Economic Activity of Socialist Enterprises, Analysis of

the comprehensive study of the economic activities of enterprises and their associations, with the aim of increasing efficiency. The analysis of economic activity is a necessary link in the system of managing socialist enterprises. It provides a basis for selection of the optimal choice in decision making at all stages of planning, designing, and building an enterprise and putting it into operation and at all stages of creating new types of products and improving existing ones, as well as in the area of distributing the social product. Such analysis is conducted at various levels of management: within the enterprise in its economically accountable subdivisions, shops, and workbenches; through the whole enterprise; and finally at the level of multienterprise groupings, including trusts, retail trade administrations, firms, central boards, and ministries.

The analysis of the economic activity of enterprises studies all aspects of this activity—production, supply, sale, and financing—in their interaction and interdependence, as well as the work of all functional agencies and internal subdivisions of the enterprise (or of all the enterprises in an association). To guarantee the comprehensiveness of the analysis and the reducibility of its results, a single system of interrelated analytical indexes has been devised based on all forms of economic information—on standards and planning data, on technical documentation, and on operational, statistical, and bookkeeping records and accounts. With the aid of a system of analytical indexes it is possible to determine the influence on the efficiency of economic activity of such factors as equipment, technology, organization of labor, production and management, and financial, credit, and accounting relationships. To ensure such comprehensiveness in the analysis, workers from various technical, engineering, and economic specialties are brought in. The materials they analyze in separate sectors or aspects of the work of an enterprise are subsequently summarized by economic analysts for the enterprise or association as a whole.

In large enterprises the economic laboratories and the economic analysis bureaus direct the analytical work: they draw up plans, oversee their fulfillment, and check and summarize their results. These laboratories and bureaus are subordinate to the chief economist. In small and intermediate enterprises the economic analysis bureau or group in the planning division does this work. Party, Komsomol, and trade union organizations take an active part in this analytical work. From among scientific and technical societies the public economic analysis bureaus (OBEA) have become very widespread and are found at enterprises in all branches of the national economy, as well as in higher official bodies and at scientific research institutions. Public forms of analytical work promote the active participation of industrial workers, service workers, and engineering and technical personnel in the management of industry and in the realization of the principles of democratic centralism.

The object of analysis is economic activity directed toward fulfilling the state plan and reflected in the system of plan indicators as well as in accounts and records and other information sources. The level of efficiency attained by enterprises is also an object of analysis. The economy of enterprises and their associations is investigated comprehensively in order to assess the fulfillment of the plan, the soundness of the planning targets, and the coordination of the enterprise’s economic activity with the economic policies of the CPSU and with the general interests of the state.

The perfection of methods for obtaining and processing economic information by mathematical methods and computer technology has made it possible to analyze economic activity for an enterprise or for individual units within it with an array of previously selected indexes on a daily basis and in some cases even during the course of the working day. This in turn has made it possible not only to evaluate the achieved results in a way that can affect operations but also to predict the progress of operations for the ensuing days and weeks.

The method of analysis consists of comprehensive and organically interrelated study, measurement, and evaluation of the influence of individual factors on the fulfillment of economic plans and on the dynamics of economic development. Analysis is carried out by using special economic, mathematical, and statistical methods and procedures adapted to the object of analysis to process the plan indexes, records, accounts, and other information sources. The most widely practiced methods are comparisons, the grouping of interacting factors according to various criteria, the elaboration of a system of interrelated analytical indexes, and the elimination of the effect of individual factors with the aid of calculating formulas. For a quantitative assessment of the influence of particular factors the method of balances is used, as is the method of catenary substitutions in various simplified variations (the method of differences in percentage or in absolute values). The further refinement of special analysis procedures is related to the wider application of mathematical statistics methods and higher mathematical methods.

The interaction of various economic factors in the production process and their frequently conflicting effect on the results of economic activity are brought out by the elaboration of a system of analytical indexes and by the elaboration of formulas in which the connection between these indexes is expressed mathematically. With the aid of formulas, a determination is made of the effect of particular aspects of the economic activity on its results in terms of generalized indexes. In industry, volume of production and sales, productivity of labor, the incremental output/capital ratio, the coefficient of efficient utilization of material resources, prime cost, profit, circulation of working capital, and profit rate are used as generalized indexes. In trade, goods turnover, distribution costs, profit, profit rate, and rate of commodity circulation are used. These same indexes are also used in other branches of the economy along with other indexes appropriate to those branches.

In terms of the problems it deals with, analysis of economic activity is divided into the overall analysis of the entire economy on the one hand and the topical analysis of particular aspects or indexes on the other hand—for example, analysis of material and technical supply, of utilization of fixed capital stock, of prime cost and profit rate, and of distribution costs. According to the comparisons employed, the analysis of economic activity may be based on the data of the enterprise alone, on the data of several enterprises, or on a comparison of average indexes for a branch of the economy as well. The last is the so-called comparative analysis, which in industry is called the interplant analysis. Depending on the information used and the time allowed for the study, the following types of analysis may be distinguished: operational analysis of the work of an enterprise and of its separate subdivisions on the basis of daily economic information; analysis of the activity of individual enterprises for a more lengthy period based on the data from periodic accounts; and analysis of the activity of enterprises belonging to an association based on the data from summary reports. In terms of content and aim the analysis may be a general-economic one (financial-economic or statistical-economic) or it may be a technical-economic one. The general-economic analysis is based on data from periodic accounts and studies of generalized value indexes of economic activity. The effect on these indexes of technical, technological, and product quality factors is considered in the general economic analysis but is not disclosed in detail. The technical-economic analysis carries the general analysis further, helping in the detailed study and evaluation of the enterprise’s technical level and the effect of that level on economic indexes.

Several different stages in analytical work can be distinguished. First, the plan of the work is drawn up (usually for a year with quarterly breakdowns). Here the aim and the outline of the analysis are indicated, as well as the scheduling of the work, those responsible for doing it, the sources of information, and the means of compensating for insufficient information. The forms to be used for analytical tables and graphs are worked out beforehand, and other technical means for summarizing the materials of the analysis are specified. In the next stage source materials are gathered (information-gathering), their reliability is verified, and the analytical processing is carried out.

The most crucial stage in the analysis of economic activity is the clarification of the causes for departures from the plan and for changes in the generalized indexes and then the quantitative measuring of the effect of these causes on the indexes analyzed. In order to clarify the causes for departures from the plan and for changes in the indexes being analyzed, a range of interacting factors is specified and they are grouped together. Subsequently the interrelation between these factors is determined and the effect of factors not depending on the enterprise is removed or eliminated. On the basis of measuring positive or negative effects of particular factors, a determination is made of unutilized potential for improving the analyzed indexes. The unutilized potential is regarded as the enterprise’s reserves in the given sector of its work. In the concluding stage the results of the analysis are summarized; the conclusions and final evaluations are formulated, a combined tabulation is made of the reserves for heightening efficiency in the work of the enterprise, and proposals are submitted for mobilizing the internal economic reserves to eliminate the shortcomings discovered and to strengthen positive achievements.

The content of the analysis of economic activity for industrial enterprises and for construction, agricultural, transportation, trade, supply-sale, and other organizations differs in essential ways owing to their varied roles and functions in the national economy.

Analysis of economic activities of industrial enterprises This type of analysis pursues the following aims: to evaluate how the plan has been fulfilled and what changes have occurred in the period being analyzed in comparison with the preceding periods; to disclose those factors which have led to a departure from the plan in either a positive or a negative direction, again in comparison with the preceding periods; and to discover the reserves for increasing the efficiency of the enterprise’s work and to indicate how they can be mobilized. The analysis is preceded by verification of the completeness and reliability of the information, since the depth and validity of the analytical conclusions and proposals depend on this verification.

The analysis of the organizational and technical level of the enterprise and of improvement of this level in fulfilling the plan for increasing production efficiency begins with a study of the state of the technology and organization of production and management and an assessment of how the organizational and technological level of the enterprise corresponds with the contemporary level of development in science and technology. These factors are studied from the point of view of their effect on the economic indexes, such as norms for material inputs, amount of waste products, labor consumption requirements, productivity of labor, prime cost, length of the production cycle, incremental output/capital ratio, and profit rate. This area of analysis is handled primarily in the technical service departments of the industrial enterprises, in the scientific research institutes of particular branches of the economy, and in project design bureaus. The quality and economy of the output are analyzed. The various characteristics of the output come under examination at this point. The technical level of production is studied—the mechanization and automation of the productive processes, the extent to which labor is furnished with technology and sources of power, the age of the equipment, the relative value of new technology and the efficiency with which it is introduced, the progressive quality of the technology being used, and the correspondence between the technology and the contemporary advances in science. At the conclusion an evaluation is given of the level of technology from the point of view of its economic efficiency. The organization of labor and production and the efficiency of management in the enterprise are also analyzed. In order to evaluate the level of an organization of production, the following are taken under consideration: specialization of production, continuity of production, time requirements to produce new types of output, acceleration of the production cycle, and reduction of repair and maintenance costs related to production. Special attention is paid to the extent to which the organization of labor and production corresponds with the requirements of the scientific organization of labor. In the analysis of the organization of management of the enterprise, the following are taken into consideration: the number of supervisory personnel in terms of their various types and groups; the degree of mechanization in accounting, planning, and computing work; the use of modern organization techniques for increasing the operational efficiency of information; and the organization of supply and sale and its effect on the size of the production reserves and the surpluses of finished product.

The fulfillment of the plan for increasing the efficiency of production—the most important part of the technical-industrial-financial plan of an enterprise—is examined on the basis of data concerning actual economic efficiency achieved in improvements of product design, technology, and organization of production. Here it is determined whether all measures envisaged by the plan have been taken, whether the planned deadlines for fulfilling these measures have been met, and whether the actual economies and profits from the measures introduced correspond to planned levels. In conclusion the effect of these measures on economic activity is clarified.

The analysis of the provision and utilization of resources is the next important area in the analysis of economic activity in industrial enterprises. This analysis is conducted on the basis of an initial grouping of resources according to the three simple aspects of the production process: labor resources, the means of labor (fixed capital stock), and the objects of labor (material resources). The provision of each of these three groups of resources to the enterprise and the degree of their efficient utilization are determined. The specific actual indexes for provision of resources and their utilization are compared with the plan, with progressive norms (planning coefficients based on most efficient projected utilization of all resources), with data from preceding years, and with indexes from other enterprises as well. On the basis of all these comparisons the utilization of resources is assessed and the influence of specific factors on the efficiency of production is clarified. Further clarification is made of the potential for improving the work of the enterprise under conditions of more rational utilization of resources.

The analysis of provision and utilization of labor resources begins with an examination of how the actual number of workers corresponds to the planned needs for them. The personnel structure is studied and departures from the plan reviewed for groups and categories of the work personnel. The structure of the work force by occupations and skill categories is examined in terms of its correspondence to the needs of production. Investigation is made into the effect of changes in the number of engineering and technical workers on the improved functioning of design and technological services in the enterprise. Also analyzed are the movement of worker cadres, the reasons for dismissals, and the fulfillment of the plan for the organized hiring, training, and upgrading of skills and qualifications of workers.

A very important problem in the analysis of labor resource utilization is the study of factors causing deviation from the plan in terms of productivity of labor and of changes in the productivity of labor in comparison with preceding periods. First a determination is made in percentages of the fulfillment of the plan and of the change in the average output per employee in general, per worker, and per basic productive worker. Comparison of the extent to which the plan has been fulfilled and of improvements in these percentage indexes makes it possible to determine how the rise of labor productivity is affected by changes in the proportion of productive workers to other industrial and manufacturing personnel categories (in terms of percentage of plan fulfillment or of percentage changes in the average annual output per employee and per worker), and by changes in the proportion of basic workers to auxiliary workers (in terms of the same indexes per worker and per basic productive worker).

In order to uncover the factors of change in the productivity of labor and the potential reserves for rise in labor productivity, a separate study is conducted of the use of labor time (extensive factors) and of the average hourly output in relation to the labor-consumption requirements of production (intensive factors). The separate study of these two groups of factors is necessitated by the fact that the utilization of labor time depends fundamentally on the organization of labor and production, whereas the average hourly output depends on the general organizational and technical level of the enterprise, which determines in advance the labor-consumption requirements of the output and the skill level of the workers. By means of analysis the causes of unplanned losses of labor time within the working day as a whole and within each shift are clarified and methods for making good these losses are indicated. Potential reserves for increasing production by improving the utilization of labor time are specified. Potential reserves for reducing the labor-consumption requirements are brought out by means of the analysis of particular aggregates of labor time put into production or administration at the enterprise. In particular these are the following: all labor time put into production of particular goods in the basic productive process (technological labor-consumption requirements), the input of auxiliary workers’ labor time in basic productive shops and on auxiliary production (the labor-consumption requirements for the care and maintenance of production), and the labor time put in by the remaining categories of industrial and manufacturing personnel—engineers and other technical workers, office workers and other service workers, and the junior maintenance staff (labor-consumption requirements of management)—in relation to the total volume of output.

In order to uncover more completely the potential reserves for increasing the productivity of labor, a study is made of the pattern of labor-consumption requirements per unit produced over a number of years, and a comparative analysis is made of the labor-consumption requirements for a particular product, for particular component parts, and for semifinished products. Frequently a comparative analysis is also made of particular processing operations at several related enterprises or within an enterprise at separate subdivisions or locations. In order to evaluate the situation in regard to planning and rate fixing, the correlation between norms based on technology and those based on statistical and experimental experience is determined separately for basic shops and for auxiliary shops, including those sections of production where the growth has slowed down.

In the course of the analysis, clarification is also made of the effect upon the level of productivity of the systems of payment for labor, particularly the various forms of material incentives causing a rise in average earnings. An examination is made of how the proper proportions between the growth of labor productivity and average earnings is maintained and how these proportions affect the prime cost of goods produced. Measures are worked out to remove the causes of nonproductive wage payments.

The analysis of the utilization of labor resources concludes with a summary tabulation of the potential ways that have been uncovered for improving the utilization of labor time and for reducing the labor-consumption requirements of production. The possible growth in the volume of production and reduction of prime cost of the goods produced, given the realization of these potential reserves, is specified.

The analysis of the provision of the means of labor (fixed capital stock) and of its utilization makes it possible to establish whether the fixed capital stock of an enterprise is replaced on time and to a sufficient extent, what its technological condition is, and how the available plant and equipment is utilized. This analysis is made of the degree of production use of the plant and equipment (the value of functioning equipment in relation to installed equipment and all available equipment); utilization of the fund of total available machine-hours, whether in terms of the plan or of calendar scheduling (the extensive factors affecting return on funds); and of utilization of capacity (the intensive factors in the utilization of the means of labor). The efficiency with which fixed capital stock is utilized is determined on the basis of the incremental output/capital ratio index—that is, the relation between output and the average size of the fixed production capital. To make this calculation, output is usually measured in the most general value terms, although in making the analysis more detailed, measurement is also made in terms of natural and conventional indexes. The use of natural and conventional indexes makes it possible to specify the effect of shifts in product assortment, whether of goods produced or of products sold, on changes in the incremental output/capital ratio in comparison with the plan and with the preceding period.

In order to characterize the utilization of specific groups of technologically related or similar equipment, the planning indexes are compared with the accounting indexes for output per machine-hour, which are calculated on the basis of both natural and conventional indexes. Determination is made of the effect on the incremental output/capital ratio of changes in the relative value of the active part of the fixed productive capital—the operating machines and equipment in terms of their overall value. For this purpose a study is made of the changes taking place in the structure of the fixed productive capital, and a comparison is made of the growth in the incremental output/capital ratio per ruble of value for all of these funds and per ruble of value of the productive equipment alone.

The incremental output/capital ratio per square meter of productive space is also determined. In order to evaluate the technological condition of the capital, the level of depreciation (in terms of percentage of the original value) and of the rate of renewal of the capital are determined and compared with the base period or with the planning estimates.

Of special importance is the analysis of the provision and utilization of productive equipment. An examination is made of whether all planned equipment has been received and installed and what percentage of it is functioning. In order to assess the utilization of the available machine-hour fund, a comparison is made between the planned and the actual shift indexes (total machine shifts divided by number of machines). In addition the utilization of work time for equipment is examined over a period of days as well as during the course of a day. For a full assessment of the utilization of the total available fund of machine hours, a balance on the utilization of equipment is drawn up.

The utilization of plant capacity is examined by comparing the actual indexes of output time per machine hour with the planning indexes and with the indicators from the preceding period, as well as with the indicators of leading enterprises in the same field. Growth of capacity and its improved utilization depend on improvement in technological processing and increases in the skill level of the workers. Therefore, in analyzing the utilization of capacity, data are included on the fulfillment of the plan for organizational and technical measures proposed for the mechanization and automation of auxiliary operations, increases in the rates of processing and of chemical reactions, and other improvements. In the final tabulation of the potential reserves for increasing the incremental output/capital ratio, these are divided into reserves for improving the utilization of the total machine-hours fund and the reserves for increasing the productivity of the equipment per machine hour of work.

The provision and utilization of the objects of labor (material resources) are studied in the same order as the two groups of resources reviewed above. Analysis is made of the fulfillment of the plan for material-technical supply by volume, variety, and delivery schedules. The condition of production supplies and their correspondence to the established norms are also analyzed. On this basis conclusions are drawn about the effect of the fulfillment of the material-technical supply plan on the output of a given volume and variety of products. The analysis of supply plan fulfillment is supplemented by an evaluation of whether the supplies are of optimum quality, in which connection special attention is paid to their degree of completeness. A very important part of the analysis of material resources is the study of their utilization. If the nature of production and consumption at a given enterprise allows the calculation of generalized indexes for the utilization of raw and other materials in the form of coefficients of output from raw material or of the average percentage of waste, then such coefficients are determined and subsequently compared with analogous plan indexes from leading enterprises and from the patterns established over a number of years. At enterprises where an up-to-date record is kept of departures from established norms for expenditures of materials, it is possible to systematically establish the causes for overex-penditures or savings on material resources. At enterprises where such records are not kept, use is made instead of calculations compiled periodically and of data from inventory and sample surveys. The analysis of the utilization of material resources is completed by ascertaining its effect on the volume, variety, and prime cost of goods produced and by developing ways for mobilizing the disclosed reserves.

An especially important place in the analysis of the economic activity of an industrial enterprise is occupied by the analysis of the fulfillment of the technical-industrial-financial plan. This analysis is conducted in the following order: the analysis of production and sale of output; the analysis of profits, profit rate, and prime cost; and the analysis of financial status.

The analysis of production and sale of output includes an evaluation of how the plan was fulfilled for volume of gross output, marketable output, and output sold and for assortment and grading, as well as for the amount of socially useful work done by the enterprise on the basis of value indexes and natural indexes. For purpose of analysis the output is grouped according to various categories—for example, into corresponding to or not corresponding to the production type, into material-consuming products and labor-consuming products, into new products and into those comparable to the preceding year, into products for which there is increased demand and those for which there is a limited market, and into highly profitable, moderately profitable, and unprofitable products. An inspection of product composition and of plan fulfillment for various categories makes it possible to give a many-sided evaluation of the enterprise’s efficiency from the point of view of its correspondence to the needs of the national economy. In the same way a determination is made of the fulfillment of the plan in terms of product variety and of the factors influencing fulfillment of the plan for production and sale of output; and their relative influence is measured. This part of the analysis has the aim of bringing out the potential reserves for increasing the volume of output and its sale. In the analysis of profits, profit rate, and prime cost, special attention is paid to a study of the reasons why profit rate indexes depart from the plan or from previous levels. When total profits, the amount of fixed capital stock, and working capital do not correspond to the plan, the influence of particular factors on these deviations is clarified and specified separately. The purpose of this is to strengthen and intensify the positive effect of certain factors and to remove the negative effect of others. Insofar as the profit rate is increased as a result of increased volume of production and sales, as well as increased incremental output/capital ratio and reduced prime cost, the analysis of profits and profit rate is organically linked with the analysis of prime cost.

This analysis includes an evaluation of how the plan is fulfilled in terms of prime cost, a study of the causes for changes in prime cost, and an indication of what the potential reserves are for further reducing prime cost. With this aim in mind production costs are analyzed in terms of component elements and calculation categories. In analyzing costs a separate investigation is made into expenditures on materials, wages, servicing and management of production, and other expenditures. Particular types of cost are studied in greater or lesser detail depending on their relative weight in the formation of prime cost. In conclusion a final tabulation is made indicating the potential reserves for reducing prime cost and increasing profits. These potential reserves are usually divided into two groups: the elimination of losses and nonproductive expenditures (including unjustified overexpenditures as opposed to the estimated and planned target expenditures) and improvement in the utilization of fixed capital stock, material, labor, and monetary resources based on a rise in the organizational and technical level of the enterprise over the planned level.

The analysis of the financial status of the enterprise covers the questions of the formation and utilization of various types of financial resources, their distribution among various types of material values, the evaluation of the solvency and financial stability of an enterprise, and the rate of capital turnover. The analysis of the financial status is conducted basically from the data of an accounting balance, and therefore it is frequently referred to as the analysis of the balance. In the course of the analysis the following things are clarified: the solvency of the enterprise and of its customers, its ability to provide its own working capital in accordance with the planned needs for this, its ability to retain capital, and the causes for changes in the total sum of capital during the period being analyzed; the fulfillment of the plan for profits and profit rate; the situation regarding inventories of marketable goods and usable materials and the sources of formation of such inventories; the disposition by type of asset of internal, borrowed, enlisted, and special sources of capital; the provision of credits and their efficiency; account records in relation to debtors and creditors; the turnover of working capital; and the formation and utilization of funds for economic incentives. The intactness of the enterprise’s own working capital is also examined to see that it is not being withdrawn from circulation to cover expenses that should be met out of special sources for financing. Separate analysis is made of how long-term and short-term sources of credit are utilized, whether they are aimed at worthwhile targets, and whether loans are obtained and repaid on time. The effect of credit use on increasing the organizational and technological level of the enterprise, on expanding production, on increasing the rate of capital turnover and reducing prime cost, and on increasing profits is clarified. An analysis is also made of the fulfillment of the plan for building up special sources of capital (for example, amortization funds, material incentive funds, and other funds for economic stimulation), with attention to whether these special sources are being utilized for worthwhile purposes. Analyzing the conditions of the accounts clarifies the causes and timing of debt and credit formation, which results in redistribution among enterprises of working capital beyond levels allowed for by the plan. Insofar as a chief cause of credit formation is a slowdown of turnover in working capital, a detailed investigation is made of the goods and materials inventory in terms of a cross section of particular items on the balance and in terms of particular types and varieties of material resources. The causes for deviations in the actual turnover of capital from planned levels and from the preceding period are established. A calculation is made of the amount of capital freed from current commitments as a result of an increased rate of turnover or, on the other hand, of the amount of capital that must be committed additionally as a result of a reduced rate of turnover. The analysis of the financial status concludes with specification of measures for increasing the efficiency of utilization of all sources of capital, for increasing the rate of turnover of working capital, and for seeing to the timely fulfillment of all financial obligations on the part of the enterprise toward creditors, Gosbank (State Bank), and the state budget.

The analysis of economic activity of contracting construction organizations and construction projects This type of analysis has the aim of studying and evaluating the results over a set period of time of the work of construction, of organizations doing installation or other specialized jobs under contract, and of contracted construction projects. The main subjects of analysis are the following: fulfillment of the plan for bringing productive capacity and other construction units into use, for capital investment, for contracted work, for productivity of labor and industrialization in construction, for prime cost of construction and installation work, and for profit rate and financial status in construction organizations.

The fulfillment of the plan for bringing productive capacity and other units of construction into use is one of the basic indexes for evaluating the productive and economic activity of a general construction organization which functions as a general contractor, as well as that of installation and specialized organizations (subcontractors) and even that of a zastroishchik (one who builds using his own resources). Thus the study of the work of contracting organizations and construction projects begins with an analysis of the fulfillment of the plan. An examination is made of observance of the established deadlines for bringing particular units or complexes into operation. At units whose time of commissioning has not yet arrived or has been delayed, the fulfillment of the plan for contracting work is studied. Here an examination is made of whether or not capital is being dispersed among many construction units, both ready to operate and incomplete, and whether or not completion of work on units needed first is being held up. An examination is made of the extent to which the scheduling of particular jobs guarantees the timely commissioning of each unit. The level of plan fulfillment for particular units is compared with the overall fulfillment of the plan by the given organization, and work that is ahead of schedule or behind schedule is specified. Overfulfillment of the plan in terms of estimated value is not proof that the required units will be commissioned on time. Often the totality of construction and installation jobs in a program of contracting work on particular units is not defined with sufficient exactness. Therefore the completion of work is investigated at specified stages of construction and in terms of particular types of work—for example, sanitary engineering work, heat insulation work, and so on. For this purpose information from the detailed net schedule for the construction unit may be used effectively.

The evaluation of the fulfillment of the housing construction program answers the questions of whether the number of homes, the overall amount of living space, and the number of apartments specified by the plan have been completed and made available. The fulfillment of the plan relating to estimated value of construction and installation work on housing construction units is also specified.

The analysis of the fulfillment of the program of contracted work as a whole for general construction organizations (acting as general contractors in the construction) includes work done by the contractor himself as well as specialized and installation work done by organizations brought in as subcontractors. Here what is studied first is the extent to which the program of contracting work has been fulfilled (including work carried out by subcontractors); after that the fulfillment of the plan for construction and installation work done by the general contractor directly is examined. The latter is necessary for the analyses of the prime cost of production, the number of workers, the wage fund, and other financial economic activity indexes for construction organizations, since the wage fund and work-force limitations, instructions on increasing the productivity of labor and reducing prime cost, and the necessary monetary resources are shared by each construction organization according to the program of work carried out by its own force.

In analyzing the fulfillment of the program for contract work by a general construction organization, the fulfillment of the plan is determined regarding general contracts with individual zastroishchiki, and also with entire branches of industry (ministries, government departments). This plan is the basic one for the organization. Its fulfillment guarantees the timely commissioning of the units being built as required by the state plan. The analysis of fulfillment of the program for contracting work by specialized or installation organizations accordingly studies fulfillment of the plan concerning contracts between subcontractors and the general contractor. The overfulfillment of the plan with units built by means of special sources of capital investment not accounted for by the state plan, above and beyond the sources specified for that purpose, cannot be regarded as a positive phenomenon. Capital construction work paid for by noncentralized sources can take place within the framework of the material funds that have been distributed. The plan can be overfulfilled only under conditions in which additional local material and other resources have been found. Work on units not scheduled in the plan of state capital investments involving the expenditure of material and other resources assigned to units specified by the state plan is not permissible.

After the analysis of the fulfillment of the program for contracting work in regard to permits, parties ordering the work, and basic units is established, the question of fulfillment with regard to those doing the work is settled. The general construction organization, which acts as general contractor, is responsible for the work of the subcontracting organizations that it brings in. Therefore it is important not only to determine the extent to which the plan has been fulfilled by each organization but also to establish which organization is to blame for not fulfilling the plan for construction and installation work in regard to one or another contracting party, construction project, construction unit, and so forth, if such cases occur.

In analyzing the factors that affect the fulfillment of the plan for commissioning newly constructed units of productive capacity and the fulfillment of the program for contracting work, examination is made of how the organization is provided with workers, whether the targets for increased productivity of labor have been met, whether the plan for introducing new technology and mechanization has been met, and so forth. The material and technical supply is studied, and an examination is made to see whether the design and specification documents and the technological equipment requiring installation are delivered on time. The labor factors in construction are analyzed in basically the same way as they are in industry.

The analysis of the fulfillment of the plan for mechanization and utilization of construction machinery is oriented first toward discovering the existing reserves for expanding the mechanization of construction work. The analysis of the mechanization of construction examines utilization of construction machinery and studies how the plan was fulfilled either in terms of output per unit capacity of machinery (such as excavators, suction dredges, bulldozers, and cranes) or in terms of the number of machine shifts worked (for compressors, automatic loaders, and the like). Along with this are clarified the extent and causes of idle time, whether for an entire shift or within a shift. It is important to determine whether the construction organization is supplied with materials, structures, components, and design and technical documents in full and on time and whether the ordering parties provide on time and completely the necessary technological equipment for installation in the buildings and structures being erected; it is also important to determine whether there is sufficient space for the construction work, especially in renovating or enlarging existing plants.

The analysis of prime cost in construction and installation work investigates the fulfillment of targets for reduction in prime cost not only for the organization as a whole but also for individual types of work and costs. This analysis also discloses the factors affecting the meeting of these targets and the potential reserves offering further reduction in prime cost in this work. With this aim in mind a study is made of the fulfillment of the plan for organizational and technical measures providing savings in material and monetary expenditures. First, an examination is made of how the total sum of savings estimated in the plan corresponds to the targets set by the state plan for reducing prime cost in this work. Then the extent of fulfillment of the plan in relation to individual organizational and technical measures is reviewed, as is the amount of savings resulting from these measures in terms of particualr types of expenditure on construction and installation work. In this connection the potential reserves for further reducing the prime cost of this work are brought out. In analyzing the factors that affect prime cost in construction and installation work, it is expedient to specify first how the wage fund of the construction organization is spent on the whole. By comparing the actual expenditures from the wage fund with those of the plan, converted into terms of the percentage to which the plan for construction and installation work has been fulfilled, it is possible to determine whether prime cost for this work has increased or fallen as far as this type of expenditure is concerned.

In making an analysis of the prime cost of procurement of construction materials in the supply office or in the construction administration, if the latter conducts such procurements directly, the actual expenditures per unit of particular type of material and for the entire procured quantity are compared with their estimated value and, where planning-accounting prices exist, with the value in terms of these prices. In analyzing material inputs, an examination is made, and the efficiency determined, of the actual outcome of the planned provisions for organizational and technical measures reducing such inputs or for replacement of expensive materials or materials in short supply with local, cheaper materials.

The analysis of the financial status of a construction organization usually begins with an examination of the plan fulfillment for profits and their utilization. Especially detailed study is devoted to the so-called losses above and beyond sales realized, insofar as the causes for divergences in actual profits from those planned for construction and installation work can be brought out by the analysis of prime cost. The content of the analysis concerning the financial status of contracting construction organizations is essentially the same as that for industrial enterprises in terms of the range of questions studied.

In analyzing the economic activity of the zastroishchik (of a construction project), the objects of study are the fulfillment of the plan for bringing productive capacity and other construction units into operation, the fulfillment of the plan for capital investments and activization of basic funds, the concentration of capital investments and the condition of unfinished construction, and the supply to the construction project of design and specification documents, equipment requiring installation, and some materials. In analyzing the financial status of a construction project, the correspondence of the financing received to the actual capital investment made, the utilization of working capital and bank credits, and the fulfillment of the plan for local provision of internal resources are studied.

The indexes for the commissioning of productive capacity differ fundamentally for contracting organizations and for zastroishchiki. The contracting organization is responsible for building the productive capacity and delivering it to the zastroishchik for comprehensive testing of the equipment and the beginning of production, but the zastroishchik is responsible for bringing the delivered units into operation, for getting production under way, and for mastering the projected productive capacity within the established deadline. There are two special characteristics of the analysis of economic activity for the zastroishchik. The first is the study of the plan for activating fixed capital, in terms of estimated costs only, inventory costs being included in the fixed capital stock of the respective enterprises, organizations, or institutions. The second is the study of the amount of uncompleted construction which in many cases comes about as a result of the dispersion of resources available for capital construction. A great deal of attention is paid to analysis of the economic efficiency of capital investments in construction for industrial and other enterprises. An all-around review of the technical and economic indexes of the unit being built and a comparison of them with indexes from other construction projects or functioning enterprises make it possible to discover potential reserves for savings in capital investments, increases in the level of production, and reductions in production costs.

The analysis of economic activity for socialist agricultural enterprises The comprehensive study of the economic activity of sovkhozes, kolkhozes, and other agricultural enterprises, such as stock-breeding farms, fruit nurseries, experimental stations, and vocational training farms, has the aim of increasing their efficiency.

In the analysis of economic activity special attention is paid to analyzing the fulfillment of plans for sales of produce to the state by sovkhozes and kolkhozes. Plan fulfillment is analyzed by comparing the quantity of various types of goods sold with the amounts specified in the plan. The objects of analysis are the following: economic efficiency in the utilization of land and technology, fulfillment of sales of produce to the state, productivity of labor, prime cost of output, profit rate of production, and financial status.

Insofar as the primary means of production in agriculture is land, the analysis begins with an evaluation of how the land at the disposal of the sovkhoz or kolkhoz is utilized. First, a comparison of the amount of arable land (plowed land, fallow land, and land long fallow) with the amount of land sown with crops and lying fallow indicates the extent to which arable land is utilized; a comparison of the area covered by natural hay fields entrusted to a farm and the number of hectares from which hay is actually mowed establishes the degree of utilization of natural hay fields. Then the fulfillment of the plan for crop area, yield levels, and gross output is studied and an evaluation given of the economic efficiency of the utilization of the land. The gross product in agriculture consists of the product from plant crops and the product from livestock raising. The value of the gross product from plant crops, in terms of production per hectare or per hundred hectares of plowed land, characterizes economic efficiency in the utilization of arable land. The value of the product yield on the average per single hectare of natural hay field characterizes the economic efficiency of meadowland utilization.

Analysis of the development of livestock raising studies first the fulfillment of the plan for increasing the number of cattle and their productivity. Special attention is paid to building up the fodder base. Economic efficiency in livestock is characterized by the value of output received per hectare of agricultural lands used for livestock raising. Farms specializing in fattening cattle constitute an exception. In addition to the fodder they produce themselves, they require external purchases of fodder. Thus in analyzing the utilization of the land as well as in analyzing the gross product for livestock raising by such farms, the value of the fodder purchased must be deducted from the value of the gross product. Differences in natural conditions for the care and maintenance of animals in various regions of the country must also be taken into account. Increases in the number of stock at one or another sovkhoz or kolkhoz are compared with the average data for such enterprises within their own raion or oblast or with neighboring farms and not with farms located in other parts of the country or operating under different conditions.

The provision of feed for livestock is analyzed separately for cattle kept indoors and those kept in pastures. During the analysis the plan for fodder consumption is made specific according to the actual number of cattle available. In the investigation of the fodder base a determination is made of how well the crop pattern corresponds to the tasks involved in expanding livestock raising and of what measures are being taken toward improving meadowlands and pasturelands. Proper expenditure of feed and fodder is determined by natural and value indexes. The provision of shelter for animals is also analyzed. Failure to provide shelter for animals causes losses to a farm just as the existence of unutilized shelter space does.

In addition to raising crops and livestock and processing their own products, many sovkhozes and kolkhozes in the USSR manufacture various goods which are necessary to meet certain of their needs and in some cases are also necessary for the realization of sales. The overwhelming majority of sovkhozes and many kolkhozes have repair shops, process lumber, work peat bogs, and so forth. In such cases the analysis of their economic activity is conducted like the analysis of an industrial enterprise’s economic activity.

An important stage in the analysis of this economic activity is the analysis of the utilization of technology. The utilization of tractor-drawn implements—plows, seeders, cultivators, and the like, as well as cornhusking machinery—is analyzed by comparing the amount of work done by them with their technical potential. In this connection the seasonal nature of production and the agrotechnical schedules for the work as established by the plan are taken into account.

In analyzing the results of the economic activity of agricultural enterprises, allowance is made for the large volume of uncompleted production and for the fact that in agriculture a significant part of the output, such as seed and fodder, is consumed internally.

In the analysis of this economic activity a great deal of attention is paid to the productivity of labor and the prime cost of output. A very important factor in determining the prime cost of agricultural output in the raising of crops is the yield level per hectare of land sown to crops and the extent of costs in production. In the case of nonfulfillment of any index of the plan, the causes are brought out and their effect on prime cost is established. By comparing the actual expenditures with the norms established by the plan, overex-penditures or savings per square hectare of sown land are established. In livestock raising the main factors affecting the prime cost of output are the productiveness of the animals and the level of costs of production. The productiveness of the animals depends to a great extent on the breed or variety of the animals and on the provision of fodder and shelter, as well as on the level of mechanization of labor-consuming processes. For determining the acutal causes of divergences in actual expenditures from those planned, a technical and economic analysis is conducted of the results of measures taken in the recorded period, and their effectiveness is ascertained. In an item-by-item analysis of production costs special attention is paid to the prime cost of feed and the proper use of the fund for payment of work. The item-by-item analysis of production costs shows whether the farm is being run economically.

The conditions of agricultural production in various subsidiaries, such as brigades, specialized livestock farms, productive sectors, departments, and service and auxiliary producers, vary depending primarily on soil fertility, location, crop rotation, and so forth. Thus along with a characterization of the prime cost of output for crop raising and livestock raising for the enterprise as a whole, analyses are also conducted of the work of subdivisions within the enterprise.

The concluding phase in the analysis of economic activity for agriculture is the determination of the financial results for the enterprise as a whole, the primary factor being profits from realization of output. Also affecting the financial results are profits and losses above and beyond the realization of output—for example, a price reduction of the material supplies and goods on hand, a writeoff of debtor’s debts, and so forth. Analyzing the profit rate brings out the effect on it of extra charges for sales of wheat and rye over and above the plan and of departures from the plan in the volume and structure of realized product, particularly the effect of changes in the relative amounts of cereal crops, vegetables, and industrial crops and also basic types of livestock products.

The analysis of the financial status of a sovkhoz has basically the same content and is carried out by the same methods as the analysis for an industrial enterprise. In sovkhozes which are run completely on a basis of economic accountability, special attention is paid to how profits are distributed, how funds for capital investment are formed, and how capital earmarked for material incentives and social and cultural measures is utilized.

The experience of work at many sovkhozes and kolkhozes shows that periodic analyses of productive and financial activity contributes to better fulfillment of the plan and to more complete utilization of potential reserves.

Analysis of the economic activity of transportation enterprises and organizations. The analysis of economic activity in railroad, water, automotive, and air transport has the aim of evaluating the results of their work from the point of view of maximum satisfaction of the needs of the national economy and of the population. The objects of analysis are the fulfillment of the plan for shipping and loading-unloading work in terms of the total volume of loads and passengers hauled in ton-kilometers and in passenger-kilometers; the total mileage of shipment hauls, with a calculation of the proportion of loaded hauls to empty hauls; the extent to which the carrying capacity of the means of transportation is utilized; and loadings and unloadings. To the extent that the volume of shipping is fixed beforehand by the volume of goods to be loaded, the fulfillment of the plan for the utilization of ton-kilometers by a particular railroad division depends on the delivery of loaded cars from other divisions and on the forwarding of the means of transport loaded at the stations of the given railroad division. An investigation is made of the effect on the fulfillment of the ton-kilometer utilization plan of deviations in volume of shipments, length of haul with load, and average axle load. Nonfulfillment of the shipments plan frequently results in insufficient utilization of the allocated time and carrying capacity of the means of transportation. Fulfillment of the plan for the volume and composition of shipping also depends on the way in which the customers meet the plan for delivery of goods for shipment. Separate analysis is made of the effect of rolling stock utilization on the volume of road hauls by trains and locomotives.

In water transport a major influence on the fulfillment of the shipping plan is length of navigational time. This factor is measured by determining the number of days by which the navigational period is lengthened or shortened in comparison with the plan for the average planned volume of shipments per day. The volume of shipments from month to month shows considerable variation, especially in water transport, because of seasonal and other factors. A study of the causes for unevenness in shipping, the elimination of the effect of factors not depending on the shipping work itself, and the working out of measures for increasing the regularity of shipping are all important tasks for the analysis. Such studies are conducted both for the total volume of shipping and for important kinds of loads carried by particular types of transport. The analysis of shipping and loading and unloading work results in clarifying the possibilities for eliminating cross-hauls, reducing the average radius of shipping, improving time utilization, and increasing the efficiency of the means of transportation.

The prime cost and profit rate of transport work depend on how the plan is fulfilled with regard to volume and composition of shipping. The prime cost for shipping per 10 ton-kilometers and per 10 passenger-kilometers is compared with the plan figures to determine savings or overexpendi-tures for the entire volume of shipping carried out. Then the actual expenditures on various cost factors are compared with the plan figures converted into volume of work in ton-kilometers. In this conversion, expenditures are grouped into those depending on the volume of shipping and those not depending on it. Only the dependent expenditures are converted, and the nondependent expenditures are added to that in terms established by the plan. The dependent expenditures are broken down according to types of shipping. Appropriate accounting methods are used to determine the effect of the following kinds of changes on the average prime cost of shipping: changes in the structure of shipping, in the volume of shipping, and in the level of expenditures in comparison with the norms set by the plan.

Of the greatest relative importance for prime cost in shipping by water transport are expenditures on upkeep of the shipping fleet. Overexpenditures or savings in this area depend significantly on the length of time between shipping hauls and on the rational utilization of ship crews in repairing ships during this period.

A comparison of the prime costs for shipping by various means of transport creates the possibility of choosing the most economical kind of transportation for individual types of loads. The overall content and methods for analyzing prime cost in shipping are very close to those used in the analysis of prime cost for industrial output.

An important part of the analysis is the study of receipts from shipping and the evaluation of the fulfillment of the plan for profits. In analyzing the fulfillment of the plan for income from shipping, clarification is made of the effect of changes in the volume of shipping as well as in the structure in terms of types of load. Affecting the average income rate for particular types of load are the proportion between high-speed and low-speed shipping as well as the application of exceptional tariffs and additional charges for carrying long-haul loads, for carrying loads in the autumn, and so on. Also affecting the average income rate in relation to the total volume of shipping is the composition of the loads carried, since different rates of income are set for different kinds of loads. The analysis discloses and measures the effects of all these factors on the fulfillment of the plan for income from shipping. In conclusion the fulfillment of the plan for profits is evaluated, along with the effect on this of the volume of shipping, its prime cost, changes in the average rate of income, fines and penalties paid or received, and other unplanned profits or losses in transport. In other respects, the analysis of profits and profit rate is conducted along the same lines as such analysis for industrial enterprises.

The analysis of the financial status of transportation enterprises and economic organizations is aimed at evaluating the extent to which they provide their own working capital and how efficiently this capital is utilized and at examining capital retention and the efficiency with which Gosbank credits are sought and protected. A special feature is the great attention paid to studying the state of the accounts concerning relations between economic units and their superior organizations, but of primary importance is the correctness and timeliness of the transportation accounting records. The order in which particular questions are investigated and the methods for calculating the indexes of financial status hardly differ from the analysis of the financial status of industrial enterprises.