Analysis of the effectiveness of the use of working capital LLC Center "Zabota"

Limited Liability Company Center "Care" is based on the sole decision of its founder - Yuriy Terentyevich Gorbunov - created to fulfill the intended goals in accordance with the decision on creation and registered on February 26, 1998 in the Administration of the city of Meleuz and the Meleuzovsky district.

In its activities, the company is guided by the current legislation of the Russian Federation and the Republic of Belarus. The Company is a legal entity, has separate property, has an independent balance sheet, settlement and other accounts in credit institutions, has a seal with a company name and an indication of TIN, angular and other stamps.

The main activity of the company is the most complete satisfaction of the needs of the population in a variety of goods and services, the development of entrepreneurial activity and profit. The Company carries out the following activities:

trade, trade and intermediary, purchasing, marketing;

creates wholesale and retail trade divisions;

catering services;

any types of activities that are not prohibited by the current legislation and do not contradict the main activities of the company.

Current assets occupy a large share in the total balance sheet currency. This is the most mobile part of the capital, on the state and rational use of which the results of economic activity and the financial condition of the enterprise largely depend.

The main purpose of the analysis is the timely identification and elimination of shortcomings in working capital management and finding reserves to increase the intensity and efficiency of its use.

Analyzing the structure of current assets, it should be borne in mind that the stability of the financial condition largely depends on the optimal allocation of funds at the stages of the circulation process: supply, production and marketing. Chechevitsyna Ya.N. Analysis of financial and economic activity. - M.: Phoenix, 2008.

In the process of analysis, first of all, it is necessary to study changes in the presence and structure of current assets. At the same time, it should be borne in mind that a stable structure of working capital indicates a well-established process of production and marketing of products. Its significant changes indicate the unstable operation of the enterprise.

Analysis of the composition and structure of working capital of LLC Center "Zabota" is presented in table 1.

Table 1. Analysis of the composition, structure and dynamics of working capital

Type of current assets	Availability of funds, thousand rubles	Structure of funds, %
		Change			Change
including:
raw materials, materials and other similar values
finished goods and goods for resale
Future spending
VAT on purchased assets
Receivables
including:
buyers and customers
Cash
TOTAL current assets

OOO Center "Zabota" for 2004 and 2005

As can be seen from Table 1, the total amount of working capital of the company in 2005. compared to 2004 increased by 6400 thousand rubles. The largest share is occupied by stocks, so in 2004. they make up 47.2%, in 2005 - 76.8%, i.е. their share increased by 29.6%. Since the main activity of the company is trade, purchase and sale, the largest share in the stocks is occupied by finished products and goods for resale. Due to the fact that the company expanded its sales network in 2005, the amount of finished products and goods for resale increased by 6430 thousand rubles, and their share by 30.7%. The amount of raw materials and materials increased by 15 thousand rubles, but their share decreased by 0.6%. On the positive side, accounts receivable decreased in 2005. compared to 2004 for 1482 thousand rubles, incl. debts of buyers and customers for 646 thousand rubles. This indicates that the center is developing measures to recover funds from its debtors. There is also an increase in the company's cash by 930 thousand rubles, and their share by 4.1%.

Their turnover has a great influence on the state of current assets. Accelerating the turnover of working capital reduces the need for them, which allows the company to use the released part of working capital for additional output or other production needs.

As a result of the acceleration of turnover, the material elements of working capital are released, less raw materials, materials, fuel, work in progress are required. The financial resources previously invested in these stocks and backlogs are also released, which helps to improve the financial condition of the enterprise and strengthens its solvency. A complex indicator of the level of production and economic activity is the rate of turnover of funds.

Table 2. Analysis of working capital turnover

Indicators			Change
Revenue from the sale of goods, thousand rubles
The average value of working capital, thousand rubles.
Working capital turnover ratio, times
Turnover speed, days
The average value of inventories, thousand rubles.
Cost of sold goods, products, works, services
Production turnover ratio stocks, times
Inventory shelf life, days
Average amount of accounts receivable, thousand rubles
debtor turnover ratio. debt, times
Receivables repayment period, days

Calculations show that the working capital of LLC Center "Zabota" in 2004. turn around 3.6 times or 103 days, and in 2005. - 6.5 times or 56 days. Due to the fact that the center is constantly in search of new closest partners, acquires high-quality goods, constantly monitors stocks, working capital began to turn over 2.9 times faster and its speed decreased by 47 days. This led to an increase in the volume of goods sold, and, consequently, to an increase in proceeds from the sale of goods by 34,211 thousand rubles. Also increased the number of turnovers of inventories in 2004 was 5.6 times or 64 days, in 2005 - 8.2 times or 44 days. This is due to the fact that the center opened its cafe in 2005, began to produce its own pastries and attract new customers. As mentioned above, the center took measures to collect receivables, which led to a significant increase in the turnover of receivables, so in 2004 the number of turnovers was 9 times or 40 days, in 2005 - 34.8 times or 10 days. An important point is that the center has no doubtful receivables.

An increase in the turnover of working capital does not yet indicate its effective management, it is necessary that the acceleration of turnover leads to the release (ie, savings) of working capital. Using the formula, we calculate the release of capital: Analysis of the effectiveness of the use of working capital / / Accounting No. 10, 2006.

A positive result indicates that the center does not receive savings from the use of working capital, i.e. its inappropriate use.

To determine the degree of dependence of the business continuity on external sources, it is necessary to calculate the coverage ratio: Sheremet A.D. Comprehensive analysis of economic activity. - M.: INFRA-M, 2008.

The coverage ratio in 2004 was 37.3%, in 2005 it was 38%.

These values ​​are higher than the standard, which means that the center is sufficiently provided with its own working capital.

An important indicator of the effective use of working capital is their profitability, which shows how much profit the center will receive from one ruble of working capital, using the formula, we will find its value:

Profitability of the current asset increased by 31%, which indicates the effective management of working capital and an increase in the business activity of the center.

Material reserves make up part of the value of the center's property, and the costs of material resources make up a significant share in the costs of the center and the cost of their products. Therefore, strengthening control over the state of material reserves and their rational use has a significant impact on the financial position of the center. To determine the efficiency of the use of material resources, we calculate the indicators (5) - (8) and enter the results in Table 3.

Table 3. Analysis of the efficiency of the use of material resources

Analysis of the effectiveness of the use of material resources showed that in 2005 there was a strong increase in material costs by 3185 thousand rubles. This is due to the expansion of the trading activity of the center. However, only due to the increase in revenue from the sale of goods, the material consumption decreased by only 4 kopecks, and the material efficiency increased by 2.1 rubles. For the same reason, the center began to receive only 1 kopeck more from one ruble of material costs. The increase in material costs led to an increase in the cost of goods sold 33105 thousand rubles. A decrease in material consumption accompanies a decrease in the share of material costs in the cost of goods.

The purpose of inventory management in a market economy is to achieve optimal capital investments in materials, to exclude the "freezing" of funds in stocks, which negatively affects the financial condition of enterprises. The achievement of this goal is facilitated by the use of the methodology of optimal investment in stocks of materials. It is based on using the economical order quantity method for materials. In the "Care" center, cafe managers calculate the amount of each consumed product; let's take one product when preparing our products - mayonnaise from the city of Sterlitamak. The annual demand for this product is 194 kg. Products are purchased once every 3 months, the cost of fulfilling one order, taking into account transportation and transaction costs, is 658 rubles, the cost of storing a unit of production is 5 rubles. According to the formula, the economical order quantity will be equal to:

When determining the number of orders per year, we use the formula (14):

In this case, the total costs will be:

According to the economical order size model, the center should order mayonnaise in the amount of 226 kg once every 1.2 years, and then the total cost will be 1130 rubles. On the other hand, the center can apply the established model: once every three months.

Working capital is the most important resource in ensuring the current functioning of the enterprise, i.e., the production and sale of products. In the process of production and economic activity, the enterprise needs the funds necessary for the manufacture of products, the purchase of raw materials and materials, the payment of wages, and then the funds that are required for its implementation. Thus, working capital is cash advanced to working capital and circulation factors.

Circulating production assets ensure the continuity of the production process, and circulation funds - the sale of manufactured products on the market and the receipt of funds that guarantee the well-being of the enterprise. This economic role of working capital determines their essence, which is the need to ensure the smooth functioning of the production process and the circulation process. While functioning, working capital makes a continuous cycle, which can be conditionally divided into three phases: in the first phase, working capital is converted into a commodity, in the second phase, working capital, participating in the production process, takes the form of work in progress, semi-finished products and finished products, in the third phase, working capital in the form of finished products in the process of its implementation are again converted into money.

Working capital spent during the manufacture of products and their sale are fully consumed and transfer their value to products within one year or operating cycle. The operating cycle includes the following activities for the production of products:

Acquisition of raw materials and materials for cash and non-cash payment of suppliers' invoices;

Production processing of raw materials and materials, payment of wages;

Transfer of products into the process of its production from the category of "work in progress" to the category of "finished products";

Sales of finished products and invoicing to customers;

Receipt of cash from customers.

Current assets in economic practice include the cost of inventories, receivables (accounts presented for payment), deferred expenses, cash (cash, bank accounts, other accounts).

Rational management of working capital involves compliance with the following principles:

Ensuring the optimal ratio between the required volume of working capital and their production needs.

Economical and rational disposal of inventory items; minimizing the cost of creating inventories; ensuring the minimum presence of working capital in inventories while maintaining the continuity of the production process; the maximum possible self-financing of working capital requirements.

If these principles are followed, working capital management is ultimately falsely aimed at creating optimal production and commercial conditions and current financing of enterprises. This is achieved, on the one hand, by pursuing an effective technical policy for the best use of material and material circulating production assets, and on the other hand, by implementing such financial and commercial activities that would ensure maximum economic results with a minimum of spent working capital.

Financial and commercial work should be aimed at reducing the need for working capital while ensuring maximum production volumes and maintaining its continuity. This is done by accelerating the turnover of working capital, determining the optimal amount of working capital when creating inventories, acquiring high quality raw materials and materials, but at cheaper prices.

In particular, the issues of saving raw materials and materials, organization of their purchase require special consideration. This is due to the fact that the production of many enterprises is not only material-intensive, but also unproductive.

The efficiency of the use of working capital ultimately finds its expression in a decrease in the magnitude of their needs, which implies a reduction in the time during which working capital is diverted. Accelerating the turnover of funds reduces the additional need for them.

The turnover of working capital is calculated by the duration of one turnover in days or the number of turnovers for the reporting period (turnover ratio).

Since the turnover of capital is closely related to its profitability and serves as one of the most important indicators characterizing the intensity of the use of the enterprise's funds and its business activity, in the process of analysis it is necessary to study the indicators of capital turnover in more detail and establish at what stages of the circulation there was a slowdown or acceleration of the movement of funds.

It is necessary to distinguish between the turnover of the total aggregate capital of the enterprise, including fixed and circulating. The capital turnover rate is characterized by the following indicators:

Turnover ratio (K about);

The duration of one revolution (P about).

The capital turnover ratio is calculated by the formula:

K about = Net sales

Average annual cost of capital

The reciprocal of the capital turnover ratio is called capital intensity (K e):

K e = Average annual cost of capital

Net sales

Duration of capital turnover:

P about = D, or P about = Average annual cost x D

K o Net sales proceeds

where D is the number of calendar days in the analyzed period (year-360 days, quarter-90, month-30 days).

The average balances of all capital and its constituent parts are calculated according to the chronological average: ? amounts at the beginning of the period plus balances at the beginning of each following month plus? balance at the end of the period and the result is divided by the number of months in the reporting period. The necessary information for calculating turnover ratios is available in the balance sheet and income statement.

When determining the turnover of all capital, the amount of turnover must include the total proceeds from all types of sales. If the indicators of turnover of only functioning capital are calculated, then only proceeds from the sale of products are taken into account. Turnovers and average balances on the accounts of capital investments, long-term and short-term financial investments are not taken into account in this case.

the turnover of capital, on the one hand, depends on the speed of turnover of fixed and working capital, and on the other hand, on its organic structure, the larger the share of fixed capital, which turns over slowly, the lower the turnover ratio and the longer the duration of the turnover of the total aggregate material:

K ob.s.k \u003d UD t.a xK ob.t.a.

P obs.k \u003d P obt.a / UD t.a

where K obs.k - turnover ratio of total capital;

UD t.a - the share of current assets (working capital) in the total amount of assets;

P obs.k - the duration of the turnover of the total capital;

P obt.a - the duration of the turnover of current assets.

The main ways to accelerate the turnover of capital: reducing the duration of the production cycle through the intensification of production (using the latest technologies, mechanization and automation of production processes, increasing the level of labor productivity, more complete use of the production capacity of the enterprise, labor and material resources, etc.); improving the organization of material and technical supply in order to ensure the uninterrupted supply of production with the necessary material resources and reduce the time spent by capital in stocks; speeding up the process of shipping products and processing settlement documents; reducing the time spent in accounts receivable; raising the level of marketing research aimed at accelerating the promotion of goods from the manufacturer to the consumer (including market research, improving the product and the forms of its promotion to the consumer, the formation of the correct pricing policy, and the organization of effective advertising.

At the stage of work in progress, the acceleration of the turnover of working capital in the company is achieved mainly by reducing the duration of the production cycle based on the implementation of scientific and technological progress. It includes measures aimed at reducing the labor intensity of manufacturing products at all stages of processing raw materials; reduction of time for technical operations and interoperational laying; improvement of the organization of production and operational regulation (expansion of flow methods of production, etc.), ensuring uniform and rhythmic work. Increasing the speed of movement of funds in the sphere of circulation is achieved by reducing the stock of finished products in warehouses and speeding up the time of settlements with consumers. As a result of the acceleration of turnover, a certain amount of working capital is released. Release can be absolute or relative.

The absolute release of working capital takes place when the actual need for them is less than planned with a reduction or increase in the volume of sales for this period. Working capital can be used to further expand production, develop new types of products, improve the supply and marketing system, as well as other measures to improve business activities.

Relatively released working capital occur in those cases where the acceleration of the turnover of working capital occurs simultaneously with the growth in production. The funds released at the same time cannot be withdrawn from circulation, as they are in stocks of inventory items that ensure the growth of production.

The acceleration of turnover and the release as a result of this working capital in any form allow the company to direct them to the development of entrepreneurial activity without attracting additional financial resources.

Working capital occupies a large share in the total amount of funds available to the enterprise. In the process of analysis, the structure of working capital, its placement in the sphere of production and in the sphere of circulation, and the efficiency of use are studied. Separate groups of working capital, its placement in the sphere of production and in the sphere of circulation, and the efficiency of use are also being studied. We also study individual groups of working capital that have the most significant impact on the solvency and financial stability of the enterprise.

The main objectives of the analysis, the efficiency of the use of working capital are:

Evaluation of the implementation of the enterprise supply plan in terms of volume, assortment, quality of the supplied raw materials, basic and auxiliary materials;

Control over compliance with the norms of spending and stocks of material resources, identifying the reasons for deviations from the norms;

Development of measures to ensure the saving of material resources in production and reduce inventory through the sale of redundant and unnecessary values.

The main data sources for analyzing the use of working capital are:

Logistics plan, applications, contracts for the supply of raw materials, materials, statistical reporting forms on the availability of the use of material resources, on production costs, operational data of the logistics department, analytical accounting data on the receipt, consumption and balance of material resources.

First of all, a general assessment is given of changes in the availability of the structure of funds for their most important groups, the data of which are given in Table 8.

Table 8 Availability, composition and structure of working capital

Indicators			Deviations
Amount, thousand tenge		Amount, thousand tenge
	revolving funds
Inventory
Unfinished production
Future spending
	circulation funds
Cash
Finished products
Receivables
Advances issued
financial investments
Other current assets
Total working capital

Table 8 data shows changes in working capital. So, if in the previous year the cost of working capital amounted to 726,600.9 thousand tenge, then in the reporting year there was an increase in working capital by 1,385,779.5 thousand tenge. In the structure of funds, the greatest weight is occupied by inventories: if in 2006 they accounted for 33.8%, then in 2007 -16.2%: finished products in the reporting year - 23.3%; accounts receivable - 11.1% and advanced payments - 28.4%. Attention is drawn to the downward trend in the share of these components, except for advances issued, compared to the previous year. The composition of working capital has also undergone changes in a number of its parameters.

Since working capital is one of the most important components of working capital, it is necessary to analyze the effectiveness of their use for the analyzed period, to consider such indicators as material consumption and material efficiency. Material productivity is determined by the ratio of the volume of marketable products to the cost of working capital. Material consumption is the reciprocal of material yield.

Table 9 Efficiency in the use of working capital

Indicators					Pace. change, %
Marketable output
The cost of commercial products
Total working capital
Including: inventory
Unfinished production
Future spending
Material consumption	tenge / 1 thousand tg.
Material return	tenge / 1 thousand costs
The share of material costs in the cost of goods sold

The data in Table 9 show that the value of working capital has increased, i.e. if in 2006 it was 247044 thousand tenge, then in 2007 it was 329815.5 thousand tenge, the deviation is 82711.5 thousand tenge or 133.5 %.

Prepaid expenses and other composition of working capital are insignificant.

The indicator of material efficiency in the reporting year decreased by 0.8 times, or by -0.6 tenge / 1 tenge of costs, respectively, the share of material costs in the cost of commercial products in the reporting year decreased by 24.8%. This happened due to a decrease in the share of material costs in the cost of commercial products by 0.9 times.

The efficiency of the use of working capital is characterized by a system of economic indicators, primarily the turnover of working capital.

The turnover of working capital is the activity of one complete circulation of funds. The circuit ends with the transfer of proceeds to the settlement account of the enterprise. Consider asset turnover according to the following table.

Table 10 Turnover of working capital

Table 10 shows that the turnover ratio of working capital decreased from 1.49 to 0.90, although the cost of working capital at the enterprise increased by 1.9 times. As a result, in the reporting year, the duration of one turnover increased by 119 days.

Table 11 Assessment of the state of inventory turnover

Table 11 shows that in the reporting year there was an increase in the inventory turnover ratio from 3.5 to 4.2, i.e. by 14.8% (114.8-100). Inventory holding period decreased from 102.8 to 89.5 days. All this suggests that in the reporting year, inventories were not stale in warehouses.

Great influence on the turnover of capital invested in current assets, and therefore on the financial condition of the enterprise has an increase or decrease in receivables.

A sharp increase in accounts receivable and its share in current assets may indicate an imprudent credit policy of the enterprise in relation to buyers, or an increase in sales, or insolvency and bankruptcy of some buyers. On the other hand, the company can reduce the shipment of products, then the accounts receivable will decrease. Consequently, the growth of receivables is not always evaluated negatively. It is necessary to distinguish between normal and arrears. The presence of the latter creates financial difficulties, since the enterprise will feel a lack of financial resources for the acquisition of inventories, payment of wages. In addition, the freezing of funds in receivables leads to a slowdown in capital turnover.

Overdue accounts receivable also means an increase in the risk of non-payment of debts and a decrease in profits. Therefore, each enterprise is interested in reducing the maturity of payments due to it. Payments can be accelerated by improving settlements, timely execution of settlement documents, advance payment, and the use of a bill of exchange form of payment.

In the process of analysis, it is necessary to study the dynamics, composition, causes and prescription of the formation of receivables, to establish whether it contains amounts that are unrealistic for collection, or those for which the limitation period expires. If there are any, then it is necessary to urgently take measures to collect them (drawing up bills of exchange, applying to the judicial authorities. For the analysis of receivables, in addition to the balance sheet, primary and analytical accounting materials are used.

The problem of non-payments acquires particular urgency in the context of inflation, when money depreciates. Recently, the receivables of enterprises in the CIS countries have reached an astronomical amount, a significant part of which is lost during inflation. With inflation of 30% per year, only 70% of what could be bought at the beginning can be purchased at the end of the year. Therefore, it is unprofitable to keep money in cash, and it is unprofitable to sell goods on credit. However, it is beneficial to have credit obligations payable in cash, since payments for various types of accounts payable are made in money, the purchasing power of which decreases by the time of payment. To calculate the company's losses from the timely payment of accounts receivable, it is necessary to subtract from the overdue receivables its amount adjusted for the inflation index for this period (minus the received penalty), or multiply the amount of overdue receivables by the bank refinancing interest rate for this period and from the result obtained subtract the amount received singing.

The art of managing current assets is to keep in the accounts the minimum necessary amount of money that is needed for current operational activities. The amount of cash that a well-managed enterprise needs is essentially a safety stock designed to cover short-term imbalances in cash flows. The amount should be such that it is enough for the production of all priority payments. Since cash, being in cash or in bank accounts, does not generate income, they must be available at a safe minimum level. Having large balances of money for a long time can be the result of improper use of working capital. In order for money to work for the enterprise, it is necessary to put it into circulation in order to make a profit:

Expand your production, scrolling through them, in the working capital cycle;

Invest in profitable projects of business entities in order to receive profitable interest;

Reduce the amount of accounts payable in order to reduce debt service costs;

Upgrade fixed assets, acquire new technologies.

An increase or decrease in cash balances in bank accounts is determined by the level of imbalance in cash flows, i.e., the inflow and outflow of money. The excess of inflows over outflows increases the balance of free cash and vice versa, the excess of outflows over inflows leads to a shortage of cash.

Federal State Educational Institution of Higher Professional Education Siberian Federal University

Institute of Business Process Management and Economics

Faculty of Economics

Abstract on the discipline: "Finance and Credit"

Topic: "Analysis of the effectiveness of the use of working capital"

Completed by: 3rd year student

EA groups 08-22 Kozlova N.V.

Checked by: Chudnovets A.Yu.

Krasnoyarsk

INTRODUCTION …………………………………………………………………………..3

1. CURRENT ASSETS OF THE ENTERPRISE AND THEIR TURNOVER……………………………………………………….…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

1.1 Economic essence of working capital……………..………………..4

1.2 Classification of working capital………………………………………….7

1.3 Methodology for analyzing the effectiveness of the use of working capital ... .10

2. ANALYSIS of the efficiency of the use of working capital of the enterprise and ways to improve it………………….19

conclusion………………………………………………………………….25

REFERENCES…………………………………………………………27

INTRODUCTION

Working capital is one of the components of the property of the enterprise. The condition and efficiency of their use is one of the main conditions for the successful operation of the enterprise. The development of market relations determines the new conditions for their organization. High inflation, non-payments and other crisis phenomena are forcing enterprises to change their policy in relation to working capital, look for new sources of replenishment, and study the problem of the effectiveness of their use.

To ensure an uninterrupted production process, along with the main production assets, objects of labor and material resources are needed. The objects of labor together with the means of labor participate in the creation of the product of labor, its use value.

The presence of an enterprise with sufficient working capital and production reserves of an optimal structure is a necessary prerequisite for its normal functioning in a market economy. Therefore, the enterprise should carry out the rationing of working capital, whose task is to create conditions that ensure the continuity of the production and economic activities of the company.

It is also important to be able to properly manage working capital and stocks, develop and implement measures that help reduce the material consumption of products and accelerate the turnover of working capital. As a result of the acceleration of the turnover of working capital, they are released, which gives a number of positive effects.

An enterprise in the case of effective management of working capital and stocks can achieve a rational economic position, balanced in terms of liquidity and profitability.

All of the above determines the relevance of the chosen topic of the abstract.

The purpose of the abstract is: analysis of the state of working capital and evaluation of their effectiveness on the example of the enterprise JSC "Yaransky KMP".

1. WORKING ASSETS OF THE ENTERPRISE AND THEIR TURNOVER

1.1 The economic essence of working capital

Working capital is the part of the company's capital invested in its current assets. On a material basis, working capital includes: objects of labor (raw materials and materials, fuel, etc.), finished products in the warehouses of the enterprise, goods for resale, cash and funds in settlements.

Under working capital it is customary to understand the monetary value of funds in production, that is, stocks of raw materials and materials in warehouses, work in progress, finished products in stock, as well as funds in settlements - mainly debt for shipped, but not paid for products and receivables, as well as cash in the company's accounts.

The main purpose of working capital is to ensure a continuous process of production and sales of products, the completeness and timeliness of financing commercial activities.

The organic property of working capital is their constant movement, which takes place in the form of a cycle - a consistent change in their functional forms in production.

In the first phase of the circulation of working capital act in the form of money.

This stage of the circulation of funds is preparatory. It takes place in the sphere of circulation. Their main purpose is to serve the formation of production reserves with monetary resources. Further, at the production stage, they take the form of work in progress, concentrated on jobs, individual technological transitions, in warehouses. At the final stage, the newly created finished product is delivered to the warehouse, and then sold to the consumer, and the funds invested in it are returned to cash. There is a possibility of the next investment of resources.

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

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

Stages of circulation of working capital:

D-T -. . .P. . . - T "- D",

where D - funds advanced by an economic entity;

T - means of production;

P - production;

T "- finished products;

D "- cash received from the sale of products and includes realized profits.

Points (...) mean that the circulation of funds is interrupted, but the process of their circulation continues in the sphere of production.

The circulation of capital covers three stages: procurement (purchases), production and marketing.

Any business starts with some amount of cash that is deployed into a certain amount of resources for production (or goods for sale).

As a result of the procurement stage, working capital is transferred from the monetary form to the production one (objects of labor or goods).

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

At the stage of implementation, working capital from the commodity form again passes into the monetary one. The size of the initial amount of money (D) and revenue (D ") from the sale of products (works, services) do not match in size. The resulting financial result of the business (profit, loss) explains the reasons for the discrepancy.

As you can see, the elements of working capital are part of a continuous flow of business transactions. The purchase results in an increase in inventories and accounts payable; production leads to an increase in finished products; the sale leads to an increase in receivables and cash on hand and on the current account. This cycle of operations is repeated many times and eventually comes down to cash receipts and cash payments.

The period of time during which the turnover of funds is made is the duration of the production and commercial cycle.

This period consists of the length of time between the payment of money for raw materials and materials and the receipt of money from the sale of finished products. The length of this period is influenced by: the period of crediting buyers by the enterprise, the period of raw materials and materials in stocks, the period of production and storage of finished products.

Elements of working capital continuously pass from the sphere of production into the sphere of circulation and again return to production. Part of the working capital is constantly in the sphere of production (inventory, work in progress, finished products in stock, etc.), and the other part is in the sphere of circulation (shipped products, receivables, cash, securities, etc. ). Therefore, the composition and size of the working capital of an enterprise are determined not only by the needs of production, but also by the needs of circulation.

The need for working capital for the sphere of production and for the sphere of circulation is not the same for different types of activities and even for individual enterprises in the same industry. This need is determined by the material content and turnover rate of working capital, production volume, technology and organization of production, the procedure for selling products and purchasing raw materials and materials, and other factors.

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General assessment of the turnover of the company's assets

The financial position of the enterprise, its indicators of liquidity and solvency directly depend on how quickly the funds invested in current assets are converted into real money.

The following are related to the turnover rate:

• · minimum the required amount of advanced (involved) capital and related cash payments (interest on bank loans, dividends on shares, etc.);
• • the need for additional sources of funding (and fees for them);
• the amount of costs associated with the possession of inventory and their storage;
• the amount of taxes paid, etc.

Separate types of assets of the enterprise have different turnover rates.

The duration of funds in circulation is determined by the combined influence of a number of multidirectional external and internal factors. The first should include the scope of the enterprise (manufacturing, supply and marketing, intermediary, etc.), industry affiliation (there is no doubt that the turnover of working capital at a machine-tool plant and a confectionery factory will be objectively different), the scale of the enterprise (in most cases, the turnover of funds at small enterprises is much higher than at large ones - this is one of the main advantages of small businesses) and a number of others. No less impact on the turnover of assets is exerted by the economic situation in the country and the associated business conditions of enterprises. Thus, inflationary processes, the lack of well-established economic relations with suppliers and buyers in most enterprises lead to a forced accumulation of stocks, which significantly slows down the process of turnover of funds.

However, it should be emphasized that the period of funds in circulation is largely determined by the internal conditions of the enterprise, and primarily by the effectiveness of its asset management strategy (or lack of it). Indeed, depending on the pricing policy applied, the structure of assets, the methodology for assessing inventories, the enterprise has more or less freedom to influence the duration of the turnover of its funds.

It should be borne in mind that the value of the turnover ratio of current assets is directly affected by the methodology adopted at the enterprise for their assessment and, based on the tasks ahead and the chosen asset management strategy, the enterprise has a certain ability to regulate the value of the turnover ratio of its assets.

In the general case, the turnover of funds invested in property can be estimated by the following main indicators: the turnover rate (the number of revolutions that the capital of the enterprise or its components make during the analyzed period) and the turnover period - the average period for which they return to the economy invested in production - commercial transactions cash.

The rate of turnover of an enterprise's assets is usually calculated using the formula:

The duration of one revolution (To) is determined by the formula:

where With -- balances of working capital for the period;

Tper is the number of days in the period;

Vreal -- the amount of products sold.

The turnover ratio shows the number of turnovers made in a certain period. It is determined by the formula:

Coefficient OS loading characterizes the value of OS per 1 rub. products sold:

AT as a result of the acceleration of turnover (intensity of use of fixed assets), a certain amount of fixed assets is released.

Absolute release occurs when

where So.fact - the actual remnants of the OS;

So.plan -- planned OS balances;

Vreal -- sales volume. Absolute release is determined by the formula

The shorter the duration of one revolution, the more revolutions the working capital will make. With the acceleration of the turnover of working capital, the need for them decreases, a reserve is created to increase output.

To accelerate the turnover of working capital, it is necessary to reduce the time of their stay both in the sphere of production and in the sphere of circulation. To do this, it is necessary to reduce the time of processing and assembly of products by mechanizing and automating the production process; improve the use of new technology; accelerate the control and transportation of products during their processing; reduce stocks of materials, fuel, packaging, work in progress to the established standard; ensure the rhythmic work of all production sites and workshops of the enterprise, timely delivery of materials to the enterprise and workplaces; accelerate the shipment of finished products; promptly and quickly make settlements with consumers; improve product quality, prevent the return of finished products from the consumer, etc.

Return on working capital

Particular attention should be paid to the efficiency of the use of working capital, since the rational use of working capital affects the main indicators of the economic activity of an industrial enterprise: the growth in production volume, the reduction in production costs, and the increase in the profitability of the enterprise. An analysis of the effectiveness of the use of working capital should help identify additional reserves and help improve the main economic indicators of the enterprise.

One of the criteria for the effectiveness of the use of working capital is the amount of working capital, which depends on:

• · turnover current assets (with what frequency the funds invested in operational activities are returned to the enterprise);
• · the structure of working capital (what part of the current assets is financed from own funds and how resources are distributed in the operating cycle).

The main synthetic indicator of the use of working capital is the profitability ratio of assets (property). This ratio shows how much profit the company receives from each ruble invested in assets.

For analytical purposes, both the profitability of the entire set of assets and the profitability of current assets are calculated. This indicator gives a comprehensive assessment of the effectiveness of the use of working capital.

The indicator can be presented as a product of two other indicators: return on sales and turnover of current assets (Fig. 5).

Rice. 5. Return on current assets

Acceleration turnover of working capital depends on the time they spend at various stages of the cycle, reducing its duration. It is achieved by an increase in output and sales of products, a more complete and rational use of material resources, and a reduction in the time of the technological cycle. The turnover is affected by the use of the latest achievements of scientific and technological progress.

Introduction

In the management system of various aspects of the activities of any enterprise in modern conditions, the most complex and responsible link is financial management. An indispensable condition for the successful functioning of an enterprise of any organizational and legal form is the active implementation of a strategically directed and detailed set of measures to create or strengthen obvious and hidden advantages over its own competitors. In a market economy, all agro-industrial formations are interested in rhythmic and stable functioning. It is possible to achieve high performance results only with the help of a clearly structured, justified and effective financial policy of the enterprise.

An important component of the system of organizing the production process at agro-industrial enterprises is the policy of managing current assets and, for this purpose, conducting a detailed analysis in terms of the effectiveness of their use.

The development of a perfect mechanism for managing the working capital of organizations, as well as obtaining the results of an analysis of the composition, structure and dynamics of current assets, allow us to approach the practical solution of the issue of the need for their financing. This is the relevance of the chosen topic of this course work. In addition, the effective formation and regulation of the volume of current assets contribute to maintaining an optimal level of liquidity, ensure the efficiency of the production and financial cycles of activity, and, consequently, a sufficiently high solvency and financial stability of agro-industrial enterprises.

It is for this purpose that an analysis is carried out that reveals the ratio of current assets and the sources of their formation that are rational for a given organization: short-term liabilities and equity.

The theme of my course work is "Analysis of the use of working capital of the organization." The object of the study is JSC Beloretsk Butter and Cheese Plant, Beloretsk, which specializes in the production of dairy products. The study period is 2004–2006.

The purpose of the course work is - on the basis of studying the current state of the efficiency of the use of working capital of JSC "BMSK", to determine specific ways and reserves to improve their use.

When writing my term paper, I was guided by the following tasks:

– express diagnostics of Beloretsk Butter and Cheese Plant OJSC;

- substantiation of the relevance of the research topic, its scientific and problematic significance in a market economy;

– study of the current state of economic and financial activities of Beloretsk Butter and Cheese Plant JSC;

– identification of ways and reserves to improve the economic and financial activities of OJSC Beloretsk Butter and Cheese Plant.

1. General characteristics of the financial and economic condition of OJSC Beloretsk Butter and Cheese Plant

1.1 Organizational and legal status and priorities of JSC "BMSK"

The Beloretsk Butter and Cheese Plant was put into operation in 1977, then it was transformed into Beloretsk Butter and Cheese Plant JSC in accordance with the Federal Laws "On the Privatization of State and Municipal Property", "On Joint-Stock Companies" and the Law of the Republic of Bashkortostan "On the Privatization of State and Municipal Property in the Republic of Belarus ".

Now the open joint-stock company "BMSK" operates on the basis of the Charter, registered by the resolution of the head of the administration of Beloretsk No. 381-5 of 06/17/1998.

At the moment JSC "BMSK" is the legal successor of the Beloretsk Butter and Cheese Factory in respect of all rights and obligations in accordance with the deed of transfer and the approved plan for the privatization of the enterprise.

The founder of OJSC "BMSK" is the Ministry of Property Relations of the Republic of Belarus represented by the Committee for Management of Municipal Property of Beloretsk and Beloretsk District.

The authorized capital of JSC "BMSK" is 9,367,356 rubles, in addition, the plant, after its state registration, issues and places ordinary and preferred shares worth 7,128,306 and 2,239,050 rubles, respectively.

The main management body of JSC "BMSK" is the Board of Directors, which carries out general management of the plant. With the exception of resolving issues related, in accordance with the Charter, to the exclusive competence of the general meeting of shareholders.

The Board of Directors is elected by the general meeting of shareholders by cumulative voting in the amount of 5 members for a period until the next annual meeting of shareholders.

The General Director and members of the Management Board of JSC "BMSK" cannot make up more than one quarter of the Board of Directors.

The management of the current activities of OJSC "BMSK", the execution of decisions taken by the general meeting of shareholders and the Board of Directors of the plant, is carried out by the sole executive body represented by the General Director, Kharisov N.B. The General Director can simultaneously perform the functions of the Chairman of the Management Board of JSC "BMSK", he can also be elected to the Board of Directors.

In accordance with the current legislation, the General Director is elected for up to 5 years.

Describing the main activities of JSC "Beloretsk Butter and Cheese Plant", it should be noted:

- firstly, the production and sale of dairy products, the production of products and goods for industrial purposes, the processing of production waste;

- secondly, intermediary, trade and purchasing activities, as well as the organization of company stores.

The trading and purchasing activity of the Beloretsk Dairy Plant is directly related to the fact that the plant is located on the main transport highway of the city of Beloretsk, the entrance can be made from all sides, except for the southwestern one, where the residential area is located. The enterprise has its own transport, which allows the plant to carry out timely delivery of milk from milk collection points, as well as the delivery of products to city stores, to carry out supply and marketing deliveries with its own transport.

The range of manufactured products is quite wide - 46 items, but the main specialization of JSC "BMSK" is the production of whole milk products. However, recently the plant began to specialize in the production of cheese, which is increasing every year.

The main sales market for BMSK is the city of Beloretsk, the population of which, according to the latest census, is 113,700 people.

The company has three branded stores located within the city. There is also an active diversification into the sales market of the city of Magnitogorsk in the neighboring Chelyabinsk region.

Raw materials for processing come from Beloretsk, Uchalinsky, Burzyansky districts. On average JSC "BMSK" processes about 30 tons of raw milk per day. Accepted milk is carefully checked for compliance with all established standards. The plant works closely with local dairy farms and with numerous villagers who keep livestock in their backyard. The specialists of the plant regularly go to the places of milk collection, inspect them, in addition, they supply milk producers with special reagents, equipment, and teach the basic principles of milk production and preparation.

1.2 Economic characteristics of JSC "BMSK"

Consider the economic characteristics of JSC "BMSK". To do this, let's pay attention to the equipment of the enterprise with fixed, working capital, as well as labor resources.

The security of any enterprise with fixed assets and the efficiency of their use are important factors on which the results of economic activity depend, in particular the quality, completeness, timeliness of the performance of any type of work, and, consequently, the volume of production, its cost, and the financial condition of the enterprise. In this regard, the analysis of the security of the enterprise with fixed assets and the identification of reserves for increasing the efficiency of their use is of great importance. First of all, when analyzing fixed assets, it is necessary to study the structure of fixed assets and evaluate the changes that have occurred.

After analyzing the data in this table, we can conclude that by 2006 compared to 2004, the value of fixed assets decreased by 5.8%. The main reason for the change in the structure of fixed assets is the retirement of fixed assets in terms of some items.

First of all, this is due to the fact that by 2006 the cost of buildings decreased by 0.4% due to their depreciation. You can also see a decrease in the cost of machinery and equipment at the enterprise by 26.3% due to the obsolescence of most refrigeration and other production facilities. In addition, the cost of vehicles and household equipment remained virtually unchanged compared to 2004.

Analyzing the structure of fixed assets in JSC "BMSK" it is clear that the largest share in the period 2004-2006. occupied by buildings and industrial premises - 53.9 and 57% respectively, in 2006 machinery and equipment accounted for 17.3%, which is 2.8% less compared to 2004. The smallest share in the structure of fixed assets in OJSC "BMSK" is occupied by production and household inventory, their share for the study period remains unchanged and amounts to 0.01%.

Sufficient provision of processing and other enterprises with labor resources, their rational use, and a high level of labor productivity are of great importance for increasing the volume of production. In particular, the volume and timeliness of the performance of various types of work, the efficiency of the use of equipment and, as a result, the volume of production, its cost, profit and a number of other economic indicators depend on the availability of the economy or enterprise with labor resources and the efficiency of their use.

Consider the security of our enterprise with labor resources, the data is given in table 1.2.2.

Table 1.2.2 Equipment of JSC "BMSK" with labor resources

							2006 in % to 2004
			average annual number, pers.		average annual number, pers.
For organizing everything
including dairy workers
butter and ice cream workers
laboratory workers
sausage cheese production workers
expedition workers
employees of OGM, OGE
garage workers
compressor shop workers
leaders

As can be seen from Table 1.2.2, the total number of employees at the enterprise in 2006 compared to 2004 decreased by 7.7%. This is due, first of all, to a reduction in the staff of the whole-milk shop by 9.1%, since by 2006 there was a noticeable decrease in production volumes and volumes of orders. There is a 20% decrease in the employees of the Department of the Chief Mechanic and the Department of the Chief Power Engineer, this was the acquisition of new vehicles in 2006, and the need for service personnel in these areas of production has decreased. Also from this table it can be seen that the number of such workers as workers of the oil production shop, expedition workers, garage workers and managers has not changed. Only an increase of 8.3% in the production of sausage cheese is observed, since this enterprise began to expand the production of sausage cheese.

Analyzing the structure of the composition of employees in OJSC "BMSK", it is clear that the largest share is occupied by employees of the whole-milk section, in 2004-2006. 21.2% and 20.8%, respectively, since the production of whole milk products is the main specialization of the enterprise. A sufficient share is accounted for by service personnel, for example, the compressor shop workers in 2004 amounted to 13.5%, and by 2006 - 12.5%.

The smallest share in the structure of the plant's employees in 2004–2006. employees of the expedition occupy 3.8% and 4.2%, respectively.

The company employs highly qualified specialists, thanks to which the quality of products remains unchanged. Every year the employees of JSC "BMSK" take refresher courses not only in the Republic of Belarus, but also abroad.

An interesting fact is that many employees of the Butter and Cheese Plant have been working since its very foundation. This means that people like to work here, especially with sufficient wages.

The team considers its task to be the production of tasty, natural and high-quality products.

When conducting an analysis of the economic condition of JSC "BMSK", attention should be paid to the analysis of the production capacity of the plant.

Under the production capacity of the enterprise is meant the maximum possible output of products at the achieved or planned level of technology, technology and organization of production. To estimate the production capacity of the Beloretsk Butter and Cheese Plant for the analyzed period, we take 2004–2006. Table 1.2.3 will be needed for this analysis.

Table 1.2.3 Production capacities of OJSC Beloretsk Butter and Cheese Plant

Product type	Power per shift, t	Average - annual capacity, t	Products manufactured, t			Average annual capacity used, %
Butter animal
Whole milk products
Sausage cheese
Cheese "Adyghe"
Processed cheese "Omichka"

From this table it can be seen that in 2006 the utilization of production capacities increased due to an increase in the volume of products: Adyghe cheese, animal butter, whole milk products, as well as due to the expansion of the range of products - in 2006 the enterprise began to produce a new type of product, processed cheese. Analyzing the use of the average annual capacity, it can be seen that in 2006 there was an increase in it, and amounted to 21.5% for the listed range, compared with 2005 and 2004.

1.3 Analysis of the financial condition of JSC "BMSK"

The financial condition of the enterprise is characterized by a system of indicators that reflect the state of capital in the process of its circulation and the ability of a business entity to finance its activities at a fixed point in time. In the process of supply, production, marketing and financial activities, there is a continuous process of capital circulation. The structure of funds and sources of their formation is changing, the availability and need for financial resources, and, as a result, the financial condition of the enterprise, the external manifestation of which is solvency. Consequently, a stable financial condition is the result of competent, skillful management of the entire complex of factors that determine the results of the financial and economic activities of an enterprise.

An analysis of the structure of financial liabilities indicates the predominance of short-term sources in the structure of borrowed funds, which is a negative factor that characterizes an inefficient balance sheet structure and a high risk of loss of financial stability.

Operating profit increased in the analyzed period from -107 thousand rubles. and up to 71 thousand rubles. or by 166.4%. This indicates an increase in the efficiency of the company's operations.

At the end of the analyzed period, the company had a net profit of 23 thousand rubles, which tended to decrease, i.e. own funds received as a result of financial and economic activities decreased.

The amount of income from non-sales operations tended to increase and amounted to 1,330 thousand rubles. At the same time, there are no expenses for non-operating activities at the end of the period.

The results of comparing the rates of change in income and expenses associated with non-operating activities indicate an increase in its profitability.

At the end of the analyzed period, the company had a net profit of 23 thousand rubles, which had a growth trend, i.e. own funds received as a result of financial and economic activities increased.

Calculate the coefficients characterizing the financial condition of the enterprise and compare them with the results of the last three years. We write the results in the form of table 1.3.1.

Table 1.3.1 Financial performance indicators of JSC "BMSK"

Indicators			Growth, %
Absolute liquidity ratio
Current liquidity ratio
Net working capital, thousand rubles
Total liabilities to assets
Total liabilities to equity
Return on sales, %
Return on equity, %
Return on current assets, %
Return on non-current assets, %
Turnover of fixed assets, times
Asset turnover, times
Inventory turnover, times
Receivables repayment period, days

The general liquidity ratio, which characterizes the general provision of the enterprise with working capital for conducting business activities and timely repayment of the enterprise's urgent obligations, decreased in the period under review from 1.1 to 0.8, or by 27%.

The value of the indicator indicates an insufficient level of coverage of current liabilities with current assets and general low liquidity, since its normative value is in the range from 1 to 2. This may indicate difficulties in marketing products and problems associated with the organization of supply.

The negative trend in this indicator for the analyzed period reduced the likelihood of repayment of current liabilities at the expense of inventories, finished products, cash, receivables and other current assets.

The quick liquidity ratio, which reflects the share of current liabilities covered by cash and the sale of short-term securities, increased in the analyzed period from 0.4 to 0.5, or by 27.3%.

The absolute liquidity ratio, which reflects the share of current liabilities covered exclusively by cash, decreased in the analyzed period from 0.0061 to 0.0001, or by 97.9%. Thus, for the analyzed period, the company loses the ability to immediately repay current liabilities at the expense of cash.

The return on equity of the enterprise, which determines the efficiency of the use of funds invested in the enterprise, decreased, which is a negative fact, and amounted to 0.2%.

The return on current assets also decreased, which is a negative trend, and amounted to 0.2%.

Return on non-current assets decreased to 0.2%.

Thus, the management of the financial service of JSC "BMSK" should take measures to increase the return on its own capital, since at the end of the analyzed period this indicator is below the standard level, and the level of borrowed capital is so high that the company is heavily indebted, which means , the risk of its insolvency is high in the event of disruptions in the flow of income.

2. Analysis of the provision of JSC "Beloretsk Butter and Cheese Plant" with its own working capital and the efficiency of their use

2.1 Theoretical foundations of the analysis of the organization's working capital

In a market economy, all agro-industrial formations are interested in rhythmic and stable functioning. It is possible to achieve high performance results only with the help of a well-defined, reasonable and effective financial policy of organizations.

An important component of the system of organizing the production of agro-industrial enterprises is the policy of managing current assets. The development of a perfect mechanism for managing the working capital of organizations and its effective application in practice is an urgent problem at the present time, since the effective formation and regulation of the volume of current assets contribute to maintaining an optimal level of liquidity, ensure the efficiency of the production and financial cycles of activities, and, consequently, a sufficiently high solvency and financial stability of agro-industrial enterprises.

The financial condition, liquidity and solvency of the organization to a greater extent depend on the level of business activity, the optimal use of working capital, assessment of its size and structure. Due to the fact that current assets form the bulk of the liquid assets of the company, their value should be sufficient to ensure the rhythmic and uniform work of the organization and, as a result, profit. The use of working capital in economic activity should be carried out at a level that minimizes time and maximizes the speed of circulation of working capital and its transformation into real money supply for subsequent financing and acquisition of new working capital. The need for financing proportionally depends on the rate of turnover of assets. The lower the turnover of working capital, the greater the need to attract additional sources of financing, since the organization does not have its own funds to carry out business activities.

Each enterprise carrying out business activities must have working capital that ensures an uninterrupted process of production and sale of products. Current assets of economic entities, participating in the circulation of market economy assets, represent an organically integrated complex. Working capital is cash advanced to working capital and circulation funds.

Working capital of the enterprise, participating in the process of production and sale of products, make a continuous circuit. At the same time, they pass from the sphere of circulation to the sphere of production and vice versa, consistently taking the form of circulation funds and circulating production funds.

Unlike fixed assets, which are repeatedly involved in the production process, working capital operates in only one production cycle and fully transfers its value to the entire manufactured product.

According to the sources of formation, working capital is divided into own and borrowed. Own funds of enterprises with the development of entrepreneurial activity and corporatization play a decisive role, as they provide financial stability and operational independence of an economic entity. Own circulating assets of privatized enterprises are at their complete disposal. Enterprises have the right to sell them, transfer them to other business entities, citizens, rent them out, etc.

Borrowed funds, attracted mainly in the form of bank loans, cover the additional need of the enterprise for funds. At the same time, the main criterion for the terms of lending by the bank is the reliability of the financial condition of the enterprise and the assessment of its financial stability.

The placement of circulating assets in the reproduction process leads to their division into circulating production assets and circulation funds. Circulating production assets function in the process of production, and circulation funds - in the process of circulation, i.e. in the process of selling finished products and acquiring inventory items. The optimal ratio of these funds depends on the largest share of circulating production assets involved in value creation.

The value of circulation funds should be sufficient, but no more than that, to ensure a clear and rhythmic process of circulation.

The analysis of current assets is one of the most important sections of the analysis of financial statements that determine the presentation of information about the property and financial position of the organization. When conducting such an analysis, certain problems arise, the unresolved nature of which significantly reduces the reliability of its results.

The first question that arises when analyzing current assets is related to their definition. Current assets are cash and other assets that can be expected to be converted into cash or sold or consumed within a 12 month or normal operating cycle if longer than 12 months. The operating cycle is understood as the average period of time between the moment of procurement of material assets and the moment of payment for products sold or services rendered.

The definition of the concept of current assets allows a more reasonable approach to the formation of their value for the purposes of analysis, for which it is necessary to exclude from the balance sheet section of the same name those articles that, in essence, do not relate to current assets. This primarily applies to items of receivables for which payments are expected more than 12 months after the reporting date.

The exception to the rule is receivables under contracts concluded for a period of more than a year, but with a turnover period during the normal operating cycle. The presence of such receivables as part of current assets should be commented on in the explanatory note in order to indicate to external users the specificity of the approach.

In practice, this procedure is considered as the only adjustment of items of current assets. At the same time, in order to analyze current assets, it is necessary to further clarify their value, excluding from their composition those accounting objects, the receipt of potential income from which seems unlikely. Such an adjustment should be carried out at the stage of preparing the information of the balance sheet for its analysis.

When analyzing the operating cycle and determining the need for sources of financing, it is difficult to establish the duration of the stages of repayment of receivables and payables in a mixed settlement system, which is the most typical for the present. The problem is that the methods of financial analysis are focused on a simplified situation, when the sale of goods is carried out only on credit, and the receipt of material values ​​is accompanied by the emergence of accounts payable. However, the system of relations between an organization and its counterparties in many cases presupposes the presence of pre-payment for products in one volume or another.

This aspect is fundamental for obtaining reliable results of the analysis of solvency, as well as the analysis of financial results and profitability of organizations. An overvaluation of assets or the inclusion of so-called “dead” items in them, for example, items that are unlikely to be collected, lead to a distorted assessment of solvency and an overestimation of the financial result and, consequently, to an unreliable presentation of information about the property and financial position of the organization.

It is advisable to conditionally divide the articles of current assets, depending on the degree of their liquidity, into three groups:

1) liquid funds that are in immediate readiness for sale;

2) liquid funds at the disposal of the organization;

3) illiquid funds.

The next problem with the analysis of turnover is that the revenue reflected in the financial statements may be overestimated in comparison with the actual value of revenue in situations of possible return of products, as well as emerging discounts associated with the terms of the calculations. For the purposes of the turnover analysis, it is recommended to use the net revenue indicator.

Inventory turnover analysis is also important because it serves as the basis for developing turnover rates. Even if other methods of control and regulation are used for inventory management purposes, the development of inventory turnover norms will be useful because:

- turnover rates are those general indicators that allow you to compare the level of stocks in different time periods;

- turnover rates are the starting point in justifying inventory limits in the financial and production plan;

- as a result of the current comparison of actual turnover rates and planned norms, it becomes possible to evaluate the effectiveness of financial planning. On the other hand, a comparison of actual and planned turnover rates allows you to assess the degree of compliance of stocks with the real needs of the organization.

In this regard, working capital is divided into standardized and non-standardized. Normalized working capital correspond with own working capital, as they make it possible to calculate economically justified standards for the relevant types of working capital. Non-standardized working capital is an element of circulation funds. The management of this group of working capital is aimed at preventing their unreasonable increase, which is an important factor in accelerating the turnover of working capital in the sphere of circulation.

In addition to the general turnover rates established for certain groups of stocks, for most enterprises it is necessary to carry out a more detailed calculation of stock rates so that it becomes an integral part of the enterprise's production plan. In this case, the assessment of turnover is carried out not in isolation, but as an integral part of the system for analyzing the relationship between sales - production - purchases.

The basic principles of normalization of working capital are adjusted depending on changes in business conditions, the development of corporatization, and, consequently, self-financing and self-sufficiency.

In the process of normalization of working capital, norms and standards are developed. The norm of working capital is a relative value corresponding to the minimum, economically justified volume of stocks, inventory items, established, as a rule, in days. The norms of working capital depend on the norms of consumption of materials in production, the norms of wear resistance of spare parts and tools, the duration of the production cycle, the conditions of supply and marketing, the time it takes to give certain materials certain properties necessary for industrial consumption, and other factors.

The working capital ratio is the minimum required amount of funds to ensure the entrepreneurial activity of the enterprise.

If the norms of working capital can be set for a relatively long period, then the norms are calculated for each specific period. Working capital ratios are defined as the product of the amount of one-day consumption or output and the norms for the corresponding types of working capital.

One-day consumption or output at enterprises with a uniformly increasing volume of production throughout the year is calculated according to the cost estimates of the fourth quarter of the coming year. This is due to the fact that the calculated standard of working capital is valid at the end of the forthcoming period and should meet the needs of production at the beginning of the next period.

Only in the conditions of the seasonal nature of production, one-day consumption is calculated according to the cost estimate with a minimum volume of production, since the need in excess of the minimum is covered by borrowed funds.

Rationing of working capital should ensure the optimal value of all constituent elements of normalized working capital.

So, the analysis of the state of use of working capital of an enterprise, analysis of the composition and structure of their components: inventories, work in progress and finished products, which are an important indicator of the commercial activity of an enterprise, is necessary not only for a reliable assessment of their actual use, but also for calculating the effectiveness of their use in the future. Determining the structure and identifying trends in changes in the elements of working capital make it possible to predict the parameters of entrepreneurship development.

2.2 Analysis of the provision of JSC "BMSK" with its own working capital

Current assets serve the sphere of production and fully transfer their value to the cost of finished products, changing their original form. They provide an uninterrupted circulation of funds, as well as the continuity of the production process, including all the funds necessary for the enterprise to create inventories in warehouses and in production, for settlements with suppliers, the budget, for paying wages and other purposes, so it makes sense to analyze them in detail .

A detailed analysis of the availability of working capital and the efficiency of their use will be carried out using the example of OJSC Beloretsk Butter and Cheese Plant, Beloretsk, for the analyzed period we will take 2004–2006.

Table 2.2.1 Equipment of OJSC "BMSK" with working capital

Types of working capital

2006 in % to 2004

cost, thousand rubles

cost, thousand rubles

cost, thousand rubles

including raw materials

future spending

Receivables

including buyers and customers

Cash

The analysis of this table makes it possible to judge that the total amount of the cost of working capital increased by 58.44% by 2006, which in total amounts to 4530 thousand rubles. There is a tendency to increase the amount of reserves by 7.3% and cash, and special attention should be paid to the increase in receivables, which increased almost threefold. In addition, there is a rather significant reduction in the value of VAT, by 35.7%.

Analyzing the structure of working capital in JSC "BMSK" for 2004-2006, it can be seen that the largest share belongs to reserves - 62.3% and 42.2%, respectively. In the composition of reserves, the largest share is occupied by raw materials and materials in 2004 - 39.8%, and by 2006 - 24.9%, finished products account for 22.1% and 17.2%, respectively. Another fairly significant percentage is accounted for by accounts receivable, of which the debt of buyers and customers is 34.9% in 2004 and 52.9% in 2006. The lowest value at the plant is cash, which in 2004 occupied 0.54% in the total structure of working capital, and by 2006 their value decreased to "0".

In general, the cost of working capital in the organization could be significantly affected by an increase in the cost of finished products and goods for resale by 23.1% and a sharp increase in customer debt due to late payment for shipped products.

As is known, in any enterprise, the source of replenishment of its own current assets is retained earnings, as well as capital gains due to share premium of a joint-stock company, reserve capital and social funds.

The financial position of the enterprise directly depends on how quickly the funds invested in assets turn into real money. The following factors, in turn, affect the speed of circulation of funds:

– the scope and scale of the enterprise,

- industry affiliation,

- the economic situation in the country,

- pricing policy of the enterprise,

– structure of assets,

- a method for assessing deadbolts.

Let's consider what factors can influence the change in the value of directly own working capital of JSC "BMSK". To do this, we analyze table 2.2.2.

Table 2.2.2 Factors affecting the change in the value of own working capital

Indicators	Amount, thousand rubles			Change	2006 to 2004, %
Own working capital
authorized capital in terms of the formation of working capital
Extra capital
Reserve capital
retained earnings of the reporting year

Analyzing the data in Table 2.2.2, we draw the following conclusions.

It can be seen that there is a lack of own working capital in JSC "BMSK", even by 2006 there is a tendency to reduce their value, almost 8 times. This is mainly due to a sharp decrease in the authorized capital in terms of the formation of working capital by 3603 thousand rubles. or by 136.6%, that is, almost 2.5 times.

Unfavorable is the fact that there is an increase in the amount of loss by 6.4% or 437 thousand rubles. This explains the negative value of the cost of own working capital. Only the amount of additional and reserve capital in OAO BMSK remains unchanged in the amount of 7976 thousand rubles. and 285 thousand rubles. respectively. So, in JSC "BMSK" there is a rather significant shortage of own working capital, primarily associated with the absence of the main sources of their formation at the enterprise.

2.3 Analysis of the effectiveness of the use of working capital in JSC "BMSK"

Improving the use of current assets with the development of entrepreneurship is becoming increasingly important, since the material and monetary resources released in this case are an additional internal source of further investment. Rational and efficient use of working capital helps to increase the financial stability of the enterprise and its solvency. Under these conditions, the enterprise timely and fully fulfills its settlement and payment obligations, which allows it to successfully carry out commercial activities.

The efficiency of the use of working capital is characterized by a system of economic indicators, one of which is the ratio of their placement in the sphere of production and the sphere of circulation. The more working capital serves the sphere of production, and within the latter - the production cycle, the more rationally they are used.

All performance indicators for the use of working capital will be calculated according to Form No. 1 "Balance Sheet" and Form No. 2 "Profit and Loss Statement" of JSC "BMSK" for the period 2004-2006.

The calculation of the main indicators of the use of working capital is presented in table 2.3.1.

Table 2.3.1 Efficiency of the use of working capital in JSC "BMSK"

Indicators				Change	2006 to 2004, %
1. The volume of sold products, works, services, thousand rubles.
2. Number of days in the reporting period
3. One-day turnover for the sale of products, works, services, thousand rubles.
4. The average cost of working capital balances, thousand rubles.
5. The turnover ratio of working capital, turnover
6. Coefficient of fixing working capital
7. Duration of one turnover of funds, days
8. The amount of released or additionally attracted all working capital compared to 2004, thousand rubles.
9. Load factor of funds in circulation, rub.

These tables confirm that the turnover of working capital of JSC "BMSK" slowed down by 29 days - from 80.75 to 109.9 days. This is, first of all, to a decrease in the turnover ratio of funds by 1.19 turnovers - from 4.46 to 3.27 turnovers, and an increase in the consolidation ratio by 0.08. The change in the turnover rate of working capital was achieved as a result of the interaction of two factors: an increase in revenue by 29 thousand rubles. and an increase in the average balance of working capital by 2643 thousand rubles. The slowdown in the turnover of working capital is a negative factor for the activities of the enterprise, for example, to reduce profits and reduce solvency. Therefore, with a slowdown in the turnover of working capital, in order to maintain the achieved indicators, the enterprise needs to attract additional funds. On the example of OAO BMSK, the amount of attracted additional funds after the analysis for 2006 should amount to 2623.3 thousand rubles.

In this situation, you can also analyze the reasons that influenced the slowdown in the turnover of working capital. This may be, as already mentioned, a change in the value of the average annual balances of current assets and sales proceeds. To do this, we use the method of chain substitutions in the following sequence:

∆ K about \u003d K about.o -K about.p,

where K ob.o, K ob.p - the value of the turnover ratio of the reporting and previous year.

∆ K vol \u003d 3.27 - 4.45 \u003d -1.18.

We make a substitution:

K ` vol. \u003d In about 2.3.27284 \u003d 4.46.

Calculation of the change in the turnover rate due to the influence of factors:

1) the volume of products sold

∆ K about 1 = K ` about. -K about..p

∆ K about 1 \u003d 4.46–4.45 \u003d 0.01;

2) the average cost of working capital balances:

∆ K about 2 \u003d K about - K `

∆ K about 2 \u003d 3.27 - 4.46 \u003d - 1.19.

So, according to the factor analysis, it can be seen that due to a slight increase in revenue from sales of products by 29 thousand rubles. or 0.08% turnover of working capital increased by only 0.01 turnover. And due to the increase in the balance of working capital in comparison with 2004 by 2643 thousand rubles. or 36.6% there was a significant reduction of 1.19 turnover.

Checking the results of the influence of factors:

∆ K about 1 + ∆ K about 2 = ∆ K about

0,01 – 1,19 = – 1,18.

The main task of the analysis is not to assess the value of indicators, but to determine the financial consequences of their change. In JSC "BMSK" due to the slowdown in the turnover of working capital, the decrease in revenue amounted to:

∆B \u003d ∆ K about * O s.s.

∆B \u003d -1.18 * 9927 \u003d - 11713 thousand rubles.

In addition, the change in the turnover of working capital had an impact on the change in the amount of profit, an increase of 36.86 thousand rubles, which can be determined by the formula:

∆P = - P p.

where P p. \u003d 139 thousand rubles. - profit from the sale of products in the previous year.

∆P \u003d - 139 \u003d 102.14 - 139 \u003d 36.86 thousand rubles.

The most complete analysis of the effectiveness of the use of working capital of JSC "BMSK" is impossible without assessing the individual, most important components of current assets, which include production inventories and the amount of accounts receivable, which occupy the largest share in the amount of current assets. The analysis of these particular components of working capital of the enterprise under study should be given special attention. To analyze the turnover of inventories and accounts receivable, consider table 2.3.2.

Table 2.3.2 Estimation of inventory turnover and receivables in JSC "BMSK"

Indicators				Change	2006 to 2004, %
1. The amount of receivables, thousand rubles.
2. Reserves, thousand rubles
3. Turnover of receivables, turnover
4. The share of receivables in the total volume of current assets
5. Inventory turnover, turnover

Analyzing the data in Table 2.3.2, we draw the following conclusions. First of all, the increase in the share of receivables in the total volume of current assets by 2006 by 69.7% confirms the significant role of this indicator in relation to the turnover of own assets in the enterprise. In addition, the amount of receivables increased in 2006 compared to 2004 by 3,147 thousand rubles, while the amount of inventories decreased by 308.5 thousand rubles. or by 3.8%, in connection with this, there is a decrease in inventory turnover by 0.6 turnover. The receivables turnover ratio in our case, due to a rather significant increase in receivables, decreased in 2006 compared to 2004 by 7.6 turnovers. This speaks, first of all, of the untimely payments on the part of buyers and the “freezing” of the amount of the main debt to the plant for shipped products. A sharp decrease in the turnover ratio of receivables in OJSC "BMSK" indicates that the company, despite the failure to repay the principal amount of the debt, continues to sell finished dairy products "on credit".

In conclusion of the analysis of the effectiveness of the use of working capital in JSC "BMSK" it would be appropriate to calculate the final indicator - the value of the economic effect obtained from the acceleration of the turnover of working capital. It can be determined using the load factor.

If the load factor in JSC "BMSK" increased by 23.2 rubles, then the total savings in working capital will be:

E ef \u003d ∆K s * In report 2.3.81000 \u003d 753.8 rubles.

Summarizing the conclusions on the calculations made, we can say that at the enterprise under study it is necessary to pay attention to improving the management system in terms of the use of current assets. This will help not only stabilize the rhythm of the production process, but also eliminate excess working capital, which lead to a slowdown in the turnover of working capital, as well as reduce the duration of the operating cycle.

3. Ways to optimize the use of current assets in Beloretsk Butter and Cheese Plant OJSC

The current asset management policy is part of the overall asset management strategy of the enterprise. It consists in the formation of the required volume and composition of assets, optimization of the process of their circulation.

The main disadvantage in almost every enterprise is the insufficiently developed policy for managing current assets, where, first of all, it should be taken into account that the acceleration of their turnover has a significant impact on the size of the enterprise's profit. Reducing the period of turnover of current assets leads to a decrease in the need for them. A decrease in the use of current assets causes a reduction in costs, which, other things being equal, leads to an increase in profits.

The insufficiency of own working capital necessitates an increase in borrowed sources of financing: loans and borrowings. In cases where, for one reason or another, the use of loans and borrowings seems inappropriate, in the absence of additional capital investments by owners, a slowdown in the maturity of accounts payable inevitably occurs, which, in turn, leads to an increase in its balance sheet.

As a result, the appearance of a decrease in the need for own working capital is created, which in most cases is not true, since the indicated increase in accounts payable is accompanied by an increase in overdue obligations, indicating problems with solvency.

The forced or intentional increase in the volume of accounts payable as part of the passive part of the balance sheet of Russian organizations makes the issue of determining the cost of this source of financing current assets particularly relevant.

Beloretsk Butter and Cheese Plant OJSC is a vivid example of an enterprise for which the issue of improving management policy remains open at the moment.

With a lack of current assets, as in our case, there is a risk of disruption of production processes, a possible default on obligations, and as a result, a decrease in profits.

To overcome such situations, the enterprise urgently needs to attract additional financial resources. This urgency is reflected in the increase in their value. Calculations showed that in 2006 it was necessary to attract additional working capital in the amount of 2632.3 thousand rubles.

The management of individual groups of current assets is the second section of the general policy for their management. Improving the management of each of the components of the total number of current assets can solve many problems in the enterprise.

Since inventories and receivables occupy a significant share in the structure of current assets of JSC "BMSK", we will consider how it is possible to optimize the management of these particular items of current assets.

Inventory management is a complex set of activities that consist in ensuring an uninterrupted production and sales process while minimizing current costs for the formation and maintenance of stocks. In relation to the enterprise under study, I would suggest optimizing the delivery time of raw materials by choosing to choose disciplined, reliable and constant suppliers. In the worst case, a shortage of inventories can lead to a halt in production and a decrease in sales volumes.

One of the measures for effective inventory management is the establishment of strict control over the use of stocks, their replenishment and turnover. To implement this program, it is necessary to introduce the ABC system - a system for controlling the movement of stocks. This method involves the division of stocks into three categories - A, B and C, depending on the cost estimate of the total annual need for this type of stock. Category A management should be frequent, daily; at the enterprise under study, this may be raw milk, which is daily involved in the production process; stocks belonging to category B should be under close control; for category C, safety stocks are created, which must be monitored periodically.

This system allows you to get the total need for financial resources advanced for the formation of reserves, i.e. determine the size of current assets serving a specific stage of the production and commercial cycle, excluding a situation in which production stocks stagnate and remain unused in the production process

The main task in the inventory management process is to optimize their size and turnover. To this end, it is also proposed to introduce an economically justified order model at the enterprise. First, an analysis is made of the current costs of placing an order, delivering goods, receiving and storing in a warehouse, and also determines the value of each type of cost. Minimizing all these types of costs is the key to determining the most economical inventory size.

Another solution to many problems in terms of inventory management is the involvement in the economic turnover of excess inventories of goods and materials. This will reduce the cost of storage, possible losses due to aging and deterioration of stocks, and also free up part of the financial resources.

During the period from 2004 to 2006 JSC "BMSK" has seen a sharp increase in accounts receivable by 129.5%. This tends to increase bad debts and collection costs. In the context of inflation, the aging of accounts receivable leads to the depreciation of the funds invested in it, and as a result, to the formation of a lack of financial resources.

As part of debt management, including receivables, it is necessary to assess the solvency of customers, control the timeliness of payments.

Also, in order to optimize the efficiency of management over the use of current assets in terms of receivables, it is necessary to implement the following measures in BMSK OJSC:

- development of the company's marketing policy,

- Improve the billing system

– study of the degree of saturation of the market with products and its capacity, etc.

The receivables management policy is aimed at expanding the volume of product sales and optimizing cash flows.

Conclusion

Thus, the most important element of production, ensuring the continuity of production and functioning in the normal mode, are current assets.

The effective use of working capital plays a significant role in ensuring the normalization of the work of any enterprise, increasing the level of profitability of production and depends on many factors. External factors, as a rule, include the general economic situation: tax legislation, conditions for obtaining loans and interest rates on them, the possibility of targeted financing, etc. These factors determine the framework within which any economic entity can use the reserves of the rational movement of working capital.

Currently, the elements of the crisis state of the economy have a negative impact on the change in the efficiency of the use of working capital of an enterprise and on the slowdown in their turnover: a decline in production and consumer demand, a break in economic ties; violation of contractual and payment discipline, etc.

At the same time, significant reserves for increasing the efficiency of using current assets lie directly in the economic entity itself. In the field of production, this applies primarily to inventories. Being one of the components of working capital, they play an important role in ensuring the continuity of the production process.

The rational organization of inventories is an important condition for increasing the efficiency of their use.

In this course work, the theoretical aspects of the importance of conducting an economic analysis of current assets were considered on the example of JSC "BMSK" in Beloretsk, the state of financial and economic activities of JSC "BMSK" was studied, an economic and financial analysis of the activities of this enterprise was carried out.

The main problems of the use of working capital were also identified.

So, for example, by 2006 there was a significant slowdown in the turnover of working capital, which is a negative factor for the activity of the enterprise, which led to a decrease in profits and a decrease in the solvency of the plant. In addition, it was revealed that there was a very sharp reduction in receivables turnover. This speaks, first of all, of the untimely payments on the part of buyers and the “freezing” of the amount of the main debt to the plant for shipped products. In this regard, it was proposed at the enterprise under study in the framework of debt management, including receivables, to thoroughly assess the solvency of customers, control the timeliness of payments, the procedure and terms for concluding contracts, etc.

With regard to increasing the efficiency of the use of stocks in BMSK OJSC during the analysis in order to involve their full volume in the production process, it was proposed to introduce an ABC analysis system that would allow the enterprise to establish a system of strict control over the use of stocks, their replenishment and turnover.

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