ON THE METHODOLOGY OF THE ANALYSIS OF BUSINESS ACTIVITIES OF ENTERPRISE
ON THE METHODOLOGY OF THE ANALYSIS OF BUSINESS ACTIVITIES OF ENTERPRISE

Summary/Abstract: In general, the business activity is characterized by an intensity of use of the advance (internal) capital. Capital of an enterprise is in constant motion and moves from one stage of the turnover cycle to another: M > E > . . . > T > . . . E2 > M1 The faster the capital turnover cycle, the more goods the enterprise will produce and sell with one and the same invested money. Delays in the reserves at any stage, lead to a slowdown in the capital turnover cycle, which requires additional capital investments and may cause a deterioration in the financial state of the enterprise. The effect of acceleration of the capital turnover is primarily manifested in the increase of the volumes of production, n output without attracting additional financial resources. In addition, the acceleration of capital turnover increases the amount of profit, since at the initial stage of capital turnover in monetary form, it returns with an increase. If the production and sale of products is unprofitable, then accelerating the turnover of capital resources worsens the financial results of the enterprise. Therefore, we can conclude that the enterprise should strive not only to accelerate the capital movement at all stages of its turnover, but also to maximize its return, which is reflected in the increase in the amount of profit per capital of one Euro. All this is achieved through the rational and economical use of the resources and inadmissibility of losses and overspendings at all stages of the capital cycle. As a result, the capital returns to its original state with an increased amount, i.e. with a profit.

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