Business activity indicators are a tool for assessing the effectiveness of the primary activities of a business entity.As the main characteristics of these indicators can be considered as the rate of turnover of financial resources.Analysis of economic activity of the subject is carried out by calculating the following factors:
- current assets, calculated as the ratio of net revenue (according to the statement of income) to the average balance sheet total.This ratio is characterized by an optimal use of economic entities of all available resources, regardless of the sources of supply.
- Revolving accounts or accounts payable, which is calculated the ratio of the net proceeds to the respective average debt.This figure shows the velocity of receivables (payable) of an economic entity for the period under review, as well as the dynamics of financial loans that are provided or obtained now.
- long rotation of the above types of debt, calculated as the ratio of the length of the period under review to the corresponding coefficients negotiability of such arrears.It characterizes the average repayment period of these types of debts.
- Werewolves of inventories, as well as equity.Like any rate, turnover of inventory is calculated by finding the relationship of production costs to the average cost of such stocks.Using this index describes the speed of implementation of inventory of a business entity.When considering the negotiability of equity takes into account the ratio of net earnings to the average equity of the subject.This indicator assesses the effectiveness of the company using its own capital.
- return on assets (Current assets).The calculation is performed in a ratio of net revenues to the average for the year of fixed assets.The indicator assesses the optimal use of capital assets.
Overall, indicators of business activity characterize the general activities of the company and its possibilities for advancing in the relevant market.The evaluation of these parameters is carried out in comparison with the similar activity of economic entities in the related fields.
Indicators of business activity from the perspective of financial activities are very closely connected with the element of performance evaluation, as profitability.This ratio shows the profitability of the subject and is a relative measure of its results.
Indicators of business activity will enable an analysis of the effectiveness of the use of their funds.Expressed in days, the number of turns in each of the resource of choice for the analyzed period.
For a complete description of the company should be analyzed and a concept such as "financial cycle", which starts from the date of payment of accounts payable (payments to suppliers for materials) and ends with the date of receipt of funds from the buyer for the goods shipped.
Business activity indicators are qualitative in nature, are characterized as: latitude market for goods, the existence of the exported finished products, commercial reputation and stability of relationships with contractors.It is advisable to consider these factors in the dynamics, ie,compare them with the pace of change.It is the ratio of the dynamics of production and resources determines the growth of an economic entity.
