There are many different indicators that assess the detail of enterprises, the financial condition and effectiveness of the management of human and other resources. An important area is economic analysis, which is responsible for determining the level of efficiency of use and involvement of fixed assets in the production process.
In order to characterize these processes, three indicators are used: capital intensity, capital productivity, capital ratio. The formula for calculating the last indicator is given below. Let us dwell in more detail on the capital-labor ratio.
The concept and meaning of the indicator
The capital-labor ratio is an indicator that helps to determine the degree of provision of all employees with fixed assets of the enterprise.
It has a direct impact on the value of indicators such as return on assets and capital intensity, with which it is often confused.
To avoid this, we will analyze what these indicators mean.
Not to be confused with return on assets and capital intensity
Return on assets is the ratio of the value of manufactured products to fixed assets of the enterprise, which are calculated as an average annual indicator. Thanks to this indicator, one can express how effectively all fixed assets are involved in the production process.
Capital intensity - an indicator that is calculated to determine the necessary number of production assets for the production of a unit or a certain amount of production.
Capital ratio. Calculation formula
Wrong are those people who believe that the capital ratio of fixed assets is different from the capital ratio of labor. This is an erroneous opinion.
The capital ratio of fixed assets (the calculation formula of which requires the availability of data on fixed assets and the number of employees) is the same indicator as the capital ratio of labor. In textbooks there is no difference between these concepts, and the formulas by which they can be determined are completely identical.
The ratio of capital to labor ratio is determined by the formula:
- Fv = SSOP: SSH, where
Fv - capital-labor ratio;
SSOF - the average cost of fixed assets during the annual period of time;
HSS - the average number of employees for the year.
The average annual value of fixed assets and the average number of employees are needed to determine the capital-labor ratio. The calculation formula clearly shows this. How to calculate them, we will analyze further.
The average annual value of fixed assets
This is a special indicator that displays the average total cost of fixed assets of the enterprise. It is used in calculations related to the efficient use of fixed assets of the company.
In order to calculate the required cost, you can use the following formula:
- SSOP = OSn + OSv x Ch1: 12 - OSvib x Ch2: 12, where
OSN - the total value of fixed assets at the beginning of the period;
OSv - the value of those fixed assets that were put into operation during the period;
OSby - the value of fixed assets that were disposed of during the period;
P1 - the number of months in which the newly introduced fixed assets were operated;
P2 - the number of months in which retired fixed assets were not employed in production.
Average number of employees
This is one of the indicators that you need to know in order to calculate the capital-labor ratio. The formula for calculating the number is quite simple, if you correctly understand the definition of the indicator.
The average number of employees is an indicator of the enterprise, which displays the average number of employees for a certain period. It can be calculated both for a month, and for a quarter, a year.
It can be calculated as follows:
- HSS = MF - RB - Hand, where
MF - the average number of employees for a certain period;
RB - workers who are on maternity leave, pregnancy, childbirth;
Ruch - workers who are on vacation without pay during training or admission to educational institutions, if such leave is required by law.
