the following formula:
Where - VP - manufactured products.
After a thorough calculation of the indicator has been carried out, the owner of the company can receive information about the need financial resources to replenish fixed assets in order to get the required volume of production at the exit. In the case of a decrease in the value of this indicator, we are talking about insufficient productivity. Two indicators are a reflection of the efficiency of using existing capital.
Normative value of return on assets
We've covered how to calculate return on assets, however there are several factors that are considered regulatory that need attention. In general, this coefficient does not have a general meaning, since it varies depending on the industry, the scale of the enterprise, and the region. For example, in production with normal capacity indicators, the share of fixed assets among assets is quite large, so the value of the ratio will be much lower. If we consider the value of this indicator in dynamics, then with its growth, an increase in the efficiency of the use of equipment is observed.
Hence it follows that to increase the return on assets, an inevitable increase in revenue is required. For example, you can focus on making products with higher added value, or increasing equipment uptime by increasing the number of shifts. Some enterprises operate more radically, completely replacing old equipment with new and progressive ones.
Use of the return on assets indicator in practice
Return on assets is used in the process of settlement operations for the effectiveness of the use of funds. When in normal developmental conditions, the indicator should be increasing, regardless of the situation.
Numerous influencing factors are taken into account in the formula for calculating the return on assets, therefore, they can have an impact on the final indicator of the calculation. These factors may include - a change in the ratio of funds, changes in the structural apparatus of equipment, the implementation of reconstruction or modernization, changes in the volume of output and in the degree of capacity utilization.
Note: in view of the colossal range of values of the indicator, it is necessary to take into account the influence on its value higher the reasons listed... The indicator is useful in comparing the effectiveness of the organization of production.
Analysis of indicator dynamics: what you need to pay attention to
When carrying out analytical work regarding changes in the value of the indicator, it is important to analyze individual elements, including changes in the share of production assets, changes in the structure of production assets and equipment productivity.
How to increase the return on assets
There are several real methods of increasing the indicator that actually work:
- through changes in the structure of funds;
- increasing the value of the utilization rate of machine time;
- reduction of the total downtime at the enterprise;
- transition to the manufacture of goods with high added value;
- general increase in productivity and implementation of activities.
Thus, the indicator is important for any industrial enterprise within the framework of its activities, informing the management about the possibility of changes being made and applied modern technologies... When calculating the indicator, one has to deal with pitfalls, often firms come to use the services of third-party companies. It may take a lot of time to increase this parameter, but after its expiration, the enterprise will embark on a new path of its development and increase profit indicators.
In contact with
classmates
101biznesplan.ru
The formula for calculating capital productivity - capital productivity
Turnover ratios show the return on investment. One of these ratios is the total capital productivity. Return on assets is an economic indicator and one of the most important indicators of the activity of any company. It allows you to draw conclusions in a timely manner about how correctly built in modern market conditions economic activity companies.
It should be noted that the rate of return on assets does not in itself speak of how production assets are used, efficiently or not, but only shows what is the ratio of the volume of products received from the sale (i.e., revenue) to the cost of the means of labor available to the organization
The turnover ratio of total assets or Total capital productivity (resource productivity, capital productivity) R TAT (Total Asset Turnover Ratio) is calculated as follows:
R TAT = Sales revenue / Average property value
This formula displays the output per unit of property. It is often referred to as the main parameter for the quality of asset management. In analysis, it is typically used in comparisons of asset use efficiency between firms. A high level of this ratio indicates a good ability of managers to use funds efficiently. Low return on assets indicates an absolutely ineffective use of funds. Although it happens that such a comparison takes place to be incorrect:
- for example, if in accounting policies there are some differences;
- overestimation of revenue;
- different levels of equipment wear,
- for finished products there is an inflationary rise in prices.
When an internal analysis is carried out, then with a low value of the capital productivity ratio, a significant conclusion is made that the volume of activity is not high enough for this value of assets. Therefore, the first thing to do is to increase sales. However, if it is not possible to increase sales, then some types of assets should be written off.
The great importance of return on assets should direct the efforts of managers to find various kinds of investments in order to expand this production.
Considering this indicator of capital productivity, we can conclude that it refers to the indicators of turnover ( receivables, inventory turnover, other assets). The ratio of revenue to certain assets or liabilities is always calculated as indicators of turnover.
Example.
Calculation of the total capital productivity (turnover ratio of total assets) for OJSC MMC Norilsk Nickel in 2008:
R TAT = 13,980,000,000/28 259,500,000 = 0.49
Thus, in 2008, 49 kopecks of sales proceeds were accounted for for every ruble of the company's total assets. In 2008, the assets turned around only 0.49 times and "paid off" only half.
Dynamics of the capital productivity ratio of assets of OJSC MMC Norilsk Nickel for the period 2005 - 2008. shown in the figure above.
The total capital productivity of the company since 2007 also shows a downward trend. This most likely indicates an ineffective asset management policy legal entity.
In the period under review, asset growth rates often exceed the revenue growth rate. For example, since 2007, Assets have grown by 119% with revenue growth by 44%. On the other hand, in some periods, the excess of the growth rate of assets over the growth rate of revenue is possible, since assets can be introduced abruptly, and revenue usually grows more smoothly.
If the negative dynamics of capital productivity of OJSC MMC Norilsk Nickel persists, it is advisable to revise the sales management strategy and investment strategy and also liquidate non-core assets.
Normal value
The return on assets ratio does not have a common standard value. In connection with the above, capital productivity depends strongly on the characteristics of each industry. For example, where there is capital-intensive production, then there the return on assets will be lower, because the share of fixed assets in the assets of the enterprise is large. If the rate of return on assets is considered in dynamics, then its growth indicates an increase in the efficiency of equipment use.
Therefore, in order to increase the return on assets, you need:
- To increase the amount of proceeds without changing the composition of the used (in the period under review) assets of fixed assets:
a) increase the efficiency of its use by producing products with greater added value;
b) increase the time when the equipment is used, for example, the number of shifts, using more productive and modern equipment;
- Write off unnecessary equipment, thus reducing its cost in the denominator of the coefficient.
finansovyesovety.ru
balance calculation formula :: BusinessMan.ru
Financial analysis of any enterprise cannot do without studying the effectiveness of the use of fixed assets. For this, analysts use such an indicator as capital productivity. The formula for calculating it on the balance sheet allows you to identify the negative aspects in the organization of the main factors of production available to the company. On the basis of the analysis carried out, economists and financiers can draw conclusions about ways to improve the structure of the balance sheet, which will make it possible to receive large profits in the future period. That is why the calculation of the formula for return on assets is so often used in financial and economic analysis.
Definition
Return on assets of fixed assets stands financial ratio, the formula of which gives a characteristic of the efficiency of their use. It shows how much revenue the company receives per unit of resources invested in production assets. In other words, capital productivity, the formula for calculating the balance of which will be considered below, gives an assessment of the feasibility of using the means of labor in relation to the proceeds obtained as a result of their use. 
To assess the effectiveness of the use of fixed assets, the rate of return on assets must be analyzed in dynamics. This will make it possible to determine the financial condition and literacy of management activities in terms of the use of funds. The practice of comparing the obtained indicator with the same results of competing enterprises is widely used.
Calculation formula
Return on assets, the calculation formula of which is presented below, is as follows:
F = Sales revenue / Fixed assets 
To draw correct conclusions based on the data obtained, the indicator of the number of production assets should be taken as an arithmetic mean for the reporting period.
The data of the accounting report No. 1 and No. 2 will help to make calculations. Capital productivity, the formula for calculating the balance of which allows us to draw conclusions about the state of production factors, has the following form:
F = s. 2110 f. 2 / (p. 1150 beginning f. 1 + p. 1150 end f. 1) / 2
In their own way general principle the indicator presented is similar to the turnover ratios.
Normative value
The capital productivity, the formula of which was considered above, does not have a general normative value. In each industry, the coefficient under consideration differs in its value. 
In industries requiring in the production process finished products a large number of equipment, expensive equipment, the rate of return on assets will be lower than that of a production using cheap equipment in small quantities.
Therefore, the comparison of the analysis results is carried out in dynamics and based on the indicators of the study of the financial and economic activities of enterprises in this industry. Only on the basis of such studies can one draw conclusions about the literacy of the management of production assets.
Analysis of return on assets
Return on assets, the formula for calculating the balance of which was carried out by analysts for several years, should be interpreted correctly. If in the period under review the coefficient decreased, this indicates a decrease financial sustainability company and not a sufficiently effective policy in the field of the use of production facilities. 
With a gradual increase in capital productivity, it can be concluded that the company is developing correctly and harmoniously. Competent, expedient use of production assets led the enterprise in this case to an increase in financial stability.
The return on assets indicator, the calculation formula of which helps to calculate the industry average value, should be compared with the results of the analysis of competitors' activities. If the return on assets ratio exceeds the intersectoral value, one can say about the growth of the competitiveness of the analyzed organization. And vice versa.
Two-factor and four-factor analysis of return on assets
To determine what factors affect changes in the indicator of production assets, a certain type of analysis should be performed. 
It allows you to take a deeper look at the ratio. With the help of two-factor analysis, capital productivity, the formula for the balance of which is calculated by the analyst at the initial stage, is studied in the aspect of the influence of the structure of production assets on it. The two-factor model is calculated as follows:
F2 = Af / F * O / Af, where Af is the active part of production assets, F is fixed assets of production, O is the volume of product sales.
The analysis can take into account 4 factors - the level of specialization, the capacity of the company, the structure of production assets and the turnover of active means of production.
F4 = O / Oosn. * Oosn. / Msred. * Af / F * Msred. / Af, where Oosn. - the main products of the enterprise, Msred. - the average annual capacity of the enterprise.
Seven-factor analysis of return on assets
The seven-factor model for performing the analysis allows you to deeply evaluate all the elements that influenced the coefficient of efficiency of production facilities. The capital productivity of fixed assets, the formula of which shows only a general picture of the state of the means of labor, would be incomplete without the following analysis.
This technique makes it possible to assess the degree of influence in the production process of the structure of fixed assets, equipment, machines, shift work of machines, average annual cost of each piece of equipment, duration of equipment operation, and its efficiency.
The technique is calculated as follows:
Ф7 = Af / F * Cm / Af * Ks / M * Dp * 1 / St * Chm / Ks * O / Chm, where C is the average annual cost of machines and machine tools, Ks is the number of equipment changes, St m is the average cost of labor instruments, M is the number of cars, Dp is the duration of the period, Wm is the number of hours worked by the equipment.
Return on assets management
After calculations, the return on assets, the formula of which was presented above, requires adjustment. You can manage this indicator using revenue and the size of fixed assets. To increase the return on assets, it is necessary to increase the productivity of labor and equipment. For this, it is possible to automate production processes, increase the load on equipment. 
It is also possible to increase the return on assets by introducing scientific developments and innovation in the manufacturing process. Increase in sales will allow an increase in the distribution network. By improving product quality, you can achieve good results.
Having familiarized yourself with such a coefficient as capital productivity, the formula and analysis of which are necessarily used by analytical services, you can understand the ways to improve it. Justifiably increasing production capacity, introducing innovations in technology, expanding the distribution network, and ensuring the development and prosperity of production will not be difficult.
businessman.ru
Capital intensity ratio of fixed assets. Calculation formula
In the article, we will analyze such an economic coefficient as capital intensity, as well as the formula for calculating the indicator for a business plan.
Capital intensity
Capital intensity- a financial indicator characterizing the efficiency of management of fixed assets and shows the amount of fixed assets per unit of manufactured (sold) products. Fixed assets of production include: buildings, structures, equipment, machinery, transport, production equipment, i.e. what provides the production process of the enterprise. This indicator is actively used in countries with socialist economy to substantiate production plans in the context of the entire country.
The formula for calculating the ratio of capital intensity
The capital intensity ratio is inversely proportional to the return on assets and the calculation formula is as follows:
To calculate this ratio, both accounting and production reports are used, showing the volume of products produced.
In practice, a modification of the capital intensity ratio is used, where the average annual value of fixed assets, as well as the proceeds from the sale of manufactured products, are used. This indicator is calculated only for the balance sheet, and the formula is as follows:
This formula of capital intensity reflects the degree of payback of fixed assets.
Analysis of the capital intensity ratio
This coefficient does not have a generally accepted standard value and is analyzed in dynamics over several years. The table below shows the analysis of the capital intensity of the enterprise in dynamics.
|
Indicator value |
Analysis of the dynamics of the coefficient |
|
To fund e ↗ |
An increase in the capital ratio shows a decrease in the efficiency of production. |
|
To fund e ↘ |
A decrease in the capital intensity ratio shows an increase in the efficiency of use production equipment and production capacities. |
|
K fond.e> K * fond.e |
The excess of the level of capital intensity over the industry average value (*) shows a decrease in the efficiency of production in relation to similar companies in the industry. |
|
To fund e< К * фонд.е |
A decrease in the level of capital intensity in relation to the industry average value (*) shows an increase in the effectiveness of the use of fixed production assets. |
Capital intensity of industries
The capital intensity ratio characterizes the level of optimization of the entire production process and is used in assessing the efficiency of both enterprises and industries. The capital intensity of the industry shows the ratio of production assets to gross marketable output.
There are two types of capital intensity of the industry: direct and full. Direct reflects the performance of fixed assets involved in the creation of products, while the total capital intensity includes, in addition to fixed assets, funds indirectly involved in the production of products. Currently, this indicator is auxiliary, rather than capital productivity. For more details about return on assets, see the article "Return on assets of fixed assets".
finzz.ru
The return on assets is called a ratio that directly characterizes the efficiency of using the organization's financial resources. It is thanks to the return on assets that you can find out how much revenue one unit of the value of fixed assets brings. So let's look at how to calculate the return on assets.
Separately, the rate of return on assets does not say at all whether the productivity of fixed assets is effective or not, but it shows the degree of the ratio of the volume of proceeds that was received after the sale of the goods by the company to the cost of fixed assets available to the organization. Regarding the efficiency of the use of fixed assets, you can draw the correct conclusions if you compare the rate of return on assets over several years, or by comparing this indicator with the return on assets of similar enterprises.
Calculation of the rate of return on assets
Return on assets is the revenue divided by the fixed assets of the enterprise.
Thus, the return on assets is calculated. The calculation formula is quite simple, so you can calculate this indicator without resorting to the help of specialized programs.
The indicators should be taken by calculating their arithmetic average for the entire period, which has a positive revenue value.
The turnover indicator is an integral part of the capital productivity indicator. It is also necessary when analyzing the profitability of an enterprise.
Normative value
It should be noted that the rate of return on assets itself cannot have a normative value. Depending on the industry characteristics, this indicator is largely subject to change in different industries. If production is, for example, capital-intensive, then the coefficient will be lower, if we consider the indicator in its dynamics, then with an increase in the indicator, we can state the intensity of the use of production equipment.
Thus, if you want to increase the return on assets, you should either increase the revenue indicator using the appropriate equipment, or make products that would have a greater added value.
The article examined how to determine the return on assets. It is this coefficient that is needed to determine the profitability of an enterprise.
