Profitability is a measure of the relative.It characterizes the level of profitability of the enterprise.This indicator reflects the efficiency of the business as a whole, shows the yield of individual activities.Profitability ratios used in financial analysis, because they can more fully than profit, characterize and reflect the actual results of business activity.Their value shows the ratio of performance against resources consumed.
Financial analysis gives a true picture of the performance of the company, its solvency, profitability and prospects.Data of this analysis can be based on specific figures in the strategic decision-making for future periods.
Trends differ very rich diversity.All of them are characterized by the efficiency of the enterprise from different perspectives.These indicators can be grouped into three large groups in their areas.They include product profitability, return on sales and return on equity.
Return on equity, or ROE reflects the ratio of the balance sheet profit or partial profit to the average cost of all capital invested in the company or its individual parts.Capital can be private, joint-stock, debt, permanent, negotiable, basic, operational, etc.
ROE bank or enterprise is a financial indicator, which characterizes profitability in the context of being in possession of their assets, which produce profits.When analyzing these figures take into account all of the assets held by the company.The total return on equity is calculated as follows.
To calculate the return on equity is necessary to determine the volume of sales for the period.The information can be viewed as the shipment and payment, received for products shipped.Companies in this issue are based on the convenience method for determining the volume of sales.
Then you need to determine the cost of goods sold.This is done by one of the methods peculiar definition of sales.In addition, you must determine the operating costs (fixed costs) for the same period.Calculate the amount of taxes that will be paid over the period.
then calculates the net profit.To do this, subtract the cost of sales of products, operating costs and taxes.All figures in the calculations necessary to carry out one unit of measure (for example, thousands of rubles).
At this stage, you can start the definition of total assets.Total assets - is the sum of total liabilities of the company and its shareholders' equity.Now you can calculate the return on equity.To this end, the net profit is divided by total assets.
If the company in its activity operates various financial indicators, return on equity can be calculated in a different way.To do this, the profitability of sales turnover is multiplied by the total capital.
For owners of the most important indicator is the return on equity.He is the main criterion of efficiency of invested funds.This is calculated as the ratio of net profit to equity on the balance sheet.
profitability analysis allows you to reflect the quality of the financial condition of the company and see its future prospects.Therefore, in the analysis focuses on the quality indicators and their proper grouping of consolidated groups.
