The return on assets shows how much output the company produces for each invested unit of the value of fixed assets.
Many sources, while maintaining the ideology of the indicator, however, give slightly different definitions of the return on assets indicator. Also, different authors have different formulas for calculating the return on assets. Therefore, below are several options for the formula for calculating the return on assets with comments. Also, for a complete understanding of the essence of the indicator, read the contents of the article " Capital intensity".
Additional definition.
return on assets (Ukrainian fundraising, English output/capital ratio)- an indicator of the efficiency of the use of fixed assets, which is defined as the ratio of output (gross, marketable, net) to the average annual value of fixed assets (fixed production assets, funds with which these products are produced).
As can be seen from the definition itself, various authors use three variants of the numerator in the formula and three variants of the denominator in various combinations. Thus, nine different indicator values can be obtained. However, most sources define the return on assets as the ratio of manufactured marketable products to the average annual cost of all fixed assets of the enterprise .
The original idea for calculating the indicator is that return on assets characterizes the efficiency use all fixed assets enterprises. That is, this indicator can be compared with the depreciation of fixed assets, product profitability, etc., and on the basis of this, conclusions can be drawn about the efficiency of the enterprise. The basic verifiable figure should be a comparison of the volume of output in relation to the value of the involved fixed assets of the enterprise. After that, it is necessary to determine the amount of net profit received by the enterprise and compare it, at least with depreciation charges. Depreciation should be less than the profit received.
This analysis can be important when making a decision to purchase equipment. In this case, the profit from the use of equipment in a particular business for the standard period of operation must exceed the cost of acquisition. If this condition (testing for efficiency through the return on assets) is met, then further checks are made for the effectiveness of investments in terms of return on invested capital (ROI).
The formula for calculating the return on assets indicator
Basic Formula.
Return on assets \u003d Manufactured commodity products / Initial cost of Fixed Assets
Since, to calculate the return on assets, we are interested in manufactured products in relation to invested funds, it is the initial cost of fixed assets that is taken into account.
It should be noted that many authors disagree about both the numerator and the denominator of the formula for calculating the return on assets (ukr. fund_ddachy).
Additional formulas.
Return on assets \u003d Marketable products / ((Fixed assets at the beginning of the period + Fixed assets at the end of the period) / 2)
Since the fixed assets of the enterprise are not in an unchanged state, the indicated formula for calculating the return on assets takes into account their change between the reporting dates of the balance sheet. In fact, the denominator contains the arithmetic mean.
Return on assets \u003d Annual output / Average annual cost of fixed assets
In this formula, in the numerator, instead of the value of the volume of marketable output, the annual output is indicated. This replacement, it would seem, does not change the meaning of the indicator itself, but its numerical value can change radically. The fact is that the indicator "commodity output" is calculated in conditional domestic prices, which the enterprise "desires". When we talk simply about output, we assume the prices of specific transactions at which the company's products are actually sold. Thus, the value of the return on assets index calculated using different formulas may be different for the same enterprise. You should not be afraid of this - the meaning of calculating this indicator is not to determine its specific current value, but to compare its dynamics for the same enterprise for different periods or to compare its value for different enterprises of the same industry in the same period (benchmarking) (see below).
Comments on the application of the indicator of capital productivity
(Ukrainian fundraising, English output/capital ratio)
.
| The rate of return on assets is used in the analysis of the efficiency of the use of fixed assets. The inverse indicator to the capital productivity ratio (Ukrainian funds/capital ratio) is the capital intensity indicator. Under "normal conditions" capital productivity should tend to increase | The index of funds is fixed during the analysis of the effectiveness of the selection of the main funds. The return indicator to the fund indicator is the indicator of fund capacity. For normal minds, fundraising is to blame for the mother's tendency to zbіlshennya. |
| Since the formula takes into account all the fixed assets of the enterprise, it must be remembered that the final value of the return on assets index can be affected by:
| Oskіlki formula vrakhovuє all the main funds of business, then it is necessary to remember that on the basis of the bag, the value of the indication of funds can be added:
|
|
|
Thus, due to the significant variability of the indicator under the influence of reasons that are “outside production”, as well as the possibility of fluctuations in the return on assets indicator under the influence of production factors, the analysis must necessarily take into account the influence of the reasons outlined above. so, for example, at an enterprise with a high level of depreciation of fixed production assets, the commissioning of a large modern information system can have a significant negative impact on the return on assets and, without analyzing the reasons, lead to incorrect conclusions.
Nevertheless, to compare the efficiency of production organization and businesses in enterprises in the same industry, the return on assets indicator can be very useful. And under the condition of comparing "similar" productions, the formula for calculating through natural indicators can be applied. Thus, an enterprise can conduct its own benchmarking in relation to competitors, using only open statistical data and data from officially published financial statements.
To compare the return on assets by natural indicators (for example, the production of bricks, concrete, crushed stone, grain and other homogeneous products), you can use the following return on investment formula:
Return on assets \u003d Production in kind / Average annual cost of fixed assets
| When working with the return on assets indicator, it must be remembered that it does not take into account, for example, changes in product quality. Therefore, the reasons for its fluctuations must always be taken into account to evaluate the results of the analysis. | When working with a show of funds, it is necessary to remember that the fault is not insured, for example, change the quality of the products. |
When analyzing changes in the rate of return on assets, it is necessary to analyze:
| When analyzing changes in the indicator of funds, it is necessary to analyze:
|
| Increasing return on assets can be achieved through: | Promotion of funds you can reach for the rahunok: |
|
|
| If we carefully analyze the economic essence of the return on assets, we can conclude that it is inextricably linked with the indicator of labor productivity. Therefore, when assessing the feasibility of investing in increasing fixed assets, it is always necessary to take into account changes in labor productivity. | It is also important to analyze the economic essence of the indicator of funds, you can develop a visnovka, which is inconsistently connected with the indicator of the productivity of work. |
Indicator of return on assets (Ukrainian capital ratio, English output/capital ratio) in the USSR
If speak about practical application the rate of return on assets, then another "pitfall" may be the fact that, according to the old "Soviet" methods, the book value of fixed assets without deducting depreciation was taken to calculate the rate of return on assets. This was done for the purposes of state statistics in order to further recalculate the indicator in comparable prices. Of course, in the current conditions, this method of calculating the return on assets does not have much economic sense, but this should be taken into account when evaluating the data of the state statistics of the USSR.In addition, since in the "Soviet era" the fall in the rate of return on assets was categorically unacceptable, the planned volume of production was determined by the product of the volume of fixed assets by the coefficient of return on assets. But if you look "truth in the eye", then in the USSR there were also significant fluctuations in the level of capital productivity, both associated with cyclical processes and the presence of large capital investments. For example, until 1959, the return on assets ratio had a constant upward trend, and in the period 1961-65 there was a fall. From 1966 to 1970, the rate of return on assets did not change significantly, and later, starting from 1971, it even experienced a fall. In 1985 the return on assets in the USSR decreased by 14% compared to the level of 1980.
Return on assets ratio is highly variable for various industries and depends on the structure and characteristics of production. As of 1975, in the USSR, the average return on assets was 0.45 (in actual prices), in industrial production - 0.5, in agriculture- 0.36, in transport and communications - 0.13, in construction - 1.18.
For manufacturing enterprises the most important factor in the analysis of financial and economic activity is the assessment of the return on investment. The organization's fixed assets are non-current assets, i.e., the funds invested in their purchase will be returned in stages, over several production cycles. Accordingly, the more efficiently they are used, the faster the company returns the invested own or borrowed financial resources. founders, credit organizations, the owners, when evaluating the activities of the enterprise, consider indicators characterizing fixed assets. These include return on assets, return on investment, capital-labor ratio and capital intensity.
Characteristics of the return on assets ratio
To calculate the return on assets ratio, a single formula is used, the calculated values of the mathematical components can be adjusted depending on the purposes of calculating the indicator. The main rule for a correct analysis of the return on investment is to track the dynamics of the obtained value. For comparison, the base value taken as a single positive level for a particular enterprise can be used, or the indicators of the current calendar period are compared with the previous one. Also, a prerequisite for the objectivity of the obtained coefficient are the units of measurement used in the calculation; they should not change in comparable periods (most often it is a thousand rubles). The procedure for calculating the indicator "capital productivity" - the formula for calculating this coefficient - implies that it refers to the values characterizing the turnover of non-current assets. Similarly, the renewal rate is calculated for inventory, receivables, IBE, and other types of assets involved in the production process.
Factors affecting return on assets
The value of the coefficient, which indicates the level of OPF turnover, is significantly influenced by a number of factors:
- The volume of products sold in a certain period (in some cases, the indicator of manufactured, manufactured products is taken into account).
- Performance of the main active part of the equipment.
- Decreased downtime, shorter shifts, days.
- The level of technical perfection of equipment and machines.
- OPF structure.
- Equipment load level.
- Increasing labor productivity and non-current assets.
Formula for calculating return on assets
The coefficient is calculated as the ratio of the released, manufactured (sold) products of the enterprise to the value of the OPF, as a result, an indicator is obtained that indicates how many products are produced (sold) per unit of funds invested in the OF. Let's look at the generalized calculation of the "capital productivity" indicator. The calculation formula has next view: Fo \u003d Vpr / Sof, where Fo is the total return on assets; Vpr - manufactured products for the selected period; Sof - the cost of fixed production assets. This calculation option is used to obtain a generalized indicator, which must be calculated for all production units, otherwise it will be necessary to specify the elements of the numerator and denominator.
Denominator adjustment
The capital productivity formula in the denominator contains such a value as the cost of fixed assets. To obtain a correct indicator, the values of the numerator and denominator must reflect the actual calculated data. The cost of fixed assets can be calculated as follows: OSav \u003d OSn + OSk / 2, i.e. the book value of the OPF at the beginning of the period is added to the data at the end of the period, then the resulting value is divided by 2 (to obtain the arithmetic mean). You can expand and specify this number by including in the calculation the cost of fixed assets acquired over the period, retired as a result of sale or complete depreciation. The same indicator changes in case of revaluation of funds. Many analysts prefer to use the value of the residual value of fixed assets - it can be defined as the difference between the book price at a certain point (account 01 in the balance sheet) and the amount of fixed asset depreciation (balance sheet account 02) accrued for the entire period of operation.
When taking into account the structure of the OPF, only active (participating in the production process) OS, i.e. machines, machines, equipment, depending on the specialization of the enterprise, are taken into the formula for calculating the return on assets. From the total cost, the funds of the enterprise located on the reservation, leased, modernized and not operated during the analyzed period are taken away. As part of fixed assets, it is necessary to take into account leased or leased units of equipment. They can be reflected on off-balance accounts, so their value does not fall on account 01, which affects the receipt of incorrect data when analyzing such an indicator as capital productivity. The formula, or rather its denominator, must be increased by the value of the leased property.
Numerator adjustment
The volume of products manufactured in the analyzed period is necessarily adjusted for the amount of taxes, i.e. VAT and paid excises are deducted from the total volume of goods sold. Sold products in sum terms are indexed to the level of inflation in order to obtain comparable indicators. It is possible to use the average contractual prices for products sold to calculate the return on assets.
To calculate the return on assets ratio (the general formula was discussed above), the volume of products produced for a certain period can be structured by departments, by types of goods. In this case, output indicators should be correlated with the cost of fixed assets employed in the production of a particular type of product.
Analysis of the return on assets
The coefficient obtained in the calculation of capital productivity is analyzed by comparison with similar data obtained in other periods, or with the level of the planned indicator. The dynamics of the values will show an increase or decrease in the efficiency of the BPF operation. Positive dynamics indicates the proper use of fixed assets, which leads to an increase in production, and, consequently, sales (in the case of a stable level of demand). Lowering the calculated level of the return on assets is not always a negative aspect of the enterprise. Therefore, it is recommended to carefully weigh all the factors affecting its value. For the growth of capital productivity, if it is objectively necessary, several methods are used.
Ways to increase return on assets
In order to increase the capital productivity ratio, it is necessary to increase the efficiency of the operating system at current implementation rates. There are the following ways:
- Reduce equipment downtime by organizing multiple work shifts.
- Stimulation of personnel - a direct dependence of wages on output is introduced.
- Increasing the technical level of personnel - will make it possible to avoid downtime by reducing the number and time of repairs.
- Modernization of equipment, commissioning of more technologically advanced machines.
- Sale of mothballed equipment, write-off of machines with a high level of physical wear or obsolete.
These methods will allow you to gradually increase the economic result from investing financial flows in fixed production assets, without cutting back on
DEFINITION
return on assets is the most important tool for determining the performance of an enterprise, which reflects the probable (actual) "return" of financial resources from investments made.
The capital productivity formula for the balance sheet is a value showing how many rubles of income fall on a single ruble of the value of fixed assets.
Fixed assets (or fixed assets) are non-mobile funds that make up the underlying assets of an enterprise. Fixed assets include:
- buildings and structures,
- Technique, equipment,
- Vehicles,
- Licenses and patents, etc.
The capital productivity formula for the balance sheet contains the company's income, which includes the type of profit (revenue or operating income).
Features of calculating the return on assets
The capital productivity formula in its calculation includes two indicators that reflect certain aspects of the company's functioning:
- the amount of income
- value of fixed assets.
Most often, the calculation is carried out for this type of income as revenue, since it reflects the primary result of the sale of goods (performance of work, provision of services). In some cases, profit from the sale of the enterprise is taken as income.
The capital productivity formula for the balance sheet also includes the full value of fixed assets, but it can also be calculated only for their active part, directly related to the production process. If only the active part of fixed assets is used, this will be advisable only if there is on the balance sheet:
- non-industrial buildings, machines not put into operation,
- unused infrastructure facilities.
Capital return formula for balance sheet
To calculate the formula for return on assets on the balance sheet, two forms of accounting are used:
- Form No. 1 ( balance sheet), which determines the value of fixed assets.
- Form No. 2 (profit and loss statement), from which they take the amount of revenue.
The capital productivity formula for the balance sheet in general terms:
Photd.= p. 2110 / p. 1150 *100%
Fodd is here. - the rate of return on assets (in%),
Page 2110 from OFFR - the amount of revenue,
Page 1150 from BB - the cost of fixed assets.
In order to obtain a more accurate result, the average annual value of the value of fixed assets is calculated. At the same time, the indicator of the line 1150 BB of the beginning and end of the period is summed up, then this amount is divided by 2.
Often, profit from sales is used instead of revenue in the calculation. Then line 2200 is substituted in the capital productivity formula for the balance sheet instead of line 2110.
The value of return on assets
The capital productivity formula for the balance sheet makes it possible to consider, evaluate the effectiveness of the use of fixed assets in the process of production activities in order to make a profit.
The return on assets indicator on the balance sheet is usually considered in dynamics for several periods of time in order to get a more complete picture of performance. If the cost of fixed assets rises sharply (for example, when starting a new production site), then the return on assets may decrease. For this reason, it is necessary to analyze other characteristics related to the use of the property of the enterprise and the types of profit.
In the case when the value of fixed assets increases, we can talk about a further increase in capital productivity.
The return on assets formula for the balance sheet makes it possible to analyze the weak points in investment and develop a more successful strategy for investing in the company's fixed assets.
Examples of problem solving
EXAMPLE 1
| The task | Calculate the return on assets from fixed assets if the enterprise has the following performance indicators for the current and last reporting period, taken from financial statements:
The amount of revenue (OFR) - 2,425,000 rubles, The cost of fixed assets (at the beginning of the year) - 1,112,000 rubles, The cost of fixed assets (at the end of the year) is 1,298,000 rubles. |
| Solution | The capital productivity formula for the balance sheet for solving this problem is as follows: F = p. 2110 / p. 1150 First of all, you need to determine the average cost of fixed assets for the period: OS cf. \u003d (1,112,000 + 1,298,000) / 2 \u003d 1,205,000 rubles. F \u003d 2,425,000 / 1,205,000 \u003d 2.01 (or 2%) Output. We see that for every ruble invested in fixed assets, there are 2 rubles of revenue (201%) |
| Answer | F = 2 rubles |
Accounting, analysis and audit / Comprehensive economic analysis economic activity/ 4.2 analysis of the intensity and efficiency of the use of fixed assets
For a generalizing characteristic of the efficiency and intensity of the use of fixed production assets (OPF), the following indicators are used:
· capital productivity of OPF
where VP is the cost of output.
The capital productivity indicator shows how much production is received from each ruble invested in fixed production assets and is used in the analysis of the economic efficiency of using existing funds;
· return on assets of the active part of the OPF
,
where OPFact is the average annual cost of the active part of fixed assets;
· capital intensity
The capital intensity indicator characterizes the value of the costs of the cost of fixed production assets to obtain the required amount of production;
· relative economy of OPF
where , - respectively, the average annual cost of fixed assets in the base and reporting years; IVP - index of production volume.
Along with a generalizing indicator, the efficiency of using individual machines and equipment can be expressed, for example, by the following indicators:
1) the average daily volume of steel from 1 m2 of the furnace hearth area (in metallurgy);
2) productivity of cement rotary kilns (in the cement industry);
3) the production of yarn per 1,000 spindles (in the cotton industry);
4) the productivity of trucks per one average vehicle-ton (in transport).
In the process of analyzing the effectiveness of the use of fixed production assets, the dynamics of the listed indicators, the implementation of the plan in terms of their level are studied, and inter-farm comparisons are carried out. After that, the factors of change in the value of return on assets and return on assets are studied.
The most general indicator of the efficiency of the use of fixed assets is the return on assets, which is determined by the formula:
where PR - profit from the sale of products
The level of return on assets depends on the return on assets and the profitability of products.
The relationship between these indicators can be represented as follows:
;
To determine how the return on assets has changed due to the return on assets and the profitability of products, for example, the method of absolute differences is used.
We determine the change in capital profitability due to:
capital productivity of fixed production assets
;
product profitability
.
The factors of the first level that affect the return on assets of the fixed assets are the change in the share of the active part of the funds in the total amount of the fixed assets, the share of operating equipment in the active part of the funds and the return on assets of operating equipment:
The influence of these factors on the change in the return on assets of the OPF is carried out by the method of absolute differences. We determine the change in capital productivity due to:
specific gravity of the active part of the BPF
the share of operating equipment in the active part of funds
return on assets of existing equipment
The influence of these factors on the volume of production is established by multiplying the change in the return on assets of the OPF due to each factor by the actual average annual balances of the OPF of the current period.
The change in the level of return on assets is also influenced by a number of factors that can be grouped as follows (Fig. 4.1).
return on assets formula
To calculate the return on assets, data from the company's balance sheet can be used. The unit of measurement of capital productivity is rubles.
Return on assets formula and return on assets ratio show how many goods are sold (released) per unit of production assets. The calculation formula is as follows:
Kf=Vp/OSng
where Kf is the capital productivity ratio (rubles),
OSng - fixed assets at the beginning of the year (average annual cost in rubles),
Vp - sales revenue (rubles).
The capital productivity indicator is the reciprocal of capital intensity, so it can be found using the following formula:
Kf \u003d 1 / capital intensity
The return on assets ratio is not standardized; for each company, management determines its own levels of acceptable turnover of production assets. The return on assets must be analyzed over several years in dynamics to assess the nature of the trend.
Capital return formula according to the balance sheet
When calculating the return on assets, you need to use two forms of accounting:
- Balance sheet, referred to as Form No. 1;
- Report on financial results(profit and loss statement), referred to as Form No. 2.
The amount of revenue is taken from the statement of financial results, and the cost of fixed assets is calculated according to the balance sheet. Formula of return on assets according to the balance sheet:
F \u003d (p. 2110 / p. 1150) * 100%
where Ф - return on assets (in percent);
line 2110 - revenue from the income statement (in rubles);
line 1150 - fixed assets calculated according to the balance sheet (in rubles).
To obtain a more accurate result, the average annual value of fixed assets is determined by adding the indicators of line 1150 of the balance sheet at the beginning and end of the period and dividing them by 2.
In calculations, instead of revenue, profit from sales is often used, while line 2200 (OFR) is substituted into the capital productivity formula instead of line 2110 (OFR).
What does the return on investment formula show?
Return on assets is a basic indicator of turnover, reflecting the efficiency of the company and the actual (potential) volume Money in response to investments.
Simply put, capital productivity reflects how many rubles of income will fall on each ruble of the value of fixed assets.
Most enterprises consider the rate of return on assets in dynamics, making calculations for several periods. This makes it possible to assess the performance picture with higher accuracy. If the cost of fixed assets rises sharply (for example, a new workshop is launched), then the return on assets may decrease sharply.
Topic 5. ANALYSIS OF THE USE OF FIXED PRODUCTION ASSETS
When evaluating the effectiveness of managing production assets, it is required to use the following indicators:
- return on assets,
- resource intensity,
- resource return,
- material consumption.
In general, an increase in the number of fixed assets in dynamics leads to an increase in the return on assets, which shows an increase in the intensity of the use of fixed assets.
Capital productivity management
It is possible to manage capital productivity on the basis of managing the size of fixed assets of production and the company's revenue.
The increase in capital productivity is achieved through the following activities:
- Increasing the productivity of labor and equipment,
- Carrying out production automation;
- Increased equipment load;
- Development of a distribution network;
- Improving the quality and competitiveness of goods;
- Implementation in manufacturing process new technologies and innovations.
Examples of problem solving
F - change in capital productivity for the analyzed period, rub
Return on assets of the active part of fixed assets shows the volume of products sold per one ruble of the average annual cost of the active part of fixed assets; is calculated using the following formula:
fakt = Np/ Fakt,av, (55)
where fact- return on assets of the active part of fixed assets, rub.;
Fact, cf- the average annual cost of the active part of fixed assets, thousand rubles.
The average annual cost of the active part of fixed assets is calculated by the formula:
Fact,av = (Fact,beginning + Fact,end) / 2, (56)
where Fact, beginning, Fact, beginning- the initial cost of the active part of fixed assets, respectively, at the beginning and end of the year, thousand rubles;
Return on equity (profitability of fixed assets) is determined by the following formula:
Roc= Рp/ Fср, (57)
where Ros— return on equity (profitability of fixed assets);
Rp— profit from sales, thousand rubles.
This "Profit from sales" is taken from form No. 2 "Statement of financial results".
Similarly, the return on equity of the active part of fixed assets (profitability of the active part of fixed assets) is calculated:
R act, os \u003d Pp / Fact, cf, (58)
where Rakt, os— return on equity of the active part of fixed assets (profitability of the active part of fixed assets);
Profitability of sales calculated by the formula:
Rpr= Рp/ Np , (59)
where Rpr- profitability of sales.
Values return on assets are calculated by formulas (51) and (52):
Favg 2012 = (134975 + 152386) / 2 = 143680.5 (thousand rubles)
Favg 2013 = (152386 + 171653) / 2 = 162019.5 (thousand rubles)
f 2012 = 813819 / 143680.5 = 5.66 (rubles)
f 2013 = 619340 / 162019.5 = 3.82 (rubles)
Relative savings (relative overspending) of fixed assets is determined by formula (53):
F \u003d 162019.5 - 143680.5 * 619340 / 813819 \u003d 52674.46 (thousand rubles)
There is a relative overspending of fixed assets, since the result of the calculation is positive.
Growth (decrease) in the volume of production as a result of a change in the level of capital productivity of fixed assets is determined by the formula (54):
N \u003d (3.82 - 5.66) * 162019.5 \u003d - 298115.88 (thousand rubles)
There is a decrease in the volume of production, since the level of capital productivity of fixed assets has decreased.
Values return on assets of the active part of fixed assets are calculated by formulas (55) and (56):
Fav act 2012 = (71717 + 89128) / 2 = 80422.5 (thousand rubles)
Fsrakt 2013 = (89128 + 106007) / 2 = 97567.5 (thousand rubles)
f act 2012 = 813819 / 80422.5 = 10.12 (rubles)
f act 2013 = 619340 / 97567.5 = 6.35 (rubles)
Capital profitability (profitability of fixed assets) is determined by formula (57):
Ros, 2012 = 92896 / 143680.5 = 0.6465
Ros, 2013 = 48741 / 162019.5 = 0.3008
Profitability of the active part (profitability of the active part of fixed assets) is determined by formula (58):
R act, os, 2012 = 92896 / 80422.5 = 1.1551
R act, os, 2013 = 48741 / 97567.5 = 0.4996
Profitability of sales is calculated by formula (59):
Rpr, 2012 = 92896 / 813819 = 0.1141
Rpr, 2013 = 48741 / 619340 = 0.0787
The calculated indicators of the intensity and efficiency of the use of fixed assets of the analyzed enterprise are presented in Table. 10.
Table 10
Analysis of the effectiveness of the use of fixed assets of the enterprise
| No. p / p | Indicators | 2012 | 2013 | Absolute deviation | Rate of change,% |
| 1. | Average annual cost of fixed assets, thousand rubles | 143680,5 | 162019,5 | 112,76 | |
| 2. | The average annual cost of the active part of fixed assets, thousand rubles. | 80422,5 | 97567,5 | 121,32 | |
| 3. | Revenue, thousand rubles | -194479 | 76,10 | ||
| 4. | Profit from the sale, thousand rubles | -44155 | 52,47 | ||
| 5. | Capital productivity, rub. | 5,66 | 3,82 | -1,84 | 67,49 |
| 6. | Return on assets of the active part of fixed assets, rub. | 10,12 | 6,35 | -3,77 | 62,75 |
| 7. | Capital return, % | 64,65 | 30,08 | -34,57 | 46,53 |
| Profitability of the active part of fixed assets, % | 115,51 | 49,96 | -65,55 | 43,25 | |
| 9. | Return on sales, % | 11,41 | 7,87 | -3,54 | 68,97 |
| 10. | Relative overspending of fixed assets as a result of a decrease in capital productivity, thousand rubles. | — | 52674,46 | — | — |
| 11. | The same in % of the value of fixed assets of the reporting year | — | 32,51 | — | — |
| 12. | Decrease in production due to lower return on assets, thousand rubles | — | -298115,88 | — | — |
| 13. | The same in % of the total decrease in sales volume | — | 153,29 | — | — |
Table data analysis. 10 shows that for the analyzed period:
- return on assets decreased by 1.84 rubles. for each ruble of the average annual value of fixed assets or by 32.51%;
— due to a decrease in capital productivity, the volume of sales decreased by 298,115.88 thousand rubles, which is 153.29% of the total decrease in the volume of sales;
— due to a decrease in capital productivity, there is a relative overspending of fixed assets in the amount of 52,674.46 thousand rubles, which is 32.51% of their actual value in 2013;
— in contrast to the growth in the average annual cost of fixed assets, the proceeds and profit from the sale decreased by 23.90% and 47.53%, respectively, which is considered as a negative trend, indicating the inefficient use of fixed assets;
- the rate of decline in profit from sales exceeds the rate of decline in revenue, which indicates a decrease in profitable products in the composition of products;
— as a result, there is a decrease in capital profitability by 53.47%, capital profitability of the active part of fixed assets by 56.75% and a decrease in profitability of sales by 31.03%;
- the return on assets of the active part of fixed assets decreased by 3.77 rubles. for each ruble of the value of fixed assets or by 37.25%; however, the rate of its decline and the rate of decline in the return on assets of the active part of fixed assets exceed the rate of decline of the corresponding indicators for the fixed assets of the enterprise as a whole.
Related information:
- B) Change in the volume of production, including due to individual factors
- C) absolute change in the average price of product A, including due to individual factors
- Gross profit for the analyzed period also decreased by 202 thousand rubles, which should be considered as a negative point
- Hydrosol vit PIO. Types, sod-e, value in pit. Change in the quantity in the pr-se rework
- Question: What about practical considerations, such as financial pressure? How does changing the context help?
- d) Changing scale parameters
- Ch. XIV.
How to calculate the return on assets of fixed assets according to the balance sheet of an enterprise
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Definition
return on assets is a financial ratio that characterizes the efficiency of the use of fixed assets of the organization. Return on assets shows how much revenue falls on the unit cost of fixed assets.
It should be canceled that the return on assets indicator itself does not indicate the efficiency of the use of production assets, but only shows how the volume of products received from the sale (i.e., revenue) correlates with the cost of the organization's means of labor. It is possible to draw conclusions about the effectiveness of the use of production assets by comparing the rate of return on assets in dynamics over a number of years, or by comparing it with the same indicator for other, similar enterprises in the same industry.
Formula (calculation)
The return on assets index is calculated according to the following formula:
Return on assets = Revenue / Fixed assets
For a more accurate calculation, the value of fixed assets should not be taken at the end of the period, but as the arithmetic average for the period for which the proceeds are taken (i.e., the sum of the value of fixed assets at the beginning of the period and the end of the period, divided by 2).
Some sources recommend using the historical cost of fixed assets. However, in the financial statements (Balance Sheet) it is indicated residual value fixed assets, therefore, this estimate is often used in the calculations.
At its core, the return on assets can be attributed to the turnover indicators (along with the turnover of inventories, receivables and other assets). Turnover indicators (coefficient) are always calculated as the ratio of revenue to certain assets or liabilities.
Normal value
The return on assets ratio does not have a generally accepted normal value.
Capital return formula for balance sheet
This is due to the fact that the indicator is highly dependent on industry characteristics. For example, in capital-intensive industries, the share of fixed assets in the assets of the enterprise is large, so the ratio will be lower. If we consider the rate of return on assets in dynamics, then the growth of the coefficient indicates an increase in the intensity (efficiency) of the use of equipment.
Accordingly, in order to increase the return on assets, it is necessary either to increase revenues when using existing equipment (to increase the efficiency of its use, to produce products with greater added value, to increase the time of equipment use - the number of shifts, to use more modern and productive equipment), or to get rid of unnecessary equipment by reducing thus its value is in the denominator of the coefficient.
The increase in capital intensity indicates the inefficient use of fixed assets.
Profitability of OF (fundamental profitability)- shows how much profit the company received from each ruble of used fixed assets.
fp – return on equity,
P - profit
capital-labor ratio- characterizes the number of fixed production assets in monetary terms per employee.
The task:
According to the table, calculate the return on assets, capital intensity, capital profitability and capital-labor ratio for the reporting and previous periods and draw conclusions about the efficiency of using fixed assets in the reporting period compared to the previous period.
Output:
Compared to the previous period, in the reporting period there was a decrease in capital productivity (from 4.86 to 4.60 rubles), capital-labor ratio (from 350 to 313 rubles), capital return (from 0.129 to 0.125 rubles), an increase in capital intensity (from 0.21 up to 0.22 rubles). This indicates a decrease in the efficiency of the use of fixed assets in the reporting period compared to the previous one.
2. Private indicators - characterize the use of fixed assets in time, in terms of productivity.
Among other indicators of the efficiency of the use of fixed assets in the practice of enterprises, the most commonly used shift ratio and equipment load factor. The first is determined by the ratio of the number of worked machine shifts to the total number of installed equipment. The achieved level of utilization of the possible productivity of technological equipment is measured coefficient of intensity of use of the machine park , which is determined by the ratio of the actual volume of output to the installed production capacity of the equipment. Based on the shift indicator of equipment operation, and coefficient of use of the shift mode of equipment operation time . It is determined by dividing the achieved in given period the shift coefficient of equipment operation for the duration of the shift established at the given enterprise (in the workshop). In addition to intra-shift and all-day downtime, it is important to know how efficiently the equipment is being used during its actual loading hours. This problem is solved by calculating indicators of intensive use of fixed assets, reflecting the level of their use in terms of capacity (productivity). The most important of them is equipment intensive utilization rate .The coefficient of intensive use of equipment is determined by the ratio of the actual performance of the main technological equipment to its standard performance, i.e. progressive technically sound performance. Kint \u003d Vf / Vn, where Vf is the actual output of equipment by equipment per unit of time; Vn is the technically justified output of equipment by equipment per unit of time (determined on the basis of equipment passport data). The third group of indicators for the use of fixed assets includes coefficient of integral use of equipment , capacity utilization factor .The coefficient of integral use of equipment is defined as the product of the coefficient of intensive and extensive use of equipment and comprehensively characterizes its operation in terms of time and productivity (power). The value of this indicator is always lower than the values of the two previous ones, since it simultaneously takes into account the disadvantages of both extensive and intensive use of equipment.
Improving the use of fixed assets is reflected in the financial performance of the enterprise due to: increase in output; lower property tax and increase net profit.
Improving the use of fixed assets in the enterprise can be achieved by:
· Releasing the enterprise from excess equipment, machinery and other fixed assets or renting them out;
· Timely and high-quality carrying out of scheduled preventive and capital repairs;
· Acquisition of high-quality fixed assets;
· Increasing the level of qualification of service personnel;
· Timely renewal, especially of the active part, of fixed assets in order to prevent excessive moral and physical wear and tear;
· Increasing the shift ratio of the enterprise, if there is economic feasibility in this;
· Improving the quality of preparation of raw materials and materials for the production process;
· Increasing the level of mechanization and automation of production;
· Providing, where it is economically feasible, the centralization of repair services;
· Increasing the level of concentration, specialization and combination of production;
· Introduction of new equipment and advanced technologies (low-waste, waste-free, energy-saving and fuel-saving);
· Improving the organization of production and labor in order to reduce the loss of working time and downtime in the operation of machinery and equipment.
Ways to improve the use of fixed assets depend on the specific conditions prevailing at the enterprise for a given period of time.
- Working capital of the organization
An important part of the property of the enterprise are its working capital.
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 of an optimal structure is a necessary prerequisite for its normal functioning in conditions of 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, 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 its own and other people's working capital can achieve a rational economic situation, balanced in terms of liquidity and profitability.
Increase - return on assets
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Increasing the return on assets is possible on the basis of the intensive use of funds, advanced technologies, and the growth of labor productivity. Currently, there is a decrease in capital productivity, which indicates a poor state of the material and technical base of production. The growth of capital intensity and capital-labor ratio does not always reflect positive changes in the structure and condition of fixed assets. It may be the result of reduced productivity and the presence of uninstalled equipment.
Increasing the return on assets is possible on the basis of the intensive use of funds, advanced technologies, and the growth of labor productivity. Currently, there is a decrease in capital productivity, which indicates a poor state of the material and technical base of industries. The growth of capital intensity and capital-labor ratio does not always reflect positive changes in the structure and condition of fixed assets. It may be the result of a decrease in labor productivity, uninstalled equipment.
Increasing the return on assets in the national economy with the current scale of the economy is becoming increasingly important. It is necessary to stabilize the return on assets in the first half of the 1990s, and subsequently ensure its growth through a more complete use of machinery and equipment, an increase in the shift ratio, a reduction in the time for mastering new capacities, and further intensification of production processes.
An increase in capital productivity contributes to an increase in balance sheet profit and an increase in the overall profitability of production as a result of savings on fixed costs (expenses for heating and lighting premises, maintenance of equipment, wage shop management personnel, administrative and economic, etc.) and depreciation deductions. With an increase in the water supply to the enterprise due to an increase in the return on assets, the absolute conditionally fixed costs and depreciation charges, as a rule, do not change or increase slightly, as a result of which the amount of these costs per 1 m3 of supplied water decreases compared to the base period.
Increased return on assets provides savings capital investments.
An increase in capital productivity leads, ceteris paribus, to a decrease in the amount of depreciation per ruble finished products, or depreciation capacity, and accordingly contributes to an increase in the share of profit in the price of goods.
2.2 Analysis of the effectiveness of the use of fixed assets
Increasing the return on assets is of great national economic importance.
Increasing the return on assets of the main equipment is achieved through the use of production assets in strict accordance with their purpose. It is expressed in the annual increase in the free balance of profit received by saving money intended for depreciation payments. The total effect of the introduction and operation of complex systems, which is manifested in the improvement of the above indicators, can be illustrated by the following facts.
Increasing the return on assets is facilitated by: 1) mechanization and automation of production, the use of advanced technology; 2) increasing the operating time of the equipment; 3) increasing the intensity of the equipment through the use modern methods organization and management of production, use of progressive types of raw materials and materials, advanced training of personnel; 4) increase in the share of the active part of fixed assets; 5) increase in the share of operating equipment.
To increase the return on assets, it is necessary both to improve the equipment used and to improve the use of fixed assets. Improvement of the equipment used can be carried out by replacing or upgrading obsolete equipment.
To increase the return on assets, it is necessary that the growth rate of labor productivity outstrip the growth rate of its capital-labor ratio.
There are various ways to increase the return on assets. In many ways, its level depends on the quality of the project of the enterprise. Errors, excesses included in the project or design, adversely affect the return on assets. A lot depends on the builders, on the time frame and at what cost this or that object was built. The directives of the 24th CPSU Congress resolutely demand that capital investments be made more efficient and that the most rational use of the material and financial resources allocated for construction be ensured in order to obtain the maximum increase in output per ruble of funds invested.
Opportunities to increase the return on assets are available at all enterprises. Some of them, as they say, lie on the surface: they are visible to everyone who looks at the production with a master's eye. For example, changes in production often lead to the fact that some machines, tools, devices are unnecessary for this enterprise.
The tasks of increasing the return on assets require a deeper analysis of the costs associated with the maintenance of equipment and other fixed assets and depending both on their size and structure, and on the degree of use.
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There are several indicators that take part in the assessment of the economic activity of both the state and an individual enterprise for a particular past period. Within the industry, the indicator will be output, as well as gross value added. Within the framework of the economy, the value of the gross domestic product is analyzed. The efficiency of the use of non-working capital is determined by an indicator called the return on assets of fixed assets (OS).
Tools for analyzing the return on assets indicator
Reasonable use of the OS is necessary to raise the level of production within the company, and within the state - a social product and, in general, national income without additional investment and in as soon as possible. A rational approach to the use of fixed production assets helps to accelerate production, reduce the cost of reproducing new operating systems and the costs that accompany the production process.
Thus, the return on assets reflects how much profit an enterprise receives from each ruble it has in the form of fixed assets. Doesn't exist for indicator normative value, which is why it is extremely volatile in relation to current inflation, the conditions of the industry activity of a manufacturing company, the peculiarities of the revaluation of fixed assets carried out by the organization and other sources of influence.
The indicator demonstrates the degree of profitability of investments invested in the company's fixed assets. The size of the return on assets, its growth or decrease is influenced by a number of factors, clearly presented in the demonstration below:
The economic result of an increase in the level of use of the OS, as a rule, is an increase in labor productivity. In order to conduct a complete analysis of the return on assets, it is required to create a table aggregating the input data that accompanies the process of operating fixed assets:
Formulas
The 16th row of the table leads to the definition of the formula for calculating the return on assets through the ratio of the cost of output of the product after deducting VAT and excises to the average amount or total production means, i.e:
FO - return on assets;
Svp - the cost of output of the product;
Sos - for the analyzed period.
For the cost of the released product, they often take the proceeds from sales and sales. The value corresponds to the value recorded in line 2110 of the Statement of Financial Results "Revenue", in accordance with the Order of the Ministry of Finance of the Russian Federation 3 66n dated 02.07.2010.
For the correct calculation of the financial assets, it is recommended to take the fixed assets cost indicator not at the end of the analyzed period, but in the form of an arithmetic mean for the period of established revenue:
Data on the cost of fixed assets are obtained from summaries analytical accounting to account 01 on the basis of the Order of the Ministry of Finance of the Russian Federation 3 94n dated October 31, 2000.
In the calculation, when using the initial cost of fixed assets, it must be taken into account that for a correct analysis in the future, it will be necessary to ensure the comparability of the calculated data. These criteria are usually set accounting policy enterprises.
It is also worth noting that if the volume of output in calculating the return on assets is not the cost of the product produced, but the proceeds from sales, the FD indicator is sometimes called the turnover ratio.
Balance calculation
Sometimes you can find operating data on the initial cost of fixed assets, while they are recorded in the balance sheet. Taking into account this approach, it is recommended to initially use the cost of fixed assets minus depreciation in management calculations.
Return on assets is an indicator related to the basic measurements of turnover. Along with the turnover of accounts receivable and inventory, it reflects the planned or actual return on financial investments. Due to the fact that the capital productivity index is calculated as the ratio of revenue for the produced and sold goods to another asset, it is considered by companies.
The formula for calculating the balance determines the share of income in value terms attributable to the share of the cost of fixed assets. When comparing the dynamics of capital productivity for several years in one enterprise or correlating "own" indicators with the coefficients of other similar industries, one can draw a conclusion about the effectiveness of using the OS.
Fixed assets include the basic property of the enterprise:
- buildings, industrial and warehouse complexes;
- motor transport;
- equipment;
- power lines;
- patents, licenses.
To calculate the financial accounting, 2 forms of accounting are used: a balance sheet to determine the cost of fixed assets and a profit and loss statement as a source of data on the company's revenue.
The formula for calculating the financial balance according to the balance sheet is defined as:
line 2110 - revenue according to the enterprise's report on financial results;
line 1150 - the cost of fixed assets according to the balance sheet of the enterprise.
As mentioned above, for the correct calculation of the coefficient, the average annual value of fixed assets is calculated by summing the values of the 1150 BB lines of the initial and final periods in the arithmetic mean. Sometimes, instead of the revenue indicator, the profit from sales is used for FD calculations, inserting line 2200, and not 2110, into the formula.
Significance of the indicator
The value of the FD coefficient makes it possible to assess the effectiveness of the operation of fixed assets in order to make a profit. The FD indicator, like other criteria for asset turnover, must be considered taking into account growth or decline rates, that is, in dynamics over several periods of economic activity in order to obtain an objective picture of the efficiency of using fixed assets.
For example, as a result of an unprecedented increase in the cost of fixed assets when a new production shop is launched, there is a possibility of a fall in the return on assets ratio. Knowing about such dependencies, it is necessary to analyze other data related to the operation of the enterprise's property and types of profit.
With a change in the value of fixed assets in the direction of increase, a further increase in the return on assets ratio should be expected. Thus, the calculation of the CF indicator contributes to the analysis of vulnerabilities in the investment process and the development of a successful strategy for investing in non-working capital.
Development of own standard
As noted earlier, there is no universal value for the CF indicator. An organization that takes into account the return on the use of fixed assets must determine its own optimal value of the coefficient that is acceptable in the area of asset turnover. Given that the indicator reflects the nature of the trend, it is advisable to calculate it taking into account the dynamics of several reporting periods, usually by years.
If the coefficient goes down, then this indicates a decrease financial stability and efficiency of use. Growth, on the contrary, speaks of the positive dynamics of these parameters. The excess of the value of capital productivity over the industry average indicates high competitiveness, and indicators below the average for the industry indicate its decline.
Calculation examples
Measures to increase the FD coefficient
Based on the definition of factors that have a positive or negative impact on the efficiency of the use of fixed assets, it is recommended to develop measures to improve the performance of the indicator. These include:
- methodical renewal of production lines with capacity support at the optimal level for the enterprise;
- production of timely technical re-equipment;
- equipping with modern high-tech funds;
- construction of new or reconstruction of old facilities to meet the changing needs of production;
- reduction of downtime of production equipment with constant monitoring of the causes of downtime with the mandatory introduction of scheduled preventive maintenance.
These activities, as a rule, are labor-intensive and require the involvement of new working personnel. In addition, an increase in the number of scheduled repairs can slow down the production process and increase the amount of costs with further refusal of customers to place orders.
Measures that increase the production capacity of the enterprise and increase the effectiveness of working time include:
- automation of work processes;
- timely staff development;
- reducing the cost of funds by introducing new ones that are less expensive.
The listed activities are designed to increase the return on assets by managing the state of the fixed assets. However, when implementing them, it should be taken into account that the FD coefficient is influenced not only by fixed assets, but also for the analyzed period. If revenue increases, then with other indicators remaining unchanged, the return on assets ratio will also increase.
The optimal measures to increase the volume of revenue, as a rule, are the development of a sales network, an increase in the competitiveness of the product, the search and development of new markets with the production of marketing activities. With the introduction of a regular correct analysis of the return on assets, an enterprise is able to timely identify vulnerabilities in the use of fixed assets and, in a planned manner, increase the efficiency of its own production.
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