Earnings is fundamental in determining the overall performance of the company, so it is necessary to carry out the analysis carefully.Managers who know enough, increased or decreased profit compared with last year.To take positive administrative decisions is extremely important to understand what the changes are related.Profit increased due to the fact that the price has been raised?Or, the company managed to increase sales?Maybe success is due to a successful product policy?All these questions will help answer Factor Analysis of profit before tax.
Factor analysis divides the change in profits into several parts, depending on what they were due.Today decided to allocate five main factors: changes in pricing policies, changes in the volume of sales, changes in the structure of sales (in the range), the change in cost and, finally, change the cost structure.
greatest impact on profit has typically price change, and factor analysis of income allows one to easily determine the size of this effect.Enough of this year from the sale (price multiplied by volume) take the implementation of the previous year in the volume of the current (just multiply last year's prices for current levels).The resulting difference is usually positive, and show the effects of changing prices on profits.
For companies, however, are more important and significant is the increase in profits due to an increase in sales volumes.Since the profit growth is often affected by inflation, factor analysis is to separate its profit and to determine the actual merits of the company.To determine the effect of the volume is sufficient profit last year, multiplied by a special factor K1 minus one.This ratio is calculated as the ratio of sales volumes this year, a life-size to last year.If sales volumes fell, the multiplier is negative, and therefore the impact on profits would also be negative.
No less significant factor analysis of income paid and changes in profit occurred because of changes in product mix.For example, the most profitable goods sold in weaving, the better, while the loss-making sales were reduced.Calculate the effect follows.You need to multiply the gains of the last year between the two factors.From the factor K2 need to subtract calculated above ratio K1.K2 is calculated as the ratio of volume of realization in the current year and the prices of last year to the implementation of the previous year (the numerator in the calculation we considered the impact of the price).
Thus, it remains only to identify the impact of changes in the cost of, and factor analysis of income from the sale of can finish.To calculate the effect you want from the indices S deduct the cost of the current year.The index S is calculated simply.Take the cost of last year, and recalculate it according to the current sales of each product.Thus, you eliminate the impact of the volume and structure.
latter figure indicating the change in the cost due to structural changes, calculated rather complicated way, and does not carry particularly important information.You can simply subtract from the total change in earnings calculated above all the factors and get the so-called other conditions.
In fact, factor analysis of income to spend is not so difficult as it might seem at first glance.And the presence of the special management software greatly simplifies the process, so that you only need to enter the desired numbers in the pre-prescribed formula.
