important step in the analysis of economic activity should be called assessment of various parameters, including the business activity.One of the indicators used for this purpose shall be deemed turnover ratio of equity capital.Business activity is characterized by how dynamic organization which goals and to what extent achieved.All of this is reflected in the cost and relative terms.This procedure gives an indication of how effectively it uses the available means.This line of business analysis is to examine not only the level but also the dynamics of a variety of factors.Business activity is manifested primarily in the rate of turnover of existing media organizations.As more capital than do the "circle", the greater the volume of production, the company will be able to purchase and implement without additional investment finance.Slow rotations, delays arising at any stage, lead to deterioration in the financial stability of the company.If the turnover ratio of equity capital, in contrast, increases, increases of such an important figure as a thief.However, there is one important feature.Turnover ratio of equity can play a negative role, deteriorating financial condition of the company.This occurs if the result of the sale of goods formed a loss.
factors affecting the level of business activity indicators and their dynamics
enough of them, we list only a few.Firstly, on the turnover ratio and return on equity affects the quality of management and the level of organization of the production process.The second factor - the structure and the main sources of funding.Third, the rational use of available resources.The fourth factor - the volume of production, product quality and its structure.It is also important production costs.
Characteristics of some factors
This is a series of indicators of turnover of fixed assets and working capital of their own, assets inventories.The first indicator reflects how effectively the organization uses of BPA in a given period.This capital productivity.Working capital turnover ratio indicates the rate at which back both material and financial resources of the organization.Next, we should say a few words about the coefficients characterizing equity.It affects various aspects of the economic entity.He can talk about the excess (deficiency) implementation.In addition, this indicator reflects the rate of return on invested capital and the activity inherent in investments.Too high a value of this parameter, as well as low, not good for business.In the first case, a significant excess of the level of sales of invested assets is the cause of attracting more debt.The second option indicates the presence of some downtime share of the underlying assets, and therefore, the management company it is advisable to think about investing in a more efficient source of profit.Current assets turnover ratio indicates how many revolutions accomplished in a single production cycle.And the latter can be called different speed implementation.As a rule, the higher the value of the parameter in question, the liquid capital, and, consequently, more stable state of the organization as a whole from an economic point of view.
