METHODOLOGY FOR ANALYSIS OF THE EFFICIENT USE OF FIXED TANGIBLE ASSETS

Abstract

Fixed tangible assets are one of the main factors required for the business of every enterprise. These assets, together with material resources and workforce, are the direct factors that have immediate effect on the performance of the business plan, on the quantity and dynamics of costs and income, and thus, on the quantity and dynamics of the enterprise’s financial performance. Profit, compared on the relevant base, is the enterprise’s profitability. Based on the dialectic cause-and-effect relationship between the indicators (resultative and factor), we can make the conclusion that the use and the efficient use of fixed tangible assets have direct effect on the financial performance, the financial position and the financial stability of the enterprise. The object studied in this publication refers to fixed tangible assets. The nature of fixed tangible assets may be defined as follows. These are identifiable non-financial resources acquired and held by the enterprise. They have the key feature to be in natural and material form and to be used for manufacturing and/or supply or sale of assets or services, respectively, for lease, for administrative and other purposes. Fixed tangible assets are expected to be used for the enterprise’s business for more than one reporting period. We should identify the link among different types of assets within the composition of fixed tangible assets and the economic benefits obtained from them. The economic benefit itself is defined as (direct or indirect) achievement of enterprise’s revenue increase or cost reduction in the process of using the fixed tangible asset. The subject matter of this publication refers to the efficient use of fixed tangible assets and the methods for its analysis. Such methods are considered an element of the complex methodology for analysis of the enterprise’s fixed tangible assets. The methodological stages of the fixed tangible asset analysis are implemented consistently in the logical interrelation between them. These stages are: analysis of enterprise’s provision with fixed tangible assets; analysis of the use of fixed tangible assets and analysis of the efficient use of fixed tangible assets. The article highlights the indicators for analysis of the efficient use of fixed tangible assets in two interrelated aspects. Firstly, as a separate object of the analysis, i.e. as resultative indicators, the values they are based and changed on, subject to the influence of a system of direct factors. Secondly, the indicators for the analysis of the efficient use of fixed tangible assets are studied as direct factors that have influence on the formation and the dynamics of other resultative indicators that characterise various aspects of the overall business of the enterprise. The aim of this study is to describe the opportunities for improvement of the methodology for analysis of the efficient use of fixed tangible assets.