Calculation of the economic efficiency of the project. Formula of economic efficiency Calculation of the value of the economic effect
The stumbling block of the modern economy is its productivity, which is defined by the term economic efficiency. It can be applied both to the work of a single enterprise, and to the entire economic system as a whole.
How to determine economic efficiency
It is possible to calculate the economic efficiency of a certain type of production based on its main indicators, one of which is resource efficiency. It is the ratio of the result of production to the resource spent on its implementation, which can be:- Material;
- Work.
- Material return;
- Labor productivity.
- Ireland - 56 thousand dollars;
- Luxembourg - 55.6 thousand dollars;
- Russia - 18 thousand dollars;
- USA - 36.8 thousand dollars.
How to compete
Efficient work economic system can only be achieved if the needs of all members of society are fully met through the use of a prescribed list of resources. The most visible of all its indicators is competitiveness, which has been studied for two decades by leading economists within the framework of the project “Competitiveness. Global Review". In 1999, they analyzed in detail all aspects of the economy of 59 countries whose products provided the demand of the world population by 95%. According to statistics, the implementation of a number of reforms in the 90s in Russia significantly reduced the established level of competitiveness of the state. However, the analysis of doing business by 125 countries by experts from the World Economic Forum lifted Russia to 62nd place. India and China took 40th and 50th place in the ranking, and economically developed countries became its leaders. Although competitiveness fails to shed light on complex indicators economic efficiency of the state, its advantage is a complete and qualitative assessment of one of the parties to production. The ability to outperform competitors expresses a country's potential in industries such as:- Production;
- Science and technology;
- Economy.
What is effective from the point of view of the economy
Economic efficiency is understood as the ratio of the efficiency of an enterprise to the amount of funds spent to achieve a certain result. It can be expressed:- In monetary terms;
- In relative units.
- production costs;
- Used capital.
Independent calculation of the profitability of the enterprise
The calculation of economic efficiency is made after determining the final result and relative costs. Let's try to do it ourselves in the following example. Let's assume that end result The activity of the enterprise is the monthly release of a certain product in the amount of 3 million rubles. The direct costs of production are:- Employee payroll deductions.
- The cost of packaging the product and the required raw materials is 100 thousand rubles.
- Expenses for the needs of the enterprise - 80 thousand rubles.
- Director - 70 thousand rubles;
- Chief Engineer- 60 thousand. rub.;
- Chief Accountant- 50 thousand. rub.;
- Management team (10 people) - 35 thousand rubles;
- Taxes - 159 thousand. rub.
- Transportation - 50 thousand rubles;
- Storage - 60 thousand rubles;
- Unforeseen expenses - 70 thousand rubles.
The effect is an absolute value showing the result achieved when performing any procedure.
DEFINITION
Economical effect represents the result of the used labor of a person, which is aimed at creating certain material benefits.
At the same time, it is important not only to ensure the result itself, but also by what forces it was achieved.
For this reason, the basis for calculating economic efficiency is the annual economic effect, including the costs of achieving it. In addition, in addition to the absolute size of the effect, it is also necessary to determine the relative size of the effect, which is calculated by dividing the total result obtained by the resources spent to obtain it.
The economic effect formula is considered to be the final economic result, which is obtained as a result of carrying out certain activities that cause an improvement in the corresponding performance indicators of the company. The result is an absolute indicator measured in monetary units.
Obtaining the effect as a whole is based on the initial implementation of certain costs, and in the future, obtaining additional profit from the implementation of activities. The economic effect itself can be represented in the form of this additional income that the company receives through:
- additional profit
- minimization of material costs,
- reduction of labor costs,
- increase in production volumes,
- increase in product quality, which is expressed in price.
Formula of economic effect
There is no definite formula for the economic effect. In this case, the following formulas are most often used in the calculation:
- The total amount of economic effect;
Egen=(Rnew – Rstar) C
Here Rnew is the new result,
R old - old result of activity,
C - the amount of costs discounted (for the entire period of implementation of the changes)
- Annual amount of economic effect
Egod \u003d (Rnew - Rstar) - C * N
N is the standard annual return on investment.
This economic effect formula compares the alternative possibility of investing the spent amount of funds in an alternative source of income. Here N can be the refinancing rate, loan interest, deposit rate, bond yield percentage, etc. The choice of this value will depend on certain investment opportunities.
Economic efficiency formula
Economic efficiency is an indicator that is determined by the ratio of the economic effect to the cost of this effect. The economic efficiency formula is as follows:
E = EE/W
Here, EE is the value of the economic effect,
Z - the cost of its implementation.
What is the economic impact
We can say that with the help of the effect the degree of efficiency is determined, which in turn determines the degree of profitability. The effect indicator is relative, so it can be used in comparison with existing standards.
In general, the benefit from the implementation of the effect is characterized by three circumstances:
1) the cost of carrying out activities, which should be as small as possible;
2) the effect of the introduction, which should be maximum;
3) the period during which the effect occurs.
Depending on the nature of the measures taken to increase the effect, its calculation is carried out in different ways. General formula there is no economic effect, it is determined as the source of obtaining this effect is determined.
If the calculation results in an annual effect from the event, then to obtain the total amount of the effect, it is necessary to multiply it by the number of years that this effect brings.
Examples of problem solving
EXAMPLE 1
| Exercise | Calculate the economic effect of the event (improvement of equipment at the enterprise) in the production of shoes. The following indicators are given: The number of pairs of shoes (plan) - 2350 pcs., Norm of time Before the introduction of new equipment - 26.5 hours, After - 11.1 hours. |
| Solution | Production costs 2350 pcs. products: Before the introduction of equipment - 2350 * 26.5 = 62275 hours. After the introduction of equipment - 2350 * 11.1 = 26085 hours. Let's calculate the economic effect from the introduction of equipment: Eff \u003d 62275 - 26085 / 62275 \u003d 0.5811 |
| Answer | We see that time has been used more efficiently more than twice. The economic effect was 58.11% |
In order to better understand what efficiency is, it is necessary to distinguish between the concept of efficiency and effect.
DEFINITION
Effect represents an absolute value, which means the achieved result of a certain process. Economical effect is the result of the labor of the person who creates the product. At the same time, the effectiveness is determined precisely by the indicator of the effect, but taking into account the costs with which it was achieved.
The base of economic efficiency is the ratio of the effect and the costs of achieving it. But in addition to the absolute magnitude of the effect, it is important to determine its relative magnitude, which can be calculated by the ratio overall result(effect) on the resource costs that led to its receipt.
In practice, when making calculations, 2 performance indicators are used:
- Relative efficiency (compared to something),
- Overall (absolute) efficiency, which is determined by the ratio of the total amount of the effect to the corresponding costs for its implementation
Economic efficiency formula
The economic efficiency formula is calculated by dividing the economic effect by the cost of this effect. The economic efficiency formula is as follows:
E = EE/W
Here, EE is the value of the economic effect,
Z - the cost of its implementation.
In practice, the economic efficiency formula is difficult to use, since the numerator and denominator for its calculation most often cannot be measured quantitatively. This is due to the diversity of economic activity, which is easier to express in qualitative terms than in quantitative terms.
Performance indicators
At the macroeconomic level, the two most commonly used performance indicators are:
- Increase in produced GDP (national income - ND) per capita;
- Production of GDP (NI) per unit of input.
Macroeconomic indicators that are used to determine the level of performance in general are different from indicators that are used at the level of enterprises (primary economic entities).
At the microeconomic level, the system of indicators of economic efficiency consists of:
- Indicators by types of resources used,
- Estimated indicators.
Estimated indicators of the economic efficiency of the enterprise are:
- profitability of products, funds;
- production of a product for the corresponding amount of costs;
- relative savings of basic and working capital,
- material, labor costs and wage fund.
Problems in Determining Efficiency
The most important problem in determining economic efficiency is the choice (what to produce, what types of goods, in what ways, how to distribute them, how much resources to use in this case).
The economic efficiency formula is based on the principle of comparative advantage, which is considered the basis of specialization of both each state individually and the world community as a whole. Due to the comparative advantage in the use of certain resources over others, it becomes possible to determine the most efficient production option that will provide the maximum difference between results and costs. In this case, you can set the opportunity cost of any resource.
In connection with the above, economic efficiency is defined as the ratio of the values of goods produced to the values of goods, the production of which had to be abandoned due to their maximum opportunity cost.
Efficiency is defined in two ways:
- The ratio of the production result to the costs incurred,
- The ratio of the result produced to the amount (amount) that had to be abandoned in the process of choosing an alternative.
Examples of problem solving
EXAMPLE 1
| Exercise | It is planned to open a new workshop, the enterprise needs to invest 900 rubles for each unit of production, while the cost price was 1600 rubles. The wholesale price for each unit of production is set at 2,000 rubles, while 100,000 pieces of products are produced per year. The company's profitability level is 0.3. |
| Solution | Product profitability is defined as the ratio of profit to investment: Rprod \u003d Pr / Vl Vl \u003d 100,000 * 900 \u003d 90,000,000 rubles To determine profit, subtract the cost of production from revenue: B \u003d 100,000 * 2000 \u003d 200,000,000 rubles Let's calculate the profit: 200,000,000 - 100,000 * 1600 = 40,000,000 rubles Calculate the profitability by the formula: Rprod = 40,000,000 / 90,000,000 = 0.44 Conclusion. Since the profitability turned out to be higher than the standard value (0.44 more than 0.3), the opening of this workshop should be recognized as effective. |
| Answer | Production efficiently |
The efficiency of production largely depends on the optimal location of enterprises. Except directly production factors(labor productivity, equipment quality) it is also affected by transport costs, the level of infrastructure development, complexity, population density, geographical location of enterprises and other factors and prerequisites.
Production efficiency is determined by two components: the effect of production and the costs to achieve it. The effect should strive for the maximum possible, and the costs - to a minimum. The general efficiency formula is
E - efficiency; E f - effect; B - costs.
The effect can manifest itself as an increase in production volume, an increase in profits (for an individual enterprise) or national income (for a region or country as a whole. They distinguish between general and comparative efficiency. The overall efficiency of economic measures is determined by the ratio of the increase in national income to capital expenditures. Comparative efficiency is calculated when choosing the most advantageous option for placing an object from several possible ones. To and running costs FROM(product cost). At the same time, it is impossible to sum up costs and investments in annual calculations, because investment pays off in more than one year.
When annual settlements the investment efficiency ratio is used E, it is the reciprocal of the payback period T, i.e.
Thus, the value E denotes that part of the investment that pays off within a year. There are standard payback periods T n. In a planned economy, they are calculated by the state based on the level of productivity social labor during this period of development of the country. In a market economy T n is not regulated, but objectively there is such an average payback period for investments, the increase of which makes the costs ineffective. Accordingly, there is also a normative indicator of efficiency E n. It is not the same for different sectors of the economy. Individual efficiency of investments should not be lower than this indicator.
The general cost formula will look like this:
B i \u003d C i + E n X K i
This is a reduced cost formula, since all costs are reduced to an annual dimension. The above costs are one of the components in the calculations of the so-called comparative economic efficiency. Since comparative efficiency serves to choose from several options one in which the effect is achieved at the lowest cost, then
C i + E n X K i min
The reduced cost formula is often used in the analysis of production location. It is possible, for example, to calculate what is more profitable: to build one large plant or several medium-sized ones that produce similar products. Usually (though not always), with an increase in capital investment, operating costs decrease.
Such a reduction is not always proportional, so the reduced costs must be calculated for each option. It may turn out that a further increase in capital investment, an increase in production volumes stimulates a reduction in current costs, but not to such an extent that it will reduce overall costs.
Consider an example. There are four options for locating enterprises, differing in the size of capital investments; at the same time, with the growth of capital investments, current costs are reduced. It is necessary to determine the option with the lowest cost. The initial data are given in conventional monetary units.
| K 1 \u003d 1,000,000 | C 1 = 200,000 |
| K 2 \u003d 1,200,000 | C 2 \u003d 160,000 |
| K 3 \u003d 1,400,000 | C 3 = 125,000 |
| K 4 \u003d 1,600,000 | C 4 = 100,000 |
I - 200,000 + 0.15 x 1,000,000 = 350,000
II - 160,000 + 0.15 x 1,200,000 = 340,000
III - 125,000 + 0.15 x 1,400,000 = 335,000
IV - 100,000 + 0.15 x 1,600,000 = 340,000
In this way, the best option is the third. In the fourth option, costs rise again despite the fact that current costs are halved and capital investments increase by 1.6 times compared to the first option. When cost options are considered relative to territory, it is necessary to without fail calculate the cost of transporting raw materials, fuel and finished products. They can also be attributed to current costs. FROM, but for clarity, it is advisable to separate them, since they are the most important spatial factor. Then B i \u003d C i + E i + K i + T i, where T - unit costs of the enterprise for the transportation of raw materials, fuel and finished products.
01.07.19 39 053 0
Profitability is an economic indicator that shows how efficiently resources are used: raw materials, personnel, money and other tangible and intangible assets. You can calculate the profitability of an individual asset, or you can calculate the profitability of the entire company at once.
Profitability is calculated to predict profit, compare a company with competitors, or predict the return on investment. The profitability of an enterprise is also assessed if they are going to sell it: a company that brings more profit and at the same time spends less resources, costs more.
How profitability is calculated
There is a profitability ratio - it shows how efficiently resources are used. This ratio is the ratio of profit to the resources that have been invested in order to receive it. The coefficient can be expressed in a specific amount of profit received per unit of invested resource, or maybe as a percentage.
For example, a company produces sour cream. 1 liter of milk costs 5 rubles, and 1 liter of sour cream costs 80 rubles. From 10 liters of milk, 1 liter of sour cream is obtained. From 1 liter of milk, you can make 100 milliliters of sour cream, which will cost 8 rubles. Accordingly, the profit from 1 liter of milk is 3 rubles (8 R − 5 R).
And another company makes ice cream. 1 kilogram of ice cream costs 200 rubles. For its production, 20 liters of milk are needed at the same price - 5 rubles per liter. From 1 liter of milk you get 50 grams of ice cream, which will cost 10 rubles. Profit from 1 liter of milk - 5 rubles (10 R − 5 R).
Profitability of the resource "Milk" in the production of ice cream: 5 / 5 = 1, or 100%.
Conclusion: the return on resources in the production of ice cream is higher than in the production of sour cream - 100% > 60%.
The profitability ratio can also be expressed in terms of the amount of resources spent that were needed to get fixed amount arrived. For example, to get 1 ruble of profit in the case of sour cream, you need to spend 330 milliliters of milk. And in the case of ice cream - 200 milliliters.
Types of profitability indicators
To evaluate the performance of the company, several indicators of profitability are used. Each of them is calculated as the ratio of net profit to some value:
- To assets - return on assets (ROA).
- To revenue - return on sales (ROS).
- To fixed assets - profitability of fixed assets (ROFA).
- To the invested money - return on investment (ROI).
- To equity - return on equity (ROE).
Profitability threshold
The threshold of profitability is the minimum profit that covers costs. For example, investments, if we are talking about investments, or cost, if we are talking about production. When talking about the threshold of profitability, the term "break-even point" is most often used.
Return on assets (ROA)
The ROA indicator is calculated to understand how efficiently the company's assets are used - buildings, equipment, raw materials, money - and what kind of profit they bring in the end. If the return on assets is below zero, then the company is operating at a loss. The higher the ROA, the more efficiently the organization uses its resources.
ROA = P / CA × 100%,
P - profit for the period of work;
TA - the average price of assets that were on the balance sheet at the same time.
Return on sales (ROS)
Return on sales shows the share of net profit in the total revenue of the enterprise. When calculating the ratio, instead of net profit, gross profit or profit before taxes and interest on loans can also be used. Such indicators will be called respectively - the profitability ratio of sales by gross profit and the operating profitability ratio.
ROS = P / V × 100%,
P - profit;
B is revenue.
Return on fixed assets (ROFA)
Fixed production assets - assets that the organization uses to produce goods or services and which are not spent, but only wear out. For example, buildings, equipment, electrical networks, cars, etc. ROFA shows the return on the use of fixed assets that are involved in the production of a product or service.
ROFA \u003d P / Cs × 100%,
P - net profit of the organization for the required period;
Cs - the cost of fixed assets of the company.
Return on current assets (RCA)
Current assets are resources that are used by the company to produce goods and services, but which, unlike fixed assets, are fully spent. Current assets include, for example, money in the accounts of the enterprise, raw materials, finished products in stock, etc. RCA shows the effectiveness of current asset management.
RCA \u003d P / Tso × 100%,
P - net profit for a certain period;
Tso - the value of current assets that were used to produce a good or service during the same time.
Return on equity (ROE)
ROE shows the return on the money invested in the company. Moreover, investments are only authorized or share capital. To calculate the efficiency of using not only own, but also borrowed funds, use the return on capital employed - ROCE. It makes it clear how much income the company brings. Return on equity is compared not only with similar indicators of other companies, but also with other types of investments. For example, with interest on bank deposits, to understand whether it makes sense to invest in a business.
ROE = P / C × 100%,
P - profit;
K is capital.
Return on investment (ROI)
The return on investment indicator is an analogue of the return on capital, but it is calculated for any type of investment. For example, bank deposits, exchange instruments, etc. ROI shows the return on investment.
ROI = P / Qi × 100%,
P - profit;
Qi is the price of investment.
Profitability of production
The profitability of production is the ratio of net profit to the cost of fixed assets and working capital. In fact, the profitability of production shows the efficiency of the entire company. Diversified enterprises calculate profitability for each type of production separately. You can also calculate the profitability of production separate species products or the profitability of a particular production area, such as a workshop.
Rpr \u003d P / (Cs + Tso) × 100%,
P - profit;
Pr - the cost of fixed assets of the company;
Tso - the cost of current assets, taking into account depreciation and wear.
Project profitability
The profitability of the project, in contrast to the profitability of an already operating production, is an attempt to assess how effective investments in new business. The profitability of a project is the ratio of future profits to all the costs that will be needed to start a business. This indicator is calculated not only by those who start a business, but also by investors - in order to understand whether it makes sense to invest in this project.
As the ratio of the value of the business to the investment in its launch.
Rp \u003d Sat / Qi,
Sat - the total cost of the business;
Qi - the amount of investment.
As a ratio of net income and depreciation expenses to start-up investments.
Rp \u003d (P + A) / Qi,
P - net profit;
A - depreciation;
Qi - costs.
How to increase profitability
Profitability is the ratio of net profit to any other indicator: the value of current assets, fixed assets, capital, investments, etc. To increase profitability, you must either increase the value of the numerator - profit, or reduce the denominator - the value of assets, capital, investments, etc. d.
For example, in order to increase the profitability of sales, you can improve the quality of products or develop an effective marketing strategy - as a result, demand will increase and, as a result, profits. And you can reduce the cost of production - then the profitability will increase with the same demand.
