Name
Novozhilov Ivan Mikhailovich
Scholastic degree
—
Academic rank
—
Honorary rank
—
Organization, job position
Krasnodar Cooperative Institute
Web site url
—
Articles count: 2
In the article we consider the methodological
framework for the analysis of asset turnover; critical
assessment of individual provisions of the traditional
methods of analysis of capital turnover; a method to
eliminate the influence of the price factor and the
composition of current assets by results of approbation
of an improved method for analyzing the turnover of
circulating assets and own capital of business entities.
The basis of the theory of capital turnover is the
classic formula of the reproduction of capital by
K.Marx, suggesting the increase of goods, money and
money capital at the last stage of treatment, and
improving the efficiency of the rational organization
of the use, the rational level of concentration. The
higher the speed of capital turnover, the more efficient
its use is. The peculiarity of the process of the
turnover of inventories, working capital is its
dependence on specialization of business entities,
defining the structure of fixed and current assets, ratio
of reserves, participating and not participating in
circulation during the reporting year. However, the
traditional method of analysis of asset turnover,
inventory does not distinguish between reserves for
participating and non-participating in circulation
during the reporting year, which precludes an accurate
assessment of the process of circulation of assets to
make the best management decision for their
formation, to determine an objective rating of the
business entity in its credit scoring. With regard to the
method of analysis of asset turnover, inventory use of
non-participating stocks in circulation during the
reporting year, overstates the average annual total
assets, inventory is the baseline for calculating the
number of revolutions; inflated the average book
value of assets, inventory, reduces the number of
revolutions per year overstates the duration of one
rotation of assets, stock, increases the capacity
revenue (annual turnover) and, therefore,
overestimates the need for assets, inventories, leading
to inaccurate assessment of the release (raising) of
assets stocks
In the article we have given a critical assessment of
credit scoring by American economist D. Duran, we
have grounded the developing of his method for the
domestic economic conditions. The unacceptability of
D. Duran’s method for the analysis of financial
condition of domestic economic entities is explained
by the following reasons: 1) the imperfection of the
hierarchy of indicators of credit scoring, and 2) the
imperfection of differentiation of scoring for the actual
value of the indicators, forming the credit scoring by
groups of firms. In the methodology of D. Duran the
main indicator is a level of credit scoring profitability
of total assets - for the first class of firms, that are the
most financially stable, the authors have given a rating
of "50 points" for the actual value of the profitability
of 30%; the second most important indicator by the
author’s choice is the ratio of current liquidity - for the
actual value of the coefficient "of 2.0 and higher," are
given 30 points to a first-class firms; the third indicator
of the financial condition of firms author has defined
as the ratio of the financial independence - for the first
group of firms the actual value of the coefficient "of
0.7 and higher," are assessed 20 points. In the fifth, the
last group of firms, numerical score is 0 (for the actual
return on total assets "of less than 1%", as the value of
the current liquidity ratio "of 1.0 or less," for the
coefficient of financial independence "less than 0.2").
For assessment of the financial condition of the
domestic agricultural producers, a priority in the
hierarchy of indicators, in our opinion, has the ratio of
financial independence, which is formed mainly by
retained earnings. Our researches have shown that the
numerical score of the coefficient value "of 0.8 and above" should be 50 points. The second most
important in the assessment of the financial condition
of the organization, in our opinion, is the profitability
of total assets; its actual value "of 5% and above"
should correspond to score 30 points. The third in the
system of indicators, characterizing the financial
condition, is the ratio of current liquidity of the assets.
Its actual value "of 3.2 and above" should be evaluated
in 20 points for the agricultural organizations of the
first, most financially stable, group