How to calculate profitability?

main purpose, which puts any business in their work is making a profit.However, based on the presence of this indicator, it is impossible to determine the effectiveness of the entity.For the financial analysis of the enterprise in addition to the profit and are an indicator of profitability, showing income of one ruble buck.This value gives the answer to the question of how profitable a business entity implements manufactured products, distributes current assets and is invested in production investment.In various methodological recommendations provide guidance on how to calculate return on sales, assets and equity.These indicators combine to allow you to fully assess the activity of the economy, characterized by the use of its assets and liabilities to identify ways to grow profitability.

Prior to calculate the profitability of the enterprise, it is necessary to find out the amount of profit for the reporting period, and cost of sales.After processing the reports, balance sheet and statistical reports can begin to clarify the value of this indicator.Profitability is calculated as the ratio of profit to the company incurred costs.At the same time indicators of income can have a different meaning.Profits can be clean, from sales and from different areas of activity.The denominator of the formula for solving the question of how to calculate profitability, can be used value of non-current and current assets, debt and equity, revenue and cost of goods sold.If a business entity after the reporting period covered all the costs incurred and income received, his work is profitable.The enterprise is considered to be cost-effective at the same time.The value of this indicator characterizes the efficiency of the administrative personnel.The required values ​​in deciding on how to calculate the profitability of the organization, you can take a form of balance sheet (№1 and №2), and the annexes (№5).

planning process in the enterprise is impossible without determining the effectiveness of sales.To do this, you must know how to calculate return on sales.Depending on the goal, which is placed in the analysis of the enterprise, it can be used a variety of indicators.The value of income in the numerator of the formula can be taken as gross and balance, and clean.The denominator can be in the form of the cost of the entire issued and sold products only.

Profitability Analysis is carried out to make timely management decisions on increasing or decreasing prices or costs, implemented in the production process.By changing these parameters, you can increase the effectiveness of the entity.In order to determine how to calculate the profitability of a separate unit of production, it is necessary to organize accounting for each item of goods.If the yield is not satisfactory, it is necessary to take urgent measures aimed at reducing production costs.We should use technology to develop more efficient materials and methods for their treatment, as well as reduce the number of operating personnel.It is also necessary to find new suppliers, implementing cheaper raw materials.To increase the profitability of the company to seek additional markets for more expensive products, and increasing trade in products having a high coefficient of efficiency.