Economic efficiency is an important characteristic of production

Economic efficiency of the enterpriseis a systematic mapping of the results of the application of resources over the considered period of time. This indicator allows us to characterize the change in labor productivity, for example, increase or decrease, completeness and usefulness of using resources and production capacities, raw materials and materials. All of the above indicators allow us to direct the production process to the path of achieving the most favorable results while minimizing costs.

The result of production is traditionally calledthe final useful product that can be represented in the form of the output volume of output in value or in kind, as well as the economic activity of the enterprise, which includes not only the quantity but also the consumer value of the output.

Thus, economic efficiency isthe ratio of the result of activity to the total current expenditure of all production. In the modern world, this indicator can be expressed in a variety of forms. At the level of a particular production, this parameter is expressed as profitability, that is, the ratio of the profit received for the reporting period to the capital expended on production. However, at the national level, the indicator presented is expressed as the whole-of-the-country results of all production, based on 1 hour of labor or on one working unit (employed).

Economic efficiency is a characteristic,which allows you to make the necessary analysis of the enterprise. Therefore, it will be useful not only to the director or the manager, but also to a multitude of other persons participating in economic practice. For example, creditors, as this will provide guarantees that the enterprise will return the invested money; heads of advertising departments, since information of this kind is necessary for them to promote the company and its products on the market; investors, forming a portfolio of securities, and many others.

Economic efficiency is the indicatoreffectiveness of the economic system used in the enterprise. The main criterion for this parameter is the level of satisfaction of the needs of society, including the development of the individual.

Economic efficiency of activitiesis made for optimization and expediency of realization of economic and industrial activity of the enterprise. Thanks to this, it is possible to use the available resources to the fullest extent, dividing them between regions and various spheres of the economy. Economic efficiency is a characteristic of production, which consists of the efficiency of all enterprises involved in the technological process. In turn, this indicator is determined based on the number of products released, as well as the capital investments spent on this. Thus, you can determine the profitability, the payback period, the turnover of used funds and much more.

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