Analysis of the efficiency of working capital and its performance

economic value for the available working capital (OS) is reflected in the result, which is obtained in the course of all activities of the company or enterprise.Effectiveness is determined by its number of indicators, including the operating system occupy a leading position, and the analysis of efficiency of use of working capital stands the most important attribute in implementing the strategy of enterprise management.This performance is characterized by such indicators as the turnover of the OS.It is understood as a time period during which there is 1 turnover, starting from the moment of their conversion into inventories and ending with the moment when the output of finished products and sold on the market.Competent analysis of the efficiency of working capital accounts for the whole system of interrelated indicators that are taken over a specific period of time - a year, six months, a day.For example, to calculate the value of turnover in the days running, you can use the formula: T (0) = C-D, where: C - the remains of the OS on some selected analysis date, T - the volume of goods D - number of days.

When this value is known, one can determine the number of revolutions.This can apply the formula: R (a) = T / C, which also reflects the turnover ratio OS.It is possible to determine the ratio of profit received from the sale of goods produced by the enterprise to the remains of the OS.However, their release could be shown as absolute and relative.When the absolute value of the OS release their actual residues shall not exceed the established norm or magnitude of residues of the previous period.With the release of the analysis of the relative efficiency of working capital refers to the need to accelerate the turnover and growth of the corporation at the same time.Moreover, the rate of growth of production can not be lower than the growth rate of operating balances.Saving such conditions and trends can significantly save finances and thus increase current production.

As demonstrated by the analysis of the efficiency of working capital, in this case, the higher the value of the turnover ratio, then the more efficient the company uses the OS.

management strategy there are other parameters of efficiency of use of the OS, such as the duration of the revolutions of individual components the operating system components.In particular, the duration of inventories turnover shows the time required to transform raw materials into products sold.Analysis of working capital of the enterprise involves the study of accounts receivable turnover, and it shows the average value of the term of payment is received.The turnover period of days shows the time from the date of payment for the raw materials to the receipt of income from the sale of goods on the market.

In all cases, each company as a strategic objective has always aims - to reduce the amount of traffic and to achieve thereby increase profits.

reduce dependence on sources of funding helps analysis of working capital.It is also important to consider that and receivables serves an essential element of the operating system.The value of assets receivable depends on the volume of products sold under the loans, and the average amount of time between the start of the sale of goods and the receipt of income from this realization.

economic activity of any firm or company is always associated with the acceleration or deceleration of turnover.Such dynamics is determined by comparing the actual values ​​with their turnover forecast or planned parameters.Great importance has also accelerate the turnover rate, which is characterized by a reduction in the time to examine separately the turnover.