Lyxor asset managment represents a system of methods and principles for managing a company’s property, as well as the process of making managerial decisions in relation to such assets.
The main (strategic) goal is to increase the value of the company’s assets, to increase the value of the business as a whole. To do this, it is necessary to realize a number of goals of the second level:
Compliance with the balance of assets in terms of liquidity. A sufficient level of solvency is achieved by combining assets with different liquidity. For example, the presence of a large volume of highly liquid assets (cash on hand) does not bring additional profit, they also lose value due to inflation. However, they provide a high level of solvency of the company.
Ensuring profitability. The use of assets in the most efficient and profitable areas of activity increases their profitability. If the type of activity does not generate income, or its level is not high enough, it is necessary to take measures to improve the situation, or eliminate it. Assets should be used where they benefit the company. If you use them in unprofitable activities, their profitability will be low.
Ensuring the need and sufficiency of assets for the implementation of production activities. For the functioning of the company, a workshop, equipment, raw materials and materials are needed, as well as funds to pay for priority expenses. The lack of property and funds does not allow to conduct production in the planned volumes. If there is not enough own capital, it is worth thinking about finding and attracting additional, borrowed sources of capital to form assets.
Optimizing the use of assets. We are talking about work in three directions:
- Ensuring the production cycle through asset flow management.
- Ensuring the necessary number of assets to ensure continuity of operations. Downtime in production means losses and lost revenues.
- Minimization of rejects and losses of raw materials and waste according to the results and during production.
Management and optimization of the structure of enterprise assets
It is necessary to optimize the structure of assets – when determining the optimal ratio of their various types, an assessment of the liquidity of the enterprise is given, ways to increase it and improve economic activity are determined.
The process itself takes three steps:
The composition of non-current assets is analyzed. The part of active assets most used in operating activities and passive (auxiliary) assets is determined.
The optimal ratio of active and passive non-current assets is calculated. At this stage, it is wrong to believe that passive non-current assets must be minimized. They include buildings, structures, expensive equipment – without them, an efficient and uninterrupted production cycle is not possible.
Optimization of current assets. We also maintain a balance between highly liquid cash, accounts receivable and the availability of raw materials and materials in warehouses. It is necessary to take into
Account the features of the main type of economic activity, the factors of the production cycle, as well as the liquidity of various types of current assets.
Principles of asset management and optimization
To properly organize the process of lyxor asset managment and optimization, you need to consider the following factors:
The totality of the company’s assets is formed taking into account its development strategy, possible prospects, economic features of the market, as well as the regional segment. Important! The absence of contradictions with the goals of creating the organization itself. For example, it may seem strange to tax authorities that a large proportion of the assets of a company in the metallurgical sector are short-term financial investments in the absence of fixed assets.
The totality of assets is formed in such a way as to ensure the production of finished products, while taking into account compliance with the structure of the enterprise. In the course of activity, the composition of assets should undergo some changes, adjusting to the range of products. For example, if a confectionery company has started baking cheesecakes, you need to purchase an oven and a freezer to store food.
A smart choice of assets. It is necessary to acquire assets taking into account the maximum possible benefit from their use. The low cost of equipment from a supplier may indicate poor quality, a short period of use, and rapid obsolescence. Too expensive equipment in most cases means reckless spending on their acquisition without the ability to significantly increase the profit from the use of such an asset. The balance of price and expected benefits is the main principle of choosing an asset for acquisition.
Balance as part of assets, based on liquidity. It is worth noting that it can be difficult to comply with this principle – you need to analyze the existing property, draw up a list of assets that should ensure the achievement of key performance indicators in the future. And strive to bring the actual availability of assets to the planned one. As part of the assets of any company, there should be both highly liquid assets (money in accounts) in order to pay off its obligations in a timely manner, and low liquid assets (for example, fixed assets in the form of buildings, equipment) that provide the production cycle. But in what proportions – this is a task for the leader.
Interchangeability. It is necessary to form a set of assets taking into account their possible interchangeability. For example, one machine is out of order. Spare parts for repair or equipment capable of taking over the functions of the machine in repair should always be available. This is the only way to ensure the continuity of production. Are the assets not fungible? Then there is the risk of downtime, especially if the company only has assets that are used for a long time or there is no renewal.