Fundamentals of the analysis of goods, works, services manufacture and sale

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FUNDAMENTALS OF THE ANALYSIS OF GOODS, WORKS, SERVICES MANUFACTURE AND SALE

Skybinska Z.

PhD in Economics, Associate Professor Department of Accounting and Analysis, National University “Lviv Politechnic”

Gryniv T.

PhD in Economics, Associate Professor Department of Accounting and Analysis, National University “Lviv Politechnic”

Анотація. Головне завдання промислового підприємства - найповніше забезпечення споживчого попиту високоякісною продукцією. Темпи зростання обсягу виробництва продукції, підвищення її якості безпосередньо впливають на рівень витрат, прибутку та рентабельності підприємства.

Introduction

A main task of industrial enterprise is complete providing of consumer demand with high-quality products. The rates of output scopes, its quality improvement directly influence the level of expenses, profit and profitability of enterprise.

That is why the analysis of industrial enterprises is begun with the study of output indicators. Its main assignments are:

- estimation of fulfilling the plan, production dynamics and products sale;

- determination of factors influence on changing of these indicators value;

- exposure of inter-household backlogs of multiplying output and sales;

- development of measures on elaboration of found out backlogs.

Indicators of the analysis of production and sale of goods, works and services are closely interrelated. Depending on the specific conditions priorities may change: with the existence of a significant demand main attention focus on search of reserves for increasing the volume of output, while with market saturation the predictable demand is a basis for substantiation of the production program of the company. Accordingly, there is a need in the formation of alternative management decisions on production and sales, their comparative evaluation, choosing the most rational from them and controlling the results of implementation. Possibilities of economic analysis in such circumstances acquire a significant importance.

The purpose of the analysis consists in the optimization of the scope and range of products to meet the demand for high quality products and for the maximum use of production potential and achieve sustainable business results.

analysis industrial enterprises range products sustainable business results

Results

The scope of industrial goods production can be expressed in natural, conditionally natural and valuable measures. Generalizing indicators of the scope of production are obtained using cost estimation - in wholesale prices. The basic indicators of production scope are commodity and gross output. Gross output is the cost of all production output, executed works, including uncompleted production and is expressed in the compared prices.

Commodity output differs from gross output, because it does not include remains of the uncompleted production and inter-household circulation. It is determined in wholesale prices, actual in the period under review. On many enterprises gross output coincides with a commodity one, if inter-household circulation and uncompleted production is absent.

Analysis of the volume of manufactured and sold products

For the analysis of tendencies of change of products production and sale apply the analysis of level and dynamics of scope of production and sale of enterprise. Products, as a result of production of concrete enterprise, embrace commodities (finished and semi-finished products), executed works and delivered services. Production can be measured in natural and value indicators. More precisely produce represented by natural indicators, although they are applied only in analysis of homogeneous products. Value measurement gives an opportunity to generalise data on the scope of production of goods by enterprise or its subdivisions.

The estimation of the scope of production is carried out by an economic indicator - the scope of output (goods, works, services) in actual prices (without VAT and excise), which is the cost estimation of produced by enterprise production, that includes produced and delivered goods (or provided for shipping) to other enterprises, and also produced production and intended for an internal consumption. It is calculated by the price of producer excepting VAT, excise and other indirect taxes.

Methodology of calculating the scope of output takes into account features of corresponding types of economic activity. For example, in industry the scope of output (works, services) includes cost of: products produced for reporting period, which are intended for sale externally (outside enterprise, transferring to its non-commercial subdivisions, use for internal necessities); works of industrial character, executed on an external order; semi-finished production of own produce, sold externally. The scope of output for a transport is a cost of the rendered services in transportations, from the activity of enterprises from vehicle handling (cargo handling, transport-expeditionary works and services), from warehousing of goods, from functioning of a transport infrastructure and others like that; wholesale and retail trade - a size of trade margin, that is a difference between the cost of the sold commodities at prices of realization and purchase; in construction - the cost of construction and installation works, executed by own forces of building organization; from providing tourist services - a margin, that is a difference between the cost of the rendered services at costs of sale and purchase and does not contain the cost of sold tourist permits.

A structure of production is a quantitative ratio of the volume of certain products in a total scope of production. Unfulfillment of plan, as well as unevenness of output in a reporting period in comparison with previous one, results in the change of its structure, that is causes structural shifts in composition of products. To fulfil the plan after a structure means to save in actual scope of output planned ratios of its certain types. Structural shifts are possible at the plan fulfilment on the scope of output if by certain types of products an actual volume deviates from planed on different values.

The change of structure influences all economic indicators. If a part of more expensive products increases, then the scope of its output grows in a value term and vice versa. The same takes place with volume of profit: at the increase of the share of highly profitable products and reduction of low-profit one. Therefore study reasons of deviation from a plan after total composition of output.

The volume of the sold products is determined at price of sale of shipped finished production externally (executed works, rendered services), including products on barter contracts (except indirect taxes). To the scope of sold production include the cost of transport, packing and other works, executed by own forces of enterprise and does not include produce of own production for internal necessities of enterprise, the sum of subsidies on a production, the sum of advance payments, discounts on prices that are given by wholesale buyers. Products (works, services) is acknowledged as sold after documents' processing for settlings with buyers regardless of receipt of payments for it.

This indicator include all incomes from products sale, taken into account in the Statement on financial results after the article "Net income (revenue) from sales of products (goods, works, services)", and partly include services as for operating lease of assets, sales of foreign currency, incomes from trademarks, patents and others like that, which are recorded after the article "Other operating incomes".

The financial result of enterprise, financial state and solvency depend upon the sales scope. The analysis of products sale is executed for every month, quarter, half-year and year. In the process of analysis the actual data is compared with planned of previous periods, settle accounts in the percent of deviation from a plan, rates of increase and increment for analyzed period, absolute value of 1 % increment. Two variants of method of sales output analysis is possible. If enterprise's gains are determined by the dispatched commodity output, the balance of commodity output will be the following:

where FPb, FPe --final production remains on beginning and the end of period;

CO - commodity output;

SS - sales scope for the period under review.

If gains are determined after dispatched products payment, commodity balance is the following:

Where DPb, DPe - dispatched products remains on beginning and end of period, unpaid by a buyer.

The calculation of these factors influence of sales output scope is executed in comparing of actual indicators with planned and calculation of absolute and relative increase of each of them. For the study of these factors influencing the balance of commodity output (CO) is analyzed.

The analysis of products sale is closely associated with the analysis of contractual commitments fulfillment (%cf)from the products supply. Agreements plan unfulfillment cause gains, profits decrease. In addition, in the competitive conditions enterprise can lose the sales markets of products which will entail the slump of production. In the process of analysis, plan fulfillment of supplies is determined, taking into account separate users, types of products, reasons of plan unfulfillment are analyzed, and the estimation of activity is given from contractual commitments fulfillment. The percent of contractual commitments fulfillment is calculated as a ratio of the difference between planned dispatching scope and its unfulfillment to the planned scope:

where SPp - the scope of planned production;

SPunfui-unfulfillment of planned dispatching scope.

The underfulfilment of supplies scope is negatively reflected not only on the result of enterprises activity but also at work of trade organizations, adjoining enterprises, transport organizations. In the process of analysis it is also necessary to learn reasons of unpaid products remains increase, which were dispatched to a buyer. If terms of payment did not come up, it is the normal phenomenon; but overdue buyers liabilities makes enterprises financial state more difficult, that is why it is necessary to take measures for the penalty of unpaid sums.

Intensification of production and sales activity

The defining direction of mobilization reserves of production and sales is the intensification of production and sales activities. The combined impact of extensive and intensive factors can be estimated using the key matrix. The advantage of this assessment is that can be established inter-resources links and determined possibility of intensification. Model of key matrix is presented in Table 1.1.

Table 1.1

Model of key matrix for analysis of extensive and intensive factors of production

In the model used the following notations:

O - output, thousand UAH;

F - value of fixed assets, ths. UAH;

W - the cost of wages, ths. UAH;

M - the cost of spent materials, thousand UAH;

Yci - yield of capital investments of fixed assets;

Wr - wages return;

Mr - material return;;

Sc - the stock-capacity of production;

Wc - wages capacity of products;

Mc - materials consumption ratio;

Se - stock-equipment;;

Cs - capital supply of materials processing;

Ls - labor supply of materials processing;

Fs - supply of funds by labor force;

Msf - material supply of funds;

Msw - material supply of work.

The proportion of extensiveness and intensity of development is expressed in the indicators of use of production and financial resources. Extensiveness indicators are quantitative indicators of resource use: number of employees, the amount spent items of work, the amount of depreciation, the amount of fixed assets and working capital advances. Indicators of the intensity of development include qualitative indicators of resource use, ie labor productivity (or labor capacity) material return (or material capacity), yield of capital investments (or stock-capacity), the number of turns of working capital.

Assessment of results of intensification includes a system of calculation:

1) determination the dynamics of intensification of use of production resources;

2) determination of the ratio of increase of use of production resources per 1% increase in output;

3) calculation of the share of influence of the of indicators of intensification on the growth of production of goods;

4) calculation of the relative economy of production resources;

5) integrated assessment of comprehensive intensification of production.

Conclusions

Thus, indicators of volume of sold products and volume of output (both without VAT and excise) differ by a size of: changes of finished production leftovers and their cost; costs of purchased commodities (services); costs of products of own production for internal necessities; amounts of target inflows (subsidies) on production. The indicator of volume of output is a base for determination of efficiency of the use of resources: labour productivity, yield on capital investments, material capacity, prime price, profit. In this connection analysis of reserves of output increase is a basis for the estimation of efficiency of production in general.

The dynamics of output is characterized by such indicators: rates of growth (base and/or chain); rates of increase (base and/or chain); average annual rates of growth (increase). Rates of growth and increase can be calculated for description of output of separate types and of all products in general in natural or value terms. Rates of growth of products' production or sale characterize the dynamics of output of various products of concrete enterprise, that is why there is a necessity to apply the indicator of scope of output (sale) of products in the compared prices, which gives an opportunity to eliminate the influence of price factor.

Taking into account the current economic position in a country, decline in production, and the special attention should be devoted to the study of dynamics of scopes of output of products at the enterprise. Most appropriate is the use of natural measurements of scopes of products' output, as they give an opportunity to prevent distortions caused by inflation. If these measurements are impossible to use, then scopes determine in unchanging prices.

During analysis estimate how the plan on production was fulfilled in general and after basic productive units; what levels of fulfilment were noticed by months and quarters of reporting period. Define reasons of possible failures and determine guilty persons.

Analysing the dynamics of scopes of production it is necessary necessarily to define what factors caused such tendency and to separate those that influenced on a national economy level, were external.

However, internal factors also require attention. The scope of production can be increased using more expensive materials and accordingly increasing the price of on products or vice versa, increasing in composition of products cheap components and orienting saved deficit materials to the additional output.

Ending an analysis, should evaluate executed work as for preparation of new examples of products for production and state of research and development, design developments, which can become a key to future successes of enterprise in general.

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