Standardized working capital includes: c) work in progress; d) finished products in the company's warehouse.
The operating funds include: (inventory + work in progress and expenses of working periods)
Homogeneous costing items include: (raw materials, materials, wages and accruals for it)
Fixed assets include (specify the most complete list): c) Computer Engineering, transmission devices, perennial plantings, capital investments in reclamation works, leased fixed assets, and environmental management facilities;
To usage indicators working capital include: a) turnover rate and the amount of fixed assets per 1 ruble products sold; b) duration of turnover in days and turnover ratio; e) the number of revolutions in the period and the volume of products sold.
Indicators of OS use include: b) capital productivity, capital intensity, profitability;
Lost working time includes: a) absence from work for any reason; d) intra-shift losses.
Industrial inventories include: d) raw materials and materials, fuels and lubricants, goods and finished products, containers, spare parts, household equipment with a service life of less than 12 months, semi-finished products.
Methods of accelerated depreciation include: c) the reducing balance method, the method of writing off value by the sum of the numbers of years of useful life;
Conditionally fixed expenses include (administrative and commercial expenses)
Circulating funds include: b) finished products in the warehouse of the manufacturer, goods in transit, cash and calculations
How is the service life of equipment determined b) from the passport
Which of the following reasons is associated with employee turnover in an enterprise? c) voluntary migration of labor to areas with higher wages;
Which of the costing items are simple: a) fuel costs for technological purposes; b) costs of raw materials and supplies; e) the basic salary of production workers.
Which of the components of the stock norm in days are used in rationing?
working capital located in production assets? c) safety stock; d) transport stock.
What indicators characterize personnel turnover in a company? Admission turnover intensity coefficient. Disposal turnover intensity coefficient.
Which elements of the listed elements of working capital are not standardized? c) accounts receivable; e) cash
Which of the following indicators characterizes the efficiency of using working capital? a) the number of turnovers of working capital during the year; b) level of use of working capital; c) duration of turnover;
Which statement is correct: Coverage contribution (this is the excess of revenue over variable costs for production and sales of products)
TO Which method of assessing operating assets allows for inflation? (replacement cost)
Which element of working capital is not standardized? c) accounts receivable;
Costing is a grouping of: (costs of production and sales by purpose and place of their occurrence)
Costing involves determining the cost (unit of production; commercial release products)
Are capital and non-recurring costs the same thing? a) yes;
Classification of expenses according to costing items is carried out for the purpose of: b) drawing up cost estimates;
When gross profit equals profit from common species activities? a) when the enterprise calculates the full cost;
When does gross profit equal profit from normal activities?
The number of outstanding preferred shares must be d)25% of the total number of shares
The number of outstanding preferred shares should be no more than d) 25% of the total number of shares
Should commandiots take part in entrepreneurial activities? B) no.
Does a commercial organization have the goal of making a profit? a) yes
The commercial cost of production includes the costs of: a) production and sales of products (commercial expenses);
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Standardized working capital is established in the State Plan. This includes funds for the creation of inventories, the cost of balances of finished unsold products, funds for advance payment of shipped products, the documents for which have not yet been transferred to the bank. Non-standardized funds include: funds invested in shipped products; accounts receivable (the amount of debts due to the enterprise); funds located in the current account of NGDU in the bank.
Standardized working capital are those that are necessary for the smooth operation of the enterprise. These include inventories, work in progress, deferred expenses and finished goods in containers. Once the finished product starts moving, it turns into money.
Standardized working capital is the amount of their reserves, 6ei of which is unthinkable manufacturing process, is provided for in advance by the plan.
Standardized working capital is a necessary element of production economic activity industrial enterprise.
Normalized working capital is covered from own and equivalent working capital, and in in some cases- at the expense of advances from customers. Non-standardized working capital is covered by a loan from Stroybank.
Standardized working capital (in material terms) of an enterprise includes production inventories, work in progress, and balances of finished products in warehouses.
Standardized working capital consists mainly of inventories for production purposes. 4 2% of funds are in cash settlements and normalized monetary assets.
Standardized working capital makes up the bulk of working capital.
Standardized working capital is only part of the investment in working capital available to the association. The other part consists of non-standardized working capital, correct use which it provides big influence on financial position associations. Non-standardized own working capital is considered to be cash and receivables, funds intended purpose, costs of major repairs, excess depreciation amounts contributed to Stroybank.
Standardized working capital is money allocated to an enterprise to ensure coverage of planned norms of production inventories, work in progress and future expenses. Their size is set depending on necessary conditions ensuring a smooth production process.
Standardized working capital when calculating the actual total profitability is taken in the amount of their average annual amount on balance sheets.
Standardized working capital in enterprises and organizations Catering occupy more specific gravity compared to non-standardized ones. These include: goods and raw materials, cash, funds at procurement and agricultural enterprises and other assets.
Standardized working capital of contractors construction organizations depending on the sources of financing, they are divided into two groups: 1) covered by own sources and 2) covered by customer advances and bank loans. The first group includes: low-value and wearable items, auxiliary materials and fuel, supplies Agriculture, expenses of future reporting periods, work in progress for auxiliary and auxiliary productions not allocated to the industrial balance, debt of customers on submitted invoices for work performed, cash.
Working capital is the funds used by an enterprise to carry out its ongoing activities; current assets include the enterprise's inventories, work in progress, inventories of finished and shipped products, accounts receivable, as well as cash on hand and cash in the accounts of the enterprise.
Working capital is an indispensable condition for an enterprise to carry out business activities. In essence, working capital is money advanced into circulating production assets and circulation funds; it does not cost them money invested in it.
The essence of working capital is determined by their economic role, the need to ensure the reproduction process, including both the production process and the circulation process. Unlike fixed assets, which are repeatedly involved in the production process, working capital operates only in one production cycle and, regardless of the method of production consumption, completely transfers its value to the finished product.
Composition and classification of working capital
Working capital of an enterprise exists in the sphere of production and in the sphere of circulation. Working capital and circulation funds are divided into various elements that make up the material structure of working capital.
Elements of working capital
Working production assets include:
Productive reserves;
Work in progress and semi-finished products of own production;
Future expenses.
Industrial inventories are items of labor prepared for launch into the production process. In their composition, the following elements can be distinguished: raw materials, basic and auxiliary materials, fuel, purchased semi-finished products and components, containers and packaging materials, spare parts for routine repairs, low-value and wear-out items.
Work in progress and self-made semi-finished products are objects of labor that have entered the production process: materials, parts, assemblies and products that are in the process of processing or assembly, as well as self-made semi-finished products that are not fully completed by production in some workshops and are subject to further processing in other workshops the same enterprise.
Deferred expenses are intangible elements of working capital, including the costs of preparing and developing new products that are produced in this period(quarter, year), but relate to products of a future period.
Circulation funds consist of the following elements:
Finished products in warehouses;
Goods in transit (shipped products);
Cash;
Funds in settlements with consumers of products.
The relationship between individual elements of working capital or their components called the working capital structure. Thus, in the reproductive structure the ratio of circulating production assets and circulation funds is on average 4:1. In the structure of industrial inventories on average in industry, the main place (about 1/4) is occupied by raw materials and basic materials, significantly lower (about 3%) by the share of spare parts and containers. Industrial inventories themselves have a higher share in fuel- and material-intensive industries. The structure of working capital depends on the industry of the enterprise, the nature and characteristics of the organization of production activities, supply and sales conditions, settlements with consumers and suppliers.
Standardized and non-standardized working capital
These elements of working capital are grouped in different ways. Usually there are two groups that differ in the degree of planning: standardized and non-standardized working capital. Rationing is the establishment of economically justified (planned) stock standards and standards for elements of working capital necessary for the normal operation of the enterprise. Standardized working capital usually includes working capital and finished products. Circulation funds are usually not standardized.
Sources of working capital formation
Among the sources used for the formation of working capital, there are own, borrowed and attracted funds.
The total amount of its own working capital is established by the enterprise independently. Usually it is determined by the minimum need for funds to form the necessary inventories, to ensure planned volumes of production and sales of products, as well as to make payments on time.
In progress financial planning the enterprise takes into account the increase and decrease in the standards of its own working capital, defined as the difference between the standards at the end and beginning of the planning period. The increase in the standard of own working capital is financed primarily through own resources.
Along with profit, so-called sustainable liabilities, which are equivalent to own funds, are used to replenish own working capital. Stable liabilities are those that are constantly used by the enterprise in circulation, although they do not belong to it (for example, the reserve for upcoming payments of the minimum debt to workers and employees for wages, for contributions to social insurance etc.) etc.
The stable liabilities include normal, month-to-month arrears of wages and social insurance contributions, the balance of the repair (reserve) fund, consumer funds for deposits for returnable packaging, and the reserve for future payments. Since these funds are constantly in circulation, enterprises and their size fluctuate significantly throughout the year, their minimum amount in a given year is used as a source for the formation of equivalent working capital.
During the year, the need of enterprises for working capital may change, so it is not advisable to fully generate working capital from their own sources. “This would lead to the formation of excess working capital at certain moments and weakening incentives for their economical use. The enterprise therefore uses borrowed funds to finance working capital.
Additional need for working capital due to temporary needs is provided by short-term bank loans.
In addition to own and borrowed funds, the company's turnover includes borrowed funds. These are accounts payable of all types, as well as funds for targeted financing before they are used for their intended purpose.
Determining the enterprise's need for working capital
Determining the enterprise's need for its own working capital is carried out in the process of rationing, i.e. determining the working capital standard.
The purpose of rationing is to determine the rational amount of working capital diverted for a certain period of time into the sphere of production and the sphere of circulation.
Standardization procedure
The need for working capital is determined by the enterprise when drawing up a financial plan.
The value of the standard is not constant. The size of own working capital depends on the volume of production, supply and sales conditions, the range of products produced, and the forms of payment used.
When calculating the enterprise's need for its own working capital, the following must be taken into account. Own working capital must cover the needs of not only the main production to fulfill the production program, but also the needs of auxiliary and auxiliary production, housing and communal services and other farms that are not related to the main activities of the enterprise and are not on an independent balance sheet, as well as for overhaul carried out on its own. In practice, however, the need for own working capital is often taken into account only for the main activities of the enterprise, thereby underestimating this need.
Rationing of working capital is carried out in monetary terms. The basis for determining the need for them is the cost estimate for the production of products (works, services) for the planned period. At the same time, for enterprises with a non-seasonal nature of production, it is advisable to take the data of the fourth quarter as the basis for calculations, in which the production volume is, as a rule, the largest in the annual program. For enterprises with a seasonal nature of production, data from the quarter with the lowest production volume, since the seasonal need for additional working capital is provided by short-term bank loans.
To determine the standard, the average daily consumption of standardized elements in monetary terms is taken into account. For production inventories, the average daily consumption is calculated according to the corresponding item of production costs; for work in progress - based on the cost of gross or commercial products; for finished products - based on the production cost of marketable products.
In the process of standardization, private and aggregate standards are established. The standardization process consists of several successive stages. First, stock standards are developed for each element of standardized working capital. The norm is a relative value corresponding to the volume of stock of each element of working capital. As a rule, standards are established in days of supply and mean the duration of the period provided by this type of material assets. For example, the stock norm is 24 days. Therefore, there should be only enough inventory to support production within 24 days.
The stock rate can be set as a percentage or in monetary terms to a certain base.
Next, based on the stock norm and consumption of a given type of inventory, the amount of working capital necessary to create normalized reserves for each type of working capital is determined. This is how private standards are determined.
Private standards include standards for working capital in inventories; raw materials, basic and auxiliary materials, purchased semi-finished products, components, fuel, containers, low-value and wear-and-tear items (IBP); in work in progress and semi-finished products own production; in deferred expenses; finished products.
Standardization methods
The following main methods of rationing working capital are used: direct counting, analytical, coefficient.
The direct counting method provides for a reasonable calculation of inventories for each element of working capital, taking into account all changes in the level of organizational and technical development of the enterprise, transportation of inventory, and settlement practices between enterprises. This method, being very labor-intensive, requires highly qualified economists, the involvement of employees of many enterprise services (supply, legal, product sales, production department, accounting). But this allows you to most accurately calculate the company’s need for working capital.
The analytical method is used in the case when in the planning period there are no significant changes in the operating conditions of the enterprise compared to the previous one. In this case, the calculation of the standard working capital is carried out on an aggregate basis, taking into account the relationship between the growth rate of production volume and the size of the normalized working capital in the previous period. When analyzing available working capital, their actual inventories are adjusted and excess ones are eliminated.
With the coefficient method, a new standard is determined on the basis of the standard of the previous period by introducing changes into it, taking into account the conditions of production, supply, sales of products (works, services), and calculations.
Analytical and coefficient methods are applicable to those enterprises that have been operating for more than a year, have mainly formed a production program and organized the production process, and do not have a sufficient number of qualified economists for more detailed work in the field of working capital planning.
In practice, the most common method is direct counting. The advantage of this method is its reliability, which allows you to make the most accurate calculations private and aggregate standards.
The characteristics of various elements of working capital determine the specifics of their rationing. Let's consider the main methods of rationing essential elements working capital: materials (raw materials, basic materials and semi-finished products), work in progress and finished products.
Rationing of materials
The working capital standard for stocks of raw materials, basic materials and purchased semi-finished products is calculated on the basis of their average daily consumption (P) and the average stock rate in days.
One-day consumption is determined by dividing the cost of a certain element of working capital by 90 days (with a uniform nature of production - by 360 days).
The average rate of working capital is defined as a weighted average based on the rate of working capital for individual types or groups of raw materials, basic materials and purchased semi-finished products and their daily consumption.
The rate of working capital for each type or homogeneous group of materials takes into account the time spent in current (T), insurance (C), transport (M), technological (A) and preparatory (D) stocks.
Current stock is the main type of stock required for the smooth operation of an enterprise between two next deliveries. The size of the current stock is influenced by the frequency of supplies of materials under contracts and the volume of their consumption in production. The working capital rate in the current inventory is usually assumed to be 50% of the average supply cycle, which is due to the supply of materials from several suppliers and at different times.
Safety stock is the second largest type of stock, which is created in case of unforeseen deviations in supply and ensures the continuous operation of the enterprise. Safety stock is generally assumed to be 50% of the current stock, but may be less than this amount depending on the location of suppliers and the likelihood of supply disruptions.
Transport stock is created in case of exceeding the terms of cargo turnover in comparison with the terms of document flow at enterprises located significant distances from suppliers.
Technological stock is created in cases where this type raw materials require pre-processing and aging to impart certain consumer properties. This stock is taken into account if it is not part of the production process. For example, when preparing for the production of certain types of raw materials and materials, time is required for drying, heating, grinding, etc.
Preparatory stock is associated with the need to receive, unload, sort and store production stocks. The time standards required for these operations are established for each operation on the average size deliveries based on technological calculations or by timing.
The working capital standard in inventories of raw materials, basic materials and purchased semi-finished products (N), reflecting the total need for working capital for this element of production inventories, is calculated as the sum of working capital standards in current, insurance, transport, technological and preparatory stocks. The resulting general norm is multiplied by the daily consumption for each type or group of materials:
H= P (T+ C+ M+ A+D).
In production inventories, working capital in stocks of auxiliary materials, fuel, containers, low-value and wearable items, etc. is also standardized.
Rationing of work in progress
The value of the working capital standard in work in progress depends on four factors: the volume and composition of products produced, the duration of the production cycle, the cost of production and the nature of the increase in costs during the production process.
The volume of production directly affects the amount of work in progress: the more products are produced, all other things being equal, the larger the size of work in progress will be. Changes in the composition of manufactured products have different effects on the amount of work in progress. With an increase in the share of products with a shorter production cycle, the volume of work in progress will decrease, and vice versa.
The cost of production directly affects the size of work in progress. The lower the production costs, the lower the volume of work in progress in monetary terms. An increase in production costs entails an increase in work in progress.
The volume of work in progress is directly proportional to the duration of the production cycle. The production cycle includes the time of the production process, technological stock, transport stock, the time of accumulation of semi-finished products before starting next operation(working stock), the time that semi-finished products are in stock to guarantee the continuity of the production process (safety stock), The duration of the production cycle is equal to the time from the moment of the first technological operation to the acceptance of the finished product at the finished product warehouse. Reducing inventories in work in progress improves the use of working capital by reducing the duration of the production cycle.
To determine the rate of working capital for work in progress, it is necessary to know the degree of readiness of products. It is reflected by the so-called cost increase coefficient.
All costs in the production process are divided into one-time and accruing. Non-recurring costs include those incurred at the very beginning of the production cycle - the costs of raw materials, supplies, purchased semi-finished products. The remaining costs are considered accrual. The increase in costs during the production process can occur evenly and unevenly.
Rationing of finished products
The working capital standard for finished products is defined as the product of the working capital standard and the one-day production of marketable products in the coming year at production cost:
where N is the working capital standard for finished products; B - production of commercial products in the fourth quarter of the coming year (with a uniform nature of production) at production cost; D - number in the period; T - working capital norm for finished products, days.
The stock rate (T) is set depending on the time required;
For selection individual species products and their assembly into a batch;
For packaging and transportation of products from the suppliers’ warehouse to the sender’s station;
For loading.
The total standard of working capital at the enterprise equal to the sum standards for all their elements and determines the overall need of an economic entity for working capital. General norm working capital is established by dividing the total standard of working capital by the one-day output of marketable products at production cost in the fourth quarter, according to which the standard was calculated.
Non-standardized working capital in the sphere of circulation includes funds in goods shipped, cash, funds in accounts receivable and other calculations. Business entities have the opportunity to manage these funds and influence their value using a system of lending and settlements.
Analysis of the use of working capital of the enterprise
The financial position of an enterprise is directly dependent on the state of working capital, therefore enterprises are interested in organizing the most rational movement and use of working capital.
Indicators of efficiency of use of working capital
The efficiency of using working capital is characterized by the system economic indicators, primarily the turnover of working capital.
Working capital turnover refers to the duration of the complete circulation of funds from the moment of acquisition of working capital (purchase of raw materials, supplies, etc.) to the release and sale of finished products. The circulation of working capital is completed by crediting the proceeds to the company's account.
The turnover of working capital is not the same at different enterprises, which depends on their industry, and within one industry - on the organization of production and sales of products, the placement of working capital and other factors.
Working capital turnover is characterized by a number of interrelated indicators: the duration of one turnover in days, the number of turnovers for a certain period (turnover ratio), the amount of working capital employed at the enterprise per unit of production (load factor).
The duration of one turnover of working capital is calculated by the formula:
where O is the duration of the turnover, days; C-balances of working capital (average or as of a specific date), rub.; T - volume of commercial products, rub.; D is the number of days in the period under review, days.
A decrease in the duration of one revolution indicates an improvement in the use of working capital.
The number of turnovers for a certain period, or the working capital turnover ratio (CR), is calculated using the formula:
The higher the turnover ratio under these conditions, the better the use of working capital.
The load factor of funds in circulation (Kz), the inverse of the turnover ratio, is determined by the formula:
In addition to these indicators, the return on working capital indicator can also be used, which is determined by the ratio of profit from sales of the enterprise's products to the balance of working capital.
Working capital turnover indicators can be calculated for all working capital involved in turnover and for individual elements.
Changes in the turnover of funds are identified by comparing actual indicators with planned or indicators of the previous period. As a result of comparison of working capital turnover indicators, its acceleration or deceleration is revealed.
When the turnover of working capital accelerates, material resources and sources of their formation are released from circulation; when it slows down, additional funds are drawn into circulation.
The release of working capital due to the acceleration of their turnover can be absolute and relative. An absolute release occurs if the actual balances of working capital are less than the standard or balances of the previous period while maintaining or exceeding the sales volume for the period under review. Relative release of working capital occurs in cases where the acceleration of their turnover occurs simultaneously with an increase in production volume, and the growth rate of production volume is faster than the growth rate of working capital balances.
Increasing the efficiency of working capital
The efficiency of using working capital depends on many factors. Among them, we can distinguish external factors that influence regardless of the interests and activities of the enterprise, and internal ones, which the enterprise can and should actively influence.
TO external factors include: the general economic situation, features of tax legislation, conditions for obtaining loans and interest rates according to them, the possibility of targeted financing, participation in programs financed from the budget. Taking these and other factors into account, an enterprise can use internal reserves to rationalize the movement of working capital.
Increasing the efficiency of using working capital is ensured by accelerating their turnover at all stages of the circulation.
Significant reserves for increasing the efficiency of using working capital are built directly into the enterprise itself. In the production sector, this applies primarily to inventories. Inventories play an important role in ensuring the continuity of the production process, but at the same time they represent that part of the means of production that is temporarily not involved in the production process. Effective organization inventory is an important condition increasing the efficiency of using working capital. The main ways to reduce inventories come down to their rational use; liquidation of excess stocks of materials; improving standardization; improving the organization of supply, including by establishing clear contractual terms of supply and ensuring their implementation, optimal choice suppliers, well-established transport. Important role belongs to the improvement of the organization of warehouse management.
Reducing the time spent by working capital in work in progress is achieved by improving the organization of production, improving the equipment and technology used, improving the use of fixed assets, especially their active part, and saving at all stages of the movement of working capital.
In the sphere of circulation, working capital does not participate in the creation of a new product, but only ensures its delivery to the consumer. Excessive diversion of funds into circulation is a negative phenomenon. The most important prerequisites for reducing investments of working capital in the sphere of circulation are rational organization sales of finished products, the use of progressive forms of payment, timely execution of documentation and acceleration of its movement, compliance with contractual and payment discipline.
Accelerating the turnover of working capital allows you to free up significant amounts and thus increase production volume without additional financial resources, and use the released funds in accordance with the needs of the enterprise.
Conclusion
1. Working capital of an enterprise is a set of circulating production assets and circulation funds. Working production assets include: raw materials, main and auxiliary materials, unfinished products, fuel and other items of labor that are entirely consumed in each production cycle and the cost of which is transferred to the manufactured product immediately in full.
The circulation funds include: finished products in the warehouse, shipped products, cash in settlements.
2. According to the sources of formation, working capital is divided into own (funds constantly at the disposal of the enterprise and formed from its own resources) and borrowed (bank loans, accounts payable and other liabilities).
3. According to the scope of rationing, working capital is divided into regulated (by which stock standards are established: circulating production assets and finished products in the warehouse) and non-standardized. Rationing of working capital is the process of developing economically justified amounts of working capital necessary for organizing the normal operation of the enterprise. It is a necessary prerequisite effective use working capital. Typically, an enterprise determines working capital standards for materials, inventories in the production process, and inventories of finished products.
4. Increasing the efficiency of using working capital is achieved by accelerating their turnover.
Today, many companies are faced with the problem of cash shortages caused by an unjustified increase in inventories of raw materials and finished products, as well as an intensive increase in accounts receivable. To avoid this type of problem, working capital should be properly rationed.
As is known, working capital- These are the funds used by the company to carry out its ongoing activities. Rationing of working capital is the process of establishing standards ( relative values, corresponding to the minimum, economically justified stock of inventory and set in days) and standards (minimum required amounts of funds to ensure the economic activity of the enterprise) for the regulated group of working capital. In this case, it is necessary to take into account the dependence of the standards on the following factors:
- duration of the production cycle for manufacturing products;
- consistency and clarity of work of procurement, processing and production shops;
- supply conditions (duration of delivery intervals, sizes of supplied lots);
- distance of suppliers from consumers;
- speed of transportation, type and uninterrupted operation of transport;
- time to prepare materials for their launch into production;
- frequency of launching materials into production;
- conditions for selling products;
- systems and forms of payments, speed of document flow, possibility of using factoring.
The standards developed by the company for each element of working capital are valid for several years. However, in the event of significant changes in technology and organization of production, nomenclature and volume of products, addresses of cooperative enterprises, demand prices and credit policy, they are clarified taking into account the relevant reagents.
Note! Working capital standards characterize the minimum inventories of inventory, calculated in days of supply or as a percentage of a certain base (commercial products, volume of fixed assets). Typically, they are set for a quarter or year, but can be valid for a longer period.
When rationing working capital, several methods are used:
direct account;
analytical;
experimental laboratory;
reporting and statistical;
coefficient
Direct counting method based on the actual need for working capital. It is used when it is possible to determine the duration of execution of business processes included in the company’s operating cycle. Provides for a reasonable calculation of inventories for each element of working capital, taking into account all changes in the level of organizational and technical development of the company, transportation of inventory, and settlement practices between enterprises.
Analytical method The assessment of the working capital standard is established based on the actual amount of working capital for a certain period, taking into account adjustments for surplus and unnecessary inventories, as well as changes in production and supply conditions. It is used in those companies where funds invested in material values and costs occupy a large share in total amount working capital.
Experimental laboratory method is based on measurements of the consumption of working capital and the volume of products (work) produced in laboratory and pilot production conditions. Consumption rates are established by selecting the most reliable results and calculating the average value using mathematical statistics methods. The most appropriate areas of application of these norms are auxiliary and chemical production, technological processes, extractive industries and construction.
Reporting and statistical method comes from the analysis of statistical (accounting or operational) reporting data on the actual consumption of materials per unit of production (work) for the previous (base) period. Recommended for developing both individual and group
standards for the consumption of material, raw materials and fuel and energy resources.
With the coefficient method The working capital standard for the planned period is established using the standard of the previous period and taking into account adjustments for changes in production volume and acceleration of working capital turnover. Provides for their division into two groups:
depending on changes in production volume (raw materials, materials, costs of work in progress, finished goods in warehouse);
independent of production volume (spare parts, low-value and wearable items, deferred expenses).
It should be noted that the following elements of working capital are standardized:
productive reserves;
unfinished production;
Future expenses;
finished products in the enterprise warehouse;
cash in the cash register for storage.
Let us consider in more detail the normalization of each of the elements.
RATING IN PRODUCTION STOCK
Productive reserves— these are material resources located at the enterprise, but not entered into the production process. Composition of working capital in production inventories:
- raw materials;
- basic materials and purchased semi-finished products;
- auxiliary materials;
- fuel;
- container;
- spare parts;
- low-value and high-wear items (IBP). The IBP includes labor tools with a service life of up to one year, including:
o low-value and wear-out tools and devices;
o low-value household equipment;
o special clothing and shoes;
o special tools and devices;
o replaceable equipment;
o production containers.
Depending on the purpose of the stock and the need for preparation material resources for use in production, there are current, insurance (or warranty), technological (or preparatory) and transport stocks.
Current stock necessary to ensure uninterrupted production at the enterprise during the period between regular deliveries. The norm of the current stock is taken, as a rule, equal to half the average interval between two next deliveries. The maximum value of the current stock (Z current) is determined by the formula:
Z tek = P avg. days × T, (1)
where P avg. day - average daily need for this material, natural units of measurement;
T— time between two next deliveries, days.
Safety stock designed to prevent consequences associated with supply disruptions. The safety stock norm is set either within 30-50% of the current norm, or equal to the maximum time of deviations from the supply interval. Insurance, or guarantee, stock (3 pages) is calculated using the formula:
3 pages = N h. page × P, (2)
Where N h. pp - norm of safety stock of materials, days;
P - average daily demand for this type of materials, rub.
Preparatory (technological) stock(Z those) is created in cases where raw materials entering the enterprise require appropriate additional preparation: drying, sorting, cutting, packaging, etc. The norm of the preparatory stock is determined taking into account the specific production conditions and includes the time for receiving, unloading, paperwork and preparation for further use of raw materials, materials and components. The amount of such reserve is determined as follows:
Z those = P avg. days × T c, (3)
Where T c—duration of the technological cycle, days.
Transport stock(Z tr) is formed in the event of a discrepancy in the timing of document flow and payment for them and the time the materials are in transit. Its value is calculated by direct and analytical methods.
The direct counting method is used when there is a small range of consumable material resources coming from a limited number of suppliers. If the supplier is located far away, payment documents for raw materials arrive and are paid by the company before the cargo arrives. Therefore, the size of the transport stock is equal to the time interval between the payment of the invoice and the receipt of raw materials by the company.
At large number suppliers and a significant range of consumed resources, the norm of transport stock is determined analytical method. To do this, from the data accounting behind last year the balances of inventory items in transit at the beginning of each quarter are taken minus the cost of resources delayed in transit beyond the established deadlines.
The general inventory rate (3 total) for raw materials, basic materials, and purchased semi-finished products is calculated using the formula:
Z general = Z tech + Z str + Z tech + Z tr. (4)
Working capital standard in production inventories ( N pz) is calculated by the formula:
N pz = Z total × P, (5)
where P is the average daily consumption of working capital, rub.
Example 1
The enterprise OJSC "XXX" works with 40 suppliers with general cycle deliveries 2000 days. The safety stock norm (Z str) is set at 35% of the current stock norm (Z tek). The average daily requirement (P average day) for material (for example, large-section steel St3) is 50 kg, the price for 1 kg is 48.6 rubles. The duration of the technological cycle is 10 days. Let us determine the standard of working capital in production inventories, in this case - in large-section steel ( N pz).
1. Let’s find the one-day consumption of steel in cost terms: P = 50 × 48.6 = 2430 rubles.
2. The current stock rate (Z current) is equal to: 2000 / 40 / 2 = 25 days.
3. Safety stock norm (3 pages): 25 × 0.35 = 9 days.
4. Technological stock norm (Z technical): 10 days.
5. General inventory rate (3 total): 25 + 9 + 10 = 44 days.
6. The standard for working capital in inventories ( N pz): 44 × 2430 = 106,920 rub.
RATING IN WORK IN PRODUCTION
Unfinished production- products at various stages of processing, from the launch of raw materials, materials and components into production to acceptance by the department technical control finished products. It is determined by the amount of advanced funds invested in the costs of raw materials, basic and auxiliary materials, fuel, electricity, depreciation deductions and other expenses. All these costs for each product increase as you move along the technological process chain.
NOTE
The size of working capital employed in work in progress depends on the duration of the production cycle, the cost of manufactured products and the rate of increase in costs during the production process.
The rate of working capital employed in work in progress ( N oil refinery), calculated as follows:
N npz = C av × T c × Kn, (6)
where C av - average daily production at cost, rub.;
T c—duration of the production cycle for manufacturing a given product, days;
Kn is the cost increase coefficient, which characterizes the level of product readiness as part of work in progress. The need to calculate it is due to the fact that costs in work in progress are carried out at different times. If they grow evenly, then the cost increase coefficient is found by the formula:
K n = (MZ + 0.5 × R pr) / C plan, (7)
where МЗ — planned material costs, rub.;
R pr - other expenses by cost elements, rub.;
C plan - planned cost per unit of production, rub.
If costs increase unevenly, the coefficient formula changes as follows:
K n = C av / C prod, (8)
where Tsr - average cost products in work in progress;
From production - production cost of the product.
Example 2
At the enterprise OJSC "XXX" there is a product left in work in progress A, the production of which requires basic materials, purchased components, components of material costs, wages of production workers, as well as other expenses, which include overhead costs, etc. Data for calculating the rate of working capital in work in progress (in the product A) are presented in table. 1.
Table 1. Calculation of norms of working capital employed in work in progress
|
Name |
Designation |
Amount, rub. |
|
Data for calculation |
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|
Material costs according to plan |
||
|
Wage production workers |
||
|
Social insurance contributions |
||
|
other expenses |
||
|
Planned cost |
||
|
Production cost |
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|
Product price in work in progress |
||
|
Average daily production at cost |
||
|
Duration of the production cycle for the manufacture of this product |
||
|
Calculation part |
||
|
Cost increase coefficient (with a uniform increase in costs) |
||
|
Cost increase coefficient (with uneven increase in costs) |
||
|
Norm of working capital in work in progress: |
||
|
with a uniform increase in costs |
N npz0 |
|
|
with an uneven increase in costs |
N oil refinery1 |
|
According to table. 1 with a uniform increase in costs K n0 = (896,876 + 0.5 × 847,889) / 2,074,090 = 0.64; with uneven - K n1 = 1,440,341 / 1,920,454 = 0.75.
Norms of working capital in the product A with a uniform and uneven increase in costs amounted to, respectively, N npz0 = 464,551 × 4 × 0.64 = 1,118,250 rub. And N npz1 = 464,551 × 4 × 0.75 = 1,393,653 rub.
RATING OF FINISHED PRODUCTS
The next element of rationing working capital is working capital standard for finished products— products accepted by the technical control department and delivered to the finished goods warehouse for which the production cycle has ended. The rate of working capital for finished products is determined by the time from the moment the product is accepted into the warehouse until it is paid by the customer and depends on a number of factors:
the order of shipment and the time required for acceptance of finished products from the workshops;
the time required for completing and selecting products to the size of the shipped batch and in the assortment according to orders, orders, contracts;
time required for packaging and labeling of products;
the time required to deliver packaged products from the enterprise’s warehouse to the railway station, pier, etc.;
time of loading products into vehicles;
storage time of products in the warehouse.
Working capital standard in finished product inventories ( N gp) in the warehouse is determined by the formula:
N gp = Per day × N zgp, (9)
where In day is the average daily output of each product at production cost, rub.;
N zgp - standard stock of finished products, days. Includes the time required to accept products from the workshops, complete the transport batch, package and ship the products, and prepare documentation.
Example 3
Using formula (9), we determine the standard of working capital in finished product inventories (Table 2).
Table 2. Calculation of the working capital standard in finished product inventories at the enterprise OJSC XXX
RATORATION OF FUTURE COSTS
The economic content of future expenses consists in the need to finance some expenses that are incurred in the present, and will be written off as cost in the future.
Future expenses include the following costs: for the development of new types of products and new technological processes; by subscription to periodicals; on rent; for communication; for taxes and fees paid for the future. Working capital standard for future expenses ( N rbp) is determined by the formulas:
N rbp = P bud. pl - R pl + R s, (10)
where R bud. pl - the amount of funds in future expenses at the beginning of the planning period, rub.;
R pl - expenses incurred in the planning period, rub.;
Р с — expenses written off to the cost of production in the planning period, rub.;
N rbp = P 0 + P pl - P sp, (11)
where P 0 - expenses at the beginning of the period, rub.;
R pl - expenses according to the plan for the year, rub.;
R sp - expenses subject to write-off in the planning year, rub.
Example 4
Let's calculate the working capital standard for future expenses (the results are in Table 3).
Table 3. Calculation of the working capital standard for deferred expenses
GENERAL WORKING CAPITAL RATIO
Completing the standardization process, they establish a total working capital standard by adding up private standards for inventories, work in progress, deferred expenses and finished products.
The average rate of working capital for the enterprise as a whole is calculated by dividing the total standard by the one-day output of marketable products at production cost.
Working capital standards are calculated in physical terms (pieces, tons, meters, etc.) and monetary terms (rubles) and in days of supply. The general working capital standard of an enterprise is calculated only in monetary terms and is determined by summing the working capital standard for individual elements:
N total = N pz + N w/w + N rbp + N gp. (12)
Example 5
According to table. 4, the general working capital standard for the enterprise JSC XXX will be 60,203 thousand rubles.
Table 4. Calculation of the general standard of working capital for the enterprise OJSC "XXX"
|
Working capital standard by elements (items), thousand rubles. |
General standard N generally |
|||
|
Productive reserves, N pz |
Unfinished production, N w/w |
Finished products, N G |
Future expenses, N RB |
|
Thus, correctly carried out rationing of working capital allows for the economical use of financial resources, contributes to the successful implementation of economic activities and strengthening financial condition companies.
M. V. Altukhova,
economist at JSC Rudoavtomatika
Non-standardized working capital operate in the sphere of circulation. They include: funds in goods shipped; cash; funds in accounts receivable and other settlements; funds in short-term financial investments.
Management of non-standardized working capital consists of: regulating the amount of cash and funds in settlements; control over the quality composition of working capital; taking prompt financial measures to improve the financial situation; increasing profitability and profitability of the organization.
Organizations are interested in reducing non-standardized working capital, since this accelerates the turnover of working capital in the sphere of circulation and contributes to their more efficient use.
Possible ways to reduce the volume of non-standardized working capital are: development of direct economic ties between organizations; improving the state payment system and choosing progressive forms of non-cash payments; diversification (expansion) of clientele; monitoring the financial condition of clients; use of factoring if necessary; transfer of accounts receivable to the tax authorities.
Funds in goods shipped, as a rule, make up a significant part of non-standardized working capital. The goods shipped include: goods shipped, the payment terms for which have not arrived; goods shipped but not paid for on time; goods in safe custody of the buyer.
The presence of the last two groups causes an unscheduled redistribution of working capital from suppliers, which negatively affects their financial stability.
Funds are mainly stored in the organization's settlement (current) account with a bank, since settlements between business entities are carried out primarily in non-cash form. Limited amounts of funds are in the cash register of organizations. In addition, they may be in letters of credit and other forms of payment until their end. To implement a flexible financial policy, it is necessary to regulate the amount of financial cash of the organization. “Free” money in bank accounts is not protected from inflation; its excessive balance reduces the profitability of production. A large number of cash balances in organizations’ accounts indicates poor performance financial services economic entity.
In this regard, the placement of funds in short-term financial investments should be considered positive actions of the organization. Short-term financial investments include: investments in dependent companies; own shares purchased from shareholders, and other investments.
Accounts receivable shows the amounts of funds temporarily diverted from the organization’s turnover, while accounts payable are funds attracted into the organization’s turnover. If the ratio between them is in favor of accounts receivable, then this causes an additional need for resources and financial difficulties for the organization.
There are the following types of receivables: buyers and customers; bills receivable; debt of subsidiaries and dependent companies; advances issued; debt of participants (founders) for contributions to authorized capital; other debtors.
The named types of receivables are grouped in the financial statements according to the timing of expected payments: more than 12 months after the reporting date; within 12 months after the reporting date.
Accounts receivable before the expiration of the terms established by contracts and stipulated by the current payment system are considered acceptable. However, this does not mean that there is no need to regulate the size of accounts receivable. An organization can afford to have debt obligations of other persons within the limits that do not violate its own solvency.
Accounts receivable can be caused by theft or damage to valuables. These facts indicate shortcomings in the financial and economic activities of the organization, and debt is considered unacceptable. Such debt is a form of illegal diversion of working capital.
To mitigate its negative impact on the organization’s finances, a reserve is created for its “doubtful” debts.
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