Share of current assets in assets. Coefficient of liquidity: formula

Working capital refers to an important part of the property of any enterprise. During one production cycle, these resources completely change their material expression to a monetary form. Therefore, they are called the mobile part of the property.

The share of current assets in assets is at constant control of the analytical service. The shortage and surplus of these resources are equally bad for the company's performance. If the number of working capital accumulates, the speed of their turnover decreases. Because of this, the profit decreases.

The lack of mobile means accompanies downtime, malfunctions during the course of the production cycle. This also has a negative impact on financial results. Therefore, the standards and approaches to the analysis of assets that are in circulation deserve careful consideration.

Mobility of Working Capital Funds

The company's current assets consist of stocks, materials, short-term investments and receivables. They become finished products in the production process and are realized in the operational period. The cycle ends when the funds from their sale are returned to the accounts of the organization.

The share of current assets in assets is under the untiring control of the financial service. In addition to the fact that the amount of the company's profit depends on the speed of turnover, these resources form the investment rating of the company.

The fact is that such property can most quickly be transferred to a monetary form. Accordingly, the more mobile resources are available to the company, the faster it will be able to pay if necessary with creditors. Therefore, these funds are called liquid.

The concept of liquidity

The availability of working capital in an amount commensurate with or larger than the company's short-term obligations guarantees the repayment of loan funds on time (for the operational period).

The concept of liquidity includes several definitions. Firstly, it gives an opportunity to react quickly to the emergence of financial difficulties. Secondly, liquidity allows you to increase the currency of the balance according to sales growth. Thirdly, guarantees timely return of short-term obligations.

Sufficient liquidity of the property opens up new opportunities and benefits for the company. It means full control of management over its assets, as well as financial sustainability.

If this indicator is normal, then the company management competently disposes of the property entrusted to it.

Insufficient liquidity

Insufficient share of working capital in assets leads to a number of problems. In the first place, production suffers. The lack of raw materials, materials is reflected in the speed of production of finished products. When the technological cycle slows down, the amount of profit decreases.

In addition, the lack of liquidity in the structure of the balance sheet currency leads to a partial or complete loss of financial independence. Sometimes an enterprise may even face bankruptcy.

Lenders can not receive their funds and interest at the agreed time. This reduces the investment attractiveness of the company. She has to work in the most unfavorable conditions. Therefore, the share of working capital and liquidity should not be lost from the field of view of the financial service of the enterprise.

Formula

To understand correctly what liquidity represents, the formula of which will be presented later, it is necessary to consider the logic of calculations. It involves consideration of the entire amount of current assets, as well as their structure. The total (or current) liquidity is calculated as follows:

Ктл = ОА / КО, where ОА - the average annual amount of the turnover of assets, KO - short-term liabilities.

The data for the evaluation is taken from form No. 1 of the financial statements - balance sheet. In this case, the liquidity, the formula of which was presented above, will look like this:

Ktl = (sec 1240 + 1220 + 1250 + 1232 + 1260 + 1231) / s. 1600

However, this is the most common indicator. The fact is that the property of the company is characterized by a different turnover rate. Therefore, the structure should be considered separately.

Other indicators

In addition to the current liquidity, it is necessary to assess its intermediate and absolute value. The share of own funds in current assets is also investigated. Intermediate liquidity does not take into account the slowest realized in the inventory of current assets stocks. The formula will be:

Кпл = (ОА - З) / КО, where З - stocks.

The most liquid assets are cash. Therefore, this article balance is also necessarily pay attention. Absolute liquidity is calculated as follows:

Кал = ДС / КО, where ДС - money resources.

Estimating the share of circulating resources in the aggregate property, one can not ignore the provision of the company's own working capital. The coefficient will look like this:

Koc = (KO - HA) / OA, where HA is non-current assets.

Normative values

The share of current assets in assets should have a certain value. The standard is established in accordance with the type of industry in which the enterprise operates. For each type of liquidity indicators, their boundaries are also defined.

Thus, the majority of domestic and foreign companies withstand a current liquidity ratio of at least 2. That is, revolving funds should exceed the current debt by 2 times. But this is not the only criterion.

Intermediate liquidity must comply with the standard of 0.7-1. It is not desirable to reduce the figure below 1, but it all depends on the industry. Absolute liquidity is equal to 0.2-0.5. The minimum allowed value is 0.1.

The indicator of the security of turnover by own sources of financing should not fall below 0.1. Fulfillment of all these conditions speaks about the correct balance structure, as well as financial stability and investment attractiveness of the company.

Exceeding the standard

If we calculate the share of current assets in the assets and compare the result with the standard, we can conclude that it is appropriate to distribute the property according to balance sheet items. A significant excess of the coefficients over the established values is not welcomed. Accumulation of funds in inventories, accounts receivable leads to an increase in the turnover cycle.

Having studied such concept, as a share of circulating assets in assets, it is possible to carry out the correct analysis of balance structure. Based on the data obtained, the main indicators of liquidity and availability of own sources of financing are optimized. This increases the stability of the organization and leads to higher levels of profit.