modern entrepreneur is not often used in his practice Calculation of marginal income, but in vain, because with their help we may compile financial forecast activity.Marginal income - the difference between revenue from sales and variable costs.Sometimes it even designated as the amount of coverage, the portion of revenue that goes to compensation for fixed costs and profit.
This term is commonly used in two senses: the marginal profit and the income from the sale of the goods obtained after covering variable costs.The first definition involves the calculation of income for the sale of each subsequent unit of production.In the second case refers to a source of coverage of fixed costs and the generation of income.
for every manager it is important to calculate profit margins.The formula is very simple, you need to find a difference between the volume of sales, multiplied by the sales price, and sales volume multiplied by the value of direct costs per unit of product.For greater convenience, you can calculate the rate per unit of output, you need to find a difference between the cost of sales and direct costs per unit of product.
In most cases in our country only in the trade expect profit margins, it is, in fact, the trading margin.In foreign companies the figure plays an important role in drawing up financial plans, forecasting future production.To obtain the correct values, it is important not to make mistakes and get the desired performance, because then will not understand the business brings a profit or not.
In large companies for each product is calculated profit margins.It lets you know how profitable or unprofitable is a particular product.If the index is negative, it is necessary to suspend the release of goods, because with each successive unit of the firm will be more at a loss.Margin analysis to determine the release of goods to engage in profitable, and what better to withdraw from production.The model can determine the break-even point, since any sales made or services, the company begins to generate income.
Marginal income - is a significant indicator to track statistics on the types of products, different sectors and activities.Knowing his industry regulations, you can easily calculate the direct costs and revenues.It should be borne in mind that the business will be profitable only if the sum of the marginal income tax completely cover the common costs and still have a profit.If this amount is not even enough to cover the costs, the production is considered unprofitable.
To properly calculate the profit margin, it is necessary to pinpoint the direct costs.These include the costs that are linked to the unit of production, such as wages or the cost of materials.Common expenses include everything else, and covers their profit margins.If everything correctly calculate the amount of the total cost will be little change because they include the cost of renting premises, wages, full-time employees, utilities, etc.
