Analysis of the turnover of circulating assets and its importance for assessing the financial stability of an enterprise

Circulating assets (OS) are such means of the enterprise or the company, which can resume with a specified periodicity and serve to ensure activity at a given moment in time. The minimum for this turnover is one turnover of funds at a minimum. Other indicators of turnover time can be used. This can be a calendar year, a fiscal year or the production cycle of an enterprise. It is important to analyze the structure of working capital to understand their role in the economic process.

According to the traditional classification, they are divided into two categories: circulating and circulation funds. The first category includes production stocks, unfinished production facilities and semi-finished products, as well as funds planned for use in future periods.

Production reserves include spare parts, raw materials, various additional production materials and others. Their size is determined from considerations of ensuring the rhythmic work of the enterprise.

Incomplete production is materials, parts and products that are still in the production process.

The costs of developing promising technologies and marketing constitute a group of future expenses.

The analysis of sources of formation of circulating assets makes the following:

- finished products ;

- already shipped goods to the consumer;

- all funds in the accounts;

- funds accounted for in settlements with consumers and suppliers.

This structure shows the share of some specific components of the OS in the total pool of funds.

The issues of OS management are quite an actual problem. An analysis of the turnover of current assets is increasingly becoming the subject of research within the framework of economic science. This is due to the fact that the most popular solutions are the unique solutions, the most modern concepts and technologies of financial management. It is the analysis of the turnover of current assets that serves as an adequate definition of the financial condition of the firm or company, the ability to correctly assess the liquidity indicators, which are increasingly dependent on business activity and OS usage.

Since they participate in the formation of a significant proportion of liquid assets, the effective value of the OS should ensure the stable operation of the enterprise. At the same time, the criteria of this efficiency are the indicators of the minimum time period of circulation and its speed. During this period, the working capital must be transformed into real money.

The need for investment is directly proportional to the value of turnover. Consequently, the lower the rate of turnover, the higher the need of the enterprise or organization in attracting borrowed resources. And this, in turn, significantly reduces the stability of the company in an unstable market and its attractiveness to external investors.

Effective OS management is achieved when the analysis of turnover of current assets demonstrates that their values are at the level of 58-75% of the total assets.

In addition, since the OS is designed primarily for servicing and ensuring the continuity of current production, the analysis of the turnover of current assets makes it possible to quickly restructure the entire OS system in order to give it a more perfect configuration that meets the modern requirements of financial management.

In short, the role and importance of professional OS analysis becomes an essential tool of management strategy and a way of promptly responding to changes in the dynamically changing market conditions.