The concept and essence of company's business activity
Business activity in the broadest sense, means activities of the company aimed at promoting its products on the market, the increase in production volumes, growth companies, and improving financial performance. In particular, the concept of company's business activity includes the specification of its commercial and industrial economic activities.
Business activity of the company depends on various factors: the specifics of the company, market, competitors, production and price. Analysis of business activity helps to characterize its core production activities. For example, the efficiency analysis of business activity indicates the growth of indicators such as: revenue from sales of products on the market, the pace of implementation of new products, profit from the sale of a unit of production and other. In the analysis of business activity of an enterprise should assess the indicators of implementation of the production plan of the enterprise and use of resources.
Indicators of business activity of the enterprise
Business activity of the company provides him with financial stability. To perform the business activity of the enterprise to help profitability, turnover and other financial indicators characterizing the efficiency of the company. Thus, analyzing the financial condition of the enterprise, should pay attention to the rate of turnover and the efficiency of use of company resources in General.
The assessment of indicators of the turnover of the enterprise gives an idea about the level of its profitability. With the various indicators of the turnover of the enterprises are analyzed, such as: the coefficient of turnover of working capital, receivables and payables, inventory, fixed assets and capital.
For example, the asset turnover ratio of the enterprise talks about how much revenue the company brings the implementation of each unit of assets over a certain period. The higher the figure, the faster turns the capital of the company. In contrast, low rates of turnover, the company is forced to raise more funds in circulation.
Therefore, the asset turnover ratio describes the intensity of use of assets in the enterprise. Thus, the more efficiently assets are used, the higher the business activity of the enterprise.
