Asset Utilization:
The data listed in Tables 1 and 2 provide information about M/S Forge Private Limited.
Table: Annual Balance Sheet with Partial Information
The company has 200 workers. In the current financial year 2005-06, company sold 6000 units and had payroll costs of Rs. 90000 Lakh. Compute total head count productivity, units per payroll rupees, value added per employee, return on assets and asset turnover.
Solution
From Eq total head count productivity is computed as
Total Head Count Productivity = 6000 /200 = 30
From Eq. units per payroll is computed as
Units per Payroll Rupees = 6000/90000 = 0.06
From Eq. Value added per employee is computed as
Value added per Employee = (5200 - 1550)/200 = 17.5
From Eq. return on total asset is computed as
Return on Total Assets = (175 + 64 × (1 - 0.3) )/3025 = 0.07
From Eq. asset turnover is
Asset Turnover = 5200 /3025 = 1.72.