Using the relative dynamics of indicators for making management decisions

Abstract

The article discusses the possibilities of using the relative dynamics of indicators for making management decisions. The method of absolute dynamics of economic indicators and the method of relative dynamics are compared. The advantages of using the growth rate of indicators in comparison with their absolute dynamics for analytical purposes are shown. Thus, if indicators with different units of measurement are analyzed, the detected deviations in absolute measurement are disproportionate and, therefore, cannot be compared with each other. On the contrary, using the relative dynamics method allows you to estimate the change in the analyzed indicators in relative terms, usually as a percentage. This makes it possible to compare the dynamics of incommensurable indicators and make analytical conclusions for making management decisions. The article provides examples of using the method of relative dynamics of indicators to assess the efficiency of technical, raw materials, personnel and financial policies of the production business. In particular, it shows a methodological approach to assessing the efficiency of the use of fixed assets based on the relative dynamics of business technical policy indicators. It also shows the possibility of assessing the financial stability of a business by comparing the growth rate of such important indicators of financial policy as the cost of equity and the cost of property. Taking into account that in reality the financial situation and efficiency of the business are constantly changing, it is necessary to regularly monitor its production and economic activities. In this case, it becomes possible to identify shortcomings in business management and make timely management decisions aimed at eliminating negative trends and improving the efficiency of business activities.