Current assets and their analysis
Current assets - the entire fund of cash and property of the enterprise, reflected in cash equivalent. They are used in production, estimated in one accounting year and reflected in the liabilities side of the balance. Current assets consist of cash, investments, accounts, costs and inventory items. These funds make it possible to make stocks, produce goods, keep payroll and other calculations.
Types of current assets:
- cash funds;
- goods shipped;
- goods for resale;
- short-term investments;
- expenses in the work;
- costs planned for the future;
- reserves of materials, raw materials and other production stocks;
- other working capital.
Current assets are divided into:
- financial security;
- workflow needs;
- unregulated assets;
- adjustment of management and control;
- established working capital and the basis for calculating economic feasibility.
The composition of current assets:
- working capital - the working part of production, used for one production cycle, their cost is fully included in the price of the product;
- funds circulation - all funds in circulation of the enterprise.
Turnover - indicators of the turnover of goods and funds in time or the number of these revolutions for a certain period of time. Analysis of the turnover of current assets makes it possible to make a forecast of the income of the enterprise, which is formed from turnover: money - product - money.
Consider examples of calculations
The asset turnover ratio of 4 means that the organization’s profit for a single reporting year increases fourfold (assets are wrapped four times over the year). It is convenient to do the calculation by the number of days per 1 turnover, dividing the year (365 days) by the turnover ratio for this period. If kof. = 4, then the average asset turnover = 91.25 days. This is the time used to make a profit, which is equal to the size of the assets used in production. The turnover ratio determines the speed of turnover of assets (or liabilities) and is an indicator of signs of activity.
Most used turnovers:
The speed of turnover is influenced by industry properties. A high turnover ratio means that the assets are used efficiently, and also shows business success. The greater the profit, the higher the turnover.
Analysis of currentfunds
To make it more convenient to analyze the current assets of the enterprise, they are better distributed by risk groups. It is necessary to take into account the areas of their application, since multi-purpose means are less risky to implement than narrowly targeted ones. The liquidity of the company decreases the increase in deposits in current assets that have a high degree of risk.
- minimum - cash and short-term securities with quick implementation;
- small - accounts receivable of the enterprise and finished products;
- medium - means at work, products for the needs of production, planned costs for future periods;
- high - illiquid assets, obsolete supplies, unclaimed products, receivables with return difficulties.
It is important to assess the rate of change of illiquid assets (with a high degree of risk) in relation to general means, as well as their correlation with easily realizable ones. The increase in such assets threatens to lower liquidity.Depending on economic indicators, changes in the assignment to the implementation classes are possible.
Dead capital - one of the options for the consequences of illiquid funds. It inhibits asset turnover, as a result, the profitability of the enterprise falls. In many ways, productivity depends on the growth of such assets. Sometimes hard-to-implement funds are difficult to track, making it difficult to identify real liquidity. If it was possible to detect the presence of a large number of dead assets, then the manager and the chief accountant immediately begin to correct the difficult situation of the enterprise, trying to stabilize the situation. An inventory of working capital is being taken, liquidity is being overestimated, calculations are changing, reserves are being regulated - everything is aimed at reducing monetary losses.