purpose of any business - is to get the result, in this case, in the form of profits.You need to know how it is calculated to determine the profit from the sale of products.Formally, it is calculated as follows: from the proceeds from the sale deducted the cost of commercial costs and management costs.
The company sells its products, earns revenues and financial results for the detection compares revenue with the money spent on production, as well as the implementation of an enterprise of products produced (services provided or work performed).In the economic literature examines two approaches to the definition of expenses (costs):
- economic;
- accounting.
and profits is considered on the basis of these two aspects.Under
realize economic profit revenue minus total economic costs that are explicit and implicit.It is a charge for risk and uncertainty is the result of innovation, initiative and entrepreneur.
revenue minus accounting costs are clear - it is an accounting profit.
Types profit and its functions.
Each enterprise three indicators:
- balance sheet profit;
- profit that is taxed;
- net profit.
balance sheet profit - an important indicator showing the financial condition of the company.It includes three elements:
- profit from product sales, which in the carrying has the largest share;
- Profits from the sale of fixed assets, other assets;
- Profits from non-sales operations, taking into account losses, considered as financial results.
net profit is distributed to the following funds: consumption, savings, reserve.
formation of profit can be represented as follows:
- Proceeds from the sale of products;
- cost of production;
- profit from the sale of products;
- Gain on disposal of fixed assets and other transactions;
- Non-operating income;
- balance sheet profit;
- Adjustment of profit;
- Taxable income;
- Income Taxes;
- Net income from sales.
Profit performs functions listed below:
- demonstrates what economic effect obtained as a result of economic activity;
- is a key element in the formation of financial (cash) resources of the enterprise;
- thanks to profits is the formation of budgets of different levels.
Ways to increase profits.
increasing its possible as follows:
- technical ways of increasing that are based on the improvement of production technology, to installation of modern equipment, and as a consequence, improve the quality and the quantity produced by the enterprise, respectively, should increase the volume of sales of products;
- organizational way, which is to improve the organization of production, labor and management;
- economic levers to increase profits include: financial incentives for staff to work creatively for the growth of the enterprise, the growth of its business;creating a competitive environment that promotes the growth of profit by finding and using reserves, and production of competitive products;promotion of enterprise through regulations.
more fully analyze the final results of economic profitability.They indicate whether the company operates efficiently and how effectively, whether the various profitable activities.With the help of these indicators, an analysis of volume sales, evaluation of the enterprise as a whole, as well as an instrument of investment policy and pricing.The value of profitability clearly demonstrates the effect of the relation with the availability and use of resources.
