Analysis and assessment of the turnover of assets and capital of the organization. Analysis of the turnover of assets of the enterprise Analysis of the turnover of current assets in brief

The activity of the financial activity of commercial organizations is based on the analysis of a number of indicators, including the turnover of assets, the calculation of which makes it possible to determine how effectively the organization uses its assets or liabilities.

Asset turnover

CODS \u003d V / DS, where

KODS - cash turnover ratio,
B - revenue,
DS - the amount on the accounts and in the cash desk of the enterprise.

If the ratio tends to decrease, it means that the work of the enterprise is organized inefficiently, and highly liquid assets are used with a slowdown.

Turnover of tangible current assets (stocks)

The correct organization of the production process also requires the effective use of stocks, the calculation of which is made in the following order:

KOzap \u003d V / ZAP, where

KOzap - inventory turnover ratio,
B - revenue,
ZAP - book value of inventory.

The increase in the indicator indicates that the demand for the products sold is at a good level and the goods are not stored in warehouses. A decrease in the indicator indicates that the marketing policy of the enterprise is poorly organized and requires careful analysis.

The analysis of these indicators should be carried out not by comparison with the established norms, but by considering their dynamics over the past years and comparing them with the activities of competitors. So, if the indicator does not reach the norm, but at the same time, against the background of other reporting periods, it is of greater importance, this indicates the correct organization of the enterprise's activities and a gradual increase in asset turnover.

Analysis of the profitability of organizations

The financial and economic activities of any legal entity, regardless of the form of ownership, are assessed by analyzing the absolute and relative indicators of its activities. The indicators of the first group of economic burden do not bear and have a purely arithmetic character.

Relative indicators characterize how well the financial and economic activities of the enterprise are organized and show the dynamics of its development. One of these indicators is the return on assets, which is calculated by multiplying the asset turnover ratio by the return on products sold.

It is the ratio of net profit to revenue, and net profit, in turn, is the difference between the revenue received and the cost of goods sold.

Thus, the higher the rate of return on assets, the greater the profit of the organization in the reporting period.

We analyze the results

Ra \u003d PP / Cav, where

Ra - return on assets,
PE - net profit,
САср is the average asset value.

The profitability of current assets is calculated in the same way.

In order to make a complete analysis of the activities of the enterprise, all groups of factors must be taken into account: capital productivity, profitability of sales, the intensity of operating the operating system, and the efficiency of financial management. Constant monitoring of the company's activities will allow to work out the correct development strategy aimed at ensuring financial stability. The completeness of the analysis of business activities also depends on the correctness of the data provided in the reporting documentation.

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The financial condition of any organization is directly dependent on the turnover of assets, i.e. on how quickly the funds invested in assets turn into money.

Certain types of assets of the organization have different rates of turnover. Non-current assets (intangible assets, fixed assets, construction in progress, long-term financial investments, etc.) have the largest turnover period. All other assets, referred to as circulating and intended for sale or consumption, can repeatedly change their form (tangible to monetary, and vice versa) during one year or one operating cycle (if it exceeds one year).

Operating cycle - the average time interval between the moment of procurement of material assets and the moment of payment for the sold products (works, services).

The duration of funds in circulation is influenced by a combination of external and internal factors.

TO external factors relate:

- scope of the organization (for example, a trade organization has a higher rate of circulation of funds than an organization engaged in production activities);

- industry affiliation (organizations employed in different industries have different duration of the operating cycle. In particular, a confectionery factory will objectively have a higher asset turnover in comparison with a machine-building enterprise);

- the scale (as a rule, in small enterprises the turnover of funds is higher than in large ones, since the former are mainly employed in the trade or service sector);

- socio-economic factors (economic, demographic situation in the country, the level of development of foreign economic relations). In the context of inflation, leading to an increase in the prices of consumed goods, many enterprises make excessive purchases of raw materials and materials, trying to protect themselves from more expensive purchases in the future, but ultimately the consequences of such a policy turn out to be extremely negative (accumulation of stocks, increased storage costs, growth losses due to damage, uncontrolled use and a slowdown in asset turnover in general).

Internal factors characterized by the effectiveness of the asset management policy, including the choice of methods for assessing assets, planning inventory balances, accounts receivable; funds, a system of internal control over their condition and use, etc.

The analysis begins with the calculation and assessment of the dynamics of the turnover of all capital (total assets) and current assets. For this, data is used not only from the balance sheet, but also from the Statement of Financial Results.

To assess the asset turnover, the following are used indicators:

1) the capital turnover ratio (total assets) or capital return in turnover (L CA):

where, N - proceeds from the sale of goods, products, works, services;

Average annual value of total assets (capital);

n.g. - the beginning of the year;

since. - the end of the year.

2) the turnover ratio of current assets in turnover (L ОА);

where, - the average annual value of current assets;

3) Average term of capital turnover (total assets) in days (P SA);

4) Average period of turnover of current assets in days (P OA);

The average annual value of assets can be calculated using the arithmetic mean formula (this is the simplest way):

where O n.g. , About k.g. - balances of current assets at the beginning and end of the year, respectively.

The next stage of the analysis is the study of inventory turnover. It is advisable to carry out such an analysis not only as a whole for the entire aggregate of stocks, but also in the context of their individual types (production stocks, work in progress, finished goods, etc.). Since inventories are reflected in the Balance Sheet at the cost of their procurement (purchase) or at cost, and not at sales prices, then to calculate the indicators of inventory turnover, not sales proceeds are used, but the cost of goods, products, works, services sold (S n). In this case, the following indicators are calculated:

1) inventory turnover in turnover (L z):

where, is the average annual stock balance.

2) the average shelf life of stocks in days (PZ);

At the next stage of the analysis, it is important to determine how the current dynamics of inventory balances and their structure influenced the turnover of these assets of the organization. The above indicators of inventory turnover are analyzed in dynamics (for the previous and the reporting year), and the factors that caused their changes are identified.

In general, factor analysis allows us to identify ways to accelerate the turnover of assets (capital) of the organization. These include:

1. optimization of pricing policy, as a result of which the organization can increase revenue from sales and the flow of money from customers;

2. improving the structure of assets;

3. selection and use of optimal methods for assessing inventories and depreciation on non-current assets;

4. improving the quality of products and searching for new markets for their sales;

5. tightening control over the status of inventories, accounts receivable and other assets;

6. planning of inventory balances, cash receivables, etc.

The financial position of the organization is directly dependent on how quickly the funds invested in assets turn into real money.

However, certain types of assets of the organization have different rates of turnover. The duration of funds in circulation is determined by the cumulative influence of a number of multidirectional factors of external and internal nature. The first should include the scope of the organization, that is, in most cases, the turnover of funds in small businesses is much higher than in large ones - this is one of the main advantages of small businesses, and a number of other reasons.

The economic situation in the country and the associated economic conditions of organizations have no less impact on the turnover of an organization's assets. Thus, the inflationary processes taking place in the country, the lack of established economic relations with suppliers and buyers in most organizations lead to a forced accumulation of stocks, which significantly slows down the process of turnover of funds.

Consider the reasons for the change in current assets in "DMD SLOT ALLOCATION CJSC" in 2010 according to table 2.7.

Table 2.7. - Reasons for changes in current assets in DMD SLOT ALLOCATION CJSC in 2010 (million rubles)

From the table it follows that the increase in current assets by 7 million rubles. happened due to an increase in own funds by 7 million rubles. The decrease in working capital was caused by a decrease in accounts payable by 7 million rubles.

The most important part of the analysis of the financial condition of the organization is the study of the indicators of the turnover of the organization's current assets, which allow us to characterize the efficiency of their use. The study and analysis of indicators of the turnover of current assets is important, since such important indicators as the volume of sales of goods, works, services and the profit received by the organization are directly dependent on the speed of their turnover.

Let's analyze the indicators of the turnover of current assets in "DMD SLOT ALLOCATION CJSC" for 2009 - 2010. according to table 2.8.

Table 2.8. - Analysis of the turnover of current assets in "DMD SLOT ALLOCATION CJSC" for 2009 - 2010.

Turnover ratio of current assets:

Kob 2009 \u003d 424: 63 \u003d 6.7 (revolutions)

Kob 2010 \u003d 522: 70 \u003d 7.4 (revolutions)

Material turnover ratio:

Kob 2009 \u003d 424: 61 \u003d 6.9 (revolutions)

Kob 2010 \u003d 522: 39 \u003d 13.3 (revolutions)

Using the turnover ratios, we calculate the duration of one turnover:

current assets:

DD 2009 \u003d 360: 6.7 \u003d 48.6 (days)

DD 2010 \u003d 360: 7.4 \u003d 53.7 (days)

material circulating assets:

DD 2009 \u003d 360: 6.9 \u003d 52.2 (days)

DD 2010 \u003d 360: 13.3 \u003d 27.1 (days)

Using the data obtained, we will calculate the amount of additionally attracted working capital as a result of a slowdown in their turnover:

additional attraction of current assets:

Δ OK \u003d 2.1 x 0.7 \u003d 1.47 (million rubles)

additional attraction of material working capital by slowing down their turnover:

Δ OK \u003d 2.1 x 5.1 \u003d 10.7 (million rubles)

In 2010, compared to 2009, the proceeds from the sale of goods, works, services increased by 23.1% (522/424 x 100%) with an increase in current assets by 11.1% (70/63 x 100%) and decrease in material working capital by 36.1% (39/61 x 100%).

The excess of the growth rate of proceeds from the sale of goods, works, services (23.1%) over the growth rate of current assets (11.1%) led to a decrease in the turnover of current assets. A decrease in the growth rate of tangible current assets (63.9%) compared to the growth rate of proceeds from sales (23.1%) led to a slowdown in the turnover of tangible circulating assets.

The organization must identify the reasons for the slowdown in the turnover of tangible current assets in order to eliminate the action of these reasons in the next reporting period.

Turnover analysis is one of the leading areas of analytical study of the financial activities of an organization. Based on the results of the analysis carried out, assessments of business activity and the effectiveness of asset and / or capital funds management are made.

Today, the analysis of working capital turnover raises a lot of controversy between practical economists and theoretical economists. This is the most vulnerable point in the entire method of financial analysis of the organization's activities.

What characterizes the analysis of turnover

The main purpose for which it is carried out is to assess whether the company is able to make a profit by making a turnover of "money-commodity-money". After the necessary calculations, the conditions for material supply, settlement with suppliers and buyers, sales of manufactured products, etc., become clear.

So what is turnover?

This is an economic value that gives a characteristic to a certain time period during which the full circulation of money and goods passes, or the number of these calls for a given time period.

So, the turnover ratio, the formula of which is given below, is equal to three (the analyzed period is a year). This means that the enterprise in a year of operation rescues a second more money than the value of its assets (that is, they turn over three times in a year).

The calculations are simple:

K about \u003d sales proceeds / average assets.

It is often required to know the number of days in which one revolution takes place. For this, the number of days (365) is divided by the turnover rate for the analyzed year.

Frequently used turnover ratios

They are needed to analyze the business activity of the organization. The indicators of the turnover of funds show the intensity of the use of liabilities or certain assets (the so-called rate of turnover).

So, when analyzing the turnover, the following turnover ratios are used:

Equity capital of the enterprise,

Working capital assets,

Full assets,

Stocks,

Debts to creditors,

Accounts receivable.

The higher the calculated turnover ratio of full assets, the more intensively they work and the higher the indicator of the business activity of the enterprise. Industry specifics do not always have a positive effect on turnover. So, in trade organizations through which large amounts of money pass, the turnover will be high, while in capital-intensive enterprises it will be much lower.

When comparing the turnover ratios of two similar enterprises belonging to the same industry, one can see a difference, sometimes significant, in the efficiency of asset management.

If the analysis shows a large ratio of accounts receivable turnover, then there is a reason to talk about the significant efficiency of collection of payments.

This coefficient characterizes the speed of movement of working capital from the moment of receipt of payment for material values \u200b\u200band ending with the return of funds for goods (services) sold to bank accounts. The amount of circulating assets is the difference between the total amount of circulating assets and the balance of funds in the bank on the accounts of the enterprise.

In the case of an increase in the rate of turnover with the same volume of goods (services) sold, the organization will use smaller amounts of working capital. From this we can conclude that material and monetary resources will be used more efficiently. Thus, the working capital turnover ratio indicates the entire set of processes of economic activity, such as: a decrease in capital intensity, an increase in productivity growth rates, etc.

Factors affecting the acceleration of the turnover of working capital

These include:

Reduction of the total time spent on the technological cycle,

Improvement of technologies and production process,

Improving the supply and marketing of goods,

Transparent payment and settlement relations.

Money cycle

Or, as it is also called, working capital is the time period of cash turnover. Its beginning is the moment of acquisition of labor, materials, raw materials, etc. Its end is the receipt of money for the goods sold or services provided. The value of this period shows how effective the management of working capital is.

A short money cycle (a positive characteristic of the organization's activities) makes it possible to quickly return funds invested in current assets. Many enterprises with a strong position in the market, after analyzing the turnover, receive a negative working capital ratio. This is explained, for example, by the fact that such organizations have the ability to impose their conditions on both suppliers (receiving various payment delays) and buyers (significantly reducing the payment period for the goods (services) supplied).

Inventory turnover

This is the process of replacing and / or complete (partial) renewal of stocks. It passes through the transfer of material values \u200b\u200b(that is, the capital invested in them) from the group of stocks into the process of production and / or sale. The inventory turnover analysis makes it clear how many times the inventory balance was used during the billing period.

Inexperienced managers create excessive reserves to reinsurance, not thinking about the fact that this surplus leads to a "freeze" of funds, spending in excess of the norm and a decrease in profits.

Economists advise avoiding such low-turnover stocks. And instead, by accelerating the turnover of goods (services), free up resources.

The inventory turnover ratio is one of the important criteria for assessing the activities of an enterprise.

If the calculations show a ratio that is too high (in comparison with the average or the previous period), then this may mean a significant lack of reserves. If, on the contrary, the stocks of goods are not in demand or are very large.

It is possible to characterize the mobility of funds invested in the creation of stocks only by calculating the stock turnover ratio. And the higher the business activity of the organization, the faster the money is returned in the form of proceeds from the sale of goods (services) to the accounts of the company.

There are no generally accepted norms for the turnover ratio. They are analyzed within the framework of one industry, and the ideal option is in the dynamics of a single enterprise. Even the slightest decrease in this ratio indicates excessive stockpiling, ineffective warehouse management, or the accumulation of unusable or obsolete materials. On the other hand, this high indicator does not always characterize well the business activity of the enterprise. Sometimes this indicates depletion of reserves, which can cause disruptions in the technological process.

Affects the inventory turnover and the organization's marketing department, since a high return on sales leads to a low turnover ratio.

Accounts receivable turnover

This ratio characterizes the rate of repayment of accounts receivable, that is, it shows how quickly the organization receives payment for the goods (services) sold.

It is calculated for a separate period, most often for a year. And it shows how many times the organization received payments for products in the amount of the average outstanding balance. He also describes the policy of selling on credit and the efficiency of working with customers, that is, how effectively receivables are collected.

The receivables turnover ratio does not have standards and norms, since it depends on the industry and technological features of production. But in any case, the higher it is, the faster the receivables are covered. At the same time, the efficiency of the enterprise is not always accompanied by a high turnover. For example, sales of products on credit give a high balance of accounts receivable, while the rate of its turnover is low.

Accounts payable turnover

This coefficient shows the relationship between the amount of money that needs to be paid to creditors (suppliers) by the agreed date and the amount spent on purchases or on the purchase of goods (services). The calculation of the turnover of accounts payable makes it clear how many times its average value was repaid during the analyzed period.

Financial stability and solvency decrease with a high proportion of accounts payable. While it also gives the opportunity for the entire period of its existence to use "free" money.

The calculation is simple

The benefit is calculated as follows: the difference between the amount of interest on the loan, equated to the amount of debt (that is, a hypothetically taken loan) for the time it is on the balance sheet of the organization, and the amount of the accounts payable itself.

A positive factor in the activity of the enterprise is the excess of the ratio of accounts receivable over the ratio of accounts payable. Lenders give preference to a higher turnover ratio, but it is beneficial for the enterprise to keep this ratio at a lower level. After all, unpaid amounts of accounts payable are a free source for financing the current activities of an organization.

Resource efficiency, or asset turnover

It makes it possible to calculate the number of capital turnovers for a particular period. This turnover ratio, the formula exists in two versions, gives a characteristic of the use of all assets of the organization, regardless of the source of their receipt. It is also important that, only by determining the coefficient of resource efficiency, one can see how many rubles of benefit are accounted for for each ruble invested in assets.

The asset turnover ratio is equal to the quotient of dividing the proceeds by the value of assets on average for the year. If it is necessary to calculate the turnover in days, then the number of days in a year must be divided by the asset turnover ratio.

The leading indicators for this category of turnover are the period and rate of turnover. The latter is the number of capital turnovers of the organization for a certain period of time. This interval is understood as the average period for which the funds invested in the production of goods or services are returned.

Asset turnover analysis is not based on any norms. But the fact that in capital-intensive industries the turnover rate is much lower than, for example, in the service sector, is definitely understandable.

Low turnover may indicate insufficient efficiency in working with assets. Keep in mind that ROIs also affect this category of turnover. Thus, high profitability entails a decrease in asset turnover. And vice versa.

Equity capital turnover

It is calculated to determine the rate of the organization's equity capital for a given period.

The capital turnover of the organization's own funds is designed to characterize various aspects of the financial activity of the enterprise. For example, from an economic point of view, this coefficient characterizes the activity of the money turnover of the invested capital, from the financial point of view - the rate of one turnover of the invested funds, and from the commercial point of view - surplus or insufficient sales.

If this indicator shows a significant excess of the level of sales of goods (services) over the invested funds, then, as a result, the growth of credit resources will begin, which, in turn, allows reaching the limit beyond which the activity of creditors increases. In this case, the ratio of liabilities to equity increases and the credit risk increases. And this entails the inability to pay these obligations.

The low turnover of equity capital indicates their insufficient investment in the production process.

The analysis of turnover allows you to assess the ability of an organization to generate income by making a turnover "money - goods - money". As a result of the turnover analysis, it is possible to understand the conditions of material supply, sales of finished products, terms of settlements with buyers and suppliers, etc.

What is turnover?

Turnover Is a value that characterizes the time period for which the full circulation of goods, money, or the number of these calls for the time period is carried out.

So, the value of the asset turnover ratio equal to 3 shows that the organization during the year receives revenue three times the value of its assets (assets for the year "turn around" 3 times).

The turnover is often calculated in terms of the number of days that takes one turnover. To do this, 365 days are divided by the annual turnover rate. For example, an asset turnover ratio of 3 shows that assets turn over on average in 121.7 days (i.e., during this period, revenue is received equal to the value of the organization's assets).

Turnover rates

Turnover rates - show the intensity of use (rate of turnover) of certain assets or liabilities. The turnover rates are indicators of the business activity of the enterprise.

Among the most popular turnover ratios in financial analysis are used:

• turnover of current assets
• inventory turnover
• accounts receivable turnover
• accounts payable turnover
• asset turnover
• equity turnover

The higher the asset turnover ratio, the more intensively the assets are used in the activities of the organization, the higher the business activity. However, turnover is highly industry-specific. In trade organizations where large volumes of proceeds pass, the turnover will be higher; in capital-intensive industries - lower. A comparative analysis of the turnover ratios of two similar enterprises of the same industry can show differences in the effectiveness of asset management. For example, a higher turnover of accounts receivable indicates a more efficient collection of payments from buyers.

• Money cycle
• Inventory turnover
• Equity capital turnover

Turnover of working capital

Turnover of working capital (English working capital turnover) - characterizes the rate of turnover of working capital from the moment of payment of material assets to the return of money for the products sold to a bank account. The amount of working capital is calculated based on their total size minus the balance of funds in the bank account of the enterprise.

With the acceleration of turnover with the same volume of products sold, the enterprise needs less working capital. If the turnover of circulating assets accelerates, then this reduces the need of enterprises for circulating assets, allows the use of monetary and material resources more efficiently. The circulating assets released from production can be used in other branches of production. Thus, the indicator of the turnover of working capital reflects the entire set of economic processes: acceleration of the growth rate of labor productivity, a decrease in the capital intensity of production, etc.

The main factors in accelerating the turnover of working capital are: reduction in the total duration of the technological cycle; improvement of technology and organization of production; improving the conditions for the supply of enterprises and the sale of products; clear organization of payment and settlement relations.

Money cycle

The money cycle, or the working capital cycle (English cash conversion cycle, operating cycle) is the period of circulation of funds from the moment of acquisition of resources (raw materials, materials, labor) and until the sale of finished products and receipt of money for it. This period reflects the effectiveness of the organization's working capital management.

A short cash cycle allows the organization to quickly return the money invested in current assets. The smaller the cycle, the better for the organization. There are even cases when an enterprise has a negative money cycle indicator. For example, this occurs in enterprises with strong market positions, so they can dictate terms to both buyers (shortening the payment period for their products) and suppliers (getting them a deferred payment).

Inventory turnover

Inventory turnover (English inventory turnover) - the process of updating and replacing stocks by moving material values \u200b\u200b(money invested in them) from the category of stocks into the production and / or implementation process. Shows how many times during the analyzed period the organization has used the average available stock balance.

In practice, a situation often arises when managers, fearing a possible shortage of goods, create excess stocks to hedge, and do not think that this leads to unnecessary costs, "freezing" funds and reduced profits.

A smart manager avoids large inventory with low turnover, preferring to free up resources by accelerating product turnover.

Inventory turnover is an important criterion and should be carefully reviewed.

If the ratio obtained is too high (compared to the previous period or with the average data), this may indicate insufficient reserves. If the ratio is too low, then this may mean that the inventory is large or not in demand. For example, a coefficient equal to 3 means that this product or group of products is turned around 3 times during the month.

Inventory turnover characterizes the mobility of the funds that the company invests in creating stocks: the faster the funds are returned to the company in the form of proceeds from the sale of finished products, the higher the business activity of the organization.

There are no generally accepted standards for turnover indicators; they should be analyzed within one industry and, even better, in dynamics for a particular enterprise. A decline in inventory turnover may reflect an accumulation of surplus inventory, ineffective warehouse management, and an accumulation of unusable materials. But high turnover is not always a positive indicator, since it can speak of depletion of warehouse stocks, which can lead to interruptions in production.

In addition, inventory turnover depends on the marketing policy of the organization. Organizations with high profit margins tend to have lower turnover rates than enterprises with low profit margins.

Accounts receivable turnover

Accounts receivable turnover (eng. receivable turnover) - measures the rate of repayment of the organization's receivables, how quickly the organization receives payment for goods (work, services) sold from its customers.

The accounts receivable turnover ratio shows how many times over a period (usually a year) the organization received payment from buyers in the amount of the average outstanding balance. The indicator measures the efficiency of work with customers in terms of collection of receivables, and also reflects the organization's policy in relation to credit sales.

For the turnover of accounts receivable, as well as for other indicators of turnover, there are no clear standards, since they strongly depend on the industry characteristics and technology of the enterprise. But in any case, the higher the coefficient, i.e. the sooner buyers pay off their debts, the better for the organization. At the same time, effective activity is not necessarily accompanied by high turnover. For example, when selling on credit, the balance of accounts receivable will be high, and the ratio of its turnover is low.

Accounts payable turnover

Accounts payable turnover (English accounts payable turnover) - an indicator linking the amount of money that an organization must return to creditors (mainly suppliers) by a certain date, and the current amount of purchases or goods and services purchased from creditors. The ratio shows how many times (usually per year) the organization has repaid the average amount of its accounts payable.

A high share of accounts payable reduces the financial stability and solvency of the organization, but accounts payable to suppliers and contractors allows the company to use "free" money during its existence.

The benefit of the enterprise in this case is not difficult to calculate: it consists in the difference in the amount of interest on the loan equal to the amount of this debt (if the company took this money from the bank at interest), during the time the debt was on the balance sheet of the enterprise, and the amount of this accounts payable. That is, the profit of an enterprise is how much the bank would have to pay in interest for a loan for providing a given amount for a given period.

If the turnover of accounts receivable is higher (i.e. the ratio is less) the turnover of accounts payable, then this is a positive factor.

Accounts payable turnover strongly depends on the industry, the scale of the organization's activities. For creditors, a higher turnover ratio is preferable, while the organization itself is more profitable with a low ratio, which allows it to have the balance of unpaid accounts payable as a free source of financing for its current activities.

Asset turnover (resource productivity)

Asset turnover (resource productivity) (English asset turnover) - allows you to determine the number of capital turnovers over a period of time.

The asset turnover ratio makes it possible to assess the efficiency of using all assets of an enterprise, regardless of the source of their formation. In addition, the determination of the resource efficiency ratio clearly shows how many rubles of profit the company receives from each ruble invested in assets.

The financial condition of the enterprise, its solvency and liquidity directly depend on the rate of turnover of the invested funds.

The most important indicators of asset turnover are speed and turnover period. The rate of turnover refers to the number of turnovers of the company's capital or its components for the estimated period of time. The turnover period is the average time it takes to recover funds invested in production or commercial operations.

The coefficient characterizes various aspects of activity: from a commercial point of view, it reflects either excess sales, or their insufficiency; from financial - the rate of turnover of the invested capital; from economic - the activity of the funds that the depositor risks. If it significantly exceeds the level of implementation over the invested capital, then this entails an increase in credit resources and the possibility of reaching the limit beyond which creditors begin to participate more actively in the business than the owners of the company. In this case, the ratio of liabilities to equity capital increases, the risk of creditors increases, and therefore the company may have serious difficulties associated with the inability to pay on liabilities. On the contrary, a low indicator means the inaction of a part of own funds. In this case, the equity capital turnover indicator indicates the need to invest own funds in production.