The ratio of possible profits and losses. Enterprise profit analysis

Yu.A. Inozemtseva, accounting and taxation expert

How to “spend” your net profit correctly

As is known, the net profit (NP) of a company is distributed by the owners. But whatever their decision, the accountant must reflect it in accounting and reporting. The catch is that accounting regulations only talk about how to calculate profit clause 83 of the Regulations, approved. By Order of the Ministry of Finance dated July 29, 1998 No. 34n. During the year, it accumulates on the credit of account 99 “Profits and losses”, and when preparing annual financial statements, the amount of net profit is written off from account 99 to the credit of account 84 “Retained earnings”. The credit balance on account 84 is your retained earnings (RRP). But the accounting regulations say practically nothing about how to “spend” the profit; there is only a mention in the Chart of Accounts.

The procedure for distribution of private equity is established by the Laws on JSC and LLC subp. 11 clause 1 art. 48 of the Law of December 26, 1995 No. 208-FZ (hereinafter referred to as the Law on JSC); subp. 7 paragraph 2 art. 33 of the Law of 02/08/98 No. 14-FZ (hereinafter referred to as the LLC Law). At the same time, joint-stock companies are obliged to send part of the emergency fund to the reserve fund, and LLCs can do this if they wish. pp. 1, 2 tbsp. 35 of the Law on JSC; clause 1 art. 30 of the LLC Law. Shareholders (participants) can distribute the remaining profit at their own discretion. Thus, subject to certain conditions, they can use profits to pay dividends in Articles 42, 43 of the Law on JSC; clause 1 art. 28, art. 29, paragraph 1, art. 30 of the LLC Law. And sometimes owners decide to use emergency funds to purchase new operating systems or pay bonuses to employees. But the Laws on JSC and LLC do not say how to reflect the distribution of NRP in accounting in these cases.

To understand this issue, let's first talk about what IUU fishing is from a reporting point of view.

What is capital and profit

Retained earnings are part of the organization’s capital; it is reflected in Section III “Capital and Reserves” of the balance sheet.

The standards establish rules only for the recognition of assets and liabilities, and capital is the arithmetic difference between them. There are no capital accounting rules in either RAS or IFRS.

In turn, profit is the difference between income and expenses and paragraph 7 IFRS (IAS) 1 “Presentation of financial statements”.

As in the case of capital, the standards establish only the rules for accounting for income and expenses, and profit is a derivative value.

Accounting for income is regulated by a special standard PBU 9/99, and expenses - PBU 10/99. Moreover, the concepts of “income” and “expenses” are also defined using the categories “assets” and “liabilities”.

Thus, an organization’s income is an increase in its economic benefits as a result of the receipt of assets or the repayment of liabilities, with the exception of participant contributions to clause 2 PBU 9/99. As can be seen from the formula for calculating capital, as a result of the receipt of assets or the repayment of liabilities, capital increases.

An organization's expenses, on the contrary, are a decrease in its economic benefits as a result of the disposal of assets and (or) the emergence of liabilities, with the exception of a decrease in contributions by decision of participants (owners of property) clause 2 PBU 10/99. As a result of the disposal of assets or the occurrence of liabilities, the capital of the organization decreases.

Of course, these are only general definitions of income and expenses; for their recognition, certain conditions established in PBU 9/99 and 10/99 must be met, but we will not consider them in this article.

Note that an increase or decrease in the economic benefits of an organization that occurs as a result of transactions with its owners (for example, payment of dividends) is not recognized as either income or expenses. True, this is directly stated only in IFRS, but in fact this rule also applies to RAS paragraph 109 IAS 1 “Presentation of financial statements”.

CONCLUSION

Capital, including NRP, is not the property of an organization, but abstract financial categories that represent the arithmetic difference between assets and liabilities (income and expenses).

We distribute profits

The question arises: if profit is not money, but an abstract indicator of financial statements, then how can it be distributed or “spent” on something? Conventionally, we can say that profit is “spent” when its value in the balance sheet decreases. This happens when paying dividends and creating a reserve fund. Let's consider these and other options for profit distribution, as well as their impact on reporting indicators.

Dividends

The most common way to distribute profits is by paying dividends. As we have already said, the outflow of assets in connection with the payment of dividends is not recognized as an expense of the organization. Therefore, the accrual of dividends to participants relates directly to the reduction of NRP and capital of the organization, reflected by the posting: debit of account 84 “Retained earnings (uncovered loss)” - credit of account 75 “Settlements with founders”.

To learn how to correctly calculate and pay dividends to LLC participants, read:

Dividends can be paid in money or property, but in any case, payment of dividends will lead to a decrease in the organization’s assets and clause 1 art. 42 of the Law on JSC. When paying in money, the posting will be as follows: debit of account 75 “Settlements with founders” – credit of account 51 “Current accounts”. And the payment of dividends with property (for example, goods) is reflected as a sale by postings:

  • debit of account 76 “Settlements with various debtors and creditors” – credit of account 90-1 “Revenue” - revenue from the sale of goods transferred for the payment of dividends is recognized;
  • debit of account 90-2 “Cost of sales” - credit of account 41 “Goods” - the cost of goods is written off;
  • debit of account 75 “Settlements with founders” – credit of account 76 “Settlements with various debtors and creditors” - the debt to the participant for the payment of dividends is offset.

CONCLUSION

The distribution of profit on dividends leads to a decrease in capital (including line 1370 of the NRP) and assets.

Reserve Fund

As we have already said, JSCs are required to create a reserve fund. Its size must be at least 5% of the authorized capital of the company, and the charter of the joint-stock company may determine a larger size of the fund. clause 1 art. 35 of the Law on JSC. If an LLC creates a reserve fund, then its size is determined solely by the charter clause 1 art. 30 of the LLC Law.

The reserve fund is created by posting: debit to account 84 “Retained earnings (uncovered loss)” – credit to account 82 “Reserve capital”. And is reflected in the balance sheet on line 1360 in section III “Capital and reserves”.

Thus, from the point of view of financial reporting, the creation of a reserve fund leads to a redistribution of amounts within Section III of the balance sheet (part of the NRP is, as it were, “shifted” to another capital item). As a result of such redistribution, the structure of the organization's balance sheet improves. After all, only NRP can be distributed for dividends, and the reserve fund will remain in the capital theoretically forever. Since, despite what is written in the Laws on JSCs and LLCs, reserve capital cannot be spent. And in the balance sheet assets, the reserve fund corresponds to resources (property, money) secured by the organization’s own funds, which is certainly good.

From a financial (but not legal) point of view, the reserve fund can be compared to the authorized capital. It is no coincidence that in the Law on JSC, when it comes to requirements for the structure of the balance sheet (for example, when deciding on the payment of dividends), the reserve fund is mentioned along with the authorized capital. For example, on the day the decision to pay dividends is made, net assets should not be less than the sum of the authorized and reserve capital and clause 1 art. 43 of the Law on JSC.

The reserve fund can be used to cover losses if the owners have made such a decision. On the date of its adoption, a posting is made: debit to account 82 “Reserve capital” – credit to account 84 “Retained earnings (uncovered loss)”. The decision by the owners to repay losses using reserve capital must be disclosed in the notes to the financial statements and clause 10 PBU 7/98. As you understand, as a result of using the reserve fund, as well as when creating it, the organization’s capital will not change. Covering losses with the reserve fund has a rather psychological effect - a “break-even” balance looks more attractive to investors.

In addition, according to the Law on Joint Stock Companies, funds from the reserve fund can be used to repay bonds and repurchase shares. However, in our opinion, this statement does not make sense. After all, paying off bonds (or buying back shares) means paying money to their holder. Consequently, only assets, and not a capital item, can be used to redeem and repurchase securities.

The issue of bonds is reflected in the same way as raising a loan, by posting to the debit of account 51 “Current accounts” and the credit of account 66 “Settlements for short-term loans and borrowings” clause 1 PBU 15/2008.

Accordingly, the redemption of bonds is reflected by the following posting: debit of account 66 “Settlements for short-term loans and borrowings” – credit of account 51 “Current accounts”. As a result, assets and liabilities on the balance sheet simultaneously decrease. This operation does not affect capital items. However, in the commentary to account 82 of the Instructions for using the Chart of Accounts it is stated that the repayment of bonds from the reserve fund is reflected by the posting: debit of account 82 “Reserve capital” - credit of account 66 “Settlements for short-term loans and borrowings”. However, we cannot agree with this. After all, as we have already said, the credit of account 66 reflects the issue of bonds, and not their repayment.

CONCLUSION

Creating a reserve fund at the expense of an emergency and using it to pay off losses leads to a redistribution of amounts within capital items. It is not possible to use the reserve fund for other purposes (for example, to pay off bonds).

Accumulation and consumption funds

Sometimes owners want to use NRP to purchase new operating systems, to pay bonuses to employees, or to charity. Usually in such cases they decide to create so-called accumulation and consumption funds.

The accountant needs to reflect the owners' decision in the accounting. But how to do this, because such funds are not mentioned either in the Laws on JSCs and LLCs, or in the current accounting regulations. Let’s say right away that there is no need to create any funds in accounting.

WE TELL THE PARTICIPANTS

Clean Profits can only be spent on dividends. There is no need to create consumption and accumulation funds from net profit, since real money, not profit, is still spent on acquiring assets.

The very concept of funds at the expense of profit came to us from Soviet accounting. For example, Soviet enterprises created production development funds, the funds of which were used to purchase new equipment. The Instructions for the 1985 Chart of Accounts state that the funds of such a fund intended for the purchase of equipment must be kept in a special account in the bank.

Set the ratio of possible profits and losses to no less than 3:1

This ratio is not due to greed, but based on the profitability of a particular position. It’s just that if you really see that your risks are three times less than the expected profit, then there is a 90 out of 100 chance that the market will allow you to make money. If you enter into a trade, initially understanding that your risks are equal to your profit, then your chances are already 50 to 50. And if you understand that your profit is less than the risks, but still enter, then you are an aggressive trader ( maybe it’s an honor? I don’t know...) and you enter the market not for earnings, but for the love of art. Choose for yourself what suits you best. And for what purpose did you come to the market? Although there are very different people...

? CHEATED

(from the series “True Stories”)

Somehow a trader comes up to me. PhD, by the way. And, lowering his voice, he says: “Irina, I found an opportunity to deceive the market...” I became interested: “Share!” He, beaming and glistening with joy, shares: “I have two open accounts: one is real, the other is mini (the so-called “marathon”). So, I open a mini account, for example, to buy, the market begins to catch me, and while it is distracted by my purchase, I quickly sell on a real one... And since he is carried away by my first transaction, he does not pay attention to the second. And if in the mini I get a stop loss, then in the real one I close the profit.” He looks at me victoriously. Pause. I also look: either grief from the mind, or spring has begun... There are no limits to perfection. Dear readers, do not engage in such stupidity. Psychology is psychology, but you also need to use your brains.

From the book Ears Waving a Donkey [Modern social programming. 1st edition] author Matveychev Oleg Anatolyevich

"Ratio of wins and losses." “Win-loss ratio” is another commonly used metric. It is very bad for the reasons already indicated in paragraph 2, since both there and here the unsatisfactory criterion of “winning” is used. In addition, this

From the book The Way of the Turtles. From amateurs to legendary traders by Kurtis Face

R-cubed - A New Risk/Return Ratio To account for all of these factors, I created a new risk/return measurement metric that I call the Robust Risk/Reward Ratio, or RRRR. I also call it R-cubed (or R cubed) -

From the book Strategic Management author Ansoff Igor

4.2.2. The relationship between system and structure As mentioned above, the development of management systems was facilitated by changes in the external environment of the company. A study of the development of American business firms showed that, in addition to the influence of external conditions, the company always had a constant, ongoing

From the book Banking: a cheat sheet author Shevchuk Denis Alexandrovich

Topic 16. Formation, distribution and use of banking profits. Factors influencing the amount of profit Profit reflects the net income created in the field of banking services in the process of activity. Profit is the excess of income from the sale of services over the costs of their

From the book Tax Optimization: Recommendations for Paying Taxes author Lermontov Yu M

6.4.14. Accounting for losses By virtue of clause 7 of Art. 346.18 of the Tax Code of the Russian Federation, a loss received by a taxpayer when applying other taxation regimes is not accepted when switching to a simplified system

From the book Human Action. Treatise on Economic Theory author Mises Ludwig von

4. Correlation of actions in time Two actions of an individual are never synchronous; their temporal relation is that of earlier and later. The actions of different individuals can be considered synchronous only in the light of physical methods of measuring time. Synchronicity

From the book The Rich Pensioner [All ways to save for a prosperous life] author Makarov Sergey Vladimirovich

The ratio between the parts of a non-state pension What should be the ratio between the parts of a non-state pension - basic, insurance and funded? It is clear that the size of the basic part is determined by the size of the minimum needs during the retirement period. But how

From the book Management Accounting. Cheat sheets author Zaritsky Alexander Evgenievich

38. Economic significance of profit, types of profit Profit is one of the main financial indicators of the economic activity of an enterprise, used in management accounting. As an economic category, it characterizes the financial result of an entrepreneurial

From the book Think Like a Millionaire author Belov Nikolay Vladimirovich

109. Accounting for profits (losses) from ordinary activities of an enterprise Income from ordinary activities is reflected in account 90 “Sales”, subaccount 1 “Revenue”. These include revenue from the sale of products and goods, income related to the performance of work, provision of

From the book Development of Leaders. How to understand your management style and communicate effectively with people of other styles author Adizes Yitzhak Calderon

Don't set any limits or limits for yourself. Don't set any limits or limits for yourself. You cannot foresee all the results of even the simplest action. You do not know the actions of all the forces that set it in motion. Much may depend on how you

From the book Day Trading in the Forex Market. Profit Strategies by Lyn Ketty

Set strict deadlines for yourself and others How to stop yourself from trying to make one more, “last” improvement? Set a deadline for making a decision. Don't procrastinate, hoping that tomorrow you will find a better solution. When determining deadlines, consider your

From the book Accounts Receivable Management author Brunhild Svetlana Gennadievna

Behavior Ignore complaints and set priorities The manufacturer often complains that he does not have time to redo everything. In fact, he is being drawn. P devotes himself to any work with all his heart, so no matter what he does, he is always busy. Sometimes I say jokingly,

From the book Accounting and tax accounting of profits author Nechitailo Alexey Igorevich

Risk-Reward Ratio Traders should establish a risk-reward ratio for each trade they make. In other words, they must have an idea of ​​how much they are willing to lose and how much they want to earn. Overall, the ratio

From the book The Ultimate Sales Machine. 12 Proven Business Performance Strategies by Holmes Chet

Determining the possible loan amount Selling goods, works, and services on credit, on the one hand, allows you to increase sales volume, but, on the other hand, increases both the volume of accounts receivable and the risk of non-payment. Since the company produces significant

From the author's book

Appendix 4 Statement of analytical accounting of profit distribution (coverage

From the author's book

Chapter 2 Set Higher Standards and Conduct Regular Training How to Reprogram Your Company to Run Like a Perfectly Oiled Machine According to the Harvard Business Review, only 10% of the population has an aptitude for learning. There are people

Russians are well aware of the phenomenon of lost profits “de facto”, but many do not even realize that the legislation provides for the possibility of compensation by the culprit for the loss of income in favor of the victim. Meanwhile, the relevant law of the Russian Federation interprets such a fact as a violation of the rights of the injured person and assumes that he receives compensation for losses incurred. From a legal point of view lost profit or lost profit is the complete or partial failure to receive profit by the victim due to another person’s neglect of his rights. Compensation for losses due to complete or partial loss of profit may be claimed in full.

Examples of lost profits

Each of us has encountered cases of lost profits at least once in our lives, and the most common of them are:

  • failure to deliver production equipment or raw materials on time, due to which the entrepreneur does not produce products and loses possible profits from its sale
  • violation by the contractor of the delivery deadlines for a property under construction or renovation, forcing the victim to incur unplanned expenses for renting other areas
  • damage by the tenant to the landlord's property, as a result of which the latter is forced to bear unplanned repair costs and loses possible income from renting out the property to another client
  • termination by the lessor of the lease agreement for retail or office premises before the agreed date and, in connection with this, the loss of the tenant;
  • car repairs take longer than the agreed period, resulting in the client incurring unplanned expenses for renting another car
  • An accident is not the fault of the owner of a car that he uses to work in a taxi service: forced downtime leads to a loss of profit

Everyone can supplement this very incomplete list of cases with examples from their own practice. But as with Who can claim compensation from? lost profits due to forced downtime and, most importantly, how to determine and prove its amount?

What does the Russian law say about compensation for lost profits?

Article 15 of the Civil Code of the Russian Federation provides a clear algorithm for calculating the amount of lost profits as magnitude of potential income increase and gives the victim the right to demand compensation for lost profits in full from the culprit for not receiving income. According to the law, compensation is possible only in cases where there is a violation of the contract in which the injured and guilty parties agreed on their relationship. At the same time the amount of compensation is calculated in accordance with the degree of neglect of the guilty party's contractual obligations.

The difference between lost profits and real damage

In everyday life, no one is insured against damage to property or health. Clause 2 of Article 15 of the Civil Code of the Russian Federation clearly separates the concepts of “real damage” and “lost profit” as follows: real damage is the expenses that the victim has already made or will make in the future to restore violated rights or compensate for loss or damage to his property; lost profit or benefit - this is lost income, which the victim would have received under normal conditions if the perpetrator had not violated his rights.

Calculation and proof

From the definition it is obvious that the two concepts are not synonymous and when going to court it is necessary to clearly determine dimensions and real damage, and lost profits. So, in the event of a fire or flood in an apartment, or damage to a car in an accident, the victim bears a number of expenses, compensation for which the culprit has the right to claim:

  • lawyer's fees
  • payment for appraiser services
  • postage costs for notifying the culprit about the upcoming inspection of the property
  • expenses of the victim to pay for the rent of another area or hotel
  • repayment of a bank loan that the victim was forced to take out to repair damaged property, etc.

Compensation for actual damage for the restoration of violated rights is possible only if it is confirmed by correctly executed documents. The victim can apply for compensation only if, using the property damaged by the culprit, he received or could receive income from it. At the same time amount of total lost profit often significantly exceeds the cost of actual damage. For example, a negligent neighbor flooded and damaged the premises that the victim was renting out. To file a claim in court for compensation in this case, the injured landlord must submit the following documents:

  • lease agreement;
  • document confirming payment of rent;
  • tax return.

Thus, the total loss suffered by the victim consists of actual damage, costs of restoring violated rights and lost income. In accordance with the law, only direct losses incurred by the victim as a result of violation of his rights are subject to compensation. That is indirect losses that are not directly related to the consequences of the violation of the rights of the victim are not subject to compensation. In the case of damage to real estate, the victim can count on compensation for lost profits if, at the time of the damage, the property was not empty, but was in use by the tenant.

Few ordinary people will be able to answer the question of how income differs from profit. Both concepts mean the arrival of funds and the possibility of investing them in the future. How these indicators relate to revenue is also a mystery for the reader who is not savvy in economic matters. However, this oversight is easy to eliminate; just understand the terminology.

What is meant by the term "revenue"

The first is the difference between revenue and accounting (that is, explicit, calculated) costs.

Taking into account economic costs, including implicit costs associated with an alternative in conditions of limited resources, we will now talk about economic profit: revenue minus economic costs.

Let's look at an example. Since the head of a passenger transportation company at one time chose the path of an entrepreneur, rather than the path of an employee with savings in a bank, he faced alternative economic costs, for example, the following:

  • savings in a bank account that were invested in business development - 60 tr.
  • lost interest on money remaining in the bank - 6 tr.
  • lost wages from hired work per year - 180 tr.

It turns out that the annual profit of 240 tr, which we calculated earlier, should be reduced by the amount of economic costs:

240 t.r. - (180 t.r.+60t.r.+6t.r.) = -6 t.r.

This business for an entrepreneur will not pay for itself in a year. If the company’s accountant congratulates the manager on his annual profit, the entrepreneur himself will assess the business’s performance as satisfactory.

Resume

Let’s summarize and answer the question of how income differs from profit, what is the difference between them and revenue, highlighting the main points briefly:

  • Revenue and income are always positive economic indicators. Profit can be positive (the company is profitable), negative (the company is unprofitable) and equal to zero (the company is at the break-even point).
  • Income includes profit, as well as costs for remuneration of employees of the enterprise and the social component of internal policy.
  • Profit is a calculated indicator. It can take into account implicit economic costs. Income can always be calculated and entered into the balance sheet.
  • Another difference between income and profit is the legislative connection: commercial enterprises work to achieve profit, non-profit enterprises should not receive profit at all, and municipal enterprises can be profitable, but subsidies only imply breaking even. All businesses can receive income.

Thus, revealing small terminological nuances of the profitable part of enterprises’ activities will allow readers to become more savvy in economic issues.

Any action, planned or carried out, implies a certain result, regardless of the type of activity. The work of any enterprise is no exception to the rule, the only difference being that the result here is of a commercial nature and acts as a profit. In order to clearly explain the principles of making a profit for a certain enterprise, it is necessary to first find out what lies under the concept of “profit”.

Economic dictionaries say that profit is the ratio of costs for the production of goods (services) to income from their sale. Typically, profit is calculated for a certain period (quarter, year, etc.). You can give a lot of methods and formulas for calculating profit depending on its type and specific conditions, but the main task of all calculations is to find out how much income exceeded expenses. Profit is one of the most important indicators of the quality of an entrepreneur’s activities and the effectiveness of his strategy.

Profit classification

In its role as an economic indicator, profit is divided into two groups:

Compensation for potential losses;

Other payments (decided by management or the board of shareholders of the company).

In addition, there is a capitalization of profits, that is, an increase in funds in circulation. This allows you to significantly expand the productivity of the enterprise at your own expense, without attracting assets from outside, which in turn allows you to save money.

Profits can be used to develop the company’s infrastructure or meet the social needs of staff. This takes into account the human factor and one of the most important assets, and this eliminates frequent savings and retention of funds to meet this expense item. Otherwise, this will have a very negative impact on the work process and on future profit margins.

When calculating profits, rely on inflation indicators, which will be equal to the product of the amount of real profit and the inflation indicator relevant for a given time period. There is also a so-called “extraordinary” type of profit, characteristic of countries with well-developed economies. The sources of this profit may be non-standard points of sale for the enterprise, for example, branches.

Finally, the main indicator that brings the final line to the company’s activities is unprofitability. After all, profit can be negative, which means that all development activities, innovation, as well as the use of different production systems and labor technologies are completely unjustified in economic terms. Especially if there is no upward trend in the indicator.

Profit is not only an indicator of quantity, but also of quality, which is typical for many other economic and financial phenomena. By consistently analyzing financial, investment and operating profit, you can trace the dynamics of its growth and analyze its sources. This will allow us to build both short-term and long-term prospects for the further development of the company.

Enterprise profitability indicators may have a hidden negative meaning. Often, in order to manipulate and simplify a company’s business activities, the volume of its profits is distorted. This may be done for the purpose of misleading potential shareholders or investors, as well as for the purpose of tax evasion.

Profit volumes allow us to analyze the efficiency of the enterprise, its prospects in terms of development and the feasibility of investing capital from outside and, of course, the prospects for expanding its potential. It is only important to analyze profit not in general, but to analyze each element of its structure separately and trace the dynamics. In addition, it is important to carry out the formation according to categories, distribute and comprehensively use.

Studying profit from the inside involves all indicators, and therefore usually belongs to the category of trade secrets of the enterprise. Superficial analysis allows other organizations to also study the company’s profits. Such organizations include the tax office, insurance companies, audit firms, credit and banking structures. The analysis is carried out on the basis of accounting and reporting documents.

Profit analysis is carried out within the framework of the enterprise’s activities, which are divided into:

Full activity;

Activity of a separate structural element;

A single action or operation.

Thematic analysis studying specific factors influencing profit volumes is carried out in order to find weaknesses in the company’s activities. Areas such as the company's tax policy, personnel bonus system, and profit capitalization are analyzed.

Enterprise profit management

When considering a particular category of profit, one should take into account its types and sources, as well as management methods, so that production processes can be optimized. Rational profit management is achieved subject to mandatory compliance with a number of rules.

1. You need to be involved in the overall system of the enterprise.

2. Use an integrated approach to the formation and approval of decisions relating to management activities.

3. Maintain management dynamics at a sufficiently high level.

4. Develop a versatile approach to the formation and implementation of solutions.

5. Keep a course on the main directions of growth and development of the company.

The main goal of profit management is to ensure the greatest welfare of the company's management while maintaining at the required level the interests of the company's service personnel, as well as the interests of the state. This concept includes the optimal ratio of the maximum possible profit and minimum risks for the enterprise with the proper quality of profit, optimal volumes of financial and material resources, provision of capital from profits and the competitiveness of the company’s value in the market.

Optimally competent profit management is achieved by developing a special strategy, systematization and a specific course of action. Regarding the orientation of management, they are divided into two types: influence on formation and influence on use (distribution). The profit management complex is influenced by a number of factors:

State settlement;

Market system;

Internal mechanisms of the enterprise;

External mechanisms.

In the management process, one of several types of analysis can be used (for each specific case): vertical, horizontal, comparative, integral, factor and risk/ratio analysis.

Profitability and profit planning

When examining profitability, it is important to keep profitability in mind. This factor indicates the efficiency of the enterprise's use of resources and funds. The ratio between profit and the average market value of funds of all types indicates the overall profitability of the company. This indicator is determined from the ratio of net profit to turnover or capital volume. It is expressed as a percentage and is aimed at identifying the amount of income that an enterprise receives from one financial unit of turnover. Profitability is calculated both for the enterprise as a whole and for the resources, sales and activities of the company in particular.

Profit lends itself not only to analysis and management, but also to planning. This process is entrusted to a certain group of people who introduce the human factor into financial and settlement processes. This allows you to consider all prospects and make forecasts subjectively, but on the other hand, it allows you to create a more realistic picture of changes in profit in the future. Like a lot of other procedures, planning applies to several items: the profit of the entire company, the profit of a separate division, the profit of a separate operation. Planning can cover short periods and be long-term.

A full range of procedures relating to the enterprise’s profit primarily contributes to its optimization, a qualitative increase in positive indicators, reducing risks related to the enterprise’s activities and increasing the well-being of management, staff and the entire state. Don’t forget, in order to competently understand profit issues, you need to read our separate publications “” and ““.

Article rating:
1 Star2 Stars3 Stars4 Stars5 Stars(No ratings yet)
Loading...
Share with friends:
Articles on a similar topic
Close
Find on the site
For example: types of drywall