Chapter 4. Calculation of the economic efficiency of the project
4.1 Selection and justification of the methodology for calculating the economic efficiency of the project
So if central bank The Russian Federation established from December 1, 2008, the refinancing rate of 13%, the rate of return on capital must be set equal to 13%.
Consider the cost components of formula (1).
Capital expenditures for AIS are one-off. Those of them that are sent to the main information processing facilities transfer their value to products in parts due to depreciation. They are called capital because they are not lost, but reproduced.
Capital costs include:
Costs for technical support(computer equipment, office equipment, means of communication, technical means of protection, etc.);
Information base formation costs Kib relate to the formation of conditionally constant information.
Kts, Kps, Quo, Kpl, Kls These figures will not be taken into account in this case, since when implementing IS, they will not affect the costs: IS is introduced into the department with existing hardware and pre-installed software.
Let's calculate the capital costs:
CPR\u003d salary of programmers * number of programmers * design period \u003d 10 thousand. rub*1*1 month=10 thousand rub.
Kib\u003d number of experts * s / pl * term for the formation of inf. Bases \u003d 3 * 5 * 0.5 months \u003d 7.5 thousand rubles.
heap= salary of an engineer in charge of IS * training period \u003d 10 * 0.03 months \u003d 0.3 thousand rubles.
In total, we get: K \u003d (10 + 7.5 + 0.3) + 7% of unaccounted for costs \u003d 19.05 tsc. rub.
The total composition of capital costs is shown in Figure 1.
Figure 1 - Capital costs for AIS
Operating costs (C)
Operating costs, unlike capital costs, are recurring. They are repeated in each production cycle, and are calculated in total for the year. Operating costs are carried out synchronously with production. Operating costs are the cost of production (goods or services):
Ensures the growth of labor productivity of employees of the management apparatus;
Allows you to expand the range of products (services);
It leads to a reduction in costs associated with the production of products and services (materials, technical means, production and auxiliary areas, etc.).
In other words, the direct economic effect is the result of any changes in the nature of the implementation of the functional component management process, as a rule, directly related to the specifics of the subject area of activity of the control object. At the same time, the growth of labor productivity can be carried out by reducing the volume of operations performed manually, or by more efficient processing of information using computing tools.
2. Indirect economic effect from the introduction of a new information technology is the result of the influence of factors that, as a rule, are not directly related to the specifics of the subject area and are of a general social, ergonomic, environmental and other nature. The influence of these factors on the economic efficiency of the management system is carried out indirectly, and sometimes through a chain of various intermediate (secondary) factors, but always ultimately leads to an increase in labor productivity. management personnel, increasing the attractiveness of the firm's products potential clients and business partners, etc.
For the purpose of analysis and methodological convenience of calculation, it is advisable to define the annual economic effect as the sum of direct and indirect effects (4):
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where https://pandia.ru/text/79/122/images/image009_17.gif" width="21" height="23"> - total operating costs for IP, excluding salaries of management personnel.
https://pandia.ru/text/79/122/images/image008_19.gif" width="35" height="24">-55.93=-55.93 thousand rubles.
The magnitude of the direct economic effect is insufficient (even negative) to justify the cost of introducing IP. This is due to the fact that IP is created from scratch and the lack of savings on wages management personnel.
In this case, the introduction of IP is advisable only if there is confidence in a sufficiently large indirect economic effect.
Consider the calculation of the indirect economic effect.
This calculation involves the determination of the following components:
Automated information systems district coefficient and the unified social tax will amount to rubles. As a result, the cost of developing an IS, including the formation of an initial information base and staff training, will amount to 19.05 thousand rubles.
Costs for Maintenance IS during the year and the cost of wages for an employee working with IS will amount to 48.6 thousand rubles per year.
After the introduction of this IS, the cost of material costs will be reduced by 20%. This will lead to a reduction in the conditional total cost of the work of the department, this saving will pay for the creation and implementation of IS. The estimated payback time for the project is three and a half months.
The essence of the economic effect
In order to determine the main ways to improve the social and economic efficiency of managing Russian organizations, it is necessary to evaluate the effect. The effect can be represented as absolute value, with which you can reflect the achievable result in the process of performing a certain procedure.
Definition 1
Economic effects are the result of the use of human labor, which can be directed to the creation of certain material benefits. In this case, it is important not only to ensure the result, but also to determine how it was achieved.
As a basis for calculating economic efficiency, specialists should take the annual economic effect, including the costs of achieving it. In addition, in addition to the absolute magnitude of the effect, the magnitude of the effect is needed, which is calculated by the ratio of the total result obtained to the cost of resources to obtain it.
Efficiency can be determined by the degree of profitability. Performance indicators are relative and are used for comparison with the existing standard or with other effect options.
Benefit from the implementation of the effect can be determined through three circumstances:
- minimum costs for events,
- maximum effect from the implementation,
- duration of the effect.
In accordance with the economic efficiency of what needs to be measured, capital investments for the acquisition of new equipment, technologies, fixed assets, Money that are invested in a particular project.
Thus, we can say that the economic effect is the result of the used human labor aimed at creating appropriate benefits or a better result.
In this case, it is important not only to ensure the result itself, but also the forces with the help of which the result was achieved. For this reason, economic efficiency is calculated through the annual economic effect, including the costs or costs of achieving it.
In addition, after determining the absolute value of the effect, the relative value is determined, which is calculated through the ratio of the overall result to the cost of resources to obtain the effect.
Formula of economic effect
The economic effect formula characterizes the final economic result obtained from the introduction and implementation of appropriate measures that can improve the performance of the company.
The best result is an absolute indicator, which is measured in monetary units.
AT general view obtaining the effect is based on the initial implementation of certain costs, and in the future in obtaining an additional amount of profit from the activities carried out. In general, the economic effect can be expressed in the form of additional income that the organization can receive through additional profit, minimizing labor and material costs, increasing production volumes, and increasing the quality of products, expressed in price.
There is no specific formula for the effect, but several different formulas are often used in calculations. So, the total amount of economic effect can be determined as follows:
$Etotal \u003d (NR - SR) - Z$, where:
- $НР$ – new result,
- $SR$ - old result,
- $3$ is the discounted amount of costs for the entire period of implementation and implementation of changes.
The annual amount of the economic effect is determined in accordance with the formula:
$GE \u003d (NR - SR) - Z GO $
$GO$ - the annual standard amount of return on investment.
The value of the economic effect formula
The essence and significance of the formula for calculating the economic effect is to determine the degree of efficiency, which in turn is able to determine the degree of profitability. The effect indicator is considered relative, for this reason it is most often used when compared with the existing standard.
In a general sense, the benefit from the implementation of the effect is characterized by several facts: the costs of the measures taken should be small, the effects of the implementation should be large, preferably maximum, the period during which the effect is expected to occur.
Depending on the nature of the measures taken to increase the effect, its calculation is carried out in different ways. There is no general formula for the economic effect; it is determined according to the sources of obtaining this effect.
If the calculation requires obtaining the annual effect from the implementation of measures, then to obtain the total amount of the effect, it is necessary to multiply it by the number of years that this effect can bring.
Sources of problems effective management in Russian organizations mainly lie in the low quality of management personnel. AT Russian practice a small number of individuals who have good management practices. The bulk of managers receive only theoretical knowledge in universities, without reinforcing them with practice. For this reason, individuals with little life and managerial experience are included in the work.
Another important problem of management efficiency in Russia is the high proportion of corruption at all levels of government. If we consider the practice of management in Western states, then there public managers are separated from the distribution of material wealth. In our country, there is a large proportion of officials who become owners of large fortunes.
Remark 1
The low efficiency of management at the state level is also associated with a large number of managers, since in Russia it is the management of state resources that is profitable and efficient business. At the same time, the sector of private enterprises lacks highly qualified high-level specialists.
If we consider enterprises separately, then the main problem of management lies in the inefficient use of their working time by Russian managers.
Closer to the completion of work on the business plan of the investment project, the overall picture of how effective investments in the event can become in the complex of considered aspects becomes clear. It must be admitted that preliminary and estimated valuation activities require high competence in the field of financial and analytical practice. This is due to the fact that project performance indicators in terms of composition and combinatorics go far beyond the assessment of local investment effects and depend on numerous factors.
Preparatory measures for calculations
The calculation of investment project (IP) performance indicators is based on the information base prepared by the entire course of the preparatory and actual planning work. The quality of the original and primary processed information is of paramount importance. In second place is the type of project corresponding to the stage life cycle the designer, on the third - the types of efficiency under consideration, etc. An important role is played by the ratio of the effects of various stages of the project. All this, to one degree or another, affects the algorithm for preparing for calculations, calculations and conclusions based on their results.
Types of performance indicators
Criteria for the successful implementation of project performance evaluation have evolved significantly over the past decades. Qualitative and quantitative characteristics of the financial and economic orientation in their expression absorbed the basic postulates financial management, Enterprise AHD, data estimation methods management accounting. But the central place in them is occupied by the theory and practice of investment analysis, which is also subject to evolution towards a systematic approach. Of fundamental importance are Guidelines on the evaluation of the effectiveness of investment projects (II edition), issued in mid-1999.
It is these recommendations that lay the foundation for understanding the analysis of investments in fixed assets from the standpoint of a holistic view. Versatility allows you to come close to the division of performance indicators into types, based on the target orientation of the analysis. The purpose of the analysis, of course, depends on the request of stakeholders who want to find an acceptable decision to participate in or start the implementation of a unique task.
However, in addition to the target orientation for the classification of indicators, other criteria can be applied, such as:
- the nature of the results and costs, among which social and environmental effects, for example, cannot be ignored;
- the method of using the time factor, which determines a number of possible distortions in the value of the benefits and costs received from IP;
- the period of accounting for results and costs for the purposes of performance evaluation;
- type of summary indicator;
- the subject of IP efficiency evaluation.
The criteria presented are not exclusive. Among them, two stand out (by the target and by the subject of assessment), for which the signs of dividing the indicators make it possible to find the characteristics that determine the weighted decision. The classification model of performance indicators is shown below.
Classification of project performance indicators
Local indicators of investment efficiency (NPV, PI, IRR, MIRR, PP, DPP) on our website are given detailed attention in separate thematic articles. We have characterized the types of IP effectiveness in the material devoted to. Let me remind you of the main types of performance indicators, divided by target orientation. These are specialized evaluation criteria:
- public efficiency of IP;
- commercial effectiveness of the project;
- the effectiveness of the company's participation in the investment event;
- the effectiveness of investing in the company's shares;
- budget efficiency;
- efficiency from the perspective of higher-level structures.
Algorithm for preparing and calculating indicators
Formation process information base for the calculation of evaluation indicators IP is the result of the implementation of measures to develop a business plan and covers almost all of its stages. It is executed iteratively, has many cycles in which you can “circle” for a very long time, increasing the quality of numbers by taking into account an increasing number of influencing factors. It's not worth getting into it. We will consider the algorithm for preparing financial and economic information without taking into account cyclic dependence, so as not to turn the article into a long and confusing story. In the center of the section, a diagram of a typical algorithm for preparing data for efficiency analysis is presented.
Step one
Formation of the planned and normative foundation for calculating the main items of the revenue and expenditure parts of the project throughout its entire length (in the diagram, fragments of the step are highlighted in light blue). Qualitative and quantitative parameters of sales, required equipment, construction and installation works, budgetary and regulatory platform are collected and consolidated. Analysis of statistics and standards (for an existing enterprise), benchmarking (for a newly designed business) are of lasting importance in order to then have integral characteristics of IP. Consumption rates for goods and materials, their stocks, labor and technological standards, tax model and prices - all this is necessary for budget planning and subsequent assessment.
step two
Preparation and rechecking of key parameters of the dynamics of project events. At the same time, the accrual method, traditional for economic practice, is used first. This step involves a sequence of planning steps following values with a certain logic for the formation of information blocks.
- The volume of production and sales revenue before the start of the project, during the implementation of the project and after its completion.
- Amounts and schedule of capital investments.
- Dynamics of changes in the residual and average annual value of non-current assets (fixed assets, intangible assets) of the company in connection with the implementation of IP. It naturally implies the possibility of calculating the amount of depreciation and property tax.
- Rolling up current costs economic activity subject in connection with the implementation of IP in the calculation of the cost of planned products (services).
- Based production program project and sales plan, the formation of cost structures for the settlement periods of activity, up to the planned reporting periods.
- Calculation of the amount of investments in the stock of circulating material assets, as well as sustainable liabilities, such as, for example, wage arrears to staff, reserves for future payments, etc.
- Calculation of planned values of profit in its standard forms and amounts of income tax planned for payment in accordance with the requirements of the legislation.
Scheme of the algorithm for preparing for the calculation of IP performance indicators
Step Three
Development of three main project budgets: income and expenditure budget (BDR), balance sheet budget (BBL) and financial and investment budget (FIB or cash flow plan) of the project. The main budgets are inextricably linked not only with each other, but also determine the possibility of calculating two key groups of performance indicators. These include parameters of business reliability in the conditions of ongoing work on the project and indicators of economic efficiency of investments.
Step Four
The choice of compositions of indicators and the actual implementation of their calculations.
Financial budgets as sources of calculations
As we noted earlier, the forms and methods for assessing the economic efficiency of investment projects are based on the data of the three main budgets. The first budget in its structure repeats the content of the income statement. This form serves to illustrate a company's comparable revenues arising from its manufacturing and sales sector and expenses over comparable time periods. Naturally, they should be considered in relation to the main processes implemented in connection with the planned investments.
It is worth noting that the actual financial result is an independent indicator involved in a comprehensive assessment of the effectiveness of IP. Its absolute values have their own value both for the design organization and for the investor, even up to the moment of refining the profit in such relative forms as, for example, profitability. In the traditional context, the financial result is used in the analysis of the effectiveness of economic activity and to search for reserves to increase it through an itemized analysis of income and expenses.
The calculation of income tax (USNO tax, if the business entity is planned (is) on a simplified system) should be carried out taking into account all the nuances of current legislation. In general, tax planning has a significant impact on the effectiveness of the project, so it is advisable to involve professional tax consultants for this work. I'm not talking about the legal model, which is an integral part of tax planning and provides, albeit small, but quite definite opportunities for economic maneuvering.
Balance sheet budget - the second main form financial plan project. It is a table with two parts. In the first of them, according to a given structure, the balances of funds and their placement are presented, and in the second - the balances of sources of funds. Balance - a static form of assessing the financial condition of the company. This distinguishes it from the profit and loss budget and the cash flow budget, which are dynamic plans of income and expenses (cash inflows and outflows). For the purposes of evaluating the effectiveness of the balance sheet budget, it is sufficient to develop it on an enlarged basis, at least at the level of a typical structure of assets and liabilities.
In the article on the issue of planning the financial and investment budget (plan for the movement of the DS) of the project, enough attention is paid. This model of planned project cash flows is the main document for investment analysis and determination key indicators efficiency. The model is based on the notorious Cash Flow methodology. There are a number of significant differences between this approach and the accrual method that separate the FIB from the BDR. The main difference is in depreciation, which is absent in cash flows.
Calculation of profitability and turnover indicators
As we remember investment project goes through three main stages: pre-investment, investment and operational. Accordingly, when evaluating the effectiveness of the project, it is advisable to consider two groups of performance indicators.
- Performance indicators of the operational stage and indicators of the financial condition of the company (data sources: BDR and BLL).
- Investment efficiency indicators calculated on the basis of financial and investment budget data (according to the cash flow method).
The first large group of indicators is often referred to by financiers as "reliability criteria" for doing business. This means that the project should not damage the financial condition of the company, undermine its stability, independence, solvency, and lead to a decrease in profitability. In their pure form, these indicators cannot be considered as evaluating efficiency in its literal sense. However, from the standpoint of project evaluation as a holistic phenomenon, they are certainly included in the complex of system parameters for IP evaluation.
To implement the settlement complex of the first group, only quantitative criteria of financial management are used. Financial reliability includes such integral characteristics as profitability, financial condition criteria, break-even point calculations and financial leverage. Profitability is the most accessible, but very informative parameter of this group. There are several types of profitability and turnover related to the same number of indicators:
- return on assets (ROA);
- profitability equity(ROE);
- return on investment (ROI, ROIC, ROACE);
- return on invested capital (ROP);
- return on sales (ROS);
- asset turnover ratio (TAT);
- inventory turnover index (ITR).
To the greatest extent, we will be interested in several of the parameters presented above. One of them is devoted to a separate article about. The most recent measure of return on investment is return on average capital employed (ROACE). Not less important for implementation integrated assessment efficiency has the indicator ROP (return on invested capital). It characterizes the company's ability to create profit in relation to the project, regardless of how it is financed. This parameter can be calculated using the formula below.
Return on Invested Capital Formula
Financial indicators and additional analytics
The project is associated with current and prospective financial condition companies. Investments are not always able to bring benefit to the enterprise-designer. With carelessness, his financial condition may be subject to a number of risks of worsening credit history and even bankruptcy. Therefore, special criteria for risk-free implementation are used in the analysis. investment investment funds in IP. They define five subgroups of indicators, for the calculation of which the information of the BBL and BDR of the project is used.
The first subgroup is responsible for assessing the solvency of the company. Under it we will understand the ability to meet the existing long-term obligations of the enterprise without the need to liquidate long-term assets. These indicators just allow us to assess the risk of the threat of bankruptcy. These include the following criteria.
- DAR (Dept Ratio to Assets Ratio). The ratio of a company's total liabilities to its total assets, showing how much the company's assets are supported by borrowed capital. The formula below allows you to calculate the indicator.
- DER (Total dept to Equity Ratio). The ratio of borrowed funds to the company's own funds shows how many total liabilities of the company account for one ruble of its own funds. In Russia, this indicator is called the coefficient financial independence or financial leverage (see formula below).
- TIE (Times Interest Earned Ratio). Interest coverage index. This is a measure of the company's debt service. In domestic financial management, the indicator is often called the interest coverage ratio (see the formula below).
Formulas DAR, DER, TIE in a comprehensive assessment of IP effectiveness
The second subgroup of indicators is responsible for assessing the company's liquidity. This subgroup includes criteria for current and absolute liquidity. Under the liquidity of assets, we mean the rate at which an asset is converted into cash without a significant loss in value. The first indicator makes it possible to assess the company's ability to meet the requirements for short-term liabilities using current assets, and the second - the most liquid of them. Qualitative differences between these indicators are not so great, however, they are. To implement the calculations, the formulas presented below are used.
Formulas of current and absolute liquidity
The remaining three subgroups of indicators are even further from investment analysis than profitability, solvency and liquidity. However, for a holistic view of the reliability of the project for the general condition of the company, they are also important. We are talking about the stability of the company, the state of relations with customers (accounts receivable), break-even analysis and financial leverage. The stability of the company is determined by the dynamics of criteria such as working capital and net working capital. An equally important role is played by the parameters of sales volume at the break-even point and the level of the company's profit margin in connection with the planned IP. Finally, the effect of financial leverage helps to understand how the changed capital structure, caused by attracting additional sources to the project, can affect the financial result as a whole.
Conclusion
In this article, I deliberately limited myself to the subject area of auxiliary tools for a comprehensive assessment of the effectiveness of investments. Many authors focus entirely on the indicators of investment analysis based on the study of cash flows. However, the economic efficiency of the project cannot be limited to 5-6 criteria that use only cash flow. This is due to the fact that in most cases IP is integrated into the entire set of company processes and affects many aspects of the enterprise's economy. A project is a dependent and influencing subsystem.
This position does not in the least detract from the importance of the research complex NPV, PI, DPP, IRR, etc. In addition to the fact that each of these parameters has already been analyzed separately, there is still not a single immersion in through examples of calculations. This is necessary so that together we can clarify the logic of making decisions based on patterns and certain normative recommendations. There is no universal formula for action here. Evaluation of criteria is always a compromise of both interests and conclusions based on the results of dynamic simulation.
What pleases? Very slowly, gradually, recommendations on the development of methods for the normative comparison of numerous parameters begin to appear in the sources. Much can already be taken from the theory and practice of financial management today. For example, the same reference values for liquidity, independence, stability, etc. And, of course, from the standpoint of practice, the challenge is financial directors: regularly benchmark and build the analytical capacity of financial ratios. Both financial analysis of an individual company and an assessment of the economic efficiency of an investment project in a localized format will only benefit from this.
There is a system of indicators to assess the effectiveness of the enterprise. For a long time, there was a discussion among economists about which indicator can be used to most objectively determine the efficiency of production. Various formulas have been proposed, but each of them has its positive and negative sides, advantages and disadvantages. And since none of the proposed indicators can act as a universal one, a system of indicators was introduced to assess the efficiency of production, in which indicators for assessing and planning an increase economic activity were grouped into four groups.
Thus, economic efficiency is considered as a multidimensional phenomenon:
General indicators of production efficiency;
Labor efficiency indicators;
Indicators of the effectiveness of the use of fixed assets and working capital;
Usage performance indicators material resources.
General indicators of production efficiency. The group of general indicators includes:
c) indicator of costs per 1 ruble of commercial output;
The most important indicators of final results and overall production efficiency in a market economy are profit and profitability (profitability). Profitability management (planning, justification and analysis-control) are at the center of the economic activity of enterprises operating on the market. The level of profitability depends primarily on the amount of profit and the amount of costs and resources used. Profit under market conditions is final goal and driving motive of production at the enterprise. The optimal addition to the profit indicator would be the allocation specific gravity increase in profits obtained by reducing costs. When assessing the amount of profit, gross (balance sheet) profit, profit from the sale of products, and net (estimated) profit are distinguished.
Gross(balance sheet) VP profit , in rubles is determined based on the results of all production and economic activities based on the balance of income and expenses according to the formula:
VP \u003d Pr + Ppr.r + Pvn.op + Dts.b., (9.1)
where Pr - profit from the sale of products of the main activity;
Ppr.r - profit (loss) from other sales of goods and services, auxiliary products Agriculture, sale of surplus inventory items, as well as the sale of works and services of a non-industrial nature (vehicles, logging, sales to the side of electricity, etc.), rub.;
Pvn.op. - profit (losses) from non-sales operations - fines, penalties, forfeits, losses from writing off bad debts, natural disasters, etc., rubles;
dts.b. - income from the sale of securities (shares, bonds), rub.
Profit from the sale of products Pr, in rubles, is calculated by the formula:
Pr \u003d RP - C, (9.2)
where RP is the volume of products sold in current wholesale prices, rubles;
C - the cost of production and sale of products, included in the cost, rub.
Pure(estimated) PE profit , remaining at the disposal of the enterprise, is determined by the formula:
PE \u003d VP - Pr - Apl - N -% DK, (9.3)
where VP - gross (balance sheet) profit, rub.;
Pr - profit from the sale of products, rub.;
Apl - rent, rub.;
H - taxes, rub.;
%DK - the amount of payments on long-term loans, rub.
A comprehensive, integral indicator of the economic efficiency of the production and economic activities of an enterprise is profitability.
Profitability expresses the absolute or relative (as a percentage) amount of profit per 1 ruble running costs or per 1 ruble of resources used (basic production assets, working capital, own and borrowed capital).
Distinguish, first of all, the general (cumulative) and estimated profitability. General profitability Rtot , as a percentage is determined by the formula:
Рtot = (Pbal) ×100 / (OPF + NOS), (9.4)
where Pbal - the amount of balance sheet (gross) profit, rub.;
OPF - cost of fixed production assets, rub.;
NOS - the cost of normalized working capital, rub.
In addition, when planning, evaluating and analyzing production efficiency, the profitability of current costs, the profitability of used (accumulated) production resources, and the profitability of capital investments (investments) are calculated.
The cost indicator for 1 ruble of marketable output 3 1 rub.tp is an important generalizing indicator of the cost of production, which is beneficial in that, firstly, it is very universal, and secondly, it clearly shows a direct relationship between cost and profit. This indicator is determined by the formula:
Z 1rub.tp \u003d Zpr / TP, (9.5)
where Zpr - the total cost of production and sales of products, rub.;
TP - the cost of marketable products in current prices, rub.
In the indicator of costs per 1 ruble of marketable output, all current production costs are concentrated, caused by the development and sale of all marketable products - basic and non-core, comparable and incomparable. The difference between 1 ruble of marketable output and the cost of it shows the amount of profit received by the enterprise from each ruble of marketable output. The level of these costs also reflects the level of organization of production.
Labor efficiency indicators.
The group of indicators of labor efficiency includes:
a) labor productivity;
b) growth rates of labor productivity;
c) the complexity of products;
d) an increase in the volume of production as a result of an increase in labor productivity;
e) relative economy of living labor.
The next group of functional indicators are indicators of the use of fixed production assets, working capital and capital investments, which include:
a) return on assets;
b) capital intensity;
c) capital-labor ratio;
d) relative savings in fixed production assets;
e) relative savings in working capital;
e) turnover of working capital;
The group of functional indicators characterizing the use of material resources includes:
a) material consumption;
b) relative savings in material costs;
c) reduction in the specific consumption of materials;
d) material costs per 1 ruble of marketable products.
The creation of a formula for calculating economic efficiency could greatly facilitate the life of enterprises. In order to increase profits, every company is trying to improve the quality of products and increase their income or invest money in manufacturing process in order to reduce costs.
Types of efficiency
Efficiency falls into two categories. The first is economic. The second is socio-economic.
With economic efficiency, the criterion is the company's ability to maximize its profits. The criterion of socio-economic efficiency is the level of satisfaction of the interests and needs of the population.
Classic efficiency calculation
The general formula for calculating economic efficiency is as follows:
EkEf \u003d R / Z, where
ЕкЕф - economic efficiency;
Р - the result received from investment;
Z - the costs incurred to achieve the result.
This formula can be used to calculate the cost-effectiveness of activities whose duration is designed for a short period of time. In another case, this indicator is not able to reflect the feasibility of investments, since additional variables appear in the formula that are not included in the above formula.
Absolute Efficiency
There is also a formula that displays the absolute efficiency. It looks like this:
EE abs \u003d (Eph 1 - Eph 0) / (I + K * K n), where
ITS abs - economic efficiency;
Ef 1 - the overall result after the events;
Eph 0 - the result before the events;
I - total costs;
K - capital investments for holding events;
Regulatory coefficient
This index shows what the minimum allowable efficiency in a particular area can be. The parameter is the same for all types of activities in a particular industry, but may differ depending on the area.
The value of the coefficient is in the range from 10 to 33 percent. In trade, this figure is 25%, in the industrial sector - 16%.
Efficiency in the use of factors of production
Any enterprise has labor resources, fixed and working capital. Without them, the production process is unrealistic. Companies are also trying to improve their investment performance to improve performance.
To calculate the effectiveness of the use of each of these factors, their own methods are used. Some of them are based on the same principles.
Staff efficiency
In order to measure how effectively an enterprise uses its workers, two parameters are used. The first is production. The second indicator is labor intensity. The output is calculated as the ratio of the number of goods produced to the cost of personnel:
B = O / Z, where
B - production;
The labor intensity indicator is the reverse of the previous indicator and displays how much money needs to be spent on the personnel of the enterprise in order to produce one unit of output.
T \u003d W / O \u003d B -1 \u003d 1 / B, where
T - labor intensity;
B - production;
O - the volume of products manufactured at the enterprise;
Z - the costs incurred by the enterprise for labor resources.
Formula for calculating economic efficiency for labor resources companies can be displayed as follows:
EE tr \u003d ((O 1 * C - Z 1) - (O 0 * C - Z 0)) / And, where
ITS tr - economic efficiency for labor resources;
О 1 - the volume of manufactured products after investment in personnel;
C - the price of products;
О 0 - the volume of product sales before investment in labor resources;
Fixed assets (PF)
There are two main parameters for calculating the efficiency of using fixed assets: capital productivity and capital intensity. The return on assets is calculated as the ratio of the value of all products that were produced by the enterprise within one year to the average annual value of funds.
F o \u003d VP / C this year, where
VP - all products of the company in monetary terms (including the cost of semi-finished products and work in progress);
F o - return on assets;
Since this year - the cost of the OF in the calculation for 1 year on average.
The index of capital intensity is the inverse of the return on fixed assets. You can determine the value of the coefficient using several formulas.
F e \u003d (F o) -1 \u003d 1 / F o, where
F e - capital intensity;
F o - return on assets.
In the event that the return on fixed assets (OS) is not found, capital intensity can be determined as follows:
F e \u003d (S.g. / VP), where
F e - capital intensity;
VP - the value of gross output in monetary terms;
Since this year - average annual cost fixed assets.
All companies are trying to reduce capital intensity and increase capital productivity. An example formula for calculating the economic efficiency of investments in fixed assets is presented below:
EE of \u003d ((O 1 * C 1 - Z 1) - (O 0 * C 0 - Z 0)) / And, where
ITS of - economic efficiency for fixed assets;
О 1 - the volume of manufactured products after investment in OF;
C 1 - the price of products after investment;
P 2 - the price of products before investing in fixed assets;
Z 1 - the cost of production after the events;
О 0 - sales volume before investments in fixed assets;
Z 0 - the cost of production before the events.
Working capital (Ob. C.)
To determine the effectiveness of the use of working capital of the enterprise, three indicators are used:
- turnover ratio;
- turnover period;
- load factor FROM.
Turnover ratio C. Is the same as the return on assets for the OS. It is calculated according to the formula:
K about \u003d RP / C obs, where
K about - turnover ratio;
The workload ratio is the inverse of the turnover ratio:
K s \u003d (K about) -1 \u003d 1 / K about \u003d C obs / RP, where
K s - load factor;
K about - turnover ratio;
RP - goods sold by the company in monetary terms;
C obs - the average amount of the balance Obs. FROM.
The turnover period is the number of days that it takes for working capital to make one full turnover, calculated as follows:
T about \u003d D / K about \u003d D * C obs / RP, where
T about - turnover time;
D - the number of days of the analyzed period;
K about - turnover ratio;
RP - goods sold by the company in monetary terms;
C obs - the average amount of the balance Obs. FROM.
The formula for improving the use of working capital is based not so much on additional profit, but on cost reduction.
EE obs \u003d E y / I, where
ITS obs - economic efficiency of working capital;
E y - conditional savings of working capital;
And - the size of investments.
Economical effect
Cost-effectiveness formulas have found widespread use among companies that make short-term cash injections to improve certain aspects of their operations. The formula for its calculation is as follows:
Eph \u003d D - I * K, where
Ef - economic effect;
D - income or savings from events;
I - the cost of events;
K n - normative coefficient.
Advertising effectiveness
Advertising is a combination marketing tools, the purpose of which is to disseminate information about goods, services, people, companies, as well as to attract customers. The formula for calculating the economic efficiency of advertising displays the result obtained after the advertising campaign. The formula for determining the coefficient looks like this:
EE p \u003d (VD 1 - VD 0) / And, where
When calculating the effectiveness of the use of advertising funds, it is very difficult to determine how much gross income businesses because of advertising. There is no guarantee that the company's revenue would not have increased if the company had not advertised itself or its product. Despite this, the cost-effectiveness of advertising is still considered.
Economic efficiency of the company
The main indicator in the work of the company is net profit, the part of the proceeds that remains after all costs are deducted and all taxes are paid. There is no point in increasing revenues if costs increase at the same or even greater rate.
Thus, the classical calculation of economic efficiency cannot always show how the proposed measures will eventually affect the final result. This is due to the fact that it is calculated as the ratio of the result to the costs only to achieve it. In cases where the result is gross income, the economic efficiency indicator is not accurate, as it does not take into account the possible increase in production costs.
The formula for calculating the economic efficiency of an enterprise can be expressed as follows:
ITS n \u003d (PE 1 - PE 0) / And, where
EE n - economic efficiency of the enterprise;
PE 1 - net profit after investment;
BH 0 - net profit before investment.
Long-term investment project
All of the above methods of calculating efficiency can only be used for short-term activities (up to one year). AT long term the calculation formula does not take into account discount factors that make it possible to calculate the feasibility of holding, taking into account alternative incomes.
As such, there is no formula for calculating the economic efficiency of a project that is designed for a long period of time. The feasibility of an investment is calculated on the basis of the net present value, as well as the payback period, which shows how long it takes for the investment project to pay off in full and start making a profit.
Net is calculated as the sum of all payments and income from the investment, taking into account discount factors for each period. The NTS formula can be represented as follows:
PTS = (CF / (1 + p) 1) + (CF / (1 + p) 2) + (CF / (1 + p) 3) + ... + (CF / (1 + p) n), where
NPV - net present value;
CF - payment flow (difference between income and expenses);
p - calculation percentage;
n - the term of the investment project.
This parameter shows how efficiently the investment funds are used. If the NPV is higher or equal to zero, this means that it is expedient to carry out an investment project. In the case where the net present value is shown to be negative, the internal interest calculation should be done to see how much the money has paid off.