The level of use of fixed assets is characterized by ... Capital productivity and capital ratio

Any, even the smallest production requires the availability of certain equipment, tools, inventory, etc. Everything that is used by the enterprise to carry out its activities is usually called fixed assets. The value of this indicator is also called fixed assets. To assess the overall efficiency of the enterprise, it is necessary, among other things, to analyze the level of use of fixed assets. This indicator is characterized by several coefficients - capital intensity and return on assets.

Calculation of costs

The cost of production assets, which accounts for a unit of output in monetary terms (for example, 1 ruble of finished goods) is called capital intensity. Simply put, this indicator characterizes how much equipment, tools, special equipment, etc. are needed in order to produce goods for 1 ruble. This factor helps to determine what amount of fixed assets is required to produce the right amount of products. This is especially true when the enterprise intends to expand production.

Determination of profit

Capital productivity of fixed assets is the coefficient opposite to the capital ratio and reflects the amount of profit the enterprise receives from the value unit of fixed assets. In other words, this indicator quantifies how much money it brings, for example, 1 ruble invested in equipment, tools, tools, etc. Such a factor is one of the most important in analyzing the performance of an enterprise.

Factors of influence

Capital productivity and capital intensity are not absolute indicators. There are several factors that affect their magnitude and distort the real values:

• Working hours of the enterprise: with a constant use of equipment in a constant quantity and mode, the capital ratio reflects a more realistic picture, but in the event of an idle time or temporary addition of auxiliary funds, the indicator will change significantly and its result can not be considered absolutely correct.
• In determining the coefficients, it is assumed that all fixed assets are used for their intended purpose and at the maximum effective capacity.
• Sales volumes: when calculating the return on assets, the indicator of sold products is taken into account, which, in turn, depends significantly on the work of the company's management, sales department, etc.

The coefficients considered the level of use of fixed assets are characterized without taking into account the significant changes in the value of production that do not depend on the volume of production. For example, a sharp unpredictable inflation (an increase in the prices of raw materials, a decrease in demand for finished goods due to its appreciation, etc.) or legislative changes (restrictions and quotas on production, the ban on imports or exports, etc.). Therefore, in non-standard conditions, these indicators are inapplicable.

Calculation

The indicators of fixed production assets are usually calculated using the financial statements of the enterprise compiled in accordance with the requirements of state (national) or international reporting. Indicators from internal documents of the company are also applied, but much less often. The calculation is simple enough and directly follows from the definitions of these coefficients.

Capital productivity is the ratio of revenue to the average value of fixed assets. The result is obtained by simply dividing.

The capital ratio is calculated as the ratio of the average annual value of fixed assets to the amount of revenue. Also, this indicator is the opposite of capital productivity.

To get the average annual value of fixed assets, it is necessary to add data at the beginning of the year and at the end, and then divide by 2. Most often, the primary cost (the cost of acquisition) is taken into account, but sometimes corrections are made (for example, if the equipment was bought in foreign currency , The course of which has changed significantly).

The analysis of the coefficients

The level of use of basic production assets is characterized by indicators for the purpose of further studying and making decisions that will contribute to the development of the enterprise and increase profits. Of course, the analysis should take into account the features of the products, the mode of production, the situation in the industry, etc. But there are some common for all trends. For example, if the return on capital and the capital intensity increase with time, this is a sign of a decline in the efficiency of the enterprise. Perhaps there is a need to update the fixed assets due to their wear and tear or obsolescence (physical or moral). Or the reason lies in inefficient use of equipment. In any case, the growth of these coefficients should be alarmed. In addition, it is worth considering the value of the indicator in comparison with the industry average (it can be taken from the websites of state statistics). For example, if the value of capital intensity increases by an increase in the average value for the industry, then production efficiency decreases, if on the contrary - it increases.

Features of indicators

Considered indicators of the level of use of basic production assets are characterized fairly well, but in the analysis it is worth taking into account several important points. First, when calculating and analyzing the capital intensity, it is assumed that all equipment, tools, tools, etc., are used rationally and competently, and the volume of output does not have a significant dependence on the intellectual labor of workers. Otherwise, before calculating this coefficient, it is necessary to audit the use of fixed assets, identify hidden reserves and take into account these data in the analysis. In addition, do not forget to take into account in the calculations those fixed assets that the enterprise leases, but those that are leased and do not participate in the production process, on the contrary, should be deducted from the total value of the funds.