The profit function and its species

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profit functions characterize the economic effect of the enterprise, its stimulating effect on the development, forming the budget side of his activities.In order to understand this economic category, you need to understand what is a profit.The concept reflects the profits resulting net income, which is created in the sphere of material production in the form of cash savings.It can be seen from very different sides.Profit serves as an economic category, form of cash savings, results of operations, a source of financing for development, selection criteria for investment projects and ongoing cost optimization.

Functions profits of the enterprise directly depends on its features listed above.The resulting enterprise profit reflects the economic effect obtained in the course of economic and financial activity.These functions are characterized by the excess of income over expenditure of the revenue of the enterprise aimed at the implementation of its activities.

Unfortunately, with this indicator is not always possible to evaluate all aspects of economic activity.That is why the analysis of financial and economic activities carried out by the entire system of economic indicators.The economic essence of profit is that it reflects the final financial result.

stimulates the function of profit due to the fact that it is not only the final result, but the main element of the formation of financial resources.Any company interested in its maximum size, as remaining at its disposal net income must cover the financing needs of industrial activity, social and technical development of the company, the creation of the material incentive fund.Enabling function is manifested in the fact that pay dividends from the profits of the owners and shareholders of the company.

Budget-forming function of profit is no less important because it is one of the sources of the budgets of different levels.Budgets are getting it in the form of taxes and use the proceeds to finance the needs of society;State of production, investment, social and scientific and technical programs;ensure the state functions.The profit on the scale of society is a factor of social and economic development of the entire state.

There are such types of income:

1. Gross - the difference between income from the sale of products without VAT, excise duties, other taxes, fees and the cost of the product.It is a common measure of efficiency.

2. From sales - a total profit, a reduction of the amount of administrative and selling expenses.It characterizes the effectiveness of activities related to primary production.

3. Accounting (before tax) - income from sales, increased by the amount of other income.

4. Net - a pre-tax profit, less the amount of tax liability for the period.

5. Retained - the value of net income, less the amount of the distributed profits.The separation of different types of produce on the basis of the different interests of the persons controlling the operation of the organization and control it.For example, owners of the company considered the main indicator of net profit, and the state's chief financial indicator measures the pre-tax profit.

important economic process is the allocation and utilization of profits.Legally, this process is regulated in the part that is intended for contributions to the budget.Identify ways of spending came at the disposal of the company, produced by internal regulations of the organization.

net profit can be directed to the reserve capital (fund), dividend payments, repayment of previous losses, other benefits (financing of investments, solution of social problems, financial incentives employees).