Working capital of the enterprise- these are objects of labor that participate in one production cycle (or are consumed during the year), lose their natural form, and completely transfer their value to the finished product. They serve the entire reproduction cycle, including both the production process and the circulation process. Accordingly, they are divided into circulating production assets and circulation funds.
Working capital, in turn, consists of various material elements or current assets(Fig. 2.).
Rice. 2. Composition of working capital
Let us first consider the elements of working production assets. They include:
1. raw materials and basic materials from which the product is made;
2. auxiliary materials– fuel, containers and packaging materials, spare parts. They are used for maintenance, care of tools, facilitating the production process, as well as giving the product certain consumer properties;
3. purchased semi-finished products and components. Semi-finished products are not finished products and, together with components, play the same role in production process, as the main materials.
Raw materials called products Agriculture and mining industry, and materials– products of manufacturing industries.
A special group of working production assets includes low-value and high-wear items (IBP), for example, tools with a short service life. In terms of economic content, they are not objects, but means of labor, since they can repeatedly participate in the production process without losing their material form. However, they are included in working capital to make it easier to account for their depreciation.
In addition to inventories, the working capital of an enterprise includes assets in production, which include work in progress and deferred expenses. Work in progress represents objects of labor that have not yet gone through all stages of processing. These are no longer inventories, but not yet finished products.
In industry and construction, the volume of work in progress can reach significant values, both in absolute and relative terms - much depends on the characteristics of the technological process. For example, the volume of unfinished production in automotive production. And in such an equally large industry as energy, on the contrary, specific gravity work in progress is insignificant.
Deferred expenses include costs incurred by the enterprise in the reporting period, but subject to inclusion in the cost of production in subsequent months or years.
Examples of such expenses are deferred taxes and development expenses. However, in most cases, these are costs for preparing future production.
The composition of circulation funds is also heterogeneous. The main part of it consists of finished products in the enterprise’s warehouse and shipped to customers. The arrival of finished products at the warehouse completes the production process, and their shipment to customers marks the beginning of the circulation process.
Another part of the circulation funds is cash and funds in settlements. Funds can be in the company's current account in a commercial bank, in cash, or in transfers. Accounts receivable include debt from buyers, accountable persons, tax authorities when an enterprise overpays taxes, etc.
Thus, revolving funds consist of large number elements, each of which is important for the implementation of the current one, daily activities enterprises. That's why they are also called current assets. Peculiarity current assets is that at any given time they must be present in quantities sufficient for the uninterrupted functioning of the production and circulation process. A deficiency in any of them can lead to negative consequences for an enterprise: production stoppage, loss of customers, delayed payments, etc. On the other hand, the desire to play it safe, the accumulation of excess stocks of raw materials, supplies, and finished products means an increase in the amount of working capital and a decrease in the efficiency of using the enterprise’s capital. Finding the optimal amount of working capital is the most important and at the same time the most difficult task for any enterprise.
1. Are there differences between the concepts of “property” and “assets”?
2. Can the amount of capital of an enterprise be greater than the amount of its property?
3. Are there differences between the concepts of “fixed assets” and “fixed production assets”?
4. Why can’t the entire cost of an object of fixed assets be immediately written off as the cost of production?
5. How do the concepts of “fixed assets” and “property” relate to each other?
6. Can non-working equipment be subject to physical and moral wear and tear?
7. Are there differences between the concepts of “current assets” and “working funds”?
8. Indicate the differences between working capital assets and fixed production assets.
9. Why are part of the means of labor included in the working capital?
10. Can inventories be subject to physical and moral wear and tear?
To ensure the continuity of the production process (circulation of funds), it is necessary to constantly have at the enterprise certain reserves of raw materials, fuel, blanks and semi-finished products, which all together constitute revolving funds enterprises.
The objects of labor included in the working capital consist of two parts:
Objects of labor that have not yet entered the production process, but are already available at the enterprise;
Objects of labor that are in the production process and are transformed into finished products as they are processed.
The first part of the value of working capital is formed through advances Money enterprises for the purchase of raw materials and materials. The second part of the working capital, which is
work in progress is formed from the advance cost of working capital,
spent on the purchase of raw materials and materials, as well as partially transferred to them in the process
processing the cost of fixed assets (depreciation), wages and other costs associated with processing these items of labor.
Working capital (capital) has features that distinguish them from fixed assets. Firstly,
they take only a one-time part in the production process, while changing their shape;
secondly, they completely transfer their entire cost to the cost of finished products (services). At the same time, some types of working capital (fuel, energy) completely lose their use value and are not included in the finished product, while others (raw materials, workpieces) are included in the finished product and increase their use value.
The working capital (capital) also includes low-value and wearable items, i.e., means of labor costing less than 100 times the minimum wage or with a service life of less than one year. The cost of these items can be included in the cost of finished products (services) either immediately or in two steps - 50% when transferring them from warehouse to production and 50% when they are liquidated (disposed of), taking into account the return value from disposal.
Circulation funds serve the process of circulation of all means of production and finished goods
products. They include finished products in the sales process and cash (at the cash desk, in transit, in accounts, in settlements).
The structure of working capital is shown in Fig. 5.1.
Rice. 5.1. Structure of working capital
The main indicator of the use of working capital is coefficient (multiplicity) them
turnover(CEP). It is calculated by the formula
where Vvyr is the volume of production in monetary units for the period (season);
υos - the amount of working capital involved in one turnover.
The turnover rate of working capital for trade is 52 times a year (one turnover per week), for tourism -
one revolution every two weeks per season.
A season is 180 days, or 26 weeks.
26 weeks : 2 weeks = 13 revolutions per season.
Another indicator of the use of working capital is period their turnover (to6):
Where Tsez– length of the season.
An increase in the turnover period of working capital relative to the average value leads to a slight decrease in the multiplicity (ratio) of turnover of working capital, and a decrease leads to a sharp increase in the turnover ratio. This is shown in Fig. 5.2.
Rice. 5.2. Dependence of the turnover ratio of working capital on the period of their turnover
The turnover ratio determines the amount of capital advanced for the purchase of working capital and has a serious impact on all economic indicators of the enterprise.
The production assets of a trading enterprise are divided into two groups; productive and circulation funds. In turn, productive funds are divided into fixed and working capital.
Fixed assets- means of labor with which employees of trade enterprises perform operations related to the purchase, storage, production and sale of goods (rendering services). Fixed assets create the necessary conditions for the production and circulation of goods, but do not directly enter into circulation. They participate in the technological process entirely and repeatedly, while maintaining their use value.
Revolving funds- this is part of the production assets, entirely consumed in the technological process in one cycle and completely transferring its value to the cost of the finished product. They change their natural and material form. The costs of their circulation are included in production and distribution costs. Working capital is used both in the process of operating fixed assets and for preparing goods for sale to customers. The material carrier of working production assets are the so-called other assets: reserves of fuel, materials for household needs (inventory, containers, etc.) with a service life of less than a year.
Circulation funds- this is a combination of material resources and funds: inventories of goods, finished products at manufacturing enterprises, funds and funds in settlements (accounts receivable). The overwhelming majority of production assets are inventories in the form of circulating funds. Enterprises need to have a certain supply of cash to make commodity and non-commodity payments: at the cash registers of the enterprise, in a bank account and on the way, as well as monetary documents. All these circulation funds in monetary form are constantly in circulation, updated, and replaced with new ones. Their peculiarity is that they are completely consumed in the trade and technological process. The costs of turnover of these funds are reflected in distribution costs.
Working capital and circulation funds in monetary (monetary) valuation are considered in accounting and analysis in the aggregate as the working capital of an enterprise.
Working capital represents the value advanced in cash for the formation and use of circulating production assets and circulation funds in a minimum required sizes ensuring a normal trade and technological process.
Unlike working capital, working capital is constantly in all stages of the circulation, while working capital is completely consumed in the production process. The cost of working capital for a year can be several times higher than the amount of working capital.
The second difference between working capital and working capital is that working capital is directly involved in the creation of new value, and working capital is indirect, through funds. In the process of circulation, working capital embodies its value in working capital and therefore functions in production through the latter.
Working capital, completing the circuit, moves from the sphere of production (as circulating funds) to the sphere of circulation, where they function as circulating funds. At the same time, for profitable enterprises, after the completion of the circulation of funds, the amount of advanced working capital increases by a certain amount of profit received. Conversely, for unprofitable enterprises, the amount of advanced working capital at the end of the circulation of funds decreases due to losses incurred.
All advanced capital invested in productive assets can be expressed as a valuation ( in monetary terms), and in material form.
Cash funds are represented by three types of capital: fixed capital, non-current capital and circulating capital. In turn, each of them has its own elements, expressed in material form.
The working capital of an enterprise represents a valuation working production assets And circulation funds .
Working capital simultaneously functions both in the sphere of production and in the sphere of circulation, ensuring the continuity of the production process and sales of products.
Working production assets- this is part of the means of production that are entirely consumed in each production cycle, completely transfer their value to the products produced and are fully reimbursed after each production cycle
Working production assets are classified according to the following elements:
Productive reserves(raw materials, basic and auxiliary materials, purchased semi-finished products and components, fuel, containers, spare parts for equipment repair, low-value and wearable items). The category of low-value and wearable items includes: items that last less than one year and cost no more than 100 times as of the date of purchase (for budgetary institutions- 50 times) established by law Russian Federation minimum size monthly wage per unit; special tools and special devices, replaceable equipment regardless of their cost; special clothing, special shoes, regardless of their cost and service life, etc.
Work in progress and semi-finished products own production(WIP). Work in progress represents products that have not been completed and are subject to further processing.
Future expenses- these are the costs of developing new products, fees for subscription publications, payment of rent several months in advance, etc. These expenses are written off against the cost of production in future periods.
Circulation funds- this is the totality of all means functioning in the sphere of circulation.
Circulation funds include:
– products ready for sale located in the warehouses of the enterprise.
– products shipped, but not yet paid for by the buyer.
– cash(at the enterprise’s cash desk and in bank accounts), as well as funds in unfinished settlements (accounts receivable). Accounts receivable are funds of a given enterprise that are in the circulation of other enterprises.
Working capital constantly circulates, during which it passes through three stages: supply, production and sales (sales). The circulation of working capital can be represented as follows.
At the first stage (supply), the enterprise uses cash to purchase the necessary production supplies. At the second stage (production), inventories enter production and, having passed through the form of work in progress and semi-finished products, are transformed into finished products. At the third stage (sales), finished products are sold and working capital takes cash form.
Rice. 1 Composition and structure of working capital
Structure of working capital– is the share of cost individual elements working capital in their total value. In Fig. 1 shows the composition and approximate structure of working capital at a machine-building enterprise.
The structure of working capital depends on many factors, including the specifics of the enterprise, the nature of the product, supply and sales conditions, etc.
Based on their purpose in the production process (by element), working capital can be divided into the following groups.
A) Productive reserves. All elements of industrial inventories (1-9) appear in three forms.
1. Transport stock - from the day the supplier's invoice is paid until the cargo arrives at the warehouse.
2. Warehouse stock is divided into preparatory and current.
2.1. Preparatory stock is created in cases where this type raw materials or materials require aging (time of natural processes, for example, drying lumber, aging large castings, fermentation of tobacco, etc.).
2.2. The current stock is created to meet the requirements for materials and raw materials between two deliveries.
The size of the maximum current stock is determined by the formula
where Q max is the maximum current stock of the corresponding material;
Q T - volume of average daily calendar consumption;
T p - the value of the supply interval for this type of material.
3. Safety stock is created in cases where frequent changes in the supply interval occur, and depends on the specific operating conditions of the enterprise.
B) Funds in production costs.
10. Work in progress is products (work) that have not gone through all the stages provided for technological process, as well as products that are incomplete or have not passed testing and technical acceptance.
11. Semi-finished products of our own production (castings, forgings, stampings, etc.).
12. Deferred expenses are expenses incurred in the reporting period, but related to the following reporting periods.
IN) Finished products are finished and manufactured products, tested and acceptance, fully equipped in accordance with contracts with customers and corresponding technical specifications and requirements.
13. Finished products in the enterprise warehouse.
14. Products shipped but not paid for.
G) Cash and settlements (means of payment):
15. Settlements with debtors (funds in settlements with debtors). Debtors are legal entities and individuals who have a debt to a given enterprise (this debt is called receivables).
16. Income assets are short-term (for a period of no more than 1 year) investments of an enterprise in securities (marketable highly liquid securities), as well as loans provided to other business entities.
17. Cash is funds in current accounts and in the cash register of an enterprise.
In order to fulfill production plans and commodity turnover plans, all enterprises and organizations must have at their disposal fixed and circulating production assets and circulation funds.
Working capital of enterprises is a combination of circulating production assets and circulation funds in cash. Working capital acts as an advance cost that circulates in the process of production and sales of products.
Working capital assets express the cost of labor items necessary for enterprises to ensure the continuity of the production process. They, in turn, are divided into potential funds, i.e., those awaiting entry into the production process, and funds that are directly involved in this process. The first includes fuel, raw materials, main and auxiliary production materials, stored in the form of stocks in the warehouses of enterprises, and the second - work in progress and semi-finished products.
Circulation funds are used in the sphere of circulation; they consist of finished products and cash. Each manufacturing enterprise systematically sells its products. But in order to timely fulfill obligations to supply goods to other enterprises and organizations, it is necessary to have stocks of finished products in warehouses.
The working capital assets include:
production inventories - items of labor received by the enterprise for subsequent processing and support of the production process (stocks of raw materials, materials, components, fuel, low-value and wearable items, containers, etc.);
work in progress - objects of labor that have entered the production process and are located at workplaces and between them (blanks, semi-finished products, parts, assemblies, products that have not gone through all stages of processing);
deferred expenses - valuation of expenses for the preparation and development of new types of products produced in a given period, but payable in the future (costs of rent paid in advance, etc.).
The circulation funds include:
finished products, goods for resale and shipped goods - objects of labor that have gone through all stages of processing and are ready for sale, i.e. products of labor;
accounts receivable - debts to an enterprise from legal entities, individuals and states. Accounts receivable include the debt of buyers and customers, bills receivable, debt of subsidiaries and dependent companies, debt of founders for contributions to authorized capital, advances issued;
cash.
Fixed production assets include: buildings, structures, equipment, machinery. These also include tools and devices that cannot be written off within one year.
Fixed production assets are the leading factor in determining the type structure of fixed assets; they largely influence the production, financial and economic results of the enterprise.
To evaluate fixed assets, natural and cost indicators are used.
Natural indicators are used in determining the technical level of means of labor, the production capacity of enterprises and its development (in channels, capacity numbers, etc.), as well as when planning the commissioning of communication facilities and structures, and assessing the effectiveness of their use.
Valuation of fixed assets is one of their most important characteristics. It is necessary to determine the total volume of fixed assets, their structure and dynamics, planning their reproduction, and calculating depreciation. The cost of fixed assets underlies the calculation of a number of economic indicators, such as production costs, capital productivity and capital-labor ratio, profitability.
In practice, the following types of assessments of the value of fixed production assets are used:
at original cost;
at replacement cost;
at original cost, minus depreciation (residual value in the original valuation);
at replacement cost, minus depreciation (residual value in the replacement estimate);
at average annual cost.
In practice, fixed production assets are objects of accounting. To get an idea of the availability and movement of fixed production assets, their book value is used - the cost at which they are accepted on the balance sheet of the enterprise. By economic sense book value equals residual value. It also allows one to judge the amount of unreimbursed advanced capital.
The balance of fixed assets at full cost is compiled as follows:
Fkg = Fng + Fvv - Fvyb, (1.2)
where Fng, Fkg - the total cost of fixed assets as of the beginning and end of the year, respectively; Fvv - the cost of the fixed assets put into operation; Fvyb - the total cost of retiring fixed assets.
Since the value of fixed assets changes throughout the year as a result of the introduction of new and disposal of worn-out means of labor, the average annual value of fixed assets is used in economic calculations.
Depreciation of fixed assets
During operation or inactivity, fixed assets are subject to wear and tear. The economic essence of depreciation of fixed assets consists in the gradual loss of their use value and value, which is transferred to the newly created product. In this case, part of the cost of fixed assets is transferred to the product, the size of which is determined by the amount of depreciation.
A distinction is made between physical and moral wear and tear. Physical wear and tear is determined by the fact that, while participating in the production process, fixed assets gradually lose their consumer ability, their mechanical and other properties change. I would like to note that different kinds fixed assets wear out at different times. The amount of physical wear and tear on fixed assets depends on the intensity and nature of their operation, storage conditions, etc. The higher the load on them, the faster they wear out.
To assess the degree of physical wear and tear of fixed assets, the expert method and the service life analysis method are used. The expert method, in turn, is based on an examination of the actual technical condition of the object, and the service life analysis is based on a comparison of the actual and standard service life of the corresponding objects.
Obsolescence of fixed assets is expressed in their depreciation, the loss of their use value and value by funds, regardless of physical condition due to scientific and technological progress. In the context of scientific and technological progress, the importance of obsolescence of fixed assets increases.
There are two forms of obsolescence of fixed assets.
The first form of obsolescence occurs when, under the influence of increased labor productivity in the production of machinery and equipment, the socially necessary labor costs for their production are reduced, resulting in a reduction in their value. In other words, means of labor of the same design are produced cheaper due to the improvement of their production methods.
The second form of obsolescence is a consequence of the creation of new, more productive and economical means of labor. Obsolescence of the second form of operating fixed assets is characterized by the loss of their use value and value. It is advisable to replace these funds with new ones, despite their physical suitability for further use, if the effect of the replacement exceeds the losses from the incomplete transfer of the cost of the means of labor to the created product.
The main means of preventing losses from obsolescence is more intensive use of equipment. Replacing obsolete equipment with a more advanced model is economically feasible if this replacement allows increasing labor productivity and reducing production costs compared to the same indicators when using old equipment.
The degree of depreciation of fixed assets is determined by the following indicators:
Physical wear and tear (IF):
If = Tf / Tn * 100%, (1.3)
where Tf is the actual service life of fixed assets, Tn is the standard service life of fixed assets,
or If = Ca / OFp * 100%, (1.4)
where Ca is the amount of accrued depreciation, thousand rubles; OFP - initial cost of fixed assets, thousand rubles.
Obsolescence of the first form (Im):
Im = (GPp - PFv) / GPp * 100%, (1.5)
where FV is the replacement cost of fixed assets, thousand rubles,
Obsolescence of the second form (Im?):
Im = (Mon - Ps) / Mon * 100%, (1.6)
where Mon is the productivity of new equipment, Ps is the productivity of old equipment.
The gradual wear and tear of the means of labor leads to the need to accumulate funds to compensate for the wear and tear of fixed assets and their reproduction. This is done through depreciation.
Depreciation is monetary compensation for the cost of depreciation of fixed assets. It is a method of gradually transferring the value of funds to manufactured products. Deductions intended to reimburse the cost of the worn-out part of fixed assets are called depreciation. It should be noted that fixed assets after each production cycle do not require compensation for wear and tear in kind, therefore depreciation charges accumulate, forming a depreciation fund.
There are three main methods of calculating depreciation:
linear (uniform) - depreciation is calculated monthly based on its monthly rate;
accelerated - reducing the depreciation period and increasing its annual rates;
productive - accounting of production volumes at a given facility of production assets.
Indicators of use of fixed assets
The efficiency of using fixed assets is assessed by a system of indicators.
Capital productivity (FRO) is the ratio of the volume of production in monetary terms (OP) to the average annual cost of fixed assets (Afsr).
FO = (OP / OFsr) * 100% (1.7)
Capital intensity of production (FE) is the cost of fixed assets per unit of annual production volume.
FE = 1 / FO (1.8)
Return on fixed assets.
Ro.f = (Pr / OFsr) * 100%, (1.9)
where Pr is profit, million rubles.
Profitability of production.
Рп = Pr / (OFsr + No.s) * 100%, (1.10)
where No.c is the amount of standardized working capital.
Capacity utilization factor.
Ki.m = (OP / PM) * 100%, (1.11)
where OP is the actual volume of production in conditionally natural, physical indicators;
PM is the production capacity of the enterprise in the same units.
The indicator of extensive use of machinery and equipment (Ke) is the ratio of the actual operating time of machinery and equipment (Vf) to the calendar time (Vk).
Ke = Vf / Vk (1.12)
The indicator of intensive use of machinery and equipment (Ci) is the ratio of the actual productivity of a machine per unit of time (Pf) to the technical or planned one (Ppl).
Ki = Pf / Ppl (1.13)
To determine the movement of fixed production assets and the level of their technical improvement, a number of indicators are calculated.
Renewal factor.
kobn = OFnov / OFk.g, (1.14)
where OFnov is the cost of newly introduced fixed assets; OFk.g - the value of fixed assets at the end of the year.
Input factor.
kвв = ОФвв / ОФк.г, (1.15)
where OFVV is the cost of fixed assets put into operation.
Attrition rate.
kselect = OFselect / OFn.g, (1.16)
where OFvyb is the cost of fixed assets disposed of during the year; OFn.g - the cost of fixed assets at the beginning of the year.
Wear rate.
ki = I / OFn.g. (1.17)
Suitability factor.
kg = (OFn.g - I) / OFn.g. (1.18)
Intensive load factor.
kin = (VPf / VPpl) * 100% (1.19)
Extensive utilization factor.
kext = (Tf / Tpl) * 100% (1.20)
Integral utilization factor.
kint = kin * kext (1.21)
Equipment replacement rate.
kcm = Tf / Te, (1.22)
where Te is the effective operating time of equipment in 1 shift.
Thus, in modern conditions the implementation of reserves for improving working capital and circulation funds is becoming one of the most important functions of the marketing services of communication organizations.
Indicators of efficiency in the use of working capital can be improved by:
improving the organization of production, labor and management, eliminating unscheduled downtime;
reducing time and improving the quality of repairs;
advanced training of personnel;
improvement of equipment and technology;
expansion of the scope of leasing services;
improving the quality of preparation of raw materials and materials for the production process;
increasing equipment load and capacity;
introduction of new, economically effective technology communications, technical improvement and modernization of equipment;
accelerated development of design capacities, etc.
