The financial analysis any enterprise can not do without studying the effectiveness of fixed assets. For this, analysts use such an indicator as return on assets. The formula for calculating the balance sheet allows you to identify the negative aspects in the organization of the main production factors that the company has. Based on the analysis, economists and financiers can draw conclusions about ways to improve the balance sheet structure, which will make it possible to make big profits in the future period. That is why the calculation of the capital productivity formula is so often used in financial and economic analysis.
Definition
Capital productivity of fixed assets favors financial ratiowhose formula characterizes the effectiveness of their use. It shows how much revenue the company receives per unit of resources invested in production assets. In other words, capital productivity, the calculation formula for the balance of which will be considered later, gives an assessment of the appropriateness of the use of means of labor in relation to the proceeds resulting from their use.
To assess the effectiveness of the use of fixed assets, the rate of return on assets must be analyzed in dynamics. This will determine the financial condition and literacy of managerial activities in terms of the use of funds. The practice of comparing the obtained indicator with the same results of competing enterprises is widely used.
Calculation formula
Return on assets, the calculation formula of which is presented below, is as follows:
F = Revenue from sales / fixed assets
To draw the right conclusions based on the data obtained, the indicator of the number of production assets should be taken as the arithmetic mean value for the reporting period.
Calculations will help the data of accounting report No. 1 and No. 2. Capital productivity, the calculation formula for the balance of which allows us to draw conclusions about the state of production factors, has the following form:
F = s. 2110 m. 2 / (p. 1150 beginning f. 1 + p. 1150 conc. F. 1) / 2
By its general principle, the presented indicator is similar to the turnover ratios.
Normative value
Return on assets, the formula of which was considered above, does not have a general normative value. In each industry, the ratio under consideration differs in its value. 
In industries that require a large amount of equipment, expensive equipment during the manufacturing process of finished goods, the return on assets ratio will be lower than that of a production using low-cost equipment.
Therefore, the comparison of the results of the analysis is carried out in dynamics and based on indicators of research of the financial and economic activities of enterprises in this industry. Only on the basis of such studies can we draw conclusions about the literacy of managing production assets.
Return on assets analysis
Return on assets, the calculation formula for the balance of which was carried out by analysts for several years, should be interpreted correctly. If in the period under review the coefficient decreased, this indicates a decrease in the financial stability of the company and a not sufficiently effective policy in the field of utilization of production capacities.
With a gradual increase in capital productivity, we can conclude about the correct, harmonious development of the company. Proper, appropriate use of production assets led the company in this case to increase financial stability.
The capital productivity ratio, the calculation formula of which helps to calculate the industry average value, should be compared with the results of the analysis of competitors. If the capital productivity ratio exceeds the intersectoral value, one can say about the growth of the competitiveness of the analyzed organization. And vice versa.
Two-factor and four-factor return on assets analysis
To determine what factors influence changes in the indicator of production assets, a certain type of analysis should be performed. 
It allows you to look at the coefficient deeper. Using a two-factor analysis, capital productivity, the formula for the balance of which is calculated by the analyst at the initial stage, is studied in the aspect of the influence of the structure of production assets on it. The two-factor model is calculated as follows:
F2 = Af / F * O / Af, where Af is the active part of production assets, F is fixed assets of production, O is the volume of sales.
The analysis can take into account 4 factors - the level of specialization, the capacity of the company, the structure of production assets and the turnover of active means of production.
Ф4 = О / Оосн. * Оосн. / Мсред. * Af / Ф * Мсред. / Af, where Оосн. - The main products of the enterprise, Msred. - the average annual capacity of the enterprise.
Seven-factor analysis of capital productivity
The seven-factor analysis model allows you to deeply evaluate all the elements that influenced the efficiency factor of production capacities. The capital productivity of fixed assets, the formula of which shows only the general picture of the state of the means of labor, would be incomplete without the following analysis.
This technique allows you to assess the degree of influence in the production process of the structure of fixed assets, equipment, machines, shift work of machines, the average annual cost of each unit of equipment, the duration of the equipment, its effectiveness.
The technique is calculated as follows:
F7 = Af / F * Sm / Af * Ks / M * Dp * 1 / St * Chm / Ks * O / Chm, where Sm is the average annual cost of machines and machines, Ks is the number of equipment changes, St m is the average cost of labor, M - the number of cars, DP - the duration of the period, Chm - the number of hours worked by the equipment.
Return on assets management
After calculations, capital productivity, the formula of which was presented above, requires adjustment. You can manage this indicator with the help of revenue and the size of fixed assets. To increase capital productivity, it is necessary to increase labor productivity, equipment. To do this, you can automate production processes, increase the load of equipment.
It is also possible to increase capital productivity by introducing scientific developments and innovations in the production process. Increase sales will increase the distribution network. By improving product quality, good results can be achieved.
Having become acquainted with such a coefficient as return on assets, the formula and analysis of which are necessarily used by analytical services, we can understand ways to improve it. Justifiably increasing production capacities, introducing innovations in technology, expanding the distribution network, and ensuring the development and prosperity of production will be easy.
