The turnover ratio of working capital is measured in. The formula for the turnover ratio of working capital

Turnover ratio working capital shows how many times the company used the average working capital balance during the selected period of time. In the article, using examples, we will figure out how to correctly calculate and evaluate the indicator. We have also given the procedure for the analysis of turnover, which can be downloaded.

What is the working capital turnover ratio

The turnover ratio of working capital (assets) is an indicator that allows you to understand how many times a company has used the average annual balance of working capital for a selected time interval.

Financial directors analyze this indicator in dynamics, in comparison with the industry average figures.

Calculation formula

The indicator is calculated using the following formula:

Working capital turnover ratio \u003d Revenue (rub.) / Current assets (rub.). .

How to find the balance sheet

Calculation formula according to the balance sheet data:

Ratio Analysis

The turnover ratio is analyzed:

• in dynamics,
• compared to industry averages, such as the industry average turnover period.

Too low coefficient, not justified industry specifics, speaks of excessive accumulation of working capital. There are no generally accepted, let alone legally established standards, but this does not prevent them from being put into effect by internal regulatory documents as target values ​​or key performance indicators.

Working capital turnover period

For the analysis of working capital, it is often more convenient to calculate the turnover period - the reciprocal of the turnover ratio:

Working capital turnover period (days) = Number of days / Turnover ratio

This is a more visual indicator, it is measured in days and shows us how many days the company receives revenue equal to the average working capital. When the turnover slows down, the turnover period increases, and when it accelerates, it decreases. If we calculate the turnover period for two different time intervals and compare them, we can determine the amount of additionally required, or vice versa, released Money.

Special mention should be made of the time interval for the calculation. Turnover ratios are calculated for a certain period of time. It does not have to be a whole year, as they say in textbooks. To solve practical problems, it is possible to calculate both for half a year and for a quarter, the main thing is that this interval be sufficiently indicative and include all production process factors. Which interval to choose depends on the industry, type of product, the duration of the production cycle and the conditions of mutual settlements, and so on.

Calculation example

Now let's explain all of the above with an example. Suppose our company produces products, the demand for which has significant seasonal fluctuations. For the year, the company received revenue (see table 1).

Table 1. Annual revenue of the enterprise

The average inventory during this year is presented in table 2.

table 2. Average inventory

Calculate the inventory turnover ratio for the year. To do this, we divide the revenue for the year by the average annual value of the inventory.

Annual turnover ratio = 114,830 / 36,411 = 3.154

We get that the indicator for the year is 3.154.

Let's define the turnover period.

Turnover period = 365 days / 3.154 = 115.7 days.

It is for 115.7 days that we receive revenue equal to the average annual inventory. What will it give us in practice? We can only compare these figures with those of the previous year or go to competitors. If they tell us that their stocks are turning around at about the same rate, we will calm down on this, making sure that our indicator corresponds to the industry average.

If we calculate the data for each quarter, we get Additional information(see Table 3).

Table 3. Calculation of turnover ratios for each quarter

We see that inventory turnover varies greatly throughout the year. This will become even more evident if we translate the dimensionless coefficient into the turnover period (Table 4).

Table 4. Turnover period

It turns out that the turnover rate during the year can vary by one and a half times. And this can already say a lot. For example, if an enterprise sells goods with deferred payment, then the most urgent need for working capital will be at the end of the second and third quarter. If there is no delay for buyers, then a shortage of working capital is possible from the end of the first and the entire second quarter.

Thus, to determine the need to raise additional working capital by the beginning of the "high" season, the turnover ratios should be calculated not for the year, but for the quarter.

Further, we will have a completely natural desire to accelerate inventory turnover in the first half of the year. To do this, you need to detail the calculations by type of goods. We unload from the program or request the relevant balance sheets from the accounting department and, after some processing, we receive the proceeds from the goods (Table 5).

Table 5. Product revenue ()

Revenue, million rubles	I quarter	II quarter	III quarter	IV quarter	Total for the year
Product "A"
Product "B"
Product "B"

Averaging inventory, and we obtain the following data (Table 6).

Table 6. Average stock

Average stock, million rubles	I quarter	II quarter	III quarter	IV quarter	Total for the year
Product "A"
Product "B"
Product "B"

We divide the revenue from goods by the average stock, we get the turnover ratio (Table 7).

Table 7. Turnover ratio

Turnover ratio	I quarter	II quarter	III quarter	IV quarter	Total for the year
Product "A"
Product "B"
Product "B"
By product group

And now we find that product "C" is an outsider, its turnover is two or more times lower than that of product "B" and product "A". For greater convenience, we will translate the dimensionless coefficients into periods of turnover (Table 8).

Table 8. Turnover period

Turnover period	I quarter	II quarter	III quarter	IV quarter	Total for the year
Product "A"
Product "B"
Product "B"
By product group

Now we see that the turnover varies not only for different goods, but each product turns over at a different rate during the year.

Next, you need to find out what are the reasons for such fluctuations in turnover. If these reasons are objective and fully justified from a business point of view, then you should plan to raise additional funds when necessary. If the reasons are subjective, then organizational measures must be taken to eliminate them. At this stage, the financial analyst needs to demonstrate the ability to effective interaction with management and other departments, and to the financial director - his managerial talents.

conclusions

Turnover ratios in skillful hands become an effective tool for solving the problems of financial stability of an enterprise (

Consider turnover ratio of working capital (assets). This coefficient is included in the group of indicators of Business activity and shows the intensity of the use of enterprise resources.

Let's analyze this coefficient according to the following scheme: first, we will consider its economic meaning, then the calculation formula and the standard, and also calculate the turnover ratio of working capital for a domestic enterprise in order to clearly see everything. Let's start!

Turnover ratio of working capital (assets). economic sense

It determines the efficiency of the enterprise not in terms of profitability, but in terms of the intensity of the use of working capital (assets). The coefficient shows how many times for the selected period (year, month, quarter) working capital is turned over.

What is included in working capital?

Working capital includes:

• stocks,
• Money,
• Short term investments
• Short-term accounts receivable.

What determines the value of the turnover ratio of working capital?

The coefficient value is directly related:

• With the duration of the production cycle,
• staff qualifications,
• type of business activity,
• The pace of production.

Trade enterprises have the maximum values ​​of the coefficient, and capital-intensive scientific enterprises have the minimum. That is why it is customary to compare enterprises by industry, and not all together.

Working capital turnover ratio. Synonyms

Synonyms for this ratio may be as follows: turnover ratio of current assets, turnover ratio of mobile assets, operating capital ratio. It is useful to know the synonyms for the coefficient, since it is often called differently in the literature. And so that this does not mislead you, you need to assume what synonyms the indicator has. By the way, this is one of the problems of the domestic economy - for some reason every economist wants to name the coefficient in his own way. There is no unity in terms and definitions.

Working capital turnover ratio. Calculation formula

The calculation formula is as follows:

Working Capital Turnover Ratio = Sales Revenue/Current Assets

What needs to be noted is that current assets are taken as the average value at the beginning and end of the reporting period. You need to add the value at the beginning of the period with its end and divide by 2.

By new form balance sheet (after 2011), the turnover ratio of working capital will be calculated as follows:

Working capital turnover ratio = line 2110 / (line 1200ng. + line 1200kg.) * 0.5

According to the old form of the balance sheet, the coefficient was calculated as follows:

Working capital turnover ratio = line 010 / (line 290ng. + 290kg.) * 0.5

Working capital turnover indicator

Together with the turnover ratio of working capital, it is useful to calculate turnover rate, which is measured in days. The formula for calculating the turnover of working capital:

Current assets turnover = 365 / Working capital turnover ratio

Sometimes in calculations for a place of 365 days they take 360 ​​days.

Video lesson: "Calculation of key turnover ratios for OAO Gazprom"

Working capital turnover ratio. Calculation on the example of OJSC Rostelecom

Calculation of the turnover ratio of working capital (assets) for OJSC Rostelecom. Enterprise balance

Calculation of the turnover ratio of working capital (assets) for OJSC Rostelecom. Gains and losses report

To calculate the coefficient, public reporting is enough, which can be taken from the official website of the company. Let's take 4 reporting periods (a quarter each), so we can cover a whole year for our diagnostics. Since the calculation of the coefficient uses data at the beginning and end of the reporting year, in our case it will turn out for 4 reporting periods - 3 calculated coefficients.

Working capital turnover ratio 2014-1 = 73304391/(112128568+99981307)*0.5 = 0.69
Working capital turnover ratio 2014-2 = 143213504/(99981307+96694304)*0.5 = 1.45
Working capital turnover ratio 2014-3 = 214566553/(96694304+110520420)*0.5 = 2

The value of the coefficient has increased over the year. It can be concluded that OJSC Rostelecom increased its efficiency. This is largely due to the fact that the revenue increased. It was the increase in revenue that gave an increase in the values ​​of the coefficient, since the value of fixed assets (line 1200) did not change much.

Working capital turnover ratio. standard

It should be noted right away that this coefficient cannot be negative. Low values ​​indicate that the company has excessively accumulated working capital.

How can this ratio be increased?

To do this, it is necessary: ​​to increase the competitiveness of products (from this there will be more sales), to reduce the production cycle for manufacturing products, to improve the product sales system.

Summary

The article considered the turnover ratio of working capital. This indicator belongs to the group of indicators "Business activity" and evaluates the effectiveness of the enterprise not in terms of profitability (as indicators from the "Profitability" group do), but from the standpoint of the intensity of the use of working capital. An important role in the coefficient is played by the Revenue indicator (it is in the numerator). If we talk about the fact that this ratio needs to be constantly increased, then we must first of all increase the Revenue from our activities (because fixed assets can not be changed so quickly, in the example for OJSC Rostelecom, fixed assets did not change much over the year) . Thus, the working capital turnover ratio shows our sales, which provide the Revenue. A decrease in this ratio is a direct sign either that our sales have decreased or that we have begun to accumulate excess current assets. It is useful to compare the coefficient with the coefficient of an enterprise of similar activity (industry leader) or with the average value for the industry. In addition, it is useful for analysis to evaluate changes in the coefficient in dynamics over a period (for a year, for example).

The management of any enterprise, as well as its investors and creditors, are interested in the company's performance indicators. To conduct a comprehensive analysis, various methods are used.

It is mandatory to study indicators of profitability and business activity. If the first group considers net profit in the process of analysis, then the second group considers sales proceeds. The study is carried out using a system of indicators. One of the first to be studied is the turnover ratio, the formula of which takes into account all the company's assets. Next, its structural components are examined. Liability indicators are also included in the analysis. This allows you to understand how quickly the company turns available resources into money, calculated on debt obligations.

The concept of the turnover cycle

The turnover ratio of the company's funds allows you to evaluate the speed with which the capital of the enterprise goes through its full cycle. A company that owns resources uses them to make products, sell them, and make a profit.

The period during which the funds available to the organization go through all the stages is called the turnover cycle. First, resources are converted into finished products. Then it is sent for sale. Customers purchase goods or services and the money flows back into the organization.

The faster the full cycle occurs, the more sales revenue the company receives. Therefore, she is interested in accelerating the turnover. Analysis of business activity allows you to highlight the constraining factors. The asset turnover ratio, the formula of which considers its structural elements, makes it possible to harmoniously distribute and use property.

Turnover period

The turnover ratio, the formula of which shows a numerical result, is not always absolutely informative. Its growth in dynamics indicates a positive trend for the organization. But this indicator does not disclose information about the duration of the cycle.

Therefore, such coefficients are presented in days. The analyst can then determine exactly how long the period lasts. This allows you to find the optimal value of the coefficient. The researcher evaluates the turnover cycle of fixed and current assets, accounts payable. But it is movable property that deserves the closest attention. This analysis reflects the company's system of interaction with suppliers, its marketing and material support for current activities.

Cost cycle

It is the current assets that arouse great interest of analysts in the presented analysis. Therefore, for the assessment, the turnover ratio of working capital is used, the formula of which is discussed below.

In order to have information about the factors influencing this indicator, the financial manager necessarily considers the duration of the cycle of the components of current assets. Their duration (except for money) is summed up.

This is how the cost cycle indicator is obtained. The longer it is, the more financial sources the company directs into circulation. They accumulate in it.

The faster the cost cycle occurs, the more funds are released from circulation. They can be used more constructively.

General formula

The calculation of the coefficient or assets has a general form. This is explained by an identical indicator with which one or another item of property or capital is compared. The formula looks like this:

Kob \u003d Base of calculation / Asset (or Passive).

The turnover ratio, the formula of which is used by the financial services of enterprises, involves taking into account the average annual value of the indicator. Only the article being evaluated changes. The numerator of the formula is also selected depending on the coefficient under study.

When considering receivables, advance settlements with buyers, their average annual value is compared with the proceeds from sales. If the rate of turnover of debt on loans and advances to suppliers is calculated, the cost price acts as the calculation base. She also participates in the consideration of indicators of the turnover of finished products, work in progress.

The inventory turnover ratio, the formula of which corresponds to the above methodology, takes material costs as a base.

Financial statements

To determine the indicators of business activity, financial statements are used. The denominator is found according to form No. 1 "Balance", and the numerator - according to form No. 2 "Profit and loss statement". The asset turnover ratio, the formula of which was discussed above, according to the reporting, has the following form:

Kob = s. 2110 (form 2)/s. 1600 avg. (form 1).

To determine the turnover ratio of current assets, the data of line 1200 of the balance sheet is taken as the denominator. The indicator that determines the turnover of fixed assets in the previous formula uses the data reflected in item 1150 of the balance sheet.

V general view the calculation of the turnover of current liabilities looks like this:

Kotp = s. 2110 (form 2)/s. 1300 avg. (form 1).

If investors need to estimate the speed of movement in the presented methodology, the amount c is applied. 1500 and p. 1400. To calculate the turnover of indebtedness of debtors, data from s. 1230, and stocks - the amount of s. 1210 and p. 1220.

Stocks

When assessing the movement of stocks, it is more expedient to apply a methodology that shows the result in days. This is one of the most important characteristics that defines the financial service. There should be enough stocks so that the production cycle runs without failures and stops. But materials should not be accumulated, "frozen" in the company's current assets.

The inventory turnover ratio, the formula of which was discussed earlier, allows you to determine the period in days:

Tz \u003d Material costs / Stocks (average) * 360.

If reporting period takes a different number of days, its duration is taken into account. In general, for the calculation in the numerator, the amount of proceeds from sales is used. But if we are talking about stocks, their movement is determined by the amount of material costs.

To optimize the indicator and speed up the cycle, it is necessary to reduce the amount of "dead" stocks that are not purchased with each new operating period.

Accounts receivable, finished goods

The turnover ratio, the calculation formula of which explores such current assets as receivables and finished products, is also of interest to analysts. If a significant amount of funds accumulates in these balance sheet items, this negatively affects the work of the company. If, after the analysis, a too long period of turnover of debts of debtors is determined, it is necessary to change the system of settlements with buyers.

Perhaps you should switch to an advance, non-cash type of payment. The amount of bad debt is also determined.

If the enterprise accumulates a significant amount of finished goods and work in progress, the sales system is reviewed, equipment is modernized.

current assets

The duration of the periods of turnover of balance sheet items is added up. This allows you to evaluate the effectiveness of the operation of the company's property. In general, the mobile resources of the company allows you to study the turnover ratio of working capital (the formula was presented earlier).

The increase in the duration of the cost cycle negatively affects a number of other indicators. It increases as its absolute value decreases. It also reduces the return on capital. In this case, a whole system of measures is developed to optimize the structure of the company's property.

Accounts payable

Analysts are looking at more than just the speed of an organization's property cycle. They also study the capital turnover ratio (the formula was discussed earlier). This technique shows how many times during the operating period the company settles with creditors for its obligations.

Therefore, for the calculation, it is the current debt that is taken into account. Often, an enterprise with a large amount of receivables determines a significant amount of current liabilities. This is a negative trend. Such an organization is limited in its ability to attract borrowed capital, acquire materials, resources for production on credit. By optimizing the structure of assets, it is possible to improve the performance of liabilities.

Economic effect

A special place in the financial and economic analysis is occupied by turnover ratios. Balance formulas make it possible to find factors constraining development. A qualitative assessment of business activity makes it possible to determine how effectively the company conducts its commercial activities.

All indicators obtained during the analysis are considered in dynamics and compared with similar coefficients of competing companies. If the turnover ratio, the formula of which allows you to evaluate the structure of the balance, decreases, the cycle period is accelerated. At the same time, the organization expands sales markets, it has permanent suppliers and buyers. This is a sound commercial policy of the enterprise.

The acceleration of the turnover period indicates a simultaneous increase in the return on capital. The company uses its property effectively. Therefore, the presented system of indicators is necessarily analyzed by the financial service of the organization.

Under the working capital of the enterprise refers to the assets used in the current activities of the organization. According to Russian standards accounting (RAS) they include: stocks of raw materials and materials, finished goods and work in progress, cash and cash equivalents (such as air and railway tickets, travel tickets, etc.), goods purchased for resale , accounts receivable, and financial investments for a period of less than one year.

Without competent and rational use this group of assets is impossible for the economic activity of any organization.

That is why it is so important to carefully monitor the ways and procedure for using the working capital of the company. In economic analysis, one of the most significant indicators that allows you to evaluate the effectiveness of the use of the company's working capital is the turnover ratio of the company's current assets.

Calculation procedure

The turnover ratio of working capital allows you to determine how much rationally and intensively current assets of the company are used.
In other words, it shows how much the company's revenue falls on one ruble of working capital.

Thus, the turnover ratio is calculated as:

K_rev = TR/(P_(rev.av.))

where:
TR is the revenue or the volume of products sold for the analyzed period of time, excluding VAT;
(P_(ob.sr.)) - the average cost of the company's working capital for the specified period.

Since the main goal of company asset management is to profit maximization organization received per unit of invested capital, then it is with the help of this coefficient that the owner can analyze the return received from current assets. The higher the value of this indicator, the more efficiently the working capital is used in the company!

Data for calculation

Traditionally, data are used to calculate economic indicators. financial statements enterprises. To calculate the turnover ratio of current assets, the information provided in the Balance Sheet (form No. 1) and the Statement of Financial Results (formerly Profit and Loss Statement) (form No. 2) is required. It is obvious that reporting is used for the period of time that is being analyzed.

The average cost of the organization's working capital for twelve months is found as the difference between the value of working capital at the beginning and at the end of the year, divided in half.

(P_(rev.av.)) = (P_(rev.av.2) - P_(rev.av.1))/2

where:
P_(ob.sr.1) - the value of the company's working capital at the beginning of the period;
P_(ob.sr.2) - the value of working capital at the end of the period.

All these data are presented in balance sheet organizations in the line "Total for section II".

As for revenue (TR), information about it can be found in the second form of financial statements, in the Statement of Financial Results (line "Revenue").

General information about the working capital of the enterprise can be obtained from the following video:

Factors affecting the value of the coefficient

Several factors influence the turnover ratio of a company's working capital. First, its meaning is related to the amount of working capital companies, i.e. the higher it is, the lower the final score. Secondly, the coefficient is also affected by the indicator the value of products sold.

Thus, if a company consistently demonstrates high rate revenue, then an increase in working capital in one period may not affect the final value of the turnover ratio.

Turnover ratio analysis

When analyzing the turnover ratio, it should be understood that its values ​​are not always directly related to the efficiency or inefficiency of the economic activity of the enterprise. In most cases, its value can be explained by several important factors at once:

• the scope of the company;
• production cycle;
• life cycle stage.

So, for example, for material-intensive areas production characterized by much lower values ​​of the coefficient than for trading companies, and an organization in the growth stage will always use more working capital than an organization in the decline stage. That is why it is possible to analyze the value of the turnover indicator only in dynamics. It is best to consider the values ​​of the coefficient for 5 - 10 years. In this case, it is possible to clearly define both the length of one production cycle of the company and the efficiency of the use of working capital.

In addition, in order to understand how rationally resources are used at a particular enterprise, it is worth comparing the obtained data with industry average indicators. But even in this case, an underestimated or overestimated value of the coefficient will not testify about positive or negative results. Thus, it is impossible to draw any conclusions based only on data on the value of the turnover ratio. To correctly determine the current situation, it is necessary complete economic analysis enterprises.

For information on working capital efficiency indicators, see the following video:

How to increase the turnover ratio

If, after analyzing the economic activity of the organization, it was revealed that there are no objective reasons for the underestimated value of the turnover ratio of working capital, then it's time to look for solutions given problem, and there may be several such ways.

First, you can reduce the company's working capital, i.e. sell off the rest of finished products, reduce the purchase of raw materials and materials, deal with accounts receivable, and so on. Reducing the cost of working capital will allow the company to significantly increase the turnover ratio.

Secondly, attention should be paid to company's revenue. If it is not possible to reduce current assets, then it is necessary to look for new ways to sell products. However, it should be understood that attracting new customers and increasing sales volumes in most cases leads to an increase in production volumes. Thus, along with the company's revenue, working capital costs may also increase, which will lead to a decrease in the value of the coefficient.

Possible reasons for the decline

If, when analyzing the turnover of the company's working capital, it was revealed that the value of this coefficient is constantly decreasing and this has nothing to do with the production cycle of the enterprise, then it's time to pay attention to the ways in which working capital is used.

First of all, it is necessary to complex analysis all components of the company's working capital and identify which line of the balance sheet has the largest share. More often than not, companies suffer from exorbitant inventory and receivables.

If the company's inventory grows from period to period, and the volume of products sold does not change, then the main problem is errors in logistics. In other words, the organization purchases more raw materials and materials than it needs for its current activities. To solve this problem, it is necessary to debug the supply chain, revise contracts with suppliers and once again calculate the optimal inventory levels for a continuous production process.

Another problem may be settlements with buyers and customers, it is from them for the most part that the receivables of the enterprise are formed. Many large companies prefer to pay their suppliers only at the end of the reporting period, while the finished product was shipped at the very beginning. There are no universal solutions to this problem, and the organization itself chooses how to influence its customers.

In the article we will analyze 6 basic enterprise turnover ratios, calculation formulas for a business plan.

turnover ratios. Calculation formula

Turnover ratios- indicators of financial analysis, reflecting the efficiency of enterprise asset management and characterizing the activity and intensity of their use. Unlike profitability indicators, turnover ratios do not use net profit, but proceeds from the sale (sale) of products. Therefore, turnover rates characterize the level of business activity, while profitability - the level of profitability for various types of assets. The higher the turnover, the higher the solvency of the enterprise and its financial stability. The turnover ratios show the number of turnovers required for the payback (repayment) of the company's capital.

Consider the main turnover ratios:

Video lesson: "Calculation of key turnover ratios for OAO Gazprom"

Asset turnover ratio. Formula

Asset turnover ratio (analog: total capital turnover ratio) is an indicator characterizing the speed and efficiency of enterprise asset management. The indicator is the ratio of proceeds from the sale of products to the average annual assets. The calculation formula is as follows:

There is no generally accepted recommended standard value for this factor. This indicator must be analyzed in dynamics. The growth of the indicator, as a rule, is due to an increase in the share of revenue generated by the assets of the enterprise. The table below shows an analysis of the trend in asset turnover.

Current assets turnover ratio

Current assets turnover ratio- shows the effectiveness of managing the current assets of the enterprise and characterizes the activity of their use. The current assets of the enterprise include funds that can be quickly converted into cash: inventory, receivables, short-term financial investments, work in progress. The formula for calculating the indicator is as follows:

There is no normative value for the turnover ratio of current assets. The analysis is carried out in assessing the nature of the dynamics and the direction of the trend. The table below provides an analysis of the indicator's trend.

Accounts receivable turnover ratio. Formula

Accounts payable turnover ratio

Inventory and Cost Turnover Ratio

Cash turnover ratio

Cash turnover ratio- reflects the activity of cash management and shows the number of circulation cycles of the most liquid assets of the enterprise (cash). The indicator is the ratio of revenue from sales of products to the average annual amount of cash. The calculation formula is as follows:

There is no normative value of the indicator in financial practice. The analysis is carried out in assessing the direction and nature of the trend. The table below shows the relationship between the trend of the ratio and the financial condition of the enterprise.

Summary

Turnover ratio represent important group economic indicators in financial analysis that allow you to evaluate the effectiveness of management in an enterprise various types assets and capital. The analysis of indicators is carried out in assessing the nature of the dynamics for 3-5 years and in comparison with similar companies in the industry.