The profitability shows the profitability of fixed assets of the enterprise

In the economy for a qualitative assessment of the use of fixed assets of the production process, it is customary to use a certain system of indicators. Fund profitability is one of its elements and is of a general nature. ? What does the cost-effectiveness show ? How to calculate this indicator? What is its normative meaning?

The essence of the concept

By fundorability is to be understood the coefficient, which is equivalent to such a ratio as the balance profit to the total book value of OS funds of production purpose, calculated as the average value for the year. It is important to note that the information for calculation in this case is in the balance sheet. Thus, the cost-effectiveness shows the size of a profitable article that correlates with the unit of value of the production OS, related to a particular enterprise. This indicator fully characterizes the share of profit reflected in the balance sheet to the value of non-current assets recorded for the annual period.

Naturally, the considered coefficient is expediently defined as an indicator of the profitability group calculated by means of the balance sheet and used for a detailed analysis of the effectiveness of the company's application or the business of the production process funds. These include non-residential and residential buildings, various types of structures, vehicles, tools for productive production, machine tools, computer equipment and so on.

Calculation of the cost-effectiveness

As it turned out, the fund profitability shows efficiency in the process of managing the fixed assets of the production process of the enterprise. How to calculate this indicator? It is important to note that in the process of calculating the coefficient it is expedient to use one of the two formulas. The first is a general model, the second is related to the balance sheet. In addition, the calculation below is based on the information of the new model of the balance sheet as well as on the data of the old one.

So, since the fund-profitability shows the number of rubles received per ruble of primary production, it is advisable to present this indicator as the ratio of net profit (in another sense it is called accounting) to the value of the main production funds calculated for the annual period:

• K (φ) = arr. Before taxation / cf. Cost is out of turn. Assets * 100%.

The calculation of the coefficient in accordance with the data of the old balance sheet is as follows:

• KF = page 140 / 0.5 * (page 190 ng + p. 190 kg) * 100%.

And the formula corresponding to the data of the new balance sheet is displayed like this:

KF = page 2400 Form 2 / (page 1100 ng F. 1 + page 1100 kg F. 1) / 2 * 1 -%.

Analysis of the cost-effectiveness

In accordance with the data of the previous chapters, it can be determined that the return on profitability shows the profit per unit of cost of the OS of the production process. The higher the value of the coefficient, the greater the efficiency and effectiveness of the application of the production funds of a particular enterprise. It should be noted that often even a decrease in the ratio is positive. Why is that? The fact is that such a picture can easily arise when the enterprise implements additional investments, which serve as costs and aimed at the innovation process, the development of technologies, as well as the expansion of the product range.

What else?

It is important to supplement that it is necessary to carry out the analysis of the coefficient in dynamics because this allows us to fully appreciate the management trend in relation to the main means of production. The increase in the indicator leads to a significant increase in the level of financial stability and investment attractiveness of the company.

It was proved above that the profitability of the enterprise shows the profitability of the company's OS. It follows that the coefficient can not have a generally accepted normative estimate. So, the optimal value of the indicator, as a rule, depends directly on the type of activity of the company and its industry affiliation (in the sectors of the asset-intensive nature the coefficient will be significantly lower than in the trade ones).