How to calculate the profitability of the organization

Increased profitability - that's the most important task of the enterprise.In the harsh competitive world it is very important to bring business structure to a minimum rate of return.This requires economic outlook and knowledge of how to calculate profitability.

When the firm for a certain period of receiving the proceeds, then this amount includes all depreciation expenses, the purchase of raw materials, employee salaries, utilities, etc.Therefore, it should be noted that it is important to know how to calculate the profitability of the enterprise.This will have the advantage over competitors, the full potential of the organization, to make quite a substantial amount of profit.Taking away all the costs resulting from the total revenues, the company can make a profit, which is expressed in monetary ekvivalente.Ottalkivayas the importance of this knowledge and having great ambitions Enterprise, consider the essence of the issue, how to calculate profitability.It shows the level of the final profit enterprise efficiency.But if profits can count even the inexperienced novice economist, is to understand how to calculate profitability is sometimes difficult even the wise leader of the enterprise.

There are two profits: gross and net.Before you calculate the profitability of the enterprise, it is necessary to know his profits.The resulting difference between net proceeds and cost is the gross.Well, if you take away all the company expenses (depreciation, taxes, rent) from the gross profit it posted a net profit.

primarily profitability - is the main indicator of the effectiveness of all activities of the company, and it is expressed as a percentage (although you can view it in the form factor).Consider several options for indicators: return on assets, sales, operating activities, equity and others.

To get the rate of return, you must split the profits on assets, and then multiply the answer by 100%.

Consider a couple of options, how to calculate profitability.To find the coefficient of return on assets, you need to make dividing net income by the amount of assets for the year.In order to calculate the return on equity, the net profit should be divided by the total equity.

In addition, it is important not only to monitor and calculate the profitability of the enterprise as a whole.A very important factor is what keeps afloat the organization itself - it is its resources.Whether purchasing a new product?Leave the same price or lower if demand falls?How to reduce costs without losing quality?These and many other questions related to the organization and evaluation of the use of company resources.And there should also approach the issue of how to calculate the profitability of products very seriously.

Product profitability - is another indicator of the company.Calculate how it can be, in general, throughout the sales and on the individual items.Consider the first option.The ratio of profits from sales to the cost of its manufacture and sale.Also, there are other ways of calculating profitability, such as miscalculation ratio of profit from sales of marketable products to the revenue from sales of goods;Calculation of the balance sheet profit to sales of products.All indices show the effectiveness of the company's costs for raw materials and income of products sold.

consider the second option.Return on individual items of production in this case depends on the price at which products will be sold to the consumer, and on its cost.

for successful business founders of the company must know the effectiveness of your organization.That is why it is important to know and be able to calculate the profitability of the enterprise.