All the resources that a company has are represented in the Assets of its accounting balance. It is the group where the elements that allow a business to function in its day to day are identified and valued.
The objective is to improve the utility and performance of each game to achieve greater efficiency and productivity. Now Bashar Ibrahim recommends you analyze the composition and structure of each chapter to get the most out of it.
This task is especially important in current assets, which are those that generate liquidity and, therefore, real operating capacity.
They are transferred to the balance sheet when they can be faithfully valued and it is probable that their use or application will determine a future benefit. The return on the asset depends on its operational capacity and it is in this sense that you can work to improve results.
The asset is divided into two groups, according to its time of use:
Fixed or non-current assets
It groups together elements that can be used in the activity for more than a year (long term).
Current or current assets
They are short-term operating accounts intended to generate liquidity.
Understanding the nature and functionality of each group is critical to a more efficient organization and is beneficial in several key areas:
- Financial: improves the margin of maneuver; more liquidity and less need for debt.
- Operational: increased productivity and reduced costs.
- Taxes: more opportunities for tax optimization.
How to optimize non-current assets?
To carry out business activity, structural elements and more permanence are required. With these resources, the effect of time must be controlled. The objective is to extract the highest possible value from each component, assess its risk of depreciation and minimize management and maintenance costs.
The main subgroups of non-current assets are:
Property, plant and equipment
(Real estate: land, buildings, premises, machinery, offices, furniture)
The properties and assets you have must be proportionate to the size and needs of your company. The most delicate thing is that they generate fixed costs, that is, expenses that must be met even if there is no activity.
To boost your performance:
Make an annual inventory of each unit: description, state in which it is assessment of its real profit and its amortization percentage.
Calculate and track your depreciation and compare the cost of maintenance with its operating capacity. If some good does not compensate, it may be more profitable to change it or get rid of it.
For some assets it is convenient to value the financial leasing options (leasing or renting). Don’t take depreciation, save on maintenance, renovation is less expensive and has tax advantages.
Intangible fixed assets
(Research, development and innovation projects (R + D + i), patents, business transfer rights, etc.)
Its nature is intangible, not physical. Their profitability depends on the satisfaction they generate among customers and also on their ability to bring added value and innovation to the business.A good image in the market increases intangible benefits.
They are reinforced with the effort to offer greater quality, attention, transparency and social responsibility.
(Financial assets with maturity greater than one year)
In non-financial companies, in general, these types of long-term investments are not suitable, unless they have great profit potential. Short-term values (such as the possibility of investing in crowd lendingplatforms) are more interesting.