How to calculate performance indicators

The efficiency of the company is among the most important economic criteria. In the most General form it can be represented as a ratio of expenses necessary for production and the result obtained in the course of its implementation.

Instruction

1. The most common indicator of the efficiency of production is the labor productivity which is defined as the ratio of total revenue to number of workers employed in manufacturing. The growth of labor productivity with the same number of employees indicates increasing the efficiency of use of labour resources. The reciprocal of this indicator is the complexity. It shows how much human labor is used for production of a particular product.
2. Another indicator of the effectiveness of production – consumption. It is calculated as the ratio of production costs (raw materials, materials, fuel, etc.) to value added products. This ratio shows how many material resources it took to produce one monetary unit of earnings. Indicator, reverse this – materialattach reflects the volume of production per rouble of material costs.
3. Similarly is calculated as the coefficient of efficiency of production – capital ratio and a reverse – return on assets. Unlike the previous indicator, it reflects the efficiency of fixed assets.
4. Capital intensity is calculated as the ratio invested in the production of capital to the value of the output. It shows the costs of the investment necessary to produce one unit of output.
5. In addition to indicators of the efficiency of production are the profitability ratios. The total ROI is calculated as the ratio of profit of enterprise to the cost of fixed and current assets. Profit margin is determined by dividing the profit for the cost of goods manufactured, and return on equity on the equity value of the firm.