Stages of assessing the effectiveness of enterprise activities

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The company's performance is checked in several stages.

Step 1: Calculate and analyze overall profitability indicators, which reflect how efficiently the company is conducting production activities.

The efficiency of doing business is calculated as follows:

Business profitability = Net profit / Sales revenue × 100%;

The profitability of goods sold is determined as follows:

Return on sales = Sales profit / Cost of sales x 100%.

Step 2: Identify and analyze cayman islands email list overall profitability parameters that show whether the company is effectively managing its available resources.

Efficiency of using current assets:

Return on current assets = Net profit / Average cost of current assets × 100%;

Efficiency of distribution of funds not related to working capital:

Return on non-current assets = Net profit / Average value of non-current assets × 100%;

Efficiency of using equity capital (determines the quality of the company's work in terms of personal funds):

Return on equity = Net profit / Average equity x 100%;

Efficiency of management of attracted investments:

Return on invested capital = Net income / (Average equity + Average long-term liabilities) × 100%;

Efficiency of using credit assets:

Return on debt = Net income / Average debt x 100%.

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Step 3: Perform a factorial assessment of the calculated profitability values.

The purpose of such analysis is to find out why the parameters in the reporting period have different values, different from the indicators of previous periods or the planned indicators of a given time interval.

Step 4: Identify and analyze specific performance parameters that reflect the company's performance in specific areas.

These indicators are:

cost intensity of production;

output and earnings of one worker;

the share of generalized cost items in the cost of the product, and so on.