The absolute profitability of the enterprise is characterized by the indicator. Enterprise profitability. Taxation and income

1. The structure of the company's income.

2. Absolute indicators of profitability of the enterprise.

3. Relative indicators profitability of the enterprise and their relationship.

1. In a market environment for adoption management decisions you need to know not only the size of the profit received by the enterprise, but also their profitability. Profitability characterizes the efficiency of the enterprise and the skill of investment management. The main parts of the profitability are profit, but the profit that is given in the calculations is quite relative. In practice, it is carried out: in accordance with a number of documents, in accordance with regulationsused by the STS.

The concept of income is more capacious than profit. In the explanatory dictionary, "income" is a flow money. Income - This is money that comes at the disposal of the enterprise in various forms. IN modern conditions management, along with profit, the company can receive other income (dividends, interest on deposits, etc.).

Therefore, it would be correct to call the final result from financial and economic activities not balance sheet profit, but balance sheet income.

The enterprise has at its disposal temporarily free funds, which are of a targeted nature, which are regularly transferred to the bank account. such amounts of funds can only be used after a certain period of time. These are depreciation deductions, deductions to any reserve funds, for the creation of other funds provided for by law. When you create a reserve or other fund in the balance sheet, the profit itself decreases. These deductions are not included in profit, but they remain at the disposal of the enterprise.

To determine the size of the enterprise's funds, it is necessary to determine:

1) amount net profit

2) the amount of depreciation

3) the amount of accrued reserve funds at the expense of profits.

They characterize the profitability of the enterprise for reporting period.

2. When determining the degree of return on invested capital, a whole system of interrelated indicators is used. Each of these indicators for users of reporting has its own meaning, has its own economic interpretation. When analyzing profitability, several calculation methods can be used, but most often they are calculated as the ratio of some type of income and some kind of comparison base.

Indicators (numerator):

1. Profit or income from the main activity of the enterprise, i.e. profit from the sale of products, services, type of work. This is the financial result of the enterprise for which the enterprise was created.

2. Profit or loss from financial activities... This is the balance between income and loss on operations not related to the sale of products, taking into account the interest for using a bank loan.

3. Income from investment activities. This is a part of the profit from financial and economic activities, which is the amount of income from any financial investments in shares of other companies, shares, bonds.

4. Balance sheet income or balance sheet profit. This is the amount of income from financial and production activities of the enterprise.

5. Net profit. This is part of the balance sheet profit minus contributions to the reserve and other similar funds minus the amount of payment of profitable payments minus income tax.

6. Profit is at the complete disposal of the enterprise. This is an absolute indicator, equal to income after the completion of all distribution operations, differs from net profit by the amount of accrued dividends on shares.

7. Net result of the exploitation of investments. it economic effectreceived by the company from the use of invested capital \u003d the amount of balance sheet profit + interest on the loan. This indicator can be considered as payment for financial assets transferred to the disposal of enterprises or as income from equity or borrowed capital.

8. Cash flow. The amount of funds that the company has at its disposal, albeit temporarily \u003d net profit + accrued depreciation charges + reserve fund.

Denominator of absolute indicators:

1. Proceeds from the sale of products without VAT, excluding excise taxes.

2. Equity capital \u003d authorized capital + amount of reserve capitals + amount of reserve funds + amount of retained earnings of previous years + amount of funds social sphere + the amount of targeted funding + the amount of budget receipts + the amount of intersectoral extrabudgetary funds.

3. Net assets is the amount of funds invested in the company \u003d the amount of own sources of funds + the amount of long-term liabilities. Or the difference between the total balance of the asset and the amount of short-term liabilities.

Yield indicators can be calculated either for a specific date, or average annual data can be calculated.

3. These indicators are divided into:

a) indicators of profitability of the enterprise

b) profitability indicators equity capital

c) indicators of profitability of assets of the enterprise.

Profitability indicators:

1. Self-financing rate \u003d Balance sheet profit (6) / Amount products sold *one hundred. This indicator reflects the profit that the company has from each ruble of products sold. It characterizes the ability of an enterprise to self-finance, it is important in the development of financing policy and it can be viewed as an opportunity for intensive development.

2. The rate of entrepreneurial income \u003d Net profit (5) / Sales proceeds * 100. Gives an idea of \u200b\u200bthe results of the economic activity of the enterprise, the degree of strength of its position. This indicator characterizes the strength of the enterprise in the sales market. Decrease-reduction of supply for products.

3. Profitability of products sold \u003d Profit from sales (1) / Proceeds from sales * 100. Managers use this indicator to control the relationship between the amount of products sold, the price of it, and the value of production costs.

Return on equity indicators:

4. Return on equity \u003d Net profit (5) / Equity. This is a key investment indicator, in the West it is called the rate of return on equity. Shareholders and investors pay special attention to this indicator, since it the best way shows how much profit each ruble of own funds brings.

5. Total profitability \u003d Balance sheet profit / Equity * 100. This indicator characterizes the activities of the enterprise, the profitability of the enterprise from all types of activities per 1 ruble of equity capital. This indicator is used in the analysis of working capital. This capital can be characterized by its share in the total value of assets. This is the ratio of borrowed capital and equity capital.

Return on assets indicators:

6. Net profitability \u003d Net profit / net assets * 100. Gives an estimate of the return on equity.

7. Return on total capital \u003d Net result (7) / net assets * 100. In foreign practice, this indicator is considered as one of the main and provides a characteristic of the effectiveness of the enterprise.

Every hunter wants to know where the pheasant is sitting. This children's saying is the best description of the investor's activities. Every asset owner wants to know where the profit is hiding. In the conditions of the rapid development of the investment market, it is difficult for an unprepared person not to lose money.

Professionals use the whole spectrum to assess risks and performance economic indicators... The key concept in the analysis of investment projects is profitability. There are terms such as the yield on bonds, stocks, investments, capital.

Profitability concept

Profitability is a concept used by investors to assess the performance of investment transactions. That is, this is the amount of profit that will remain with the investor after deducting all costs and expenses. Profit in this case is the amount of current income for certain period and capital gains over the same period. Thus, the profitability formula can be represented as:

Doh \u003d PP / SV * 100%, where:

  • Doh is profitability;
  • PP - profit for the period;
  • SV - the amount of investment.

Since the profitability is usually determined as a percentage of the amount of investments, the profit divided by the amount of investments must be multiplied by 100%

Example of calculating profitability

Illarion Genrikhovich owns real estate - a house worth 1 million rubles. He decides to rent it out. Illarion Genrikhovich set the rental price at 30 thousand rubles. How to determine the profitability for the year? According to the formula:

Profitability \u003d 30,000 * 12 / 1,000,000 * 100%.

The return on investments of Illarion Genrikhovich will be 36%. Thus, profitability shows the return on investment as a percentage.

How to determine good investment Did Illarion Genrikhovich make money or not?
The assessment of profitability must be approached logically. First of all, it is necessary to assess all the costs of purchasing and capital turnover. Illarion Genrikhovich bought the house for 1 million rubles - these are his expenses. Profit for the year amounted to 360 thousand rubles (30 thousand rubles * 12 months).

At first glance, it might seem like a 36% yield is great. But in fact, Illarion Genrikhovich, having spent a million rubles, did not recoup his investment in a year.

One rule should be followed when evaluating investments. The positive dynamics of investor activity occurs when the condition is fulfilled under which the profitability is\u003e 100%.

That is, the investments of Illarion Genrikhovich will become profitable only when their yield exceeds 1 million rubles.

Income and profitability

Before proceeding to the study of the types of profitability and factors influencing this very profitability, it is necessary to separate the concepts of "income" and "profitability", which are quite close in meaning. You can often find people, especially novice traders, who mix these two terms and confuse them.
Income is the amount of money received as a result of certain activities for the reporting period of time. For investing activities, income is the amount of benefits received after closing a position in monetary terms.

For example, a trader bought a share in OAO Gazprom for 150 rubles. Before the close of trading, he sold this share for 450 rubles. His income was 300 rubles (450 rubles - 150 rubles) per day.

Profitability is the amount of change in the value of assets in relation to its original value for a certain period of time in percentage. For example, a trader bought a share in OAO Gazprom for 150 rubles and sold it 4 days later for 300 rubles. The return on investment for the day will be 25%. In order to calculate it, it is necessary to present the value of an asset (stock) as 100%. The share was sold for 300 rubles, that is, for 200% of the original cost. Thus, we subtract from 200% - 100% of the initial cost (costs) and get 100% profitability in 4 days. We divide everything by 4 and we get an average return of 25% per day.

Factors affecting profitability

By their structure, the factors influencing profitability are divided into external and internal. The latter relate to the enterprise and directly to production. External factors are a combination of factors that cannot be influenced.

External factors

These include:

  • the political situation in the country and in the world;
  • prices for foreign raw materials and supplies;
  • market relations and the level of economic development;
  • demographic picture;
  • inflation rate;
  • the solvency of people;
  • climatic conditions and so on.

External factors primarily affect prices, sales of products, cost of materials.

Internal factors

To the main internal factors relate:

  • decline and growth of production;
  • decrease in sales volumes or their increase;
  • changes in product prices;
  • decrease and increase in production costs;
  • change in the process of transportation of products.

All factors, to a greater or lesser extent, affect the profit of the enterprise, and therefore can affect the amount of profitability.

Types of profitability

To assess the level of costs invested in economic activityuse the yield. There are the following types of profitability:

1. Internal - the rate of return at which net discounted income is zero, expressed as an interest rate.

The internal rate of return is determined using the equation:

0 \u003d ∑ NPD / (1 + ND), where

NPV - net cash flow for the period;
ND is the rate of return.

2. To maturity is the yield on the bond holder who holds the bond until maturity.

It is calculated in the same way as the internal rate of return:

0 \u003d ∑ NPD / (1 + ND).

3. Current is the volume of coupon payments for 12 months divided by the present value of the bonds. This view is used for stocks and bonds and allows you to compare several bonds or stocks.
Calculated by the formula:

TD \u003d (HC * SK) / RS, where:

  • TD is the current yield of the stock (bond);
  • НС - par value (initial value);
  • SK - coupon rate;
  • РС - the market value of a share (bond).

4. Dividend - this is the return on shares, reflecting the ratio of the dividend on the share to the value of the share itself.
The dividend yield of a stock is calculated using the equation:

DD \u003d D / CA * 100%, where

  • DD - dividend yield;
  • CA - share price;
  • D - dividend received on the share.

Return on equity

The return on equity is usually estimated on an annualized basis, but for long-term investments it is more appropriate to use a value such as the return on equity.

Dk \u003d TD + PC / Kper, where

  • Dk - return on equity;
  • TD - current income for a certain period;
  • PC - capital gains for a certain period;
  • Nper - initial capital.

Bonds and their yield

In order to determine the yield of bonds, it is necessary to consider the concept of "bond", which is one of the main instruments of the investment stock market.

A bond is a type of security that confirms the debt relationship between the lender (the owner of the bond) and the borrower (the one who issued the bond). Basically, buying a bond is buying debt. So why buy other people's debts?

Bonds have 2 prices:

  • Nominal. This is the bond issue price that must be returned after the bond loan expires.
  • Market. This is the price at which this bond is traded on the stock exchange.

The market price is influenced, first of all, by the reliability of investments. This means that during the turnover, securities they rise and fall in price. Closer to the bond payment, its value decreases significantly.

The current yield on a bond can be calculated using a simple formula:

Dtek \u003d (D / K) * 100%, where:

  • Dtek - current bond yield;
  • D - income;
  • K - bond rate.

Stocks and their returns

A share is a type of security that assumes that its owner receives a portion of the company's profits. Profits are usually paid in the form of dividends. Such income can also be obtained in the form of margin, in the event of an increase in the market value of the security.

Shares have par, share, book and market values. Each of them has its own characteristics:

  • The par value is indicated on the face of the share. Their total amount of the company cannot exceed the amount of the authorized capital.
  • The share price reflects the value of a share when it is acquired by its first holder, after it is placed on the stock market.
  • Book value is the result obtained by dividing the book value of a firm by the number of outstanding shares.
  • Market value is the price at which a stock is traded in the secondary market.

Shares have their own yield. Such a value is an indicator that allows you to assess the size of the profit received during the ownership of a share from the moment of its purchase.

You can calculate the profitability of a stock using the formula:
Dakts \u003d SK - PC / PC, where:

  • Dakts is the return on the stock;
  • SK - total capitalreceived from the time of purchase of the stock;
  • PC - the initial capital that was invested in the acquisition of shares.

Any security has its own yield. It can be calculated using the above formulas. But how can you find out about the profitability of securities purchased on the secondary market a week, an hour, a year ago? Is there a way to find out how much profit the acquired shares brought to their owners? For this purpose, ratings of the yield of securities were created.

Profitability and rating

The yield rating is a rating of the securities that brought their owners the highest profit in the previous period (usually a year). It is compiled on the basis of data stock exchanges Worldwide. An assessment of the investment attractiveness of shares (bonds) is taken into account. According to this assessment, the securities are assigned an assessment index from A + to C-. A + is highest quality, and C- is therefore of very low quality. The rating reflects the reliability of securities, profitability and dividend payout. The rating index from A + to C- was developed by Standard & Poor's Corporation.

To be fair, it's worth mentioning that you can often see profitability ratings in professional print media, but this does not mean their reliability. These are only competent expert opinions.

But novice investors are better off using such ratings as a cheat sheet. In most cases, securities from such lists do not bring high returns. But this is almost always a win-win option for those who are not chasing super profits, but want to preserve their capital and even increase a little. Preferred shares are often found in such ratings. In addition, the rating allows you to evaluate securities in dynamics, view their history, analyze the benefits of an acquisition, etc.

Risk and return

Profitability is effective method quality and quantify investment investments. It has its pros and cons. But it is an indispensable tool when analyzing the rationality of investment. Profitability has wide application in economic analysis, allowing you to weigh the decision on the need for capital investment. Often used in conjunction with risk indicators. The investor, when deciding on cash injections, puts on one side of the scale possible risks, and on the other - the possible return on capital. And if the second cup significantly outweighs, then the decision is made in favor of the investment.

We can say that profitability and risks are equilibrium concepts. They are always interconnected. An unspoken law of traders: the higher the risk, the higher the return. Every trader strives to reduce, calculate risk and increase profits.

This is how the stock market works. Each investor makes calculations and finds out where the profit is hidden.

How to assess the level of profitability using the analysis of absolute and relative indicators?

How to conduct a detailed analysis of the cost structure by cost item?

How to increase the level of profitability of the enterprise?

The profitability of an enterprise is an indicator that directly affects profit, that is, the final result of the activity of any enterprise. Increasing the profitability of an enterprise is one of the main goals of the management of any enterprise. There are many ways to increase profitability, each company chooses the most suitable for a particular company. Let's consider the main methods of increasing profitability and see what impact they have on the final result of financial and economic activities.

In order for an enterprise to be profitable and to hold a stable position in the market, it is necessary:

  • produce products that are in demand. You can produce a lot of products, but if there is no demand for it, then there is no sense in such production;
  • sell products at a price that corresponds to the average market price and at which potential consumers are ready to purchase this product. To establish such a price, the company's specialists must study the sales market, potential consumers, their needs and payment capabilities, the company's competitiveness and the prices of competitors for the same type of product;
  • to produce products in the quantity required by the market so that the goods do not stale in the warehouse, especially if they have a limited shelf life;
  • produce products with a rational calculation of production costs. When production costs exceed the proceeds from the sale of products, production is considered unprofitable and unprofitable, it does not bring profit. This can lead to bankruptcy.

We estimate the level of profitability

Assessment of profitability involves the analysis of absolute and relative indicators that characterize its level.

The absolute indicator is profit. Due to it, the enterprise can increase the wage fund, expand and increase the turnover of production, finance other areas of activity, etc. IN general view profit is the difference between the cost of selling a product and its cost (the sum of all costs spent on manufacturing these products).

The amount of profit can be found from the data of the financial statements, namely from the statement of financial results (form No. 2).

Consider a fragment from the financial statements for 2016 of LLC "Alpha", which is engaged in the production of chairs (Table 1).

Table 1

Statement of financial results for 2016

Indicator

Value

Sales volume, pcs. (units)

Price per unit, rub.

Revenue, rub.

Costs (cost of sales), rub.

Gross profit (loss), rub.

Profit (loss) from sales, rub.

Other expenses, rub.

Profit (loss) before tax, rubles

Current income tax (20%), rub.

Net profit (loss), rub.

So, the proceeds of LLC "Alpha" for 2016 from the sale of 4,640 chairs at a price of 24,000 rubles / unit. - 111 360 thousand rubles. Production and sales costs amounted to RUB 89,494 thousand.

We deduct the total cost from the proceeds and get a profit from the sale - 21,866 thousand rubles. Net profit (net of taxes and other expenses, the main indicator of the effective functioning of the enterprise) is 17,493 thousand rubles.

When analyzing absolute indicators, net profit is not the only thing worth paying attention to. Equally important is the ratio of proceeds from sales to the cost of production.

If the values \u200b\u200bof the level of the cost of production and the proceeds from its sale are approximately equal, the enterprise will receive a little profit, therefore it is necessary to strive to obtain more revenue at lower costs. Thus, we can conclude that an enterprise can be considered profitable if its proceeds from the sale of products are sufficient to cover all the costs of production and sale of products and to create a difference, i.e., profit.

After the absolute indicators of profitability, we analyze the relative indicators - profitability, i.e. indicators economic efficiency activities of the enterprise.

Profitability of product sales (ROM, Returnon Margin) - the ratio of profit (loss) from sales to cost.

In our case ROM \u003d 21 866 258.36 / 89 493 741.64 × 100% \u003d 24.43%.

Important!

The higher the rate of profitability of product sales, the more efficient the production and sale of products, and therefore the higher the competitiveness of the enterprise. To increase this indicator, it is necessary to reduce the cost of production and sales of products, to increase sales.

Return on sales (ROS, Margin on sales) - the ratio of profit (loss) from sales to revenue.

In the considered example ROS \u003d 21,866,258.36 / 111 360,000.00 × 100% \u003d 20%.

As you can see, the values \u200b\u200bof the indicators of profitability and competitiveness of the analyzed enterprise are quite large (maximum minimum size profitability - 5%).

The cost includes all costs incurred by the company for the production of these products and their sale. They are grouped into two broad categories: conditionally permanent and conditional variables.

The former (Table 2) do not depend or only slightly depend on the volume of production (for example, depreciation charges, rent for premises, wage personnel not related to production, purchase of office supplies, information and consulting costs, costs of telephony, Internet, etc.), the latter (Table 3) directly depend on the volume, that is, either increase with an increase in production volume, or decrease with its reduction (for example, the cost of raw materials and materials, wages of the main production workers, etc.).

table 2

Conditionally fixed expenses for 2016

Indicator

Value, rub.

Rent

Utilities

Depreciation deductions

Labor costs

Insurance premiums

Total

16 850 180,04

The amount of conditionally fixed expenses for 2016 - 16,850,180.04 rubles. Regardless of changes in the volume of production, it will remain at the same level.

Table 3

Conditional variable costs

Indicator

Consumption per unit, rub.

Total

Sales volume, pcs. (units)

Material costs, rub.

Labor costs of key production workers, rubles

Total

15 655,94

72 643 561,60

Taking into account the norms of consumption of materials and labor costs of the main production workers for one chair, the amount of conditionally variable costs for the entire volume of production (4640 units) was calculated - 72 643 561.60 rubles.

The sum of conditionally fixed (16 850 180.04 rubles) and conditionally variable costs (72 643 561.60 rubles) gives a cost estimate full cost (89 493 741.64 rubles; see also Table 1).

Let's calculate the permissible volume of production at which the enterprise will cease to be profitable, but will not become unprofitable - breakeven point.

The breakeven sales volume is 2019 chairs. With this amount, the company will not receive any profit or loss, and only starting from 2020 units. the enterprise will start making a profit. In this case, the sum of conditionally fixed (16,850,180 rubles) and conditionally variable costs (15,655.94 × 2019 \u003d 31,609,342 rubles) is approximately equal to the amount of sales proceeds (2019 × 24,000 \u003d 48,456,000 rubles. ), it is in this situation that there will be no profit or loss.

The difference between the planned sales volume and break-even is called strength threshold... In our example, this is 2621 units. It is necessary to monitor this indicator and not allow it to approach zero.

At this point, we cover all costs - both conditionally fixed and conditionally variable, and each next unit of production sold will bring approximately 8344 rubles. profit (24,000.00 - 15,655.94).

For greater clarity, let's draw up a break-even graph based on the initial data (Table 4).

In this graph, the values \u200b\u200bof costs (total, variables) and revenues are located vertically, and the values \u200b\u200bof sales are located horizontally. The graph shows that with a value of 2019 units. the lines of revenue and total costs intersect, which means that at this point their values \u200b\u200bare equal.

For all values \u200b\u200bof sales volume below 2019 units. the cost line exceeds the revenue line, therefore, the company is unprofitable; at values \u200b\u200bover 2019 units. the revenue line exceeds the cost line - the company makes a profit.

Methods to increase the level of profitability

The main factors that an enterprise can influence are increase in sales, increase in the selling price of a unit and cost reduction.

Option 1

Let's increase the sales volume from 4640 units. up to 5,000 chairs per year, subject to the demand for such a number in the sales market and maintaining the current number of employees without expanding production.

Revenue \u003d 5000 × 24,000 \u003d 120,000,000 rubles.

Conditional fixed costs \u003d 16 850 180.04 rubles.

Conditional variable costs \u003d 5,000.00 × 15 655.94 \u003d 78 279 700 rubles.

Profit from sales \u003d 120,000,000 - 16,850 180.04 - 78,279,700 \u003d 24,870,119.96 rubles.

Output

By increasing the sales volume by 360 chairs and keeping the selling price per unit, we received additional profit in the amount of 3,003,861.60 rubles.

Option 2

Let's increase the cost per unit of production to 25,000 rubles. All other things being equal, the situation will be similar to the previous one. The revenue will increase and amount to RUB 116,000,000. (25,000.00 × 4640) while maintaining the same level of conditionally constant and conditionally variable costs.

Output

In this case, the profit will be 26,506,258.36 rubles. (116,000,000 - 89,493,741.64), which exceeds the value of profit at a unit cost of 24,000 rubles. for 4,640,000 rubles.

Both in the case of an increase in sales and in the case of an increase in prices, it is necessary to take into account the nuances. There are no guarantees that, for example, an enterprise will be able to realize an increased production volume - it is quite possible that the market does not need such an amount. And then an enterprise that has already spent funds on the production of a larger amount of products, which, moreover, could not sell, will have to bear the costs of organizing / renting a larger warehouse. finished products... And if the products are perishable, the company will also incur losses with such an increase in production. To avoid such situations, you need to carefully analyze the market and potential buyers.

As for the increase in the price per unit of production: when, other things being equal properties of the goods (quality, design, etc.), its cost rises, buyers can refuse to purchase the goods. This situation can be aggravated by comparison with competitors' prices.

We found that the profitability of any enterprise is affected by the change in the balances of unsold products, as in the case of an increase in production with a constant volume of sales. The remainder (360 units that will not be sold) is an incomplete receipt of revenue, therefore, a non-receipt of profit with the funds already spent on the production of these 360 \u200b\u200bchairs.

To increase the level of profitability and profitability, the company needs to reduce the balance of unsold products.

Finally, we turn to the most common way to increase profitability - reducing production costs. To reduce the cost of production, enterprises often develop methods and programs for the implementation of certain measures. But first, it is necessary to study the structure of the cost price item by item and determine the specific weight of each item (Table 5).

Table 5

The composition and structure of the cost

P / p No.

Indicator

Value, rub.

Share,%

Rent

Utilities

Telephony and Internet charges

Depreciation deductions

Labor costs of management and engineering personnel

Insurance premiums for management and engineering personnel

Material costs

Labor costs of key production workers and insurance premiums

Total

89 493 741,64

In the structure of the price, the largest share is occupied by two items of costs - "Material costs" and "Expenses for wages of basic production workers and insurance premiums." It is rational to start reducing production costs with them.

Ways to reduce costs under the item "Labor costs of basic production workers and insurance premiums":

  • reduce the number of employees (for example, by automating some processes);
  • reduce the level of wages. But this may entail the departure of highly qualified specialists. Therefore, various systems of motivation and progressive systems of remuneration are usually used so that production workers for the same level of wages perform a larger amount of work.

Option 3

We will reduce the number of main production workers for 10 people, subject to the automation of some production processes.

The total number of employees before the layoff was 80 people.

On average, 617,940.12 rubles a year for each person under the item "Expenses for wages of basic production workers and insurance premiums" (with an average salary of about 50,000 rubles). In the case of a reduction in the number of expenses under this item will be equal to 43,255,808.40 rubles.

But at the same time, new equipment will be purchased for automation, which will increase the cost item "Depreciation deductions" by 10% and amount to 57,015.68 rubles.

Output

The cost will amount to 83,319,523.68 rubles, profit - 28,040,476.32 rubles.

The cost item for wages has been reduced by 7%.

The most important direction cost reduction for material-intensive industries - savings in the cost item "Material costs":

  • introduction of new technologies;
  • the use of waste-free technologies or the use of production waste;
  • purchase of cheaper raw materials;
  • change of suppliers of raw materials;
  • discount system with a regular supplier of raw materials.

The most common ways to reduce costs under the item "Material costs":

  • reducing the purchase cost of raw materials by concluding contracts with manufacturers directly, bypassing intermediaries or shortening their chain;
  • procurement of materials in large quantities. In this case, you can get a discount from the supplier and save on transportation costs. But for this, the enterprise must have free funds - for the purchase of large quantities and for the storage of these stocks. Therefore, it is imperative to compare the costs of placing large batches of materials with the benefits of their purchase;
  • independent production of some materials. But there are also pitfalls: independent production is not always profitable and often more expensive to produce on your own than to buy a finished product from a supplier;
  • buying cheaper raw materials is the most common way to reduce material costs. At the same time, it is worth paying attention to the quality of the purchased raw materials: with such a reduction in costs, the quality of the finished product may suffer, and this can lead to a loss of demand and, as a result, a decline in profitability.

Option 4

The enterprise buys cheaper raw materials.

For 1 chair, raw materials and materials are consumed for 5001.80 rubles. (Table 6).

According to the analysis carried out by the procurement department, it is possible to change some suppliers with more profitable pricing policy, which can be seen from table 6 (columns 7-8 table 6). Then the cost per unit of production will be reduced by 356.00 rubles, the savings for the entire volume - 1,651,840.00 rubles. (4640.00 × 356).

Output

The enterprise will make a profit:

11,360,000.00 - 16,850 180.04 - 4,640.00 (10,655.94 + 4,645.80) \u003d 23,509,746.36 rubles.

In addition to the considered methods to reduce costs, the reduction of overhead costs is considered to be no less effective: they are not directly related to the production of products and their reduction will not be able to affect manufacturing process and / or the quality of the products.

We have considered the most common methods of increasing profitability, now we will conduct comparative analysis the effectiveness of their application (Table 7).

Table 7

Comparative analysis of the effectiveness of using various methods of increasing profitability

Yield increase method

Revenue, RUB

Cost price, rub.

Profit, RUB

Initial data

Increase in sales

Increase in retail selling price

Reduction of the cost item "Remuneration"

Reduction of the cost item "Material costs"

As you can see, the most profitable was the method of reducing labor costs as having the largest specific weight in the composition of production costs. Its implementation allows you to increase profits by 30%.

To achieve the same result in terms of profit, it would be necessary to increase sales from 4640 units. up to 5400 units or to increase the retail price from 24 to 26 thousand rubles. Meanwhile, the increase in sales suggests additional expenses to expand production, recruit additional workers and the question remains whether such a number of chairs will be in demand on the market. In addition, a rise in prices may lead to the loss of some buyers.

Thus, the most rational is the cost reduction method based on the analysis of absolute profitability indicators.

Now let's see how the proposed methods will affect the indicators of profitability of product sales and profitability of sales (Table 8).

As a result of the implementation of any of the methods, the indicators improve, reaching a maximum as a result of reducing costs under the cost item "Remuneration". This means that the production of the enterprise will become more efficient, and the enterprise itself will become more competitive.

The most effective method for the enterprise to reduce the cost is under the item "Remuneration", which was implemented by automating part of production processes.

The problem should be solved comprehensively and reduce the cost of several cost items at once, and not only to increase profits, but also to reduce the retail price.

findings

It is important to keep abreast of the company's profitability, to look for ways to increase it.

Recall that the following factors affect the level of profitability:

  • unit selling price. It should be at the level of competitors and match the payment options of buyers. To increase profitability, the method of increasing the selling price is used, which, accordingly, increases sales proceeds and profits;
  • the volume of sales of products directly related to the level of demand in the sales market. The planned volume of production must correspond to the demand for products: it makes no sense to produce much more than the market requires (except for the situation when stocks of finished products are formed). To increase profitability, they increase production volumes and look for new distribution channels for products, thus increasing revenue;
  • the cost of production. If the cost exceeds the proceeds from the sale of products, the company will become unprofitable. To increase profitability, they try to reduce the cost price while keeping the sales proceeds constant.

The most effective method is to reduce the cost of production, since there is no guarantee that the goods will be purchased at an inflated price or will be bought in a larger volume.

When implementing the cost reduction method, several important aspects should be taken into account, the main one of which is that a decrease in product quality cannot be allowed by reducing production costs.

In addition, it is worth remembering that when choosing this method to increase the level of profitability, it is recommended to reduce costs in several areas (for example, in the cost items "Remuneration" and "Material costs", the costs of which, according to statistics, have the largest share in the cost of production). This will make it possible to achieve the maximum effect from the implementation of the method under consideration: to increase the level of profitability, to reduce the selling price of a unit of production, which means to ensure greater competitiveness and attract more potential buyers.

In the system of performance indicators of enterprises, the most important place belongs to profitability.

Profitability is a use of funds in which the organization not only covers its costs with income, but also makes a profit.

Profitability, i.e. profitability of the enterprise, can be estimated using both absolute and relative indicators. Absolute indicators express profit, and are measured in value terms, i.e. in rubles. Relative indicators characterize profitability and are measured as a percentage or as a ratio. Profitability indicators are much less influenced than profit margins, since they expressed in different ratios of profit and advanced funds (capital), either profit and expenses incurred (costs).

When analyzing, the calculated profitability indicators should be compared with the planned ones, with the corresponding indicators of previous periods, as well as with data from other organizations.

Return on assets

The most important indicator here is the return on assets (otherwise - the return on property). This indicator can be determined using the following formula:

Return on assets Is the profit remaining at the disposal of the enterprise divided by the average value of assets; we multiply the result by 100%.

Return on assets \u003d (net income / average annual assets) * 100%

This indicator characterizes the profit received by the enterprise from each rubleadvanced for the formation of assets. Return on assets expresses the measure of return in a given period. We will illustrate the procedure for studying the return on assets indicator according to the data of the analyzed organization.

Example. Initial data for analyzing the profitability of assets Table 12 (in thousand rubles)

Indicators

Actually

Deviation from the plan

5. Total average cost of all assets of the organization (2 + 3 + 4)

(point 1 / point 5) * 100%

As can be seen from the table, the actual level of return on assets exceeded the planned level by 0.16 points. This was directly influenced by two factors:

  • above-planned increase in net profit in the amount of 124 thousand rubles. increased the level of return on assets by: 124/21620 * 100% \u003d + 0.57 points;
  • over-planned increase in the company's assets in the amount of 993 thousand rubles. reduced the level of return on assets by: + 0.16 - (+ 0.57) \u003d - 0.41 points.

The total influence of two factors (balance of factors) is: +0.57 + (- 0.41) \u003d + 0.16.

So, the increase in the level of return on assets in comparison with the plan took place solely due to the increase in the amount of the company's net profit. At the same time, the growth of the average cost, others, and also reduced the level return on assets.

For analytical purposes, in addition to indicators of the profitability of the entire aggregate of assets, indicators of the profitability of fixed assets (funds) and profitability are also determined working capital (assets).

Profitability of fixed assets

The indicator of profitability of fixed assets (otherwise called the indicator of return on assets) is presented in the form of the following formula:

The profit remaining at the disposal of the enterprise multiplied by 100% and divided by the average cost of fixed assets.

Return on current assets

The profit remaining at the disposal of the enterprise multiplied by 100% and divided by the average value of current assets.

Return on investment

The rate of return on invested capital (return on investment) expresses the efficiency of using funds invested in the development of a given organization. The ROI is expressed by the following formula:

Profit (before income tax) 100% divided by the currency (total) of the balance minus the amount of short-term liabilities (the total of the fifth section of the balance sheet liability).

Return on equity

In order to get an increment through the use of the loan, it is necessary that the return on assets, minus the interest for the use of the loan, is greater than zero. In this situation, the economic effect obtained as a result of using the loan will exceed the cost of attracting borrowed funds, that is, the interest for using the loan.

There is also such a thing as financial leverage, representing the specific weight (share) of borrowed sources of funds in the total amount of financial sources of formation of the organization's property.

The ratio of the sources of formation of the organization's assets will be optimal if it provides the maximum increase in the return on equity in combination with an acceptable amount of financial risk.

In a number of cases, it is advisable for an enterprise to obtain loans in conditions where there is a sufficient amount of equity capital, since the return on equity increases due to the fact that the effect of investing additional funds can be significantly higher than the interest rate for using a loan.

Lenders this enterprise just like its owners (shareholders) expect to receive certain amounts of income from the provision of funds of this enterprise. From the perspective of lenders, the profitability (price) of borrowed funds will be expressed by the following formula:

The fee for using borrowed funds (this is the profit for lenders) multiplied by 100% divided by the amount of long-term and short-term borrowed funds.

Return on total capital investment

A generalizing indicator expressing the efficiency of using the total amount of capital at the disposal of the enterprise is return on total capital investment.

This indicator can be determined by the formula:

The costs associated with attracting borrowed funds, plus the profit remaining at the disposal of the enterprise, multiplied by 100% divided by the amount of total capital used (balance sheet currency).

Product profitability

Product profitability (profitability of production activities) can be expressed by the formula:

The profit remaining at the disposal of the enterprise multiplied by 100% divided by the total cost of goods sold.

In the numerator of this formula, the profit from product sales can also be used. This formula shows what profit the company has from each ruble spent on the production and sale of products. This profitability indicator can be determined both for the organization as a whole, and for its individual divisions, as well as for certain types products.

In some cases, the profitability of a product can be calculated as the ratio of the profit remaining at the disposal of the enterprise (profit from product sales) to the amount of proceeds from product sales.

The profitability of products, calculated as a whole for a given organization, depends on three factors:
  • from changes in the structure of products sold. An increase in the share of more profitable types of products in the total amount of products contributes to an increase in the level of profitability of products;
  • a change in the cost of production has the opposite effect on the level of profitability of products;
  • change in the average level of selling prices. This factor has a direct impact on the level of product profitability.

Return on sales

One of the most common ROI metrics is your return on sales. This indicator is determined by the following formula:

Profit from the sale of products (works, services) multiplied by 100% divided by the proceeds from the sale of products (works, services).

Profitability of sales characterizes the share of profit in the structure of proceeds from product sales. This indicator is also called the rate of return.

If the profitability of sales tends to decrease, then this indicates a decrease in the competitiveness of products in the market, since it indicates a decrease in demand for products.

Let's consider the order of factor analysis of the indicator of profitability of sales. Assuming that the structure of products has remained unchanged, we will determine the impact on the profitability of sales of two factors:

  • change in the price of products;
  • change in the cost of production.

Let's designate the profitability of sales of the base and reporting period as and respectively.

Then we get the following formulas expressing the profitability of sales:

Representing profit as the difference between the proceeds from the sale of products and its cost, we received the same formulas in a transformed form:

Legend:

∆K - change (increment) in the profitability of sales for the analyzed period.

Using the method (method) of chain substitutions, let us define in a generalized form the influence of the first factor - changes in the price of products - on the indicator of profitability of sales.

Then we calculate the impact on the profitability of sales of the second factor - changes in the cost of production.

where ∆К N - change in profitability due to changes in product prices;

∆К S - change in profitability due to change. The total influence of two factors (balance of factors) is equal to the change in profitability compared to its baseline value:

∆K \u003d ∆K N + ∆K S,

So, an increase in the profitability of sales is achieved by an increase in prices for products sold, as well as a decrease in the cost of sales of products. If the share of more profitable types of products increases in the structure of products sold, this circumstance also increases the level of profitability of sales.

To increase the level of profitability of sales, an organization must focus on changes in market conditions, monitor changes in product prices, constantly monitor the level of costs for production and sale of products, and also exercise a flexible and reasonable assortment policy in the field of production and sale of products.

income profit profitability

Commercial activity is not complete without such a category as profit. The very word "commerce" is already closely connected in the minds of people with this concept. The classical and simple definition of profit is as follows: profit is defined as the difference between total revenue and total cost.

Before organizing any commercial activities, the entrepreneur tries to calculate how profitable, which means that this project will be profitable, since making a profit is the main goal of any commercial organization... However, from the point of view of the Anglo-American financial school, which has received world recognition, the priority in the activities of the enterprise is specifically the maximization of the owners' income. This is due to the need for optimal allocation and use of the firm's financial resources to ensure maximum market value. Such a rational approach will ensure the income of the owners.

The enterprise has different directions of profit distribution (Fig. 1.1) In turn, the organization's income is recognized as an increase in economic benefits as a result of the receipt of assets (cash, other property) and (or) the repayment of obligations, leading to an increase in the capital of this organization, with the exception of contributions from participants ( property owners). Only part of the profit remaining after taxes and payments to the budget is directed to the development of the enterprise and is called net profit.

The company may have revenue, but this does not mean that it also receives profit. To identify the financial result, it is necessary to compare the proceeds with the costs of producing products and selling them, that is, with the cost of production. The company makes a profit if the revenue exceeds the cost. In a situation where the revenue is equal to the cost price, it is only possible to reimburse the costs of production and sales of products. The costs of the purchase and delivery of raw materials are covered, the wages of the workers are distributed, but there is no profit in such a situation, but the company has no debts either. If costs exceed revenues, then the company receives a loss, a negative financial result, which puts it in a difficult financial position, debt obligations, and bankruptcy is not excluded. Naturally, the organization strives to improve its position as quickly as possible and rehabilitate itself in the market as much as possible.

So we see that profit is a kind of benchmark for the enterprise and has a number of functions. In addition to the fact that profit characterizes the economic effect, it also performs a stimulating function, as it is the basis for expanding production, scientific, technical and social development, material incentives workers. Also, profit is one of the main sources of budgeting at different levels.

Profit is an absolute indicator of profitability, since absolute indicators allow you to analyze the dynamics of various profit indicators over several years. It should be noted that in order to obtain the most objective results, indicators should be calculated taking into account inflationary processes. Profit is formed from several components:

§ profit from the sale of products (sales) Pr is the difference between the proceeds from sales Вр and the costs of production and sales of products (full cost) Zpr, the amount of value added tax (VAT), excise taxes OCC:

Pr \u003d Vr - Zpr - VAT - OCC.

§ profit from other sales (Ппр) is the profit received from the sale of fixed assets and other property, waste, intangible assets. It is defined as the difference between the proceeds from sales (Vpr) and the cost of this sale (Zr):

Ppr \u003d Ppr - Zr.

§ profit from non-sale transactions is the difference between income from non-sale transactions (Dvn) and expenses on non-sale transactions (Rvn):

Pvn \u003d Dvn - Rvn

It should be noted that there is a distinction between accounting and economic profit. Under economic profit the difference between total revenue and external and internal costs is understood. Profit based on data accounting, is the difference between income from different types activities and external costs.

In a market economy, it is necessary to competently manage profits, use them not for consumption, but for investment, innovation and maintaining competitiveness. The amount of profit depends on the production, supply, marketing and financial activities of the enterprise. Such an indicator as profit says a lot about the efficiency of an enterprise, but there is also a concept of profitability. It is associated with the relative expression of these indicators and plays a role in the analysis of the work of the enterprise. The profit and profitability of the enterprise are directly related.