sufficient amount of products sold on the market, covers the costs spent on its production, in other words, its absolute costs.The next sale will be profitable.The amount of profit will depend on how much of the are (according to the analysis), semi-fixed costs, and changing semi-variable, as part of the total cost.When the number of products sold to reach minimum limit sufficient to cover the cost, while profits will begin to grow faster than the amount of the costs and will be an opportunity for development and investment.
ongoing analysis and some key indicators of the company provide a true picture of its profitability or unprofitability.If a company reduces the economic activities, the profits reduced, and losses increased ahead of the pace of reducing the volume of sales.
Key performance indicators of the company - is its effectiveness.You can calculate the following formula: Pr =
Fwd - ANW
This calculation: Pr - profits earned from the sale of products.
Fwd - Proceeds from the sale of products.
ANW - the amount of the costs spent on marketing and production.
In terms of calculating will be visible economic effect that characterizes the business as making a profit and excess costs.The index compares the economic effect of the costs and resources spent on his achievement.However, indicators such as profitability is beyond the scope of this analysis and evaluation.
profitability, the net profit, cost recovery, economic efficiency - these are the basic performance of a business.Profitability gives an idea of how quickly recoup the costs, and the company will be profitable.
Calculation of profitability:
- Products: R n = ratio of profit on sales (sales) / Share in the overall costs.
- Assets: is R a = ratio of profit (for the reporting period) / outcome of the Security Council.Where the Security Council - the average balance.The calculation shows how to use current and fixed assets as effectively and whether interest to the financial and credit institutions, to business partners.
- Fixed capital: R c = balance profit / share on SSOK.Where SSOK - average cost (fixed capital).
- Shareholders' equity: R sk = net profit / average share in the cost of the OS.This indicator shows what part of the profit per each ruble invested by the owner.OS - fixed assets.
- Return on equity: T = equity / net income.The calculation shows how quickly pay off the funds invested in the company, if the conditions of financial and economic activity will not change.
Key performance indicators of the company form the "break-even point of doing business", which can be reduced to answering the question: how many products to sell to cover the costs of its production and the compensation of semi-variable costs.Based on the analysis the unit price is established in accordance with all the semi-variable costs, in order to completely cover them and to receive stable profit.
indicators, in accordance with the requirements of the market, can be related to two groups:
• Evaluation , which characterize the results of an activity and the achieved level of development.
• Spending , which reflect the costs of production and types of activities.
division rather conditional and characterizes the relative performance of the company.The type and orientation of the analysis depends on the goals that are put in front of him.Thus, production costs can be considered as cost-assessment of the level, but the level can become a number that is not planned to produce a unit of production, and to provide services.The same can be said about such indicators as income, for which the landlord is not the first place, it is more important for the movement of the company's liquidity and statistics.
Therefore, assessment of overall sales, gross profit and net profit (after taxes and interest paid on borrowings), cost-effectiveness, the turnover of capital - are the main indicators of the company, describing its position in the reporting period.
