Me = Material costs / Volume of production of this type of goods
The calculated coefficient of material intensity is assessed in comparison with the standard indicator. If the calculation result is greater than 1, it means that there is an overexpenditure of japan phone number materials and raw materials. If the indicator is less than 1, it means that there is a saving of raw materials in production.
Cost per unit of production
It is defined as the ratio of material costs and the cost of the resulting product and allows for an analysis of the cost of the product. If the coefficient exceeds 1, then production is causing losses. In this case, it is necessary to either increase the cost of the product or reduce the total costs of its manufacture. This indicator can be used in any manufacturing industry, as it directly shows the relationship between profit and the cost of the product.
Performance indicators of the enterprise's material and production activities
Source: freepik.com
When setting the retail price of a product for the end consumer, it is necessary to take into account not only all the costs that the enterprise incurs in the production process (from the cost of purchasing raw materials to paying taxes on income received from sales), but also the fact that the entrepreneur needs to receive income from the sale of each unit of goods.
However, in this concept we take into account only the first category of sources, i.e. expenses directly related to production and related processes. If the actual cost is calculated incorrectly, then the efficiency of the enterprise will decrease (in case of underestimation of the cost). If the enterprise spends more money on production than was included in the price of the goods, then a loss will arise, which will increase in parallel with the growth of sales volume.
Turnover of working capital
This coefficient when calculating the performance indicators of the enterprise shows how competently the work with current assets is carried out. The indicator is calculated as the ratio of revenue from the sale of manufactured products and the average cost of all current assets for a specific period. Usually, accounting reports are used for the calculation, since they are accessible and simple.
Kooa = p.2110 OFR / ((p.1200 BB at the beginning of the year + p.1200 BB at the end of the year) /2)
The more "circles" the organization's current assets make during the reporting period, the more finances exit the cycle, resulting in the company's need for such funds decreasing. By managing accounts receivable and accounts payable, you can save on current assets.
Ways to speed up asset turnover:
reduction of material and energy intensity of production processes;
use of new improved equipment;
the use of new technologies and methods that lead to a reduction in production cycle time;
improving product quality;
increasing the competitiveness of a product among similar items on the market, and so on.