Indicators of business activity of the enterprise

Indicators of business activity are a tool for assessing the effectiveness of the main activity of the business entity. As the main characteristic of these indicators can be considered the speed of turnover of financial resources. The analysis of the economic activity of the subject is carried out by calculating the following coefficients:

- Turnover of assets, calculated as the ratio of net proceeds (in accordance with the Statement of financial results) to the average indicator of the balance currency. This coefficient characterizes the optimality of the use of all available resources by the business entity, regardless of the sources of income.

- Turnover of accounts receivable or payable, which is calculated by the ratio of the net revenue to the corresponding average annual debt. This indicator reflects the speed of circulation of the debtor (creditor) debt of the economic entity for the analyzed period, as well as the dynamics of the financial loans that are provided or received by the enterprise.

- The duration of the turnover of the above types of arrears, calculated as the ratio of the duration of the period under review to the corresponding turnover ratios of such arrears. It characterizes the average repayment period for these types of debts.

- Inventory turnover, as well as equity. As any coefficient, the turnover of material resources is calculated by finding the ratio of the cost of production to the average value of such stocks. With the use of this indicator is given a characteristic of the speed of sale of commodity-material values of the business entity. When considering the return on equity, the ratio of net proceeds to the average equity of the entity is taken into account. This indicator evaluates the effectiveness of the company when using its own capital.

- Capital productivity (turnover of fixed assets). The calculation is made in the form of the ratio of net proceeds to the average indicator for the year of fixed assets. With the help of this indicator, an assessment of the optimality of the use of fixed assets is given.

In general, the indicators of business activity of the enterprise characterize the overall activity of the enterprise and its capabilities when promoting in the relevant market. Evaluation of these indicators is carried out in comparison with the activities of similar business entities in related areas of activity.

The indicators of business activity from the standpoint of financial activity are very closely related to such an element of efficiency evaluation as profitability. This coefficient shows the profitability of the subject and is a relative indicator of its results.

The indicators of business activity will allow us to analyze the effectiveness of using our funds. Expressed in days, in the number of revolutions of each resource by choice for the analyzed period.

To fully characterize the company's activities, it is necessary to analyze the notion of the "financial cycle", which begins with the date of repayment of accounts payable (payment for materials to suppliers) and ends with the date of receiving cash from the buyer for the shipped products.

Indicators of business activity are of a qualitative nature when characterized by: the breadth of the commodity market, the availability of exported finished products, the company's commercial reputation and the stability of ties with counterparties. It is advisable to consider these coefficients in dynamics, i.e. Compare them with the rate of change. It is the ratio of the dynamics of production and resources that determines the economic growth of the business entity.