Working capital is a flexible and renewable component of the enterprise's material assets.
Concept definition
Working capital is the cost of all the assets of the enterprise that are listed as inventories or have already been put into the production process. Sufficient quantity and the optimal structure of values of this category is one of the main conditions for the successful and efficient operation of any organization.
An important point is that working capital is that part of the funds that is directly involved in production. At the same time, they completely or partially change their material and material form. It is necessary to clearly separate the resources that provide a continuous production process (for example, electricity), and those that are directly part of the finished product (raw materials).
It should be noted that working capital is an important component not only of the economy of an individual enterprise, but also of the state as a whole. Important, that this category includes not only resources and materials, but also financial resources and intangible assets (permits, rights, and so on).
Revolving production assets
Some tools are used to directly service the process of making products. They have a specific name - circulating production assets. Their peculiarity is that they are completely consumed and transfer their value to the finished product. In addition, this figure can increase significantly due to the fact that certain products are processed and completely change their shape.
OPF includes raw materials, tools that are used for no longer than one production cycle, as well as semi-finished products, work in progress and stocks. Another integral component is the costs of future periods, which represent a certain margin of safety associated with the need to upgrade equipment, purchase materials, and so on.
In order to effectively manage the BPF, it is necessary to carry out the following organizational measures:
- clearly define the composition of the funds and their structure in numerical terms;
- identify the need for missing funds;
- identification of priority sources from which working capital will regularly enter production;
- rational use of funds (complete elimination of overspending or shortage).
Working capital of the enterprise
An essential element of any production is certain resources, from which the cost of production is formed. Their monetary expression is the working capital of the enterprise. For the normal operation of the organization, you must always have the necessary supply of these resources. Nevertheless, any production strives to save these funds, which can significantly reduce costs, and therefore increase profits. However, this should not compromise quality.
Part revolving funds include the following structural elements:
- stocks are certain resources that are intended and prepared for introduction into the production process (these are materials, raw materials, semi-finished products, spare parts, energy resources, etc.);
- work in progress - these are certain elements that have already been launched into the workflow, but have not yet reached the state of the finished product (this also includes their own semi-finished products intended for internal use);
- deferred costs - these are the amounts of funds included in the cost of the product, but related to future developments and projects (they do not have a material form).
The difference between fixed and working capital
Production assets at the enterprise are defined as the sum of the cost of fixed assets, as well as working capital. These categories have fundamental differences, which are not only in the method, but also in the time of use.
Fixed and working capital differ from each other primarily in the duration of use. Thus, OBs completely change their material form. They cannot be used for more than one production cycle (only some tools may be an exception). Speaking of OF, it is worth noting that they are used for a long time. It can be buildings, structures, equipment, machines and other things that have high cost and takes part in a number of production cycles.
Fixed and revolving funds also differ in how they transfer their value to the product. So, the former involve the gradual accrual of depreciation, the amount of which later goes to reconstruction or renovation. The cost of working capital is immediately included in the cost of finished goods.
It is also worth noting the fact that the production assets, which are the main ones, do not change their form. Their wear and tear cannot be classified in this category. But working capital change completely: fuel is converted into energy, raw materials into finished goods and so on.
Rational use of working capital
One of the main tasks of any enterprise is to reduce the cost of the finished product, which is achieved when the use of working capital is rational. This can be expressed in the following basic terms:
- significant savings in raw materials and materials makes it possible to reduce production costs or increase the number of products;
- Reducing the cost of raw materials can also be achieved through the use of innovative materials, which allows improving the characteristics and improving the quality of products;
- on the way to saving working capital, a decision can be made to rationalize the production process and introduce new technologies that will significantly reduce the consumption of materials;
- savings in working capital are inextricably linked with savings in labor, which will improve the structure and quantitative composition of the enterprise's workers;
- reducing the share of working capital in the cost of products, it becomes possible to pay more attention and funds to the technological component, which significantly improves the quality and final price of products;
- if an enterprise does not have ambitions to expand the scale of production or upgrade the technological component, then saving working capital can help improve the economic situation, as well as overcome the crisis.
Main characteristics
The indicators of revolving funds reflect, firstly, the amount of resources spent, and secondly, their usefulness. Speaking about the first data, it is worth highlighting the following main values:
- The consumption of working capital is calculated as the sum of all material resources involved in the production in monetary terms (it can be determined both for individual types of products and for the entire program).
- Material consumption allows you to estimate how many resources in kind or in monetary terms were used to produce one unit of goods (you need to divide the total consumption by the number of received products of a particular item). This is true when it comes to piece goods. Otherwise, the consumption of materials per physical unit (kilogram, liter, ton, and so on) is calculated.
If working capital requires preliminary processing before being put into production, then the following indicators are used to evaluate them:
- remainder beneficial substance after primary processing of raw materials;
- percentage of losses (meaning the ratio of the useful component and waste);
- product yield - is determined by the ratio of the number of good products to the initial volume of raw materials before processing.
Quite an important indicator that characterizes working capital is their turnover. This is the speed of their movement in the enterprise. The time for one revolution is full cycle from the launch of raw materials into production to the receipt of the finished product. The higher this speed, the more efficient is the organization of work at the enterprise. 
Turnover indicators of working capital
The following main indicators are distinguished:
- Turnover ratio - is calculated as the ratio of sold products to the balance of working capital in monetary terms for a certain period. It shows the number of full turnovers for the period, and is also considered commensurate with the rate of return on assets.
- Duration of turnover - is determined by dividing the duration of the reporting period by the turnover ratio of working capital.
- Fixing coefficient - is an indicator, the reciprocal of the turnover ratio. It can be determined by dividing the balance of capital by the cost of goods produced. It characterizes the amount of working capital that falls on each unit of the cost of production.
How to speed up turnover
It is possible to accelerate the turnover of working capital through the introduction of a number of measures that are used at different stages of the production process. This allows you to significantly reduce the consumption of materials, as well as more accurately organize their movement during work.
Working capital includes inventories, and therefore, at the stage of their formation, it is worth resorting to the following measures:
- establishment of economically justified norms for the formation of raw material reserves;
- selection of suppliers with the most favorable geographical location, which will reduce the time and cost of deliveries;
- development of a system for automating the loading of materials into the warehouse, as well as their release into production.
If we are talking about work in progress, then it would be appropriate to make the following decisions:
- introduction of new progressive production technologies;
- development of standard processes and templates;
- motivation and material incentives for shop workers to economical and rational use raw materials.
Sales of products require the implementation of the following necessary measures:
- search for distribution channels that provide the shortest path from the supplier to the buyer;
- direct contacts with the end user, bypassing intermediaries (for example, own distribution networks).
What is included
Working capital includes inventories, the structure of which can be described as follows:
- raw materials and materials;
- semi-finished products and units of products purchased from third-party suppliers;
- fuel resources;
- packaging materials and containers;
- spare parts for current repair equipment and production lines;
- cheap tools and items that wear out in less than a calendar year.
Speaking of work in progress, it is worth noting that these can be materials, semi-finished products and other stocks that are released into the production process, but have not yet reached the state of the finished product.
Deferred expenses do not have material and material expression. Despite the fact that they are being implemented at the moment, the effect of them will come only in the future period. So, this category should include:
- development and development of new technologies, as well as product design;
- advance payment for ordered materials, as well as subscription to printed publications, advance payments for communication services, etc.;
- rent for premises or equipment;
- advance payment of taxes and other obligatory payments.
Also at enterprises, one can single out such a category as circulation funds. It:
- finished products, which is stored in a warehouse and has not yet been shipped for shipment to the consumer;
- products sent to the buyer, payment for which has not yet been received on the company's accounts;
- cash on hand or on the settlement account of the organization, which are intended to pay for services or supplied materials;
- accounts receivable.
Revolving funds and funds
Working capital and working capital are often identified, but they are not the same thing. So, the former represent a part of the enterprise's resources, which are completely exhausted during one production cycle. If we talk about such a category as working capital, it is worth noting that they represent a combination of the first category, as well as available circulation funds.
Rationing of working capital
Rationing of working capital is carried out in order to save them, as well as to rationalize the production process. It includes four successive steps:
- At the preparatory stage, the collection complete information about the production process and material costs. The state of stocks and the cost of each type of material are also studied.
- The organizational stage involves the development and planning of activities that are designed to make the use of working capital more rational.
- At the next stage, an economically justified calculation of the standards takes place. It is produced both for individual types of materials, and for each type of production.
- At the final stage, information about decisions taken and established norms communicated to the heads of all departments of the enterprise.
Rationing of working capital is carried out using a number of fundamental principles, among which the following should be highlighted:
- saving raw materials and materials should not be done to the detriment of the production process, as well as timely settlements with suppliers and customers of products (also do not forget about the quality of finished goods, which should not suffer from a decrease in the amount of materials used);
- when determining the standards, the schedules for the supply of materials, as well as their possible losses associated with the imperfection of the production process, should be taken into account (there must always be a certain stock in excess of the norms in the warehouse, which will ensure work in case of interruptions in raw materials);
- establishment of norms and standards regarding the use production stocks should be accompanied by the improvement of technology (in order for materials to be spent more economically, it is worth resorting to installing new equipment that minimizes the unauthorized consumption of raw materials);
- the enterprise should develop a system of employee responsibility for non-compliance with the norms and overspending of materials (violation of the rules should be accompanied by the collection of fines).
Working capital is one of the main elements of production, on which the effective operation of the enterprise depends.
1. The composition of the main production assets of the enterprise includes material elements:
3) buildings, structures, transmission devices, machines and equipment (including power machines and equipment, working machines and equipment, laboratory equipment, measuring and control instruments and devices, computer technology, other machines and equipment), vehicles, tools and fixtures, production and household inventory;
2. Fixed assets, when credited to the balance sheet of an enterprise (workshop, building) as a result of acquisition, construction, are evaluated:
2) full initial cost;
3. The level of use of fixed production assets is characterized by:
2) capital productivity, capital intensity;
4. The indicator of return on assets characterizes:
1) the size of the volume of marketable products per 1 rub. fixed production assets;
5 Depreciation of fixed assets is:
2) the process of transferring the value of fixed assets to the cost of manufactured products;
6 The concept of "working capital of an enterprise" includes:
2) part of the means of production that participate in the production cycle once and completely transfer their value to the cost of manufactured products;
7. The composition of the working production assets of the enterprise includes material elements:
1) production stocks of raw materials, materials, semi-finished products, purchased products, spare parts, fuel, work in progress, deferred expenses;
8 The circulation funds include:
2) finished products in the warehouse of the enterprise, products shipped, on the way, cash and funds in pending settlements (cash on hand, on a current account, in letters of credit, all types of debt);
9. The composition of the working capital of the enterprise includes:
2) working capital and circulation funds;
10. The turnover ratio of working capital is characterized by:
3) the amount of working capital for the relevant reporting period;
Product costs include
3) costs expressed in monetary terms for the production and sale of products.
Assignment of the classification of production costs by economic cost elements
2) serves to compile cost estimates for the production and sale of products (works, services ).
13. Appointment of classification by cost items:
3) calculation of the unit cost of a specific type of product;
14. The grouping of costs by economic elements includes the costs of:
3) depreciation of fixed assets;
15. The grouping of costs by costing items does not include costs:
2) wages;
16. The costs of management and organization of production in the cost of production include the costs of:
1) straight;
2) indirect;
3) variables;
4) permanent;
5) equipment maintenance.
17. Variable costs include:
2) expenses for the sale of products, depreciation;
4) administrative and management expenses.
18. The division of expenses into fixed and variable is carried out in order to:
2) determining for each specific situation the volume of sales that provides
19. The term "profit from the sale of products" means:
3) the difference between the volume of products sold in value terms (without VAT and excise tax) and its cost;
20) 4
21. The concept of "enterprise profitability" includes:
3) the ratio of profit to average cost fixed assets and working capital;
22. Product profitability is determined by:
2) the ratio of profit from sales to proceeds from sales (excluding VAT and excise duty);
23. The profitability of certain types of products is determined by:
1) the ratio of the profit included in the price of the product to the price of the product;
24. Profitability of production assets is determined by:
4) the ratio of profit to the average cost of fixed assets and inventories.
26. The concept of "labor productivity" includes:
3) the productive power of labor, i.e., the ability to create certain consumer values per unit of working time;
27. The main goal of the business plan is:
3) making a profit.
28. Is it possible to call a source of financing of capital investments:
1) profit (income) of enterprises;
29. The concept of "capital construction" includes:
1) construction and installation work in the construction of buildings, structures;
30. The composition of capital investments includes the following elements:
3) the cost of purchasing basic and auxiliary materials, components;
31. Comparison of various investment projects and the choice of the best of them is recommended to be carried out according to the following indicators:
2) net discounted income or integral effect
32. Enterprise management is:
3) targeted at the workforce of the enterprise in order to solve the problem
33.Main goals of management:
3) Increasing the efficiency of the enterprise
34. The most important control functions:
35. Organizational and legal forms of enterprises are:
1) state enterprise;
Working capital of the enterprise- these are objects of labor that participate in one production cycle (or are consumed during the year), lose their natural form, and completely transfer their value to finished products. They serve the entire reproduction cycle, including both the production process and the circulation process. Accordingly, they are divided into circulating production assets and circulation funds.
Revolving funds, in turn, consist of various material elements or current assets(Fig. 2.).
Rice. 2. Composition of working capital
Consider first the elements of circulating production assets. They include:
1. raw materials and basic materials from which the product is made;
2. Auxiliary materials - fuel, containers and packaging materials for packaging, spare parts. They are used for maintenance, care of tools, facilitating the production process, as well as giving the product certain consumer properties;
3. purchased semi-finished products and components. Semi-finished products are not finished products and, together with components, play the same role in the production process as the main materials.
Raw material called products Agriculture and extractive industries, and materials- products of manufacturing industries.
In a special group of circulating production assets, low-value and high-wear items (IBE) are allocated, for example, tools with a short service life. According to their economic content, they are not objects, but means of labor, since they can repeatedly participate in the production process without losing their material and material form. However, they are included in working capital to simplify accounting for their depreciation.
In addition to inventories, the current production assets of the enterprise include funds in production, which include work in progress and deferred expenses. Work in progress represents objects of labor that have not yet passed all stages of processing. These are no longer inventories, but not yet finished products.
In industry and construction, the volume of work in progress can reach significant values, both in absolute and relative terms - much depends on the characteristics of the technological process. Large, for example, the volume of work in progress in the automotive industry. And in such a no less large industry as energy, on the contrary, specific gravity work in progress is negligible.
Deferred expenses include expenses incurred by the enterprise in the reporting period, but subject to inclusion in the cost of production in subsequent months or years.
Examples of such expenses are deferred taxes and development costs. However, in most cases this is the cost of preparing future production.
The composition of circulation funds is also heterogeneous. Its main part is finished products in the warehouse of the enterprise and shipped to customers. The receipt of finished products at the warehouse completes the process of its production, and its shipment to customers is the beginning of the circulation process.
Another part of circulation funds is cash and funds in settlements. Cash can be on the current account of the enterprise in a commercial bank, at the cash desk, in transfers. Accounts receivable include the debt of buyers, accountable persons, tax authorities in case of overpayment of taxes by the enterprise, etc.
Thus, working capital consists of a large number of elements, each of which is important for the implementation of the current, daily activities of the enterprise. That is why they are also called current assets. The peculiarity of current assets is that at any time they must be present in quantities sufficient for the smooth functioning of the production and circulation process. A deficiency in any of these can lead to negative consequences for the enterprise: stoppage of production, loss of customers, delay in payments, etc. On the other hand, the desire to play it safe, the accumulation of excess stocks of raw materials, materials, finished products means an increase in the amount of working capital and a decrease in the efficiency of using the enterprise's capital. Finding optimal value working capital is the most important and at the same time the most difficult task for any enterprise.
Test questions:
1. Are there any differences between the concepts of "property" and "assets"?
2. Can the value of the enterprise's capital be greater than the value of its property?
3. Are there any differences between the concepts of "fixed assets" and "main production assets"?
4. Why is it impossible to immediately write off the entire cost of an object of fixed assets to the cost of production?
5. How do the concepts of "fixed assets" and "property" relate to each other?
6. Can non-working equipment be subject to physical and moral wear and tear?
7. Are there any differences between the concepts of "current assets" and "revolving funds"?
8. Indicate the differences between working capital assets and fixed production assets.
9. Why is part of the means of labor included in the composition of working capital?
10. Can inventories be subject to physical and obsolescence?
The means of labor (machines, equipment, buildings, vehicles) together with the objects of labor (raw materials, materials, semi-finished products, fuel) form the means of production. Expressed in value terms, the means of production are the production assets of enterprises. Distinguish between fixed and working capital.
The main production assets are the means of labor involved in the production process for a long time and retaining their natural form. Their cost is transferred to the finished product in parts, as the consumer value is lost.
Circulating assets are those means of production that are entirely consumed in each new production cycle, fully transfer their value to the finished product and do not retain their natural form during the production process.
Along with production, there are non-productive fixed assets - social property. it residential buildings, children's and sports institutions, canteens, recreation centers and other objects of cultural and community services for workers that are on the balance sheet of enterprises and do not have a direct impact on the production process.
revolving funds- this is required element production process, the bulk of the cost of production. The lower the consumption of raw materials, materials, fuel and energy per unit of output, the more economically the labor expended on their extraction and production is spent, the cheaper the product. The presence of an enterprise with sufficient working capital is a necessary prerequisite for its normal functioning in a market economy.
The material elements of circulating assets in the process of labor undergo changes in their natural form and physico-chemical properties. They lose their use value as they are consumed in production. New use-value arises in the form of products worked out from them, including those instruments of labor whose service life is less than one year.
Revolving production assets consist of three parts:
- production stocks;
- work in progress and semi-finished products of own production;
- deferred expenses.
Productive reserves - these are objects of labor prepared for launching into the production process; they consist of raw materials, basic and auxiliary materials, fuel, fuel, purchased semi-finished products and components, containers and packaging materials, spare parts for the repair of fixed assets.
Work in progress and semi-finished products of our own productioncooking- these 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 semi-finished products of their own manufacture, not completely finished by production in some workshops of the enterprise and subject to further processing in other workshops of the same enterprise.
Future expenses- these are intangible elements of working capital, including the costs of preparing and developing new products that are produced in a given period (quarter, year), but are attributed to products of a future period (for example, costs for the design and development of technology for new types of products, for rearranging equipment and etc.)
The ratio between individual groups, elements of revolving funds and their total volume, expressed in shares or percentages, is called the structure of revolving funds. It is formed under the influence of a number of factors: the nature and form of organization of production, the type of production, the duration of the technological cycle, the conditions for the supply of fuel and raw materials, etc.
Circulating production assets in their movement are also connected with circulation funds, serving the area of circulation. Circulation funds include finished products in warehouses, goods in transit, cash and funds in settlements with consumers of products, in particular accounts receivable.
Common in the structure of working capital of various enterprises and organizations is the predominance of funds placed in the sphere of production. They account for more than 70% of all working capital.
1) Indicators of the intensity of use of fixed assets
2) Indicators of the use of production areas and facilities
3) Indicators of capital productivity of fixed assets and the rate of return
4) All answers are correct.
5) There is no correct answer
22. What is included in the concept of "revolving funds of the enterprise"?
1) Basic and auxiliary materials, semi-finished products of own production, purchased semi-finished products, components
2) Part of the means of production that participate in the production cycle once and fully transfer their value to the cost of manufactured products
3) Means of production that repeatedly participate in the production process and transfer their value to the cost of products
4) Tools of labor that repeatedly participate in the production cycle and transfer their value to the cost of finished products not immediately, but in parts, as they wear out
5) Items of labor necessary for the manufacture of products
23. What material and material elements are included in the composition of the working capital of the enterprise?
1) Inventories of raw materials, materials, semi-finished products, purchased products, spare parts, fuel, work in progress, deferred expenses
2) Machine tools, units, fixtures, containers, racks
3) Finished products, cash on hand, on the current account of the enterprise
4) Profit of the enterprise, debt to suppliers
5) There is no correct answer
24. What is the minimum stock?
1) The amount of stock at which it is necessary to place an order for the purchase of a new batch
2) The amount of stock, taking into account random deviations in delivery times and consumption volume
3) The optimal size of the delivery lot
5) There is no correct answer
25. What determines the inventory turnover ratio for a certain period?
1)From starting and ending stocks
2)From average stock
3) From the cost of goods sold and the average stock
4) From all of the above
5) There is no correct answer
26. What is working capital?
1) Part of the capital of the enterprise, which is modified in the production cycle and the exchange cycle and acts in the form of inventories, receivables, cash and securities
2) Net asset value of an individual or legal entity minus the amount of liabilities
3) Part of the capital of the enterprise, which is a set of material and material elements of long-term functioning
4) Part of the advanced capital spent on the purchase of objects of labor
5) There is no correct answer
27. Which of the following applies to circulation funds?
1) Material resources of an enterprise, industry
2) Vehicles enterprises, production buildings, structures
3) Finished products, products shipped, on the way, cash in shares, on a current account, at the cash desk, all types of debt
4) Profit
5) There is no correct answer
28. Which of the following is included in the company's working capital?
1) Stocks of materials, spare parts, fuel, finished products in stock
2) Working capital and circulation funds
3) Work in progress, finished goods in stock
4) Workshop equipment, finished products in stock
5) Inventories, work in progress, prepaid expenses
29. Which of the following applies to work in progress?
1) Items of labor that have not yet entered the production process
2) Items of labor that have already entered the production process, but are still being processed
3) Items of labor that are at the enterprise in a certain size, ensuring the continuity of the production cycle
4) The costs associated with the preparation of the production of new types of products and their development
5) There is no correct answer
30. What characterizes the turnover ratio of working capital?
1) The level of technical equipment of labor
2) The intensity of the use of working capital
3) Average duration of one revolution
4) The size of sales per 1 rub. production assets
5) There is no correct answer
31. What indicator characterizes the material consumption of products?
1) Technical level of production
2) The total weight of materials for the manufacture of one product
3) Norms of consumption of materials for manufacturing
products
4) Economical use of materials
5) There is no correct answer
32. What indicators characterize the effectiveness of funds?
1) Profit, profitability of production
2) Capital productivity, capital intensity of products, capital-labor ratio
3) Turnover ratio, average duration of one turnover
4) The level of return on working capital
5) There is no correct answer
33. What stage do current assets go through in their movement?
1) Cash
2)Productivity
3) Commodity
4) All of the above
5) There is no correct answer
34. Which of the following does not belong to the category of workers?
1)Working
2) Employees
3) Repairman
4) All answers are correct
5) There is no correct answer
35. What is a profession?
1) Type of labor activity that requires special training and is a source of livelihood
2) Specialty, which is a source of livelihood
3) Any work that an employee can perform
4) All answers are correct
5) There is no correct answer
36. What individuals are workers?
1) Doing work
2) Directly engaged in the production of products of labor
3) Chiefs
4) All answers are correct
5) There is no correct answer
37. Which workers are classified as employees?
1) Mostly mental labor providing management of the production of labor products
2) Being in the service of the owner of the enterprise
3) Laborers
4) All answers are correct
5) There is no correct answer
38. Which of the following positions do not belong to the category "head"?
1) Director
2) Deputy directors
3) Chief specialists
4) Senior engineers
5) Heads of shops
39. What is the headcount?
1) The number of personnel according to the list
2) The number of personnel according to the list on a certain date, taking into account those hired and dismissed on this date
3) The number of employees who come to work during the month
4) All answers are correct
5) There is no correct answer
40. How is the overall turnover rate determined?
1) The ratio of the total number of employees hired and left for the reporting period to the average number
2) The ratio of the total number of employees hired and retired for the reporting period to the payroll
3) This is the total number of received
4) All answers are correct
5) There is no correct answer
41. What is labor productivity?
1) Production output per unit of time
2) Labor costs per unit of output
3) The degree of fruitful activity of people, determined by the indicators of output and labor intensity
4) All answers are correct
5) There is no correct answer
42. What is working out?
1) Labor costs for output
2) The total number of products manufactured by the enterprise
3) The cost of raw materials for output
4) All answers are correct
5) There is no correct answer
43. The growth of which indicator stimulates wage, which is a form of remuneration for work?
1) Productivity
2) return on assets
3)Material capacity
4) All answers are correct
5) There is no correct answer