In the year 1953 Martin Lohmann and Hans Ruchti represented an effect, which means that fixed assets articles finance themselves, if them writing-off assigned in each case can be fetched back by the market over the selling prices. The Lohmann Ruchti effect designated after them consists of two components, the capital setting free effect and the capacity extension effect.

Capital setting free effect

The depreciations are balance-technically seized by regular writings-off by operational goods. Since they are also included with the calculation of the selling prices, they settle also in the profit and loss calculation, so that the writing-off equivalents flow back again to the enterprise. The crucial effect consists of the fact that writings-off do not only increase the return flow of the equivalents, but in the profit and loss calculation as expenditure to be seized at the same time and thus the payments to the owners of the enterprise reduce. The writings-off are to the enterprise in the result thus in and/or as money at the disposal and can be used to that extent for other purposes than that the distribution of profits.

Capacity extension effect

Since the writing-off equivalents are to the enterprise at the disposal, before a replacement of investments is necessary, they can be used in the meantime also for new or extension investments. So that this process functions smoothly, an exact writing-off and reinvestment plan must be set up by the enterprise, so that with a due replacement of investments also the evenly needed capital is present.

The capacity extension factor (KEF) indicates for it the quantity of machines, on which the capacity extension effect settles down. The highest attainable capacity extension factor amounts to 2, these is possible and by therefore only however only with absolute divisibility of the machines a theoretical value.

KEF = \ frac {2n} {n+1}

Example: As basic equipment 8 machines with in each case a service life are purchased of 5 years.

\ frac {2 * 5} {5 + 1} = 1.67 => 8 * 1.67 = 13.36 machines

The capacity extension effect becomes in particular clear in table form.

Extended example: 8 machines with a service life of 5 years are purchased in the year 2006 to 15000 each "€. Each machine has a capacity of 1000 pieces for each period. It is linear copied. The calculatory depr. corresponds thereby to the relating to the balance.

Criticism

The practical meaning of the effect is however disputed, since different conditions of the model do not apply in practice.

1. Equal lasting prices for the replacement of the goods are presupposed.
2. The calculated writings-off must the actual remain however unchanged.

See also: Internal financing

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