One of the classic processes of the economy is the turnover of capital. It consists of two stages:
- finding the value of objects of labor in the stocks of the enterprise;
- the passage of the stages of work in progress and deferred expenses.
This turnover is carried out in the production process.
The main attribute that participates in this turnover is financial assets that the enterprise or company advances to revolving funds. Such funds are called in economic theory - current assets of the enterprise. The most common indicator for this economic category is the concept of working capital, which refers to a certain amount (part) of the total production capital of an enterprise that is fully consumed in one full revolution, transfers the cost to the result of production and is returned to the enterprise in the form of money.
Working capital includes funds spent on the acquisition of consumer goods, and expenses associated with the remuneration of workers. Accordingly, it exists in two areas - production and circulation.
Passing into the sphere of circulation, it is part of capital circulation, which, in turn, is also represented by two types of capital - commodity and money. And here the working capital goes through two stages - it is in the composition of the value of the manufactured products and in the cash. After the sale of manufactured products, funds are spent on the acquisition of a new batch of necessary resources for reproduction and salary.
Based on this understanding of the structure and genesis of the turnover process, we state that the current assets of the enterprise are actually working capital and its circulation, presented in cash. The process of their movement can be represented in the form of the following algorithm: money - inventories - work in progress - finished products - money. From this diagram it is clear that the current assets of the enterprise include:
- stocks of raw materials, components, energy, that is, everything that can be used during the production process;
- parts and assemblies that are still being processed and in the assembly process, that is, what is related to work in progress;
- objects of labor used to start the production process and its maintenance;
- deferred expenses - resources that the company invests in preparing the next production cycles;
- those current assets of the enterprise, which it assumes for use in the development of new products.
By the nature of origin, they are classified into own and borrowed. The former are constantly in the hands of the enterprise, and it can dispose of them at any time. The second, as a rule, represent credit resources and are intended to solve temporary problems. In addition, there are attracted funds in circulation, which have various sources, but above all these are targeted financing resources .
How efficiently circulating assets of an enterprise function depends on the nature of the ratio of working capital to capital circulation. The higher its share, the higher the efficiency of current assets is higher, and, accordingly, vice versa.
In addition, the assessment of current assets of the enterprise includes other indicators. The main ones are material consumption and turnover, which are characterized by a number of factors:
- turnover ratio ;
- the temporary duration of the turnover;
- the coefficient of utilization of funds;
- coefficient of return;
- release parameters.
The relationship between the components and the stages of the passage of turnover is called the structure of current assets.