Capital productivity is calculated using the following formula. Formula for calculating capital productivity of fixed assets: you need to be able to choose

How are the capital productivity and capital intensity formulas useful for an entrepreneur? Knowledge of these economic indicators provides a complete objective picture of the efficiency of using equipment and other means of production. Without high-quality analytics, it is impossible to imagine success in the market. We tell you how to calculate capital productivity and capital intensity using specific examples, and whether they have a normative meaning.

What is capital productivity

Among all the economic indicators of an enterprise, capital productivity of fixed assets has a very important place. This is a ratio that reflects how efficiently a company uses all its means of production. That is, real estate, land, equipment, transport. The meaning of the term is actually inherent in its name: what kind of “return” does a business get from its funds? A synonym for this term is literally translated from English “fixed asset turnover ratio”.

The capital productivity indicator characterizes the quality of use of the means of production. It can be calculated for the entire enterprise, as well as for a department or, on the contrary, for a network of companies. This way you can find out how much revenue is generated per unit of fund value. The unit of measurement is percentage (for this you need to multiply the calculation result by 100%).

Among all indicators of the economic efficiency of an enterprise, capital productivity and capital intensity are of fundamental importance

Normative value

Enterprises monitor capital productivity over time, since this indicator itself does not have standard values. Under normal conditions, the coefficient increases over time: that is, the quality of use of fixed assets of production is growing.

It's a good idea to compare one business's capital productivity ratio with its competitors in the same industry. For example, compare two manufacturers of clothing, shoes or building materials. But the problem is that the data required for calculations is usually protected by trade secrets. It's not easy to recognize them. Therefore, you can limit yourself to tracking the indicator for your company and worry about its positive dynamics. It is stable growth that is the normative value of capital productivity.

Calculation formula

How to calculate capital productivity? The formula is quite simple and requires knowledge of only two indicators: revenue for the reporting period and the average annual cost of fixed assets. Everything is elementary - it is the ratio of revenue to the average annual value of funds.

Capital productivity= revenue: average annual cost of funds

or = revenue: ((value of funds at the beginning of the year + value of funds at the end of the year) : 2)

Balance calculation formula= line 2110: ((line 1150 at the beginning of the year + line 1150 at the end of the year) : 2)

What revenue is is, in principle, clear. This is all the money earned by the company. But questions may arise regarding what the average annual cost is. Sometimes the initial cost of the equipment is used for calculations. For example, an enterprise bought a machine for crumb rubber for 170 thousand rubles and year after year uses this initial cost in the formula. It is not correct. Equipment is gradually depreciated, its cost is constantly decreasing. Using residual value in this case is more correct.

The average annual cost is obtained by adding the fund value at the beginning and end of the year and dividing the result by 2. Why do you need to use the average annual cost for the calculation? This option is most accurate when it comes to a long period of time. If we take cost data only at the beginning of the year, the coefficient will be underestimated. If only at the end, it will be overpriced. Using the average annual cost will help maintain the necessary balance.

Calculation example

Let's consider how to find capital productivity using a specific example. This is actually a very simple operation. Let's assume that in the first year of operation the company earned 2.5 million rubles, and in the second - 3.1 million rubles. The initial cost of the funds was 450 thousand rubles, which by the end of the first year was reduced to 420 thousand rubles, and by the end of the second - to 380 thousand.

Example of calculating capital productivity:

1. In the first year = 2,500,000 / ((450,000 + 420,000) / 2) = 5.74.
2. In the second year = 3,100,000 / ((420,000 + 380,000) / 2) = 7.75.

Thus, capital productivity shows that in this example the enterprise effectively uses all its means of production. By the end of the second year, the ratio had increased by 35%.

Brief information and capital productivity formula

What is capital intensity

Another important coefficient characterizing the efficiency of use of means of production is called capital intensity. This indicator is considered opposite or inverse to capital productivity. Capital intensity shows how much of the cost of funds falls on 1 ruble of finished products.

We have already learned that capital productivity must increase, but capital intensity must decrease. It is the decrease in the coefficient, that is, the reduction in the cost of funds for products, that is a normative value, a positive trend. If the value of the indicator in the two periods being compared has increased, the enterprise is unreasonably planning the production process. If at the same time the capital productivity decreases (which is almost inevitable, since the indicators are inverse to each other), the risk of losses arises.

How to calculate the indicator

Now let's look at how to find this indicator and interpret the calculation results. The capital intensity formula is the reverse of capital productivity calculations and uses the same data.

Capital intensity= cost of fixed assets / revenue

or = ((value of funds at the beginning of the year + value of funds at the end of the year) / 2) / revenue.

However, calculations alone will not provide any information. They need to be interpreted in dynamics; the calculation results should decrease with each new reporting period. For example, let's calculate and analyze the data from the previous example:

• revenue - 2.5 million at the end of the first year and 3.1 million at the end of the second;
• the cost of funds is initially 450 thousand, at the end of the first year 420 thousand, at the end of the second 380 thousand.

We calculate the capital intensity:

1. For the first year = ((450,000 + 420,000) : 2) : 2,500,000 = 0.174.
2. For the second year = ((420,000 + 380,000) : 2) : 3,100,000 = 0.196.

Based on the results of the calculations, it became clear that the capital intensity has increased. This is an alarming indicator. This means that enterprises began to spend more means of production per 1 ruble of production. It is necessary to review the work process, identify the cause of inefficiency and eliminate it.

Brief information and capital intensity formula

Factor analysis of capital productivity

Factor analysis is a method for studying and characterizing relationships between variables. It can also be used to analyze the coefficients described above. The size of capital productivity and capital intensity is influenced by the same set of indicators, namely the enterprise’s revenue and the cost of funds. These are the so-called direct factors of influence, since it is from them that the value of the coefficients is formed.

But if the residual value of assets is a fairly stable characteristic, which is difficult to manage, revenue can be influenced in several ways. For example, hold promotions with discounts, reduce product costs, and increase prices. Everything that affects revenue indirectly affects capital productivity.

The capital productivity of fixed production assets in factor analysis is determined by the formula for which you need to know:

T - average amount of technological equipment;

B is the operating time of a piece of equipment;

Sun - average hourly output in value terms;

СС - average annual cost of equipment.

The formula is: (T x B x Vs) / SS.

Capital productivity management

Now that we have looked at how to calculate capital productivity, we need to figure out whether it can be managed. The value of the coefficient should increase over time, that is, the efficiency of using funds should increase. The formula for calculating this indicator includes revenue - the total amount of money earned by the enterprise. Therefore, the most obvious option is to increase income. What are the options:

• increase labor and equipment productivity;
• increase equipment utilization;
• automate the work process, use new technologies and look for options to optimize all processes;
• work to reduce costs;
• stimulate sales with advertising, promotions, discounts;
• improve the quality of goods and create new competitive advantages.

Conclusion

This material provides information in accessible language on how to determine capital productivity and capital intensity ratios. These are inverse indicators that characterize the efficiency of an enterprise's use of means of production. Capital productivity should increase, and capital intensity should decrease. Both indicators are calculated based on data on revenue and the cost of capital goods. These coefficients can not only be calculated and compared in dynamics, but also directly controlled. For example, increase revenue and reduce costs.

Fixed assets and the specifics of their operation by the company are of global importance for overall development. Improving the quality of these elements will be the optimal solution to the problems and difficulties of production: increasing the volume of products that are produced through the use of equipment, reducing costs used to form production costs, increasing labor productivity.

Such changes are designed to have a tremendous impact on return on capital, and ultimately on the profitability of operations. For these goals to become a reality, firms must regularly conduct analytical studies of the use of funds by calculating general ratios, in particular, return on assets.

Capital productivity shows the level at which the turnover of fixed assets occurs within the enterprise. Thanks to this indicator, the effectiveness of their use in the production process is determined.

Capital productivity is an indicator of the efficiency of fixed assets

The influence of various factors on the capital productivity indicator

The success of a company is influenced by a number of factors, capital productivity is the first of them. But it is also influenced by various parameters, such as:

• armament and reconstruction;
• perfect use of available capacities;
• reduction in cost per unit of power;
• changes in the structure of funds;
• market development factors;
• quality of the goods offered.

The profitability of the company depends on these phenomena.

Carrying out settlement actions

This indicator can be applied at different economic levels. Capital productivity demonstrates the same phenomena, in particular the efficiency of production, in relation to the capital used, but the calculations are carried out on different scales:

• company level;
• industry level.

In the first case, the volume of the product produced is applied. In the second - output within the framework of the country's economic position (GDP). At both levels there are differences in the calculation actions carried out, however, the indicator is general and characterizes the same phenomenon.

Note: The main purpose of the indicator is to demonstrate the volume and cost of the product per unit (ruble).

The capital productivity formula looks like this.

The influence of the structure of fixed production assets on capital productivity is due to the fact that different categories of fixed production assets are unequally actively involved in the production process. From here when calculating capital productivity from fixed production assets are allocated active part: working machines and equipment.

Purpose. Using the online service, an analysis of the impact on capital productivity of changes in the specific gravity of the active part and changes in the active part of fixed production assets is carried out.

Instructions. Enter the required data: production volume, average annual cost. Click Next. If it is necessary to carry out more detailed capital productivity analysis, then you need to use this service.

Return on assets online

It is also possible to determine capital productivity indices of variable and constant composition and the impact of structural changes, savings (overexpenditure) of fixed assets due to improvement (deterioration) of their use.

See also factor analysis of changes in production volume

Example. Production of products, availability and use of fixed capital

Index	Plan	Fact	Changes	V %
1. Volume of production	145600	197000	51400	35.302
2. Average annual cost of OPF, million rubles, F	87400	94350	6950	7.952
2a. incl. active part, million rubles, Fa	12340	15780	3440	27.877
3. Capital productivity, rub. (page 1/page 2), FO	1.666	2.088	0.422	25.336
4. Capital productivity of the active part, rub. (page/page 2a), FOa	11.799	12.484	0.685	1.058
5. Share of the active part in the total cost of fixed assets, in fractions of units, da	0.141	0.167	0.0261	1.185

From production calculations it is clear that the capital productivity of the general public fund increased by 25.336% and:
by 0.307 rub. by increasing the share of the active part in the total cost of fixed assets: ∆FO da = 11.799 * (0.167 - 0.141)
by 0.115 rub. – due to increasing the return on the active part of fixed assets: ∆FO a = (12.484 - 11.799) * 0.167
Using these data, you can also determine what impact the indicators of use of fixed assets and their structure had on changes in production volume.
The table shows that the total change in production volume amounted to 51,400 thousand rubles. due to:
due to a change in the volume of fixed assets by 11578.032 thousand rubles: FO a da a (F 1 - F 0) = 11578.032
due to the fact that the capital productivity of the active part increased by 1.058%, this led to an increase in the volume of production by 10811.345 thousand rubles: (FO 1 - FO 0) da 1 F 1 = 10811.345

The performance of a company is determined by a number of important financial instruments, one of which is the capital productivity indicator.

Return on capital assets: concept and meaning

In essence, capital productivity is a value showing the amount of income per 1 ruble of the cost of fixed assets directly or indirectly involved in the process of producing products or providing services. This indicator is involved in the analysis of the overall efficiency of the company, and is also used to assess the productivity of using the OS in production.

As a rule, capital productivity is considered in dynamics, comparing several time periods. This allows the economist to state the complete involvement of fixed assets in the work process, identify unused objects, the implementation of which will only improve the condition of the company, or control the processes of commissioning new capacities. Analysis of capital productivity reveals investment bottlenecks and helps determine an effective strategy for future investments in fixed assets.

Standard values ​​for the indicator have not been established, but its decrease compared to previous analyzed periods is a negative trend, indicating a decrease in the financial stability of the company in general and a decrease in the efficiency of using OS in particular. Each industry determines its own industry average levels of permissible capital productivity values, and exceeding them by an individual company indicates an increase in competitiveness, and a decrease becomes an indicator of its decrease, although the introduction of new capacities or the reconstruction of existing ones can also lead to a temporary drop in capital productivity.

Capital productivity: formula for calculating the balance sheet

To calculate the indicator, key reporting values ​​are required - the amount of income received (usually revenue, since it reflects sales results, sometimes profit) and the cost of fixed assets (usually the full cost, but with various analytical actions available, idle infrastructure facilities or large volumes of unfinished work - only directly used). The separation of funds involved in the work process makes it possible to determine production capital productivity, the value of which is necessary for a basic analysis of production efficiency.

Thus, when calculating capital productivity, they use indicators of the cost of fixed assets according to the balance sheet (line 1150 of the balance sheet) and revenue according to the financial results report (line 2110 of the financial statement).

Capital productivity - balance formula:

F o = page 2110 / page 1150

To obtain a more accurate result, experts recommend using the fixed asset value indicator not at the end of the reporting period, but an average value, for example, the average annual cost, which is calculated by dividing the fixed assets amount by 2 at the beginning and end of the year.

Capital return, capital productivity and capital intensity

Another important indicator of the rational use of assets in a company is capital profitability, i.e. the ratio of book profit to the average annual cost of fixed assets, showing the amount of profit per 1 ruble. value of non-current assets. Capital return is calculated using the formula:

F r = line 2400 OFR / ((line 1100 balance sheet at the beginning of the year + line 1100 balance sheet at the end of the year)/2).

In economic analysis, there is also an indicator inverse to capital productivity - capital intensity. It shows the cost of the OS per 1 ruble. manufactured product. A decrease in the value of capital intensity is a positive trend in the development of the company, indicating the rational use of production assets. The formula for calculating capital intensity is the ratio of the cost of fixed assets to the income received, i.e. is the inverse of the capital productivity formula:

F e = page 1150 / page 2110.

Calculation of capital productivity of an enterprise using an example

Let's calculate the capital productivity indicator based on the company's reporting data:

Average annual cost of OS:

For 2016 – 1387 tr. ((1236 + 1538) / 2);

For 2017 – 1494 tr. ((1538 + 1450) / 2);

For 2018 – 1376 tr. ((1450 + 1302) / 2).

Capital productivity of fixed assets:

In 2016 – 2.60 rubles. (3600 / 1387);

In 2017 – 2.54 rubles. (3800 / 1494);

In 2018 – 3.05 rubles. (4200 / 1376).

for 1 rub. The company's OS income was 2.60 rubles in 2016, 2.54 rubles in 2017, 3.05 rubles in 2018. Fluctuations in the capital productivity indicator - a decrease in 2017 and an increase in 2018 compared to 2016 - may indicate the introduction of new equipment or reconstruction of equipment in operation. This is evidenced by an increase in the cost of fixed assets and a slight decrease in the return on funds (to 2.54 rubles). Increasing the indicator to 3.05 rubles. in 2018 indicates an increase in output, labor productivity or rational use of operating systems (in a complex of factors or individually).

When a company has infrastructure facilities that are not used in production, but socially necessary, the economist will have to calculate the capital productivity minus the cost of these fixed assets in order to determine the capital productivity of fixed assets used in the production of goods.

Let’s supplement the previous calculation with data: the average annual cost of unused fixed assets in 2016 is 320 thousand rubles, in 2017 – 302 thousand rubles, in 2018 – 284 thousand rubles.

Production capital productivity will be:

In 2016 – 3.37 rubles. (3600 / (1387 – 320));

In 2017 – 3.19 rubles. (3800 / (1494 – 302));

In 2018 – 3.85 rubles. (4200 / (1376 – 284)).

The downward trend in production capital productivity in 2017 and an increase in 2018 continues, but the amount of income per ruble of fixed asset cost has increased. This indicator reflects income from operating assets directly involved in production.

There are several indicators that take part in assessing the economic activities of both the state and an individual enterprise for a given period. Within the industry, the indicator will be production output, as well as gross value added. Within economics, the value of gross domestic product is analyzed. The efficiency of using non-working capital is determined by an indicator called capital productivity of fixed assets (FPE).

Tools for analyzing capital productivity indicators

Reasonable use of OS is necessary to raise the level of production within the company, and within the state - the social product and overall national income without additional investments and in the shortest possible time. A rational approach to the use of fixed production assets helps speed up production, reduce the cost of reproducing new operating systems and the costs associated with the production process.

Thus, capital productivity reflects how much profit an enterprise receives from each ruble it has in the form of fixed assets. There is no standard value for the indicator, due to which it is extremely volatile in relation to current inflation, the conditions of the industrial activity of the manufacturing company, the specifics of the revaluation of fixed assets carried out by the organization and other sources of influence.

The indicator demonstrates the degree of profitability of investments made in the company's OS. The size of capital productivity, its growth or decline is influenced by a number of factors, clearly presented in the demonstration below:

The economic result of increasing the level of OS use, as a rule, is an increase in labor productivity. In order to conduct a complete analysis of the capital productivity indicator, it is necessary to create a table that aggregates the input data accompanying the process of operating fixed assets:

Formulas

The 16th line of the table leads to the definition of the formula for calculating capital productivity through the ratio of the cost of product output after deducting VAT and excise taxes to the average amount or total production assets, that is:

FO - capital productivity;

Svp – cost of product release;

Sos – for the analyzed period.

The cost of the released product is often taken from the proceeds from sales and sales. The value corresponds to the value recorded on line 2110 of the Statement of Financial Results “Revenue”, in accordance with Order of the Ministry of Finance of the Russian Federation 3 66n dated 07/02/2010.

For correct calculation of financial assets, it is recommended to take the indicator of the cost of fixed assets not at the end of the analyzed period, but in the form of an arithmetic average for the period of established revenue:

Data on the cost of fixed assets is obtained from analytical accounting reports for account 01 on the basis of Order of the Ministry of Finance of the Russian Federation 3 94n dated 10/31/2000.

In calculations, when using the initial cost of fixed assets, it is necessary to take into account that for correct analysis in the future it will be necessary to ensure the comparability of the calculated data. Such criteria, as a rule, are set by the accounting policy of the enterprise.

It is also worth noting that if the volume of output when calculating capital productivity means not the cost of the manufactured product, but sales revenue, the FO indicator is sometimes called the turnover ratio.

Balance calculation

Sometimes you can see data being used to manipulate the initial cost of an asset, while it is recorded in the balance sheet. Taking into account this approach, it is recommended to initially use the cost of fixed assets minus depreciation in management calculations.

Capital productivity is an indicator related to basic measurements of turnover. Along with the turnover of accounts receivable and inventory, it reflects the planned or actual return on financial investments. Due to the fact that the capital productivity index is calculated by the ratio of revenue for produced and sold goods to another asset, it is considered by companies.

The balance calculation formula determines the share of income in value equivalent attributable to the share of the cost of the fixed assets. When comparing the dynamics of capital productivity over several years in one enterprise or correlating “your” indicators with the coefficients of other similar industries, you can make a conclusion about the effectiveness of using the operating system.

Fixed assets include the basic property of the enterprise:

• buildings, industrial and warehouse complexes;
• motor transport;
• equipment;
• power lines;
• patents, licenses.

To calculate financial statements, 2 forms of accounting are used: a balance sheet to determine the cost of fixed assets and a profit and loss statement as a source of data on the company’s revenue.

The formula for calculating financial statements on the balance sheet is defined as:

line 2110 – revenue according to the enterprise’s report on financial results;

line 1150 – cost of fixed assets according to the balance sheet of the enterprise.

As mentioned above, to correctly calculate the coefficient, the average annual value of the cost of fixed assets is calculated by summing the values ​​of lines 1150 BB of the initial and final periods in arithmetic average terms. Sometimes, instead of the revenue indicator, FI calculations use profit from sales, inserting line 2200 into the formula rather than 2110.

Significance of the indicator

The value of the FO coefficient allows you to evaluate the effectiveness of operating the operating system in order to make a profit. The FI indicator, like other asset turnover criteria, must be considered taking into account the rate of growth or decline, that is, in dynamics over several periods of economic activity to obtain an objective picture of the efficiency of use of fixed assets.

For example, as a result of an unprecedented increase in the cost of fixed assets when launching a new production workshop, there is a possibility of a drop in the capital productivity ratio. Knowing about such dependencies, you should analyze other data related to the operation of the enterprise’s property and types of profit.

When the value of fixed assets changes upward, one should expect a further increase in the capital productivity ratio. Thus, the calculation of the FD indicator contributes to the analysis of vulnerabilities in the investment process and the development of a successful strategy for investing in non-working capital.

Development of your own standards

As noted earlier, there is no universal value for the FD indicator. An organization that takes into account the return on the use of fixed assets must determine its own optimal value of the coefficient that is acceptable in the area of ​​fixed assets turnover. Taking into account the fact that the indicator reflects the nature of the trend, it is advisable to calculate it taking into account the dynamics of several reporting periods, usually by year.

If the ratio decreases, this indicates a decrease in financial stability and efficiency of use. Growth, on the contrary, indicates positive dynamics of these parameters. An excess of capital productivity above the industry average indicates high competitiveness, while indicators below the industry average indicate its decline.

Calculation examples

Measures to increase the FD ratio

Based on the identification of factors that have a positive or negative impact on the efficiency of use of fixed assets, it is recommended to develop measures to improve the performance of the indicator. These include:

• methodical updating of production lines while maintaining capacity at the optimal level for the enterprise;
• production of timely technical re-equipment;
• equipping with modern high-tech facilities;
• construction of new or reconstruction of old facilities to meet changing production needs;
• reduction of downtime of production equipment with constant monitoring of the causes of downtime with the mandatory introduction of scheduled preventive maintenance.

The listed activities, as a rule, are labor-intensive and require the involvement of new personnel. In addition, an increase in the number of planned repairs can slow down the production process and increase the amount of costs with further refusal of customers to place orders.

Activities that increase the production capacity of the enterprise and increase the efficiency of working time include:

• automation of work processes;
• timely professional development of personnel;
• reducing the cost of funds through the introduction of new, less expensive ones.

The listed activities are designed to increase capital productivity by managing the state of the operating system. However, when implementing them, it is worth considering that the FD ratio is influenced not only by fixed assets, but also for the analyzed period. If revenue increases, then, with other indicators remaining unchanged, the capital productivity ratio will also increase.

The optimal measures to increase revenue, as a rule, are the development of a sales network, increasing the competitiveness of the product, searching and developing new markets with the production of marketing activities. By implementing regular, correct analysis of the capital productivity indicator, an enterprise is able to promptly identify vulnerabilities in the use of the operating system and routinely improve the efficiency of its own production.

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