1. The concept of economic analysis, subject and objects..............................................................................

2
2. The place of economic analysis in the organization's management system.................................................2
3. System of methods for economic analysis..................................................................................................2
4. Traditional methods of factor analysis........................................................................................................2
5. General and private methods in economic analysis....................................................................................3
6. Deterministic factor models in economic analysis of the organization........................................................4
7. Principles and system of economic analysis organization...........................................................................4
8.Classification of economic analysis types....................................................................................................5
9. The chain substitution method in the study of the influence of factors......................................................5
10. Economic analysis for monitoring the implementation of a business plan of the organization..................6
11. Sources of information used for economic analysis..................................................................................6
12.Features of forming a system of analytical indicators for internal management purposes.........................7
13. Analysis of financial results for commercial organizations........................................................................7
14. Analysis of the property potential for the organization............................................................................8
15. Structural and dynamic analysis of the organization's income..................................................................8
16. Structural and dynamic analysis of organizational expenses.....................................................................8
17. Indicators of economic and financial profitability and their analysis.........................................................9
18. Principles of economic analysis..............................................................................................................10
19. Structural and dynamic analysis of the organization's current assets......................................................10
20. ystem of business activity indicators and their analysis..........................................................................11

1
1. The concept of economic analysis, subject and objects.
Economic analysis economic analysis is a system of special knowledge that helps identify trends inherent in
the activities of enterprises and organizations for the analyzed period of time, as well as their economic
interpretation based on comparison with certain assessment criteria (this process is the essence of the
diagnosis of the results of organizations) in order to identify weak sides;
Under the subject of economic analysis understand:
● economic processes of enterprises, socio-economic efficiency and final financial results of their
activities, formed under the influence of objective and subjective factors, reflected through the system
of economic information;
● cause-and-effect relations of economic phenomena and processes, i.e. the causes of changes, the
knowledge of which allows to determine the essence of economic phenomena and on this basis to give
a correct assessment and justification of any management decision.

The objects of the analysis are the results of economic processes. These are indicators of sources and means
of fixed and working capital, investment and innovation, efficiency of use of enterprise resources, production,
sales, profit and profitability.

2. The place of economic analysis in the organization's management system.

Economic analysis justifies management decisions, provides objectivity and efficiency of production
management. Thus, economic analysis is an objectively necessary element of production management and it is
a stage of management activity. By means of the economic analysis the essence of economic processes is
learned, the economic situation is estimated, production reserves are revealed and scientifically proved
decisions for planning and management are prepared.
The main stage of information support of economic analysis which explains the role of economic analysis is the
preparation of information, which includes the verification of data, ensuring their comparability, simplification
of information. 

3. System of methods for economic analysis.

Methodology of economic analysis is a system of methods and rules of analytical research aimed at achieving
the goal of analysis.
Methodology of economic analysis is based on findings of:
 Goals and objectives of the analysis
 Objects and analysis
 System of indicators (scorecards)
 Sequence and periodicity of the study
 Ways to study the objects of analysis
 Data source
 The subjects of analysis
 Technical means of information processing
 Characteristics of the documents to describe the results of the analysis
General and private methods of economic analysis
 General methods of analysis are used for the analysis of various objects
 Private methods specify General methods for enterprise, accounting the specifics, scope of activities,
tasks of analysis

2
General methods of economic analysis
 Reading reporting and analysis of absolute figures
 Horizontal analysis (analysis of dynamic)
 Vertical analysis (analysis of structure)
 Dynamic and structure analysis
 Trend analysis
 Coefficient analysis
Economic and mathematical methods
 Methods of elementary mathematics
 The classical methods of mathematical analysis
 Methods of mathematical statistics
 Econometric methods
 Methods of mathematical programming
 Methods of operations research
 Methods of economic Cybernetics
 The mathematical theory of optimal processes
 Heuristic method
Methods of factor analysis:
 Balance method
 Index method
 Method of chain substitutions
 Method of absolute differences
 Method of relative differences
 Integral method
 Method of differentiation

4. Traditional methods of factor analysis.

Factors are the reasons influencing the studied economic indicator, which as a result of the analysis receive a
quantitative and qualitative of their impact on the effective indicator. The goal of factor analysis is quantitative
measurement of the impact of each individual factor.
Methods of factor analysis:
● Balance method ● Method of relative differences
● Index method ● Integral method
● Method of chain substitutions ● Method of differentiations
● Method of absolute differences
Balance method
The balance method is used, for example, to calculate the effect of residues of finished products at the
beginning and end of the reporting period, the volume of manufactured products on the change in the volume
of finished products sold. Using the basic (or planned) and reporting values of these indicators, the calculation
can be carried out using the following formula: volume of finished products sold for the period = residues of
finished products at the beginning of the period + volume of finished products for the period - residues of
finished products at the end of the period. To calculate the influence of factors on the change in the volume of
finished products sold over a period, it is necessary to determine the deviations of the reporting factors from
the base (or planned) values. Positive values of the deviations obtained will correspond to the positive value of

3
the influence of each of the factors. The exception will be the deviation for the balance of finished products at
the end of the period.
Method of chain substitutions:
1. Select a particular type of formula, which includes the required number of factors;
2. The initial information about the indicators and factors included in the model is formed;
3. Calculation the values of the effective indicator according to the selected formula. The number of such
calculations is always one more the number of factors included in the formula;
4. The values of the factors in the calculations are successively replaced from the previous (or planned) to the
reporting ones;
5. The previous value subtracted from each subsequent effective indicator, thereby determining the impact on
the effective indicator of the factor, the value of which in the subsequent calculation was replaced from the
previous one to the reporting one.
Absolute differences
It is simple to calculate, but less universal - it calculates the influence of factors only for multiplicative models
and mixed-type models: Y = (a-b) c, Y = a (b-c). Used to calculate the influence of factors on the growth of the
effective indicator in a deterministic analysis
y0 = a0 * b0 * c0; Δyс = a1 * b1* Δс;
Δya = Δa * b0 * c0; y1 = a1 * b1 * c1;
Δyb = a1*Δb* c0;
The total change Δy = y1 - y0 is the sum of the changes in the resulting indicator due to changes in each factor:
Δy = Δya + Δyb + Δyc.
Index method
Used to identify the influence of various factors on the change in the level of effective indicators in
multiplicative and multiple models. The index method is based on relative indicators of dynamics, spatial
comparisons, implementation of the plan, expressing the ratio of the actual level of the analyzed indicator in
the reporting period to its level in the base period (or to the planned or other object).
Integral method
The integrated method allows to achieve complete decomposition of the effective indicator by factors and is
universal in nature - it is used to measure the influence of factors in multiplicative, multiple and mixed models.

5. General and private methods in economic analysis

5.1. General methods
There are general and particular methods of economic analysis. The general methodology includes a research
system that is equally used in the study of various objects of economic analysis in different sectors of the
economy. Private methods specify the general methodology as applied to economic phenomena occurring in a
particular branch of the national economy, or an object of research.
The general methodology of economic analysis consists of three parts:
 methods and techniques for processing economic information;
 stages of economic analysis;
 analysis sequence.

5.2. Private methods

Private methods are concretized by the main types of economic analysis1. As a rule, they contain:
 objectives and goals of the analysis;
 objects of analysis;
 a system of indicators with which each object of analysis will be examined;

4
  advice on the sequence and frequency of the analytical study;
 a description of the methods for studying the studied objects;
 data sources on the basis of which the analysis is carried out;
 guidelines for organizing the analysis (which services and individuals will conduct individual studies);
 hardware and software products that are advisable to use for analytical processing of information;
 characteristics of the documents that best fit the results of the analysis;
 consumers of analysis results.

6. Deterministic factor models in economic analysis of the organization.

Determined factor models - are a mathematical expression of a real economic phenomenon, where all factors
are quantitatively comparable, have a causal relationship with an effective indicator.
In deterministic factor systems, there are three main types of models:
multiplicative model - an effective indicator is a product of several factors:
Y = X 1∗X 2∗X 3∗…∗X n
additive model - an effective indicator is the algebraic sum of several factors
Y =∑ X i= X 1+ X 2 + X 3 +…+ X n
multiple model - the quotient of the division of two factors gives an effective indicator
X
Y= 1
X2
mixed model - a combination of different combinations of previous models
X +X
Y= 1 2
X3
X 1∗X 2
Y=
X3

7. Principles and system of economic analysis organization.

Principles:
● The principle of science (the methodology of analytical research should be based on the provisions of the
dialectical theory of knowledge)
● The principle of complexity of analytical research (economic analysis requires coverage of all levels and all
aspects of activity and a study of causal dependencies)
● The principle of providing a systematic approach (each object of analysis as a complex dynamic system
consisting of a number of elements, in a certain way connected with each other and with the
environment)
● The principle of objectivity (the study of economic processes on the basis of reliable, verified information
that really reflects the objective reality)
● The principle of practical significance (the need for an active impact of the analysis of economic activity on
the achievement of goals, mistakes, the study of ways to improve the efficiency of work)
● The principle of regularity (the analysis should be carried out systematically, systematically and not on a
case-by-case basis)
● The principle of confidence (results and conclusions should be correct for support management decisions,
taken in time in certain direction)

5
● The principle of efficiency (the need for an active impact of the analysis of economic activity on the
achievement of goals, mistakes, the study of ways to improve the efficiency of work)
● The principle of consistency of operations (for support relevant results of analysis methodological
approach to analysis should be unified during business activity)

8. Classification of economic analysis types.

Economic analysis is classified:
 based on time:
Operational analysis — economic analysis carried out at the time of production, economic and financial
transactions. In its implementation, information is used, recorded and processed daily. Operational analysis
allows you to make management decisions "on the go", track emerging difficulties and prevent them. A
distinctive feature of this analysis is the study of economic indicators in kind, which form the basis of primary
documentation and personal observation materials. In addition, the operational analysis is characterized by
approximation in calculations.
The current (retrospective) analysis is related to the achieved results of the enterprise. It is carried out, as a
rule, for the main reporting periods of business, mainly on the basis of official reporting and system
accounting. The current analysis is also called periodic, because most often it is carried out on the current
planning and reporting periods of work. It is based on accounting and statistical reporting, allowing you to
evaluate the work of associations, enterprises and their divisions for the month, quarter, year cumulative
total. The most important tasks of the perspective analysis: forecasting of economic activity; scientific
substantiation of perspective plans; estimation of their expected performance.
 depending on the content of the analysis, the functions performed by him and the tasks facing him:
Financial analysis, in turn, can be divided into external and internal:
o The first is carried out by tax authorities, higher organizations, investors, shareholders, audit firms, etc.
The main task of external financial analysis is to assess the financial condition of the organization, its
solvency and liquidity. It is carried out at the organization by the forces of its accounting, finance
department, planning department, and other functional services.
o Internal analysis examines the efficiency of using own and borrowed capital, examines the indicators
of profit, profitability, identifies reserves for the growth of the latter and strengthening the financial
condition of the organization. Internal financial analysis, therefore, is aimed at the development and
implementation of optimal management decisions that contribute to improving the financial
performance of this organization.
Management analysis, unlike financial analysis, is internal. It is carried out by the services and departments of
this organization. He studies issues related to the organizational and technical level and other conditions of
production, using certain types of production resources (labor, fixed assets, materials), analyzes the volume of
output, its cost.

9. The chain substitution method in the study of the influence of factors on the results of the
organization’s economic activities.
Method of chain substitutions:
1. Select a particular type of formula, which includes the required number of factors;
2. The initial information about the indicators and factors included in the model is formed;
3. Calculation the values of the effective indicator according to the selected formula. The number of such
calculations is always one more the number of factors included in the formula;
4. The values of the factors in the calculations are successively replaced from the previous (or planned) to the
reporting ones;

6
5. The previous value subtracted from each subsequent effective indicator, thereby determining the impact on
the effective indicator of the factor, the value of which in the subsequent calculation was replaced from the
previous one to the reporting one.
The advantages of this method: versatility of use, ease of calculation, which determines its frequent use.
The disadvantage of this method is that, depending on the selected order of factor replacement, the results of
factor decomposition have different meanings. This is due to the fact that as a result of applying this method,
an indecomposable residue is formed, which is added to the magnitude of the influence of the last factor.

10. Economic analysis for monitoring the implementation of a business plan of the
organization.
An exceptional role in substantiating the performance of business plans is played by the results of a
comprehensive, in-depth economic analysis of the company's financial statements. In the procedures for
compiling business plans, financial and economic analysis performs the function of forecasting the activities of
an economic entity based on an assessment of the business and its components in the previous (reporting)
period.
A business plan is a special document (program) that contains all the main characteristics of the prospects for
business development. A business plan are the means of managing a firm. The goal of any business plan is to
achieve the desired result. Depending on these or other entrepreneurial goals, the main sections and
indicators of the business plan are formed. Business planning is a consistent presentation of the project
implementation system, its key characteristics that can convince the investor (or other user) of the
profitability of the project and the need to participate in it.
The main components of the business planning process are:
● a statement of the rationale for the profitability of the project for its potential participants in an
accessible form for perception;
● evidence of strengthening the viability and future sustainability of the organization implementing the
project;
● business risk prediction;
● specification of business prospects in the form of a system of quantitative and qualitative indicators of
development;
● development of a perspective (strategic) view of the organization and its working environment by
gaining valuable planning experience.
The development of a business plan is preceded by a thorough analysis and evaluation of:
● current financial condition of the organization;
● prevailing production potential;
● achieved company market position.

11. Sources of information used for economic analysis

The system of economic information - an important part of economic management - the basis of analysis.
There is a twofold connection between the subject of economic analysis and information.
On the one hand, analysis acts as a consumer of information, on the other hand, as its source. In a revised and
summarized form, the information is used by managers and specialists to make managerial decisions. In
addition, the subject of analysis also performs control and administrative functions in relation to the
information itself, causing a change in its volume, content, quality, address and purpose of use.
For analysis, use scientific, technical, administrative, legal and economic information.
7
All data sources for analysis are divided into planned, accounting and off-accounting.
Planning includes all types of plans that are developed at the enterprise (prospective, current, operational), as
well as regulatory materials, estimates, price tags, design tasks, etc.
The accounting sources include:
 accounting and reporting;
 statistical accounting and reporting;
 operational accounting and reporting;
 selective credentials.
In accounting and reporting, the most complete reflection and generalization of household assets and
business operations in order to monitor the implementation of established business plans is found.
Statistical data, which contain a quantitative description of mass phenomena and processes, are used for in-
depth study and understanding of the relationships, identifying economic patterns.
Operational accounting and reporting used in individual areas of economic activity of enterprises provide
faster than the statistics and bookkeeping to obtain relevant information.
The leading role in information support belongs to accounting, operational-technical and statistical reporting.
The data of annual, quarterly and monthly reports and balances, indicators of statistical and operational-
technical reporting characterize the results of the enterprise as a whole for the year, for certain periods and
types of work.

12. Features of forming a system of analytical indicators for internal management

purposes.
Internal management analysis - a comprehensive analysis of the internal resources and external capabilities
of the enterprise, aimed at assessing the current state of the business, its strengths and weaknesses,
identifying strategic problems.
The purpose of internal management analysis is to provide information to owners and  managers for making
management decisions, choosing development options, and determining strategic priorities.
Analytical indicator:
1. Comparison method (comparison of comparable indicators to determine deviations from planned
indicators, establish their causes and identify reserves). The main types of comparisons used in the analysis:
reporting indicators with planned indicators; planned indicators with indicators of the previous period;
reporting indicators with indicators of previous periods; performance indicators for every day;
2. The index method (decomposition by factors of relative and absolute deviations of the generalizing
indicator). It is used in the study of complex phenomena, the individual elements of which are immeasurable.
3. The balance method (comparison of interrelated indicators in order to ascertain and measure their mutual
influence, as well as the calculation of reserves to increase production efficiency). When applying the balance
method of analysis, the relationship between the individual indicators is expressed in the form of equality of
the results obtained as a result of various comparisons.
4. The method of statistics (reflection of digital indicators characterizing the course of various processes, the
state of objects with a frequency established for research purposes). In a statistical study, the following stages
are distinguished: registration, accounting of primary data using special forms;
5. The method of chain substitutions (obtaining the corrected values of the generalizing indicator by
comparing the values of two adjacent indicators in the chain of substitutions).

13. Analysis of financial results for commercial organizations.

● Analysis of financial results is one of the most important aspects of the study of economic activity of the
enterprise. The main tool for assessing the financial situation of an enterprise is financial analysis, with
8
 which you can objectively assess the internal and external relations of the analyzed object: to characterize
its solvency, efficiency and profitability of the activity, development prospects, and then make informed
decisions based on its results.
● The financial result of a commercial organization is expressed in the amount of revenue or profit. The
financial results of the company are characterized by indicators of profit and profitability. The most
important among them are profit indicators, which create the basis for the economic development of the
enterprise. The latter make a profit mainly from the sale of products, works, services, as well as from
other types of activities: leasing of fixed assets, commercial activities on stock and currency exchanges,
etc.
Analysis Objectives:
• analyze the dynamics of profit and profitability indicators;
• assess the composition and structure of retained earnings;
• assess changes in other income and expenses;
• conduct a factor analysis of profits from the sale of products, works, services;
• analyze the distribution of profits in the enterprise;
• evaluate profitability indicators;
• calculate reserves of growth of profitability of the organization and develop measures for their
implementation.

14. Analysis of the property potential for the organization.

The property potential of an enterprise is the totality of the enterprise’s funds under its control.
Property potential is characterized by the size, composition and condition of assets (primarily, long-term),
which are owned and managed by a commercial organization to achieve its goal.
Analysis of the company's property potential is carried out on the basis of the balance sheet. The structure of
the company's assets and liabilities is constantly changing. In the balance sheet information is provided on a
specific date, therefore, to study the dynamics, indicators are calculated for several reporting periods.
In the balance sheet, the company's assets and liabilities are grouped by liquidity and maturity, respectively.
The relationship between assets and sources of coverage is analyzed.
The main standard stages of the analysis of the property structure of a company include:
 assessment of the dynamics of changes in the balance sheet currency;
 determination of net assets
 calculation of working capital
 analysis of the structure of assets and classification by the degree of their liquidity;
 analysis of the structure of liabilities and classification by maturity;
 assessment of the satisfactory structure of the balance sheet.

15. Structural and dynamic analysis of the organization’s income.

The organization’s income is recognized as an increase in economic benefits resulting from the receipt of
assets (cash, other property) and (or) repayment of obligations, which leads to an increase in the capital of this
organization (excluding deposits of participants (property owners)).
Analysis of the income structure - determining the share of certain types of income in the total amount of
income. Analysis of income dynamics is the calculation of the growth or growth rate of all incomes and their
individual types, in particular revenue.
The purpose of the analysis of income of the organization is to identify trends in this indicator and all the
elements of their formation, to identify reserves for their increase.
In the income statement, income is represented by the following indicators:
9
1. income from ordinary activities;
2. other income, including:
a) interest receivable;
b) income from participation in other organizations;
c) other income.
Amount, monetary
unit Absolute Growth Structure, % +/-
Element base reporting change, +/- rate, % base reporting
…     =v1-v0 =v1/v0      
Total         100 100 -

Despite the practical significance of the analysis of the organization’s income structure, it is nevertheless
necessary to deepen its implementation using coefficient methods of financial analysis characterizing the
degree of efficiency of use (expenditure) of these funds.

16. Structural and dynamic analysis of organizational expenses.

Expenses - decrease in economic benefits resulting from the disposal of assets (cash, other property) and/or
the occurrence of liabilities, leading to a decrease in the capital of the organization, with the exception of
reducing deposits by decision of the participants (property owners).
The following indicators are included in the expenses of the income statement:
 expenses for ordinary activities (total cost of sales), including the cost of sales of products, goods,
works, services; business expenses; management expenses
 other expenses, including interest payable on loans and borrowings received; other expenses.
Operational expenses are stable, while other expenses are random. Therefore, it is better if net profit is
formed to a greater extent due to positive financial result from operational activity.
Analysis of the cost structure - determining the share of certain types of expenses in the total amount of
expenses. Analysis of the dynamics of costs - the calculation of the growth or growth rate of all expenses or
their individual types.
In the analysis, an analytical table is used. It presents the absolute values of the organization's expenses and
their share in the total amount of expenses in the reporting and previous periods by types of expenses, the
change in the absolute values of expenses and their specific shares in the reporting period compared to the
previous period.

Amount, monetary
unit Absolute Growth Structure, % +/-
Element base reporting change, +/- rate, % base reporting
…     =v1-v0 =v1/v0      
Total         100 100 -

Analysing the structure of expenses by elements, it is necessary to take into account that some elements are
more “tax-intensive”, for example, labor costs that lead to payments to social funds. Therefore, they might be
understated, while others (for example, material costs, for which VAT is offset) might be exaggerated.
Rapid changes in shares can be caused by changes in technologies, types of activities, product range,
application of tax optimization schemes, etc.

10
The structural and dynamic analysis of expenses for ordinary activities can be supplemented by a factor
analysis of costs per 1 rouble, which provides useful information on the effectiveness of management in terms
of its ability to manage organization costs.

17. Indicators of economic and financial profitability and their analysis

Economic profitability Financial profitability

The ratio of indicators presented in the financial The ratio of indicators presented in the financial
results statement to average annual indicators of results statement to average annual indicators of
assets liabilities

The most popular indicators of profitability are:

Indicator Formula Meaning

Net profit EBIT The amount of revenue/profit on
Return on assets ∨
TA TA 1 ruble of total assets

Net profit ( Sales revenue ) The amount of revenue/profit on

Return on current assets ∨
CA CA 1 ruble of current assets

Net profit How efficiently the management

Return on equity is using company’s equity to
Sahreholde r ' s Equity
create profits
How efficiently the management
Net profit
Degree of financial leverage is using borrowed capital to create
TL
profits
Net profit The amount of net profit on 1
Profitability of all expenses
Expenses ruble of expenses

Net profit The share of net profit in the

Net profit margin
Total Revenue revenue

Sales revenue The amount of sales revenue on 1

Production profitability
Cost of sales ruble of cost of sales

Sales profit The amount of sales profit on 1

Sales profitability
Sales revenue ruble of sales revenue

18. Principles of economic analysis

The principles of economic analysis form the basis of analytical work in enterprises, the effectiveness of which
is ensured by the complexity of their use at any level of management.
The main principles of economic analysis include:
The principle of statehood reflects a state approach to the assessment of economic phenomena.  It involves
taking into account the economic strategy of the state through an analysis of the financial and economic
activities of enterprises of various ownership forms and their structural divisions.

11
The principle of scientific nature assumes that the methodology of economic analysis is based on the
achievements of economic science and takes into account the effect of economic laws.
The principle of objectivity means the study of real economic phenomena and processes, their cause-effect
relationships.  It is reflected in legislative acts providing for a different degree of responsibility of persons who
allowed falsification of accounting data and reporting on the activities of the enterprise.
The principle of consistency implies taking into account the relationship of individual factors in the study,
measurement and generalization of their influence on the formation of economic indicators.  All aspects of the
financial and economic activities of the enterprise are considered in this case in the relationship and dynamics.
The complexity of the analysis should be manifested in a systematic review of all stages and performance
indicators of the analyzed object in their relationship, while the analysis itself is carried out at all levels of
management.
The principle of efficiency requires fast and clear implementation of tasks by the enterprise, implementation
of decisions made.  According to the results of the economic analysis, measures are outlined aimed at
improving the financial and economic activities of the enterprise.  Therefore, the timeliness of the analysis
allows you to turn it into a tool for operational control of various areas of the enterprise.
The principle of mass involves involving specialists in the production sector in the analytical work, on which
the improvement of the living standard of the population depends.
The principle of effectiveness requires that the costs of the analysis give a multiple effect.

19. Structural and dynamic analysis of the organization's current assets

The ratio of elements of short-term assets characterizes their structure, which varies depending on the
industry, the volume of activity and the financial policy of the organization.
Types of current assets are:
1. Inventories
2. Long-term assets held for sale.
3. Value added tax on purchased goods, works, services.
4. Short-term receivables.
5. Short-term financial investments.
6. Cash and cash equivalents.
7. Other current assets.
The financial source of a certain part of short-term assets should be own working capital. The rest of short-
term assets is formed from attracted sources, i.e. obligations. Own funds serve as a source of creation of the
organization's constant needs for funds in the amount of the established standard. The organization’s
temporary need for funds to create additional reserves of current assets is formed by bank loans, commercial
loans, which are recognized as working capital borrowings, as well as borrowed funds (accounts payable).
According to the degree of liquidity, current assets are divided into:
 Absolutely liquid (cash);
 Highly liquid (short-term financial investments and short-term receivables);
 Medium liquid (stocks of finished products and goods);
 Slightly liquid assets (raw materials, supplies, inventory, household supplies, work in progress);
 Illiquid assets (bad receivables, deferred expenses).
 The liquidity of current assets is the main factor determining the degree of risk of investments in these
assets.

20. System of business activity indicators and their analysis.

12
The financial position of the organization, its liquidity and solvency largely depend on the effectiveness of its
use of its funds, which is reflected in the indicators of business activity.
Business activity indicators make it possible to assess how quickly the funds invested in certain assets of an
organization turn into real money.
Absolute indicators of business activity are: profit, sales, etc.
Relative indicators of business activity characterize the efficiency of using the resources of the organization.
They can be represented as a system of indicators of turnover.
Indicators of turnover.
1. Asset turnover ratio = Revenues from sales/ Average asset value over the period
2. Equity turnover ratio = Revenue from sales / Average for the period the amount of equity
3. The turnover Ratio of current assets = Выручка от реализации/ Средняя за период сумма
собственного капитала
4. Accounts receivable turnover ratio = Sales revenue / Average cost of receivables for the billing period
5. Inventory turnover ratio = Cost of sales / period average value of inventory
6. Accounts payable turnover = Revenues from sales / Average payables for the period
7. Duration of one turnover of advanced capital = Number of days in the billing period / Asset turnover
ratio
8. Duration of one turnover of receivables = Number of days in the billing period / receivables turnover
9. Average age of stocks = The number of days in the billing period / inventory turnover
For 1-5:
Individual for each organization; there should be a tendency to accelerate
For 6:
Accounts payable should be less than accounts receivable
For 7-9:
There should be a downward trend

13