Business activity of the enterprise

Business activity of a business entity is reflected in the financial aspect in the speed of turnover of its funds. At the same time, profitability reflects the level of profitability of the activity of this entity. Analysis of the business activity of the enterprise is the study of the dynamics and levels of various coefficients and profitability, as well as turnover. These indicators are relative results of the company's performance in financial terms.

The study of business activity can reveal the degree of effectiveness of the company's use of funds. As it was mentioned above, business activity operates with such indicators as profitability and turnover ratios. They have a significant impact on the evaluation of the company's performance. For example, working capital turns around once a quarter with 25% of the profitability of core activities. Then the index of business activity for the same quarter will be 0.25 (the same 25%). Hence, we can formulate the following conclusion: if the turnover of a given working capital doubles for a similar profitability, then business activity also doubles.

Similar conclusions are formulated on the issue of reducing or increasing profitability. In other words, with a slowdown in turnover, it is necessary to compensate for its greater profitability. And if the increase in profitability is impossible, then it is necessary to regulate this process with turnover, i.е. Increase output and sales of products.

Business activity is a dynamic and complex characteristic of entrepreneurial activity, as well as an assessment of the effectiveness of the use of resources at the disposal of a business entity. The levels of this indicator reflect the stages of the company's functioning, which include the consideration of origin, development, recovery, recession and crisis, and also show the level of adaptation to the changing market conditions and quality of management.

Business activity can be characterized by a motivated managerial macro or micro level in the process of stable economic activity of the organization, which is aimed at ensuring the growth of employment and the efficient use of resources in order to achieve market competitiveness.

Using the index of business activity, the effectiveness of using labor, material, financial and other resources in all areas of activity is expressed, as well as the quality of management, the adequacy of the company's capital and the possibility of economic growth.

An important influence on the indicator under consideration is provided by macroeconomic factors, the impact of which contributes to the formation or favorable climate that stimulates the conditions of active behavior of the business entity, or becomes a prerequisite for the curtailment of business activity.