One of the areas of production management is the rational use of available resources and the effective management of the company's material and technical subsystem. The analysis of the material and technical subsystem, among other things, allows us to identify the level of provision of the enterprise personnel with production facilities, i.e. capital-labor ratio. This allows you to track the effectiveness of the use of investment in production.
Management of the material and technical subsystem of the company
In order to identify the strong and weak positions of the company in the competition, managers analyze the real state and, as a result, determine the main directions of development of the material and technical base of the organization.
Such monitoring allows you to implement a number of key tasks:
- to determine the composition of non-current assets of the enterprise, the share of fixed assets in their composition, their security of the enterprise;
- analyze the degree of wear and age of the asset;
- analyze the availability and degree of compliance of the production facilities with the technology used and the production conditions; security of the production program with available material resources;
- to calculate indicators of the quality state and movement of fixed assets of the organization in different time periods (growth rate of fixed assets, suitability, renewal, depreciation, retirement rate);
- to analyze the efficiency of operation of PF by comparing the indicators of capital productivity, capital intensity, capital-labor ratio;
- to conduct a comparative analysis among the indicators of the intensity of the OB of the production system for two or more consecutive periods.
PF Update Intensity Indicators
The methodology for calculating the intensity of movement of OBs is aimed at analyzing the main indicators:
a) The suitability coefficient reflects the possibility of further use of PFs, calculated as the ratio of the residual value of PFs to their initial cost.
b) The coefficient of renewal of fixed assets allows you to determine the share of entered assets in the value of assets at the end of the year, as well as the degree of updating:
Update coefficient = Value of entered OF for the analyzed period / Value of OB at the end of the period
c) The depreciation coefficient reflects the degree of depreciation and reimbursement of expenses for the formation of fixed assets, calculated as the ratio of the amount of depreciation to the initial cost of fixed assets:
Wear Ratio = Total Depreciation / Initial Value
d) The growth factor of PF - this is the ratio of the value of the growth of fixed assets, calculated as the difference between the value of commissioned and retired PFs, to the value of PF at the beginning of the period.
e) The disposal ratio of the asset shows the share of the asset retired (withdrawn) in their valuation at the beginning of the year, reflects the degree of loss of the means of production.
Efficiency of exploitation of fixed assets by business entities
The effectiveness of using OF is characterized by a number of indicators, which are usually divided into general and private. The methodology for calculating the first, reflecting the efficiency of using the asset of the business entity, includes analysis and comparison of the following indicators:
1) Capital productivity is calculated as the ratio of the volume of production produced by the enterprise for the year (Q) to the average annual value of PF:
Return on assets = Q / OF
2) the capital Intensity is an indicator inverse to return on assets:
Capital intensity = OF / Q
3) The capital-labor ratio is the ratio of the average annual value of PF to the average number of employees of the organization (P).
Capital-labor ratio = OF / P
The capital-labor ratio is an indicator that reflects the cost of PF per employee
Capital-labor ratio
The capital-labor ratio of labor along with other indicators, such as capital productivity, capital intensity, profitability of fixed assets, helps to determine and establish how efficiently the enterprise management uses fixed assets.
As already mentioned above, the capital-labor ratio is the ratio of the average annual value of the fixed assets to the average number of employees of the organization. The indicator reflects the extent to which the enterprise personnel are provided with the means of labor.
It should be noted that additional investment in production is accompanied by an increase in capital-labor ratio. At the same time, this phenomenon can be called positive only if the process of increasing the capital-labor ratio is simultaneously accompanied by an increase in labor productivity.
As you know, labor productivity expresses the amount of products produced by one employee at the enterprise, and is calculated as the ratio of production to the number of employees.
