Why the faster the capital turnover, the more you can save upfront capital

Let me give you a simple example to illustrate::

You are a boss, you only have 1,000 yuan in your hand, in order to earn 10,000 yuan, suppose you invest 1,000, you will make a net profit of 1,000, then you have to earn 10 times to earn enough; The time spent is 10 days;

When you have 10,000 yuan on hand, invest 10,000 yuan, and you will make a net profit of 10,000 yuan, and you can get it in one day;

So the same earning 10,000 yuan, is it more prepaid capital, the time spent is short, after understanding the above examples, we will explain.

When you want to earn 10,000 yuan in a day, and you only have 1,000 yuan, do you need to do 10 transactions a day?

So these 10 times is not equivalent to improving the turnover speed, from the original 1 time a day, to the current 1 day 10 times, only in this way, you can use only 1,000 yuan to earn as much as when you invested 10,000 yuan;

So this equates to an increase in the velocity of turnover and a reduction in your upfront capital;

Hope it helps, hopefully.

Hehe, what a professional question, from the Department of Economics and Management, right?

Today's enterprises are generally based on the turnover rate of funds, the so-called"Fast fish eat slow fish"Because the faster the capital turnover, the stronger the profitability of the enterprise, the smaller the inventory, so that small enterprises can also compete with large enterprises, so that the company enters a period of rapid development.

What you mean by saving upfront capital is that the higher the turnover rate at a certain time, the longer the time you occupy, so you increase profitability and save upfront capital.

Yes or no, please refer to your own opinion.

Dear, I am glad to answer for you how to increase the turnover rate of total prepaid capital, improve the turnover rate of prepaid total capital 1, reduce the proportion of fixed capital, and increase the proportion of working capital. (According to the value turnover of capital, it can be divided into fixed capital and working capital.) Fixed capital is the part of capital that exists in the form of plant, machinery, equipment, etc., and its value is transferred to new products in part and in part according to the degree of wear and tear in the production process, and is temporarily accumulated by depreciation as the product is recovered in monetary installments; Circulating capital includes the part of constant capital that exists in the form of raw materials, fuels, auxiliary materials, etc., and the part of variable capital that is used to purchase labor.

The value of the constant capital part of the circulating capital is transferred to the new product, and all the money returned to the capitalist after the product; The variable capital part of circulating capital is reproduced by the laborer in the process of production, and also creates surplus value. 2. The production time and circulation time must be shortened as much as possible. increase social labor productivity to shorten production time; Methods such as improving means of transportation to shorten circulation times.

Summary. Reduce the proportion of fixed capital and increase the proportion of circulating capital 6) It is necessary to shorten the production time and circulation time as much as possible 7) Innovate the way of capital circulation.

Accounts receivable management can be strengthened to improve the turnover rate of total prepaid capital. Ways to speed up capital turnover: 1) Strengthen the management of accounts receivable and balance to ensure the return of funds 2) Strengthen the management of inventory and improve the utilization rate of enterprise funds 3) Ensure the capital of enterprises and provide the driving force for enterprise capital turnover 4) Strengthen financial supervision and clarify the use of enterprise funds.

Reduce the proportion of fixed capital and increase the proportion of working capital 6) It is necessary to shorten the time of production and filial piety as much as possible 7) Innovate the way of capital circulation.

Hello, dear, if you want to improve the speed of capital turnover, you must increase the total asset turnover ratio, the operating net profit margin, and the equity multiplier. To improve the total asset turnover rate, it is necessary to increase the inventory turnover rate, increase the accounts receivable turnover rate, etc., and control the amount of inventory by controlling the number of orders for inventory and the optimal order quantity. By speeding up the recovery of accounts receivable, formulating reasonable accounts receivable credit policies and other rational use of accounts receivable.

After these methods are applied, they can be used to accelerate capital turnover.

Summary. Hello, dear, very happy with your question, how to improve the turnover rate of the total prepaid capital, help you to find out, improve the turnover rate of the total prepaid capital: 1) Strengthen the management of accounts receivable to ensure the return of funds 2) Strengthen inventory management and improve the utilization rate of enterprise funds 3) Ensure the capital of enterprises and provide the driving force for the turnover of enterprise funds 4) Strengthen financial supervision and clarify the use of enterprise funds 5) Reduce the proportion of fixed capital and increase the proportion of working capital 6) It is necessary to shorten the production time and circulation time as much as possible 7) Innovate the way of capital circulation, I hope I can help you, I wish you good health and a happy mood!

Hello, dear, very happy with your question, how to improve the turnover rate of the total prepaid capital, help you to find out, improve the turnover rate of the total prepaid capital: 1) Strengthen the management of accounts receivable to ensure the return of funds 2) Strengthen inventory management and improve the utilization rate of enterprise funds 3) Ensure the capital of the enterprise and provide the driving force for the capital turnover of the enterprise 4) Strengthen financial supervision and clarify the use of enterprise funds 5) Reduce the proportion of fixed capital and increase the proportion of working capital 6) We must try to reduce the production time and circulation time as much as possible, and Changju model 7) Innovate the way of capital circulation, I hope I can help you, I wish you good health and a happy mood!

Pro, improve the turnover rate of the total prepaid capital: 1) Strengthen the management of accounts receivable to ensure the return of funds 2) Strengthen inventory management and improve the utilization rate of enterprise funds 3) Ensure that the capital of the enterprise is simplified and provide the driving force for the turnover of the enterprise capital 4) Strengthen financial supervision and clarify the use of enterprise capital 5) Reduce the proportion of fixed capital and increase the proportion of working capital 6) It is necessary to shorten the production time and circulation time as much as possible 7) Innovate the way of capital circulation.

The total turnover rate of prepaid capital is affected by the composition of productive capital as follows:

The first is the length of capital turnover time, which includes production time and circulation time. The rate of capital turnover is inversely proportional to the turnover time. The shorter the capital turnover time, the faster the capital turnover; The longer the capital turnover, the slower the capital turnover;

The second is the composition of productive capital, that is, the ratio of fixed capital to circulating capital. If the proportion of fixed capital in the production capital is large, the turnover rate of the entire capital will be slow, and on the contrary, the proportion of circulating capital will be large, and the turnover rate of the entire capital will be faster.

The speed of capital turnover affects the amount of annual surplus value.

The speed of capital turnover mainly depends on the speed of working capital including variable capital, and the faster the capital turnover, the faster the variable capital turnover.

Variable capital is the source of surplus value, and the faster the turnover of variable capital, the more a certain amount of prepaid variable capital can be converted into labor in a year, and the more surplus value leakage can be exploited, thereby increasing the amount of annual surplus value. Conversely, the amount of annual surplus value decreases.

The speed of capital turnover affects the annual rate of surplus value.

The annual rate of surplus value is the ratio of the total amount of surplus value produced in a year to the amount of variable capital advanced. Under the condition that the rate of surplus value is certain. The faster the capital turnover, the faster the turnover of the prepaid variable capital, the more labour is exploited, the greater the amount of annual surplus value, and thus the higher the annual rate of surplus value.

Conversely, the lower the annual rate of surplus value.