What is return on assets and how is it calculated. How to calculate the return on assets of fixed assets Return on assets is calculated as the ratio of revenue to

Accounting, analysis and audit / Comprehensive economic analysis of economic activity / 4.2 analysis of the intensity and efficiency of the use of fixed production 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;
• Statement of 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) amount of cash in response to financial 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;
• Introduction of new technologies and innovations into the production process.

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. ten.

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:

1. B) Change in the volume of production, including due to individual factors
2. C) absolute change in the average price of product A, including due to individual factors
3. Gross profit for the analyzed period also decreased by 202 thousand rubles, which should be considered as a negative point
4. Hydrosol vit PIO. Types, sod-e, value in pit. Change in the quantity in the pr-se rework
5. Question: What about practical considerations, such as financial pressure? How does changing the context help?
6. d) Changing scale parameters
7. Ch. XIV.

   How to calculate the return on assets of fixed assets according to the balance sheet of an enterprise

   Valentinus and his followers borrowed the beginnings of their doctrine, only with a change of names, from the pagans

8. State borders and ways of their establishment. Change of state borders. Territorial disputes
9. Step 2: Change the Chart Layout or Style
10. Amendment (termination) of the contract by agreement of the parties
11. Change the base diagram to suit your needs

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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) the residual value of fixed assets is indicated, therefore, this assessment is often used in 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.

Exercise:

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.

Conclusion:

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 shift ratio of equipment operation achieved in a given period by the shift duration established at a 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.

1. 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 a 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

Page 1

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 conditionally fixed costs (expenses for heating and lighting premises, maintenance of equipment, wages of 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.

Increasing the return on assets ensures savings in capital investments.

Increasing the return on assets leads, ceteris paribus, to a decrease in the amount of depreciation per ruble of finished products, or depreciation intensity, 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 profits 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 equipment operation by applying modern methods of organizing and managing production, using progressive types of raw materials and materials, and improving the skills 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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(efficiency of non-current capital) - a coefficient equal to the ratio of the value of manufactured or sold products after deducting VAT and excises to the average annual cost of fixed assets.

It is calculated in the FinEkAnalysis program in the Business Activity Analysis block as return on assets.

Return on assets - what shows

Shows what is the return on each ruble invested in fixed assets, what is the result of this investment.

Return on assets - formula

The general formula for calculating the coefficient:

Calculation formula according to the old balance sheet:

K f =	p.010
	0.5*(p.120 n + p.120 j)

where line 010 is the line of the income statement (form No. 2), lines 120 n and line 120 k are the lines of the balance sheet (form No. 1) at the beginning and end of the reporting period.

Calculation formula according to the new balance sheet:

Return on assets - meaning

Return on assets is an indicator that reflects the level and effect of the operation of fixed assets. The value of the indicator depends on industry specifics, the level of inflation and the revaluation of fixed assets.

Return on assets - scheme

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To assess the activities of the enterprise, managers and analysts use the return on assets indicator.

This is a financial ratio that determines the effectiveness of a business. It shows the amount of revenue per unit cost of existing fixed assets (OS). In the analysis of turnover, capital productivity shows the ratio of revenue (volume of sales) and the means of labor available to the company.

How to calculate return on assets - formula

The calculation looks like this:

return on assets= Revenue / Fixed assets

By revenue here we mean the price of products when they are sold, and not profit, since the main goal of the indicator is to demonstrate the effectiveness of converting fixed assets into goods.

Using the return on assets formula, you can calculate how much goods an enterprise produces per unit of labor. The ratio is often considered the main indicator of the quality of a company's fund management. Its calculation is necessary when comparing the efficiency of production in different companies. The return on assets shows the ability of managers to ensure the rational use of assets if the ratio is high. Low scores signal poor management.

According to the balance sheet, the indicator is calculated in the new reporting system as follows:

Return on assets \u003d Str. 2110 ⁄ (St. 1150 n. - Str. 1150 k.) ⁄ 2,

where: p. 2110 - line 010 from form No. 2, information on the proceeds received for the period under study;
Page 1150 n. - line 120 from form No. 1, which indicates the total cost of fixed assets by the beginning of the reporting period;
Page 1150 k. - a similar indicator of the cost of fixed assets at the end of the period.

Analysis of capital productivity ratios

In the internal analysis of the enterprise, the return on assets indicator allows us to draw several important conclusions. The low value of the coefficient indicates that the production volumes are insufficient for a given value of funds. To solve the problem, measures are taken to increase sales. If this is not possible, the assets will have to be written off. High values ​​signal the need for an investment source to expand production.

Among allocate the turnover of certain groups of assets, such as stocks or receivables. Such indicators are calculated by dividing revenue by the analyzed type of assets or liabilities.

Let's give an example: in 2008 OJSC Norilsk Nickel received revenue in the amount of 13,980 million rubles, and the amount of the company's funds amounted to 28,259.5 million rubles.

Return on assets = 13,980 / 28,259.5 = 0.49

In the analyzed period, 49 kopecks of proceeds were received for each ruble of funds. Norilsk Nickel funds paid off by 49%.

The dynamics of the turnover of the company's assets for 2005-2008 is in decline. This indicates the inefficiency of the adopted policy for the use of funds owned by the enterprise. Since 2005, the growth rate of the amount of assets has been higher than the growth rate of OJSC Norilsk Nickel's revenue: since 2007, the amount of funds has increased by 119%, while revenue - only by 44%. If the negative trend continues, the company should revise its sales policy, attract investors, and eliminate unnecessary assets.

The normal value of the coefficient

There is no normal return on assets. The coefficient is often determined by the characteristics of the company and industry. In the conditions of capital-intensive industries, the asset turnover indicator will be lower, since the largest part of the enterprise's funds in this case is fixed assets. When the indicator increases in dynamics, we can talk about an increase in the efficiency of the use of means of production.

To increase the turnover of funds, you can take measures:

• increase the amount of revenue, and leave the composition of funds the same. It is necessary to use assets more efficiently or increase the operating time of the equipment (number of shifts on new machines);
• change the composition of funds, that is, write off assets that are not needed or unusable. This amount will reduce the denominator of the coefficient in the calculation.

The video below introduces other financial performance indicators of the company:

The return on assets shows how much production (services) is accounted for by 1 ruble of the cost of the equipment used. The calculation and analysis of the indicator allows the financial director to establish how efficiently the company uses fixed assets, to choose the most efficient production equipment. In the article we will tell you how to find the return on assets and what are the ways to increase it.

What is capital return

The return on assets is a financial ratio that shows in dynamics how efficiently and intensively the fixed assets or funds of the enterprise are used. The term is similar to the English Fixed assets turnover ratio, which economists translate as the fixed assets turnover ratio or asset turnover ratio. Next, we will tell you how to calculate the indicator.

General formula for return on assets

In general, the return on assets of fixed assets is calculated as the ratio of revenue to average annual cost of fixed production assets . The formula for calculating the return on assets ratio is as follows:

To return on assets \u003d Revenue / Average annual cost of fixed assets

How to find income

To calculate the return on assets, gross revenue is used, which has not yet been reduced by the amount of taxes. To calculate revenue , use two methods - cash or accrual. The cash account takes into account the funds that were received in the company's bank accounts or at the cash desk, and the goods received by barter. The accrual method takes into account the payment obligations that appear with the buyer at the time of receipt of the goods, the provision of services or the performance of work.

How to find the average annual value of fixed assets

The average annual cost of fixed production assets, excluding the actually worked months:

C cf \u003d (C ng + C kg) / 2,

C cf - average annual cost;

C input - the value of the funds that were introduced;

With output - the value of the funds withdrawn.

Calculation of the average annual cost, taking into account the actual months worked:

C cf \u003d C ng + (M input / 12) * C input - (M output / 12) * C output,

M input - the number of fully worked months after the input of the object;

M output - the number of fully worked months after the withdrawal of the object.

Balance calculation formula

Standard value

The return on assets ratio is unique for each company. There is no single normative value for it. The coefficient is compared mainly with its values ​​for previous periods. In addition, when comparing k with industry average values, it is possible to determine the competitiveness of an enterprise. If the coefficient is higher than the industry average, then competitiveness is growing. If it is lower, it falls.

How to determine the reasons for the change in capital productivity

Analysis of the dynamics of capital productivity allows the financial director to control the efficiency of the use of production assets. The specialists of System Financial Director have prepared a solution that will help to correctly calculate the return on assets, analyze its dynamics, and determine the reasons that caused its changes. It will be useful for developing measures to improve the efficiency of equipment use, as well as for a preliminary assessment of activities that may affect it.

How to increase return on assets

The indicator makes it possible to qualitatively analyze the company's activities and promptly adjust work plans.

You can increase your return on investment by:

• improving the quality of labor and the quality of manufactured goods ( );
• fuller utilization of production capacities;
• labor automation and innovation;
• sales network development and sales promotion.

It has been empirically established that the greatest effect is achieved with a more complete utilization of the active part of the funds, with additional training of personnel and their retraining, a general increase in the culture of production and a reduction in the loss of working time.

Any company or enterprise should be able to analyze the effectiveness of the use of fixed assets (funds). Analysts, managers, accountants use the return on assets, or the turnover ratio of non-current assets (translated from English Fixed assets turnover ratio). It helps to determine whether the company's fixed assets are being used correctly.

The concept of return on assets

Return on assets is an economic indicator used to calculate the efficiency of using the fixed production assets of a company or enterprise in a particular industry. The value reflects the amount of products produced for each spent ruble of fixed assets of production.

Return on assets allows you to determine whether the main factors of production are organized correctly at the enterprise. The ability to conduct this financial analysis helps to increase profits without attracting additional resources and to discover opportunities for the company's development in new directions.

ATTENTION! In addition to financial performance indicators, the dynamics of the company is also very important, as well as a comparison with the return on assets of other enterprises in this industry. The resulting graphs will help determine the further strategy for using the company's funds.

Calculation formula

The general formula for calculating the indicator:

F Otd \u003d Volume of sales (received from sales) / Cost of fixed assets

We give the calculation formula according to the data of the new balance sheet:

F Otd \u003d line 2110 Form 2 / (line 1150n. Form 1 + line 1150k. Form 1) / 2

According to the old balance sheet:

F Otd \u003d line 010 / 0.5 * (line 120n + line 120k), where line 010 is the income statement line (form 2), line 120n and line 120k are balance sheet lines at the beginning and the end of the reporting period (Form 1).

The following two methods are used to calculate revenue:

1. Cash. Here, the funds credited to the bank accounts of the enterprise, as well as goods received by barter, are taken into account.
2. accrual method. It takes into account the obligations of the buyer, which appear at the time of receipt of the service, product or work.

Fixed assets of the enterprise

For a correct understanding of capital productivity, it is necessary to know what are the fixed assets of an enterprise, or funds. This is the property of the enterprise used as means of labor in the provision of services or the performance of work, the release of products or for the management needs of the company repeatedly over a period of more than 12 months.

Types of fixed assets of the organization:

• Buildings and facilities of the enterprise.
• Equipment and tools used in production.
• Various household equipment.
• Computer Engineering.
• Perennial plantations.
• Machines, vehicles and other fixed assets.

There are several ways to determine the average annual cost of fixed assets. They depend on whether the time of their operation will be taken into account. For example, new equipment put into operation at the enterprise in the middle of the year will produce less output than the existing equipment.

• First way. Excluding equipment usage time. Moreover, if the enterprise is constantly updating equipment (that is, it is put into operation at different times), the end result will be inaccurate.
• The second way. The full months of operation of the equipment in a given year are taken into account.

An example of calculating the average annual cost of fixed assets

For example, on January 1, 2017, the value of fixed assets is 200 thousand rubles. On July 1, equipment worth 100 thousand rubles was introduced, on August 1 - for 60 thousand. Equipment was withdrawn in the amount: on April 20 - for 80 thousand rubles, on June 10 - 20 thousand rubles.

The average annual cost of fixed assets, excluding months of work:

Cav = (Cng + Ckg) / 2, where:

• Сav - average annual cost;
• SNG - the cost of fixed assets as of January 1 of the year in question;
• Skg - cost as of December 31 (equal to Sng + Svved - Svyed);
• Svved - introduced funds;
• Svyved - the cost of the withdrawn equipment.

In our example, Cav = (200+(200+100+60-80-20))/2=230 thousand rubles.

Avg, taking into account the number of months worked: Cav = Sng + (Mvved / 12) * Svved - (Mvyved / 12) * Svyved, where:

• Mvved - the number of completed months worked after commissioning;
• Mout - the number of full months after the object was withdrawn.

Example: Avg=200 + (6/12) *100+(5/12)*60-(8/12)*80-(6/12)*20=200+50+25-53,33-10= 211.67.

It is clear from the example that when equipment is put into operation in different months, the indicator of the average annual cost of fixed assets will be inaccurate when calculated according to the first formula, and in some cases - fundamentally wrong. Therefore, in order to obtain an accurate result in this case, it is necessary to calculate according to the second formula.

For example, the revenue amounted to 220 thousand rubles. If you make calculations without taking into account the months worked, the return on assets will be: FOTd \u003d 220/230 \u003d 0.957. That is, for every ruble spent, the organization received 0.957 rubles. And taking into account the full months of operation F Otd \u003d 220 / 211.67 \u003d 1.039 rubles - the figure is higher.

Factor analysis of return on assets

To obtain more reliable indicators, formulas have been developed that take into account additional factors that affect the capital productivity ratio.

Two-factor calculation

In this case, the funds are divided into fixed and active (which are directly used for the production of services, goods or works).

F Otd \u003d (Fa / F) * (N / Fa), where:

• Fa is the value of the active part of the funds;
• F is the cost of fixed assets of production;
• N - the cost of products / services of the enterprise.

Example: the cost of fixed assets (F) is 200 thousand rubles, the cost of the active part of the funds (Fa) is 160 thousand rubles, the cost of production (N) is 240 thousand rubles. With a two-factor calculation F Otd = (160/200) * (240/160) = 0.8 * 1.5 = 1.2 - one ruble invested in funds brings 1.2 rubles of revenue.

Calculation by four factors

This calculation formula is used in companies where the replacement of fixed assets is carried out infrequently and products are produced in a small assortment.

The following additional factors are introduced:

• The main product of the enterprise. A company can produce many types of products, but only a part of them will be the main one.
• The average annual capacity of the enterprise. The average number of products released per year.

Fotd \u003d (N / Nos) * (Nos / W) * (Fa / F) * (W / Fa), where:

• N is the cost of released goods;
• Nos - the cost of the main products;
• W is the average annual production capacity.

Let the cost of fixed assets (F) be 200 thousand rubles, the active part (Fa) - 160 thousand rubles, the goods produced (N) - 240 thousand, the main products (Noc) - 200 thousand, and the average annual production capacity (W) - 2000 goods.

In this case, FOTd \u003d (240/200) * (200/2000) * (160/200) * (2000/160) \u003d 1.2 * 0.1 * 0.8 * 12.5 \u003d 1.2 - each the invested ruble brings 1.2 rubles.

Calculation by seven factors

It is used in large industries where a wide range of products is produced.

The following factors are taken into account:

• The main funds of production.
• Equipment and machines used in fixed assets.
• Shift duration.
• The number of shifts in the operation of equipment and machines.
• The average cost of a piece of equipment.
• The efficiency of the equipment.

Fotd \u003d (Fa / F) * (Fmash / Fa) * (Tcm / Qd) * I * (1 / s) * (Tch / Tcm) * (N / Tch), where:

• Fmash - the cost of equipment used in production;
• Qd - number of machines;
• c - the average price of machines;
• Tcm - the total number of shifts worked;
• Tch - the total number of hours worked;
• I - the duration of the considered period of work in days.

Example: the cost of fixed assets (F) is 200 thousand rubles, the active part (Fa) is 160 thousand rubles, the goods produced (N) are 240 thousand. The cost of the equipment involved in the production (Fmash) is 140 thousand rubles, the number of machines (Qd) is 20 pieces, their average price (c) is 14 thousand rubles. The period under consideration (I) is 2 days, during which 60 shifts (Tcm) and 420 hours (Th) were worked for 7 hours per shift.

Applying the formula, we get:
(160/200) * (140/160) * (60/20) * 2 * (1/14) * (420/60) * (240/420) = 0.8 * 0.875 * 3 * 2 * 0.071 * 7 * 0.571 = 1.19 - each invested ruble brings 1.19 rubles of profit.

Value is OK

There is no generally accepted normal value for the return on assets ratio. The value of the obtained coefficient depends on the characteristics of the industry, the revaluation of fixed assets and the rate of inflation. The higher the numerical value, the greater the efficiency of the fund, the higher the competitiveness among the industry. This means that for each ruble of proceeds, the enterprise spent less fixed assets of the fund, and for each ruble of fixed assets invested, it received a greater volume of production.

Capital productivity growth factors

The main ones are:

• Improving the use of plant capacity, as well as the correct distribution of time.
• Replacement of manual labor by machines.
• Increasing the productivity of equipment as a result of increased mechanization and automation, as well as the replacement of worn-out equipment in the enterprise.
• The best development of input capacities.
• Increasing the shift ratio of equipment operation.
• Transition to two- and three-shift work.
• Carrying out the sale of excess equipment.
• Improved equipment care.

A more convenient understanding of capital productivity is given by the diagram below.

Thus, by analyzing the return on assets in dynamics, it is possible to correct the work of the enterprise in a timely manner, increasing the competitiveness and quality of products.