effect of the enterprise is expressed in absolute amount of profit or loss.However, the use for the analysis of the absolute values is not very convenient, so often resort to the calculation of relative indicators.From the standpoint of the efficiency of the most popular indicators are the margins.For more information we would like to focus on those that characterize the return on assets of the enterprise.Of particular importance in this group of indicators is that the entire activity of the company mainly due to the interaction with the property, which is presented in assets.Thus, to determine the degree of effectiveness of this interaction is extremely important.
The indicator of profitability is done by ratio of profit to the amount of margin that is determined, in this case - assets.As for profits, everything is not so clear.A variety of indicators that can be used in the calculations, quite a lot.Most often, the return on assets is calculated on net profit, pre-tax profit or profit from sales.A certain amount of net income return on assets shows that what the value of the profit per each unit of value of the assets of the organization.The net profit has been influenced by many factors, so there will always be correct that you use it in the calculations, if you expect a comparison between the performance of different companies.Get rid of the influence of features in taxation will allow the use of pre-tax profit, and consider only the effectiveness of the principal activity is possible by calculating the profit from the sales.
As mentioned above, the return on assets shows the degree of efficiency by its assets.It is understood that the property is non-uniform, and to classify.In this regard, it is useful to determine the profitability of individual non-current assets and working capital of the company.The calculated coefficients are characterized by efficient use of each of these parts individually.
Attention is drawn to the fact that the principles of accounting earnings and assets are somewhat different.The profit presented in the financial statements to reflect the accumulated value for the period, and assets - the value of a specific date.To smooth over these differences and take into account possible changes in the value of assets in the calculations made use of the average cost for the period.
Return on assets shows the level of efficiency and of itself, but to draw any conclusions from a single figure is impossible.You must have a set of indicators to make comparisons among themselves.More often resorted to the use of comparisons over time, which is to study the dynamics of indicators.To do this, determine the relative and absolute change, which gives an indication of the presence of a trend.In addition, often use comparisons with levels of profitability or other similar enterprises with profitability, typical for the industry as a whole.Another popular method of analysis is a factor, which is held for a long time developed by traditional methods and to evaluate the impact of certain factors.
As you can see, the definition of efficiency of use of the property is a very important aspect of the study of the company.Return on assets shows, depending on the performance and profitability of the core business and the operation of the business in general.However, remember that simple calculation is not sufficient and it is necessary to analyze the results.
