Profitability - a measure of the efficiency with which capital assets are used, calculated as the ratio of profit to the average cost of fixed and current assets.
Profit and profitability of the company directly linked.
profit - is an economic category, which expresses production and economic relations arising on the formation and subsequent use of the manufactured product.In the real sector, the profit takes material form in the form of money, resources, funds and benefits.
If the company receives any profit, it is cost-effective.Applied in the calculation of profitability indicators reflect the relative profitability.Analysis of the financial stability of the enterprise is based on the analysis of these indicators.To assess the effectiveness and economic feasibility of operation of the business are taken absolute and relative performance.
Absolute figures provide the opportunity to analyze the dynamics of earnings for certain years.At the same time for more reliable results indicators are calculated taking into account inflation.
Ratios are variants of the ratio of profits and capital invested in the production (profit and production costs).Therefore, they are not affected by inflation.
absolute amount of profit does not always give a correct idea of the level of profitability of certain businesses because it affects the quality of the work and scope of activities.In this regard, for more precise characteristics of the enterprise is used not only the absolute amount of profit, but also a relative measure called the level of profitability.
These figures should be seen in comparison to other time periods, because it gives an indication of the dynamics of development of the enterprise.
Profitability characterizes the level of profit or loss of production.Sami margins are relative harakteristikirezultatov financial growth and efficiency of the organization.They reflect the relative profitability of the company or enterprise, which is measured as a percentage of capital costs to different positions.
most important characteristics of the actual environment in which the generated profit and revenue enterprise, is an indicator of profitability.They are used in the comparative analysis and assessment of the financial condition of the company.
main indicators of profitability are: enterprise product profitability, return on equity and total return.
Product profitability is a reflection of the relationship of profit per unit of sales.This rate increases with an increase in prices of products at fixed production costs or lowering production costs while maintaining constant cent to sell products.
Return on equity shows the efficiency of the use of all assets at the disposal of the enterprise.
Overall profitability (profitability of the enterprise) expresses the ratio of the balance sheet profit to the average value of fixed assets, as well as the normalized working capital.This ratio shows the cost of funds to the profitability of the enterprise.In other words, the level of overall profitability, reflecting the growth of the invested capital is equal to the profit generated before interest, multiplied by 100% and divided by assets.
Overall profitability is the key indicator used to analyze profitability.For a more precise definition of the organization calculated two indicators: the profitability of the production operations and the number of revolutions of the assets.
Return on sales is equal to the gross proceeds depending on costs.The number of turns of the capital is the ratio of gross revenues to the value of capital.