The economic efficiency of a business is the ability of an optimal organization of commercial activities of an organization to increase its own liquid material and intangible base (balance sheet) for the long term.
The economic efficiency of a business means the ability of a business to achieve its economic goals with optimal use of resources such as capital, labor and materials.
It manifests itself through indicators such as:
- profitability,
- labor productivity,
- turnover assets
- cost of production,
- payback
which allow you to assess how successfully resources are used to achieve business goals.
Assessment and improvement of economic efficiency are key aspects of the successful operation of the enterprise.
Sometimes, many people believe that by deducing the positive values of the fundamental performance indicators of the organization, such as profit, profitability, cost, the economic efficiency of the business has been achieved. But this is not always the case if it happens to the detriment of tomorrow.
It is always necessary to evaluate efficiency with an eye to balance sheet.
For example, if today's business is profitable, then how does this affect the accounts of current balances: is their cost price increasing for the sake of today's goods, is there an increase in the cost of worn-out non-current assets (equipment) due to the write-off of unjustified expenses of today, is the write-off of obsolete equipment being restrained etc., etc., that eventually everything will be transferred to the future for the sake of preserving today.
Sometimes consciously made decisions to reduce the economic potential today (for example, a decrease in production volumes) can have a positive impact on tomorrow (for example, working in conditions of expensive monetary resources - high interest rates), if these decisions contribute to maintaining business liquidity in the future.
Economic management is flexibility, and not just a sometimes meaningless approach to increase GDP from year to year.
Unfortunately, today's management neglects these aspects in many ways.
Hence, the trigger is born in the need for devaluation in order to bring the value of the current business to the real one (in the currency of the world equivalent), and as a result to inflation.
And here it is not so important even the positive foreign trade balance of the state (when there is enough currency), which directly affects the exchange rate of the national currency if the economy does not have a competitive advantage in its value compared to other countries, especially when it largely depends on the external environment.
