The level of profitability

In today's world, a lot of companies working and every year the number is growing rapidly.The main purpose of any legal entity (or a private entrepreneur) - is to get as much as possible profits and costs in this case should be minimal.This postulate is the basis for the development or further expansion of the production of any enterprise, without exception.

for the proper organization of the business is necessary to study economic performance, carefully monitor the financial position and carefully and to plan production activities of the company, it can only maximize profits.The level of profitability - a general indicator of the effective operation of the enterprise, reflecting the relative profitability of certain basic fundamentals.If the amount of revenue can cover not only the cost of implementation and production, but also constitutes a profit, the company is considered to be cost-effective.

Based on margins structure, it is possible to evaluate its financial results, but ultimately effective.They measure the profitability of the different positions of the enterprise, and are grouped accordingly interests of the participants of market exchange.The profitability of just refers to such indicators and reflects the work of all parties of the company.There are four main groups of types of indicators of successful operations - assets and return on assets, return on the company and products.

analyzing the level of profitability is easy to determine what kind of activity provides the most revenue, and, conversely, that provokes the loss.In today's world, such a definition is very important because it is the concentration and specialization of production depends on the financial stability of the legal entity.

most generalising indicator of quality and efficiency of the enterprise is considered to be the profitability of production.This figure commensurate the size of fixed and current assets with the value of profits earned through them.These tools are called its price, the lower this price, the greater the effect on the functioning of the enterprise.Calculate the profitability of production, you can use a simple formula - Ac split the profits for the total amount of all expenses OS and RP.
BDS = IF / (a ​​+ PF)
Where FC - the amount of profit, operating system - the amount of working capital, and off - the sum of the fixed assets.

From this formula it is clear that it is a factor of growth.High profits supported by the low cost of fixed assets and working capital, and the efficiency of their work.As a result, the maximum level of profitability, and, respectively, and the economic efficiency of enterprises.

far as profitability and efficiency of the enterprise operating activities shows the profitability of sales.Calculated profitability of sales by the following formula - the ratio of operating profit of the company IF the proceeds from the sale of products in
Fv = IF / B * 100%
Where rf - return on net sales, and FC - net profit of the company.

level of profitability - one of the best mechanisms for determining the financial, investment and operating efficiency.It helps to find out the profit of the company from each ruble invested in assets.During the meeting, it is easy to know all the answers about the main activities of the company, whether it is the production or sale of goods or services and works.

In today's world without clarifying this important factor is impossible to identify the real financial condition of any company and the efficiency of its basic parts production.Therefore, we must know how to identify all the economic indicators in order to make a correct opinion about his work.